If you put all the pieces together, the rise of AI suggests that the welfare state will collapse - distribution of national income and corresponding tax base shifts from 70/30 labor/capital (current ratio) to something more in favor of capital. Doesn’t have to be 0/100. Maybe just 60/40. - taxing capital is much harder because it is mobile - as recent examples have demonstrated - AI exacerbates this by reducing headcount and making corporates even more mobile - if the welfare states also do not control control production inputs (AI DC, GPUs), they have little capital assets to tax. They will respond by banning AI / requiring a human in the loop to rubber stamp / taxing foreign AI corporates via “fines” - generally speaking countries with high welfare states also are not prime nexuses of capital formation (for obvious reasons), so this will be a perfect storm. Have to sustain huge expenditures and no domestic capital base to harvest - response: welfare states won’t do nothing. Yes- they will ban AI, especially hard to tax foreign AI firms, and promote domestic champions + protect human white collar guilds. These are all uncompetitive measures and will further retard growth. This will put additional pressure on ability to finance welfare state.