The Economics of AGI: Why Verification Is the New Scarcity w/ Christian Catalini
MIT economist Christian Catalini joins Ryan and David to unpack his new paper, "Some Simple Economics of AGI," which argues that the scarce resource in the AI economy is no longer intelligence but verification: the human capacity to check, judge, and certify that AI output is correct. Christian walks through the two cost curves reshaping every industry (cost to automate vs. cost to verify), explains why entry-level jobs are collapsing first through what he calls the "missing junior loop," why even top experts are unknowingly training their replacements (the "codifier's curse"), and maps out the three roles that survive the transition: Directors, Meaning Makers, and Liability Underwriters.
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TIMESTAMPS
0:00 Intro
3:42 The Low-Grade Panic
6:43 Who Gets Hit First, and Hardest?
13:06 Coding as Canary, or Exception?
16:21 Human Cognition Was the Binding Constraint
19:59 What Is Verification, Exactly?
29:10 The Codifier's Curse
31:21 The Expanding Iceberg: Non-Measurable Work
38:32 The Two Racing Cost Curves
41:59 Trojan Horse Externality
48:46 The Four Quadrants: Where Do You Want to Be?
54:12 Liability Underwriters and the Venture Capital Parallel
55:41 Directors: Navigating Unknown Unknowns
59:49 60-80% of Your Job Can Be Displaced
1:06:24 Button Pushers vs. Founders: The Great Resorting
1:12:08 The Luddite Risk: Political Backlash Against AI
1:17:30 What Companies and Investors Should Do
1:22:56 The Crypto Connection
1:25:11 Don't Panic: A Closing Playbook
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RESOURCES
Christian Catalini
https://x.com/ccatalini
Some Simple Economics of AGI
https://arxiv.org/html/2602.20946v2
Christian’s thread on his paper
https://x.com/ccatalini/status/2026311784421036223
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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures
AI Just Gave You Superpowers — Now What?
A new paper, “Some Simple Economics of AGI,” is making the rounds—Web3 with a16z we sat down with author Christian Catalini (MIT Crypto Economics Lab) and Eddy Lazzarin (CTO of a16z crypto), in conversation with Robert Hackett, to unpack what AGI could mean for work and markets.
EPISODE NOTES:
A hot paper — "Some Simple Economics of AGI" — has been making the rounds, so we sat down with the author, covering:
Automation vs. verification: the key economic split
Why AI agents now feel like coworkers - What's happening to junior roles and the “codifier’s curse”
The “AI sandwich” structure for firms
The value of "meaning-makers," consensus, and status economies
Why crypto may become essential infrastructure for identity, provenance, and trust
Two possible futures: a hollow vs. augmented economy
Featuring Christian Catalini (founder of MIT Crypto Economics Lab) and Eddy Lazzarin (CTO of a16z crypto) in conversation with Robert Hackett, our discussion dives deep into how automation is reshaping labor markets, as well as the nature of intelligence.
What do these changes mean for startups, the future of work, and your career?
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Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
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A Libra Co-Creator on How Facebook Will Make Money From Calibra - Ep.144
Christian Catalini, co-creator of Libra and chief economist at Calibra, explains why Facebook made the design choices it made for Libra, reveals whether the team was prepared for the regulatory blowback it received after publishing the white paper, and talks about what it means for Libra now that nearly all the initial payment company members have left the Association. He describes how Facebook defined stability for Libra, whether the Chinese renminbi could ever be added to the reserve the way it is part of the IMF special drawing rights basket, and if so, what the Libra or Calibra would do if the Chinese government tried to censor individuals or transactions in the system. We also cover the tension between the desire to have strong know-your-customer and anti-money laundering processes on the platform but then also to bank the unbanked, who often don't have strong government identification. We also discuss how Facebook will make money from Calibra, what it would take for Facebook to let the Libra Association go forward without it, and why Facebook, which not too long ago was trying to woo China to enter the Chinese market, now says it is the best counterweight to a Chinese digital yuan. Plus, he answers how Facebook and Calibra will handle privacy.
Thank you to our sponsors!
Crypto.com: https://crypto.com/
Kraken: https://www.kraken.com/
CipherTrace: http://ciphertrace.com/unchained
Episode links:
Christian Catalini: https://twitter.com/ccatalini
Libra: https://libra.org/en-US/
Calibra: https://calibra.com/
Libra white paper: https://libra.org/en-US/wp-content/uploads/sites/23/2019/06/LibraWhitePaper_en_US.pdf
Letters to payment companies from Congress: https://www.schatz.senate.gov/imo/media/doc/Signed%20Letters%20re%20Libra%20to%20Patrick%20Collison,%20Ajaypal%20Banga,%20and%20Alfred%20Kelly.pdf
Mark Zuckerberg's testimony in front of Congress: https://www.c-span.org/video/?465293-1/facebook-ceo-testimony-house-financial-services-committee
Reported breakdown of the Libra reserve: https://www.reuters.com/article/us-facebook-libra-basket/u-s-dollar-to-be-main-currency-underpinning-facebooks-libra-spiegel-idUSKBN1W522K
Calibra — can send money at low to no cost: https://newsroom.fb.com/news/2019/06/coming-in-2020-calibra/
Chargebacks in Libra: https://www.theverge.com/2019/6/18/18682838/facebook-digital-wallet-calibra-libra-cryptocurrency-kevin-weil-david-marcus-interview
Asian central banks not too open to Libra: https://www.bloomberg.com/opinion/articles/2019-10-22/facebook-scaling-back-libra-will-please-asian-central-banks
Unconfirmed interview about UN work with blockchain-based vouchers: https://unchainedpodcast.com/the-un-world-food-programmes-blockchain-based-food-vouchers-for-syrian-refugees-with-robert-opp/
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