Academic writing
The Agentic Economy
Technological renewal and the distribution of prosperity.
Abstract
Active labour market intervention has traditionally been assessed by its contribution to employment. Lange and Marrocco's earlier chapter argued that prolonged support for obsolete activity can delay creative destruction and economic catch-up. Its chronological strategy combined initial wage increases and high-technology investment subsidies with subsequent wage restraint to support reinvestment and skilled labour demand, accepting an initial unemployment cost. This chapter continues the investment and learning argument while withdrawing that wage sequence as a general prescription. Artificial intelligence connected to tools and delegated authority can alter the relationship between productive investment and human work. A task-based analysis distinguishes output growth from employment, earnings and household participation in returns. A demand-and-task decomposition, incorporating labour savings, price pass-through, demand elasticity and new-task creation, exposes the conditions under which renewed production fails to restore labour income. Two jointly designed policy functions replace the earlier wage stages: creating dependable productive capability and securing participation in its benefits. Ownership rights, financed distributions, guaranteed AI access, verified task-output profiles and effective public control are examined within an institutional framework for computational productive capacity. The chapter formulates five testable hypotheses and quasi-experimental comparison designs oriented towards productive renewal with durable economic participation.
Research status and authorship
This is a conceptual chapter prepared for editorial consideration. It reports no new data or causal estimates. The proposed hypotheses and institutional arrangements require empirical testing.
Dominic Marrocco is the sole author of the new material. The historical starting point is Thomas Lange and Dominic Marrocco’s 2012 chapter, Unemployment and Active Labor Market Intervention: Pay for Delay? Thomas Lange was not involved in developing this extension; no endorsement is implied. AI assistance was used in drafting and preparing conceptual illustrations.
The connection to the Island
The Manx strategy applies the chapter’s distinction between productive capability and economic participation. It asks whether trusted institutions can support useful delegation while residents retain claims on its benefits and public bodies retain practical authority.