The Economics of AGI: Why Verification Is the New Scarcity w/ Christian Catalini

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Technology, Tech News, News

4.7 • 1.2K Ratings

🗓️ 26 March 2026

⏱️ 86 minutes

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Summary

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. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔮POLYMARKET | #1 PREDICTION MARKET https://bankless.cc/polymarket-podcast 🪐GALAXY | INSTITUTIONAL DIGITAL FINANCE https://bankless.cc/galaxy-podcast 🏅BITGET TRADFI | TRADE GOLD WITH USDT https://bankless.cc/bitget 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 🐇MEGAETH | 1ST REAL-TIME BLOCKCHAIN https://bankless.cc/megaeth --- 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 --- 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 --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Transcript

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0:00.0	Welcome to bankless, where today we explore the frontier of AI is going to take our job and how can we survive the transformation.
0:10.0	This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless.
0:15.9	David and I read a paper and a thread corresponding to that paper. It's called The Simple Economics of
0:22.6	of AGI. And one of the writers of that paper is on the podcast today. His name is Christian
0:27.2	Catalini. He's an economist. He is an MIT scientist. Fun fact, David, he was actually
0:32.3	one of the creators of the original Diem project over at Facebook. Do you remember that? Oh, wow. I did not know that. That whole time we just interviewed him. He's been in cryptocurrency for over a decade. In fact, about 10 years ago, he wrote a paper called some simple economics of the blockchain. So he was all over crypto when it was new, and now he's coming back to AI talking about economics yet again.
0:54.7	Yeah, he seems a little bit like a Robin Hansen type of he's putting models onto cultural
1:00.2	phenomena and trying to provide answers to him. Mainly the knowledge that we tried to get out of
1:06.5	him is if AI is going to commoditize a lot of easy tasks, where does the value go? If we're just
1:15.7	automating the foundations of like the push button jobs of society, where do people go next?
1:24.0	And that's basically the team of the episode and the question that Christian answers in the pod.
1:27.9	Really important episode. I think it's on everyone's mind. The core argument of this paper is that the
1:32.4	scarce resource is no longer intelligence, the things between our ears, our brains. It's verification
1:38.6	and the human capacity to check on AI and its output. There's a lot of implications following that from that
1:46.0	idea. So let's get right to the episode. But before we do, I want to thank the sponsors that made
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