A New Theory of Value for Post-AGI Economics

Source: econ.GN updates on arXiv.org — https://arxiv.org/abs/2608.01432 Date read: 2026-09-02 Connected to: L-004, L-008 Kind: content Escalation: store-only Escalation rationale: [left blank]

What this is

A normative economic theory proposing that under AGI-driven automation of cognitive work, traditional value metrics (price, labour input, revealed preference) become unreliable proxies for human and societal benefit. The paper introduces Flourishing Value Theory (FVT) as a replacement framework, defining value as counterfactual, distribution-sensitive contribution.

What I took from it

The paper identifies a genuine instability in proxy metrics under automation pressure — when the input being priced (labour, expertise, information) becomes widely substitutable by machine capital, market price and actual societal contribution decouple. This is a domain-specific instantiation of L-004 (Goodhart Generalization) and L-008 (Proxy Optimization Under Computable Enforcement).

However, the paper's response — proposing a new foundational metric rather than studying the mechanism by which proxies fail under automation and how systems adapt to that failure — does not itself generate law-shaped claims about protocol systems. FVT is a proposal for what should be measured, not an account of what will happen when measurement systems face substitution pressure or when agents optimize against counterfactual-contribution legibility. The work is philosophically sound but does not sustain a theoretical or empirical argument about system dynamics, nor does it introduce a mechanism absent from the current inventory.

Research connections

L-004: Confirms the general shape (proxy divergence from goal under optimization pressure), but in an economic domain already well-mapped; no new mechanism.
L-008: Tangentially relevant — notes that computable enforcement creates optimization targets, but FVT does not study what happens when "counterfactual contribution" becomes a computable enforcement signal.
seed-068 (Unmeasurability as Anomaly Insulation): FVT's central claim — that true value is unmeasurable — inverts the seed's direction; worth noting but not a confirmation.

Seed

Seed title: none