Essay: AI panic is 'cognitive mercantilism', a zero-sum view of intelligence

The essay's author says that while reading Joyce Appleby's The Relentless Revolution: A History of Capitalism (2010), he arrived at a thought: AI panic is really a form of cognitive mercantilism. He regards market capitalism as the first planetary intelligence, as he says many people do, and so finds the parallels close.

As the author tells it, Appleby's central argument is that capitalism was not the inevitable expression of a timeless human instinct to trade and accumulate. It was a historically contingent cultural invention, enabled by agricultural improvements, expanding trade and changing ideas about work, wealth and human nature. It required escaping an older, 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 only labor to be commanded.

The mercantilist worldview, per Appleby, rested on roughly four interlocking beliefs. First, wealth was scarce and finite (land, its produce, precious metals), so statecraft meant controlling territory and bullion, and one nation's gain was another's loss. Second, ordinary people could not be trusted with much freedom and had to be governed coercively by elites for their own good. Third, economic thinking was oriented toward supply and its control; demand, especially from the poor, barely registered, and only elites were discretionary consumers. Fourth, there was little reason to imagine most people doing anything but agricultural labor: if something like 80% of the population was in inefficient subsistence farming, that was the natural order, and removing them from the fields would just create millions of useless mouths.

The author then swaps wealth for intelligence. The cognitive mercantilist imagines intelligence as a fixed resource embodied in human brains and the knowledge products mined from them (now including AIs, alongside copyrightable culture and patentable inventions). Strategy becomes attracting the best brains, controlling their output, accumulating intellectual property and hoarding intelligence like bullion. Supposedly stupid people cannot be trusted to think for themselves and must be governed by cognitive elites, since democratizing intelligence is dangerous and it is safe only in the hands of those certified to have it. Supply is treated as the central economic fact and demand barely registers; less intelligent people are seen as limited cognitive laborers and passive consumers. And if 80% of humanity is occupied in low-grade cognitive labor, automating that work merely threatens to create billions of useless minds.

The author finds the last assumption the most interesting. Agricultural productivity cut the share of people needed to grow food from a large majority to a tiny minority in advanced economies, and the result was not useless mouths but far more people doing other things while enjoying far more food. He cannot farm and can barely keep a houseplant alive, yet he can buy an astonishing variety of food; his inability to produce it is economically almost irrelevant. 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.

Under the heading "The Revolution in Desire", he turns to Appleby's account of new demand in Britain well before steam engines and factories. Ordinary Britons developed tastes for tobacco, tea, sugar and colorful Indian cottons, once luxuries, and were willing to work harder to get them. Appleby describes a rise in the number of days worked annually, from something like 250 to 300 (sometimes called the industrious revolution), before the Industrial Revolution. A significant part of that increase was voluntary, driven by the prospect of desirable goods. Higher productivity produced surplus incomes, which sustained demand, which spurred more productivity, a virtuous cycle. This happened roughly a century before organized labor movements and socialism emerged as major political forces; by the late 20th century aggregate global demand was, in C. K. Prahlad's phrase, the "fortune at the bottom of the pyramid".

The author draws a historical inversion from this. Labor politics is usually read as resistance to exploitation, which is part of the story, but he says another force was the desire to join an expanding universe of consumption. Modern labor politics can be understood partly as the politics of relative deprivation in a society of expanding possibilities, and the two kinds of freedom (from coercion, and to participate) can become entangled. He offers the example that people in third-world slums are often willing to cut spending on food to buy a TV. He calls this a more interesting model for the AI transition than the familiar story of automation replacing jobs.

Under "The Cognitive Industrious Revolution", he argues the whole intellectual economy (education, professional expertise, research, consulting, software development, knowledge work) is organized around the assumption that intelligence is expensive and must be rationed, and AI is undermining that assumption. An ordinary person can increasingly command quantities and varieties of intelligence that once took teams of specialists. The crucial question becomes how much intelligence people can find uses for, and there is no obvious upper bound on that demand. Abundant intelligence changes what people can want: it makes unimagined projects feasible and unaffordable curiosities worth pursuing, so demand for intelligence can itself grow as the cost of satisfying it falls. By analogy with cottons and tobacco, abundant intelligence may stimulate a new wave of voluntary cognitive effort. The text then breaks off mid-sentence, at the start of a point that begins "Many people who appear stupid are not incapabl".

Key facts

The author argues AI panic is 'cognitive mercantilism': the old belief that wealth is fixed and must be controlled, applied to intelligence.
He draws on Joyce Appleby's The Relentless Revolution: A History of Capitalism (2010), which presents mercantilism as resting on roughly four interlocking beliefs: scarcity, distrust of ordinary people, a supply-side focus, and the assumption that most people can only do farm labor.
The central analogy: as most people now eat well without farming, most may become significant consumers of intelligence without being significant producers of it.
Per Appleby, days worked annually in Britain rose from something like 250 to 300, partly voluntarily, driven by new consumer tastes, roughly a century before organized labor and socialism became major political forces.
The author says there is no obvious upper bound on demand for intelligence and that abundant intelligence may stimulate a new wave of voluntary cognitive effort.

Why it matters

The essay offers a different frame for the AI jobs debate. Instead of automation replacing workers, it asks what happens when a scarce resource becomes cheap and demand for it grows. It casts fear of AI as the intellectual descendant of zero-sum thinking: hoarding talent and intellectual property, distrusting ordinary people with intelligence, and treating most people as cognitively useless. The author sets this against the historical shift to capitalism, when people discovered that wealth could be created rather than merely captured.

Who it affects

The argument is aimed at anyone shaping or reacting to AI policy and strategy: the national and corporate strategists who, in the author's telling, chase the best brains and intellectual property, and the cognitive elites he says want to govern the less intelligent. It also speaks to ordinary people, who the essay suggests may become significant consumers of intelligence without having to produce much of it, and to knowledge workers in education, research, consulting and software, whose fields are organized around the high cost of intelligence.

How to use it

There is no product, tool or price here. The essay works as a lens for reading AI debates: when an argument assumes intelligence is a fixed stock to be guarded, or that most people cannot be trusted with it, the author would call that cognitive mercantilism. His own test question is how much intelligence people can find uses for, rather than how much they can produce.

How solid is it

This is an opinion essay built on analogy. Its historical claims come from the author's retelling of Appleby's book, and the 80% figures in his argument are assumptions attributed to mercantilists and cognitive mercantilists, not measurements. The essay gives no empirical data on AI adoption, jobs or labor markets, and names no specific AI product, company, regulation or event. Its forward-looking statements are framed as possibilities ("may", "the analogous possibility"). The available text breaks off mid-sentence, so any conclusion the essay reaches is not visible.

Risks and caveats

An analogy is not a forecast. The essay contrasts its model with the familiar story of automation replacing jobs but does not say that AI will not displace jobs, and it gives no timescale. The author himself notes that the two kinds of freedom can become entangled: people who work harder to consume may find employers and institutions capturing the benefits of their added productivity. The essay's framing also assigns the elite-control view to the cognitive mercantilist as a characterization, not to any named person or group.

“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.”

— From the essay "Cognitive Mercantilism" on contraptions.venkateshrao.com