Cognitive Mercantilism: AI panic resembles fears of early capitalism

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I’ve been reading Joyce Appleby’s The Relentless Revolution: A History of Capitalism (2010), and it has me circling a rather delicious thought: AI panic is really a form of cognitive mercantilism. If we regard the market capitalism as the first planetary intelligence, as many (including me) do, the parallels are closer than you might think.

Appleby’s book is a sweeping history of capitalism, from its unlikely emergence in early modern England to its eventual transformation of the entire world. Her central argument is that capitalism was not the inevitable expression of some timeless human instinct to trade and accumulate wealth. It was a historically contingent cultural invention, enabled by agricultural improvements, expanding trade, and changing ideas about work, wealth, and human nature.

In particular, it required escaping the assumptions of an older, essentially zero-sum worldview, in which wealth meant controlling land, bullion, and the labor of largely impoverished populations. Capitalism emerged when people began discovering that wealth could be created rather than merely captured, and that ordinary people could be sources of demand and initiative rather than merely labor to be commanded as a factor of production.

The parallels with our current moment are striking. As Appleby tells it, the mercantilist worldview that preceded capitalism rested on roughly four interlocking beliefs.

• First, wealth was fundamentally scarce and finite. It consisted primarily of land, the agricultural produce of that land, and the precious metals it contained, accumulated through mining, trade and conquest. The goal of economic statecraft was to control more territory, maintain a favorable balance of trade, and accumulate bullion. One nation’s gain was presumed to be another’s loss. The resulting politics was one of treasure-seeking and beggar-thy-neighbor competition.
• Second, ordinary people could not be trusted with much freedom. The poor were assumed to be unruly, ignorant, and prone to disorder if left to their own devices. They needed to be governed coercively by elites, supposedly for their own good and for the stability of society.
• Third, economic thinking was overwhelmingly oriented toward supply and its control. Wealth came from controlling productive resources and commanding high prices for their output. Aggregate demand, especially demand from the poor, was barely recognized as a significant economic force. Ordinary people were primarily factors of production. They ate, worked, and reproduced, with no share of any surplus. The only real discretionary consumers were elites, who bought luxuries and commanded all surplus.
• Fourth, there was little reason to imagine most people doing anything other than agricultural labor. If something like 80% of the population was engaged in inefficient subsistence farming, that was simply the natural order of things. What else were they good for? Remove them from the fields and you would merely have millions of useless mouths to feed.

Cognitive Mercantilism

Now replace wealth with intelligence, and mercantilism with cognitive mercantilism. The parallels are almost embarrassingly direct.

• First, intelligence is imagined as a fixed resource embodied in human brains and the knowledge products mined from them. The objective of national and corporate strategy becomes attracting the best brains, controlling their output, accumulating intellectual property, and maintaining a favorable balance of knowledge trade. The cognitive mercantilist wants to hoard intelligence and its products like bullion. The global competition for talent becomes a treasure hunt for genius brains and the valuable knowledge species they can produce, which now includes AIs in addition to copyrightable culture and patentable inventions.
• Second, supposedly stupid people cannot be trusted to think for themselves. They need to be governed by cognitive elites, who know better and must regulate the behavior of the less intelligent for their own good. Democratizing intelligence is dangerous because the masses will misuse it, fall for nonsense, or unleash chaos. The assumption is that intelligence is safe only in the hands of those already certified to possess it.
• Third, the supply of intelligence is treated as the central economic fact. Controlling its production, preserving its scarcity, and maintaining high prices for brains and knowledge products (including AIs) are the primary concerns. The demand side barely registers. Less intelligent people are regarded as limited cognitive laborers and passive consumers of whatever knowledge products elites choose to provide. They are not imagined as significant sources of demand for intelligence in their own right, let alone as participants in its further production.
• Fourth, the cognitive mercantilist assumes that most people are not good for much intellectually. If 80% of humanity is occupied in low-grade cognitive labor, or simply muddling along without producing much intelligence at all, that is unfortunate but natural. Automating their cognitive work merely threatens to create billions of useless minds to occupy.

This last assumption is where the analogy gets especially interesting. The agricultural revolution that helped launch capitalism began overturning the apparent necessity of having most of humanity engaged in farming. Over the following centuries, improvements in agricultural productivity reduced the fraction of the population required to produce food from a large majority to a tiny minority in advanced economies. The result was not a world full of useless mouths. It was a world in which vastly more people could do things other than farm, while enjoying access to vastly more food.

I don’t know how to farm. I can barely keep a houseplant alive. Yet I can obtain an astonishing variety of foods, in quantities that would have seemed fantastical to an early modern peasant. My inability to produce food is economically almost irrelevant. What matters is that I can consume it, enjoy it, develop tastes for it, and devote my energies to other things.

The analogous possibility with AI is that most people will no longer need to be significant producers of intelligence in order to become significant consumers of it. And this is where cognitive mercantilism begins to look as quaint as its seventeenth-century predecessor.

The Revolution in Desire

One of the more fascinating elements of Appleby’s account is her emphasis on the emergence of new kinds of demand in Britain, well before the familiar story of steam engines, factories, and industrial capitalism really gets going. As international trade expanded, ordinary Britons began developing tastes for goods that had previously been luxuries reserved for the wealthy. Tobacco, tea, sugar, and colorful Indian cottons were among the commodities that helped create a new consumer culture. People began wanting things that were neither necessities of subsistence nor traditional markers of aristocratic status. And they were willing to voluntarily work harder to get them.

