The Age of Artificial Intelligence Labor Force Transformation, Productivity Expansion, and the Paradigmatic Reconstruction of Distributive Economics

Abstract

Generative artificial intelligence, autonomous agents, and embodied intelligence are extending the range of cognitive and physical tasks that machines can perform. This development places new pressure on the conventional assumption that labor and capital are complementary inputs. This paper examines the changing explanatory scope of the Cobb-Douglas production function, labor-value theory, and human-capital theory under conditions of advanced automation. It distinguishes task substitution, occupational restructuring, and the complete withdrawal of labor from production, and argues that these propositions should not be conflated. A set of formal expressions is used to clarify the relationships among automation, labor income, effective demand, and the sharing of returns to intelligent capital. The analysis further considers universal basic income, data governance, and human development as possible elements of an institutional response. The paper does not predict a fixed timetable for technological displacement.