Appleby describes a striking increase in the number of days worked annually, from something like 250 to 300 (sometimes called the industrious revolution), before the Industrial Revolution. This was not simply a matter of landlords or factory owners coercing more labor out of unwilling workers. A significant part of the increase was voluntary, driven by the prospect of acquiring desirable goods. People worked more days, adopted more productive agricultural practices, entered new trades, and sought opportunities for earning larger cash incomes. The increase in productivity generated surplus incomes, which sustained the expanding demand for consumer goods, which in turn incentivized further increases in productivity. A virtuous cycle was taking shape.

This happened roughly a century before organized labor movements and socialism emerged as major political forces. By the late 20th century, this was the global default. Aggregate global demand was the “fortune at the bottom of the pyramid” as C. K. Prahlad put it.

There is an important historical inversion here. We are accustomed to thinking of the politics of labor primarily in terms of resistance to exploitation: the struggle to escape servitude, coercion, and the extraction of surplus by owners. That is certainly part of the story, and a very important part. But Appleby’s account suggests that another, equally fundamental force was at work: the desire to participate in an expanding universe of consumption opportunities.

Modern labor politics can be understood partly as the politics of relative deprivation in a society of expanding possibilities. Once people discover that there are desirable things beyond subsistence, and that their labor can earn them access to those things, the political question changes. It is no longer merely how to escape domination, but how to secure a fair share of the growing surplus and the opportunities it makes available.

Western do-gooders are often surprised to learn (for instance) that people in third-world slums are often willing to cut back on spending on food in order to buy a TV. This is a different kind of demand for freedom. Not merely freedom from coercion, but freedom to participate in the expanding possibilities of economic life.

Indeed, the two forms of freedom can become entangled. People may voluntarily work harder in pursuit of consumption opportunities, only to find themselves subject to new forms of exploitation as employers and institutions capture the benefits of their increased productivity. Labor politics then emerges not simply from the persistence of old forms of servitude, but from the tensions created by the new world of abundance itself.

The demand for a fair share of expanding consumption opportunities is arguably one of the defining political inventions of capitalism, broadly construed to include labor politics too (even Marx saw capitalism not as a dispensable phenomenon, but as a transient phase on the path to communist utopia). And this is a much more interesting model for thinking about the AI transition than the familiar story of automation replacing jobs.

The Cognitive Industrious Revolution

The entire intellectual economy has been organized around the assumption that intelligence is expensive to produce and therefore must be carefully rationed. Education, professional expertise, research, consulting, software development, and knowledge work more generally are all shaped by the high cost of cognitive production. AI is rapidly undermining that assumption. We are moving toward a world in which an ordinary person can command quantities and varieties of intelligence that would previously have required teams of highly trained specialists. Just as I can enjoy food without knowing how to farm, I can increasingly enjoy the products of intelligence without knowing how to produce them myself.

The crucial economic question then becomes not how much intelligence people can produce, but how much intelligence they can find uses for. And there is no obvious upper bound on that demand.

This is not simply a matter of everyone consuming more answers, reports, software, or entertainment. Abundant intelligence changes what people can want in the first place. It makes previously unimaginable projects feasible, previously inaccessible domains explorable, and previously unaffordable curiosities worth pursuing. The demand for intelligence is not a fixed appetite waiting to be satisfied. It is itself something that can grow as the cost of satisfying it falls.

Here the analogy with the early modern consumer revolution becomes especially suggestive. Just as colorful Indian cottons and imported tobacco stimulated new desires, and new desires stimulated greater voluntary labor and more productive forms of work, abundant intelligence may stimulate a new wave of voluntary cognitive effort, and open up new ways in which you can work harder.

Many people who appear stupid are not incapable of thought. They are simply not particularly motivated to think, given the poor returns available to them. Why expend significant cognitive effort when you lack the knowledge, tools, institutional access, or intellectual leverage to do anything interesting with the results? Abundant AI changes that calculation. Someone who previously had little reason to think hard about a problem may suddenly discover that a modest investment of attention unlocks enormous possibilities. They can build something, investigate something, understand something, or pursue an ambition that was previously out of reach. The returns on attention rise, and with them the incentive to pay attention.

The early capitalist worker voluntarily increased annual working days from 250 to 300 because a new universe of desirable goods had become accessible. The AI-enabled thinker may similarly increase the amount of voluntary cognitive effort they expend because a new universe of intellectual consumption has become accessible. This has certainly been the case with me. I’m suddenly willing to work significantly harder compared to even a year ago, because a lot more is suddenly within reach. We might call this a cognitive industrious revolution, preceding and perhaps enabling a fuller AI industrial revolution.

This does not mean that intelligence becomes irrelevant as a human capacity. Quite the opposite. Just as abundant food supported the emergence of elaborate culinary cultures rather than eliminating interest in cooking, abundant intelligence may stimulate increasingly sophisticated cultures of thought. People may become more intellectually ambitious precisely because they no longer have to do all the cognitive production themselves.

And if this happens, the politics of AI will likely evolve in a manner analogous to the politics of industrial capitalism. The central political demand may not be for the preservation of existing cognitive jobs, any more than the enduring political demand of in