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AI + Population Collapse = The World as a Small Town

AI + Population Collapse = The World as a Small Town

Last updated on: July 9, 2026 at 6:00 am by Gene Veith

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AI + Population Collapse = The World as a Small Town 2026-07-05T12:28:44-04:00 Gene Veith

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I have been critical of the AI revolution, but economist Tyler Cowen offers a more optimistic take. He argues that the combination of AI and the fertility crash will turn the world into a small town with all of the small town virtues.

Cowen has written a piece for The Free Press entitled The Fertility Crash Will Make the World a Small Town with the deck, “Plummeting birth rates will hollow out cities and deflate the housing market. Meanwhile, artificial intelligence will force humans to find ways to stand out.”

Basically, he says that AI is coming at a good time: right on the verge of a population collapse. That way, it will take over human jobs when there won’t be enough human beings to take them. And since there will be fewer human beings, the few that will still exist will become more valuable.

I will share his main points, then offer my still-critical-and-skeptical comments about them.

The first and most obvious result is that the relative financial returns to being human will go up. Humans still will be needed for many jobs, especially if those jobs require manipulation of the physical world in complex or idiosyncratic ways, or if they require the expression of human charisma and persuasion. Entrepreneurs, entertainers, politicians, and gatherers of original data are still likely to be humans.

With so much wealth being produced by the AIs, those humans will earn very high wages. You might also be worried that a lot of human jobs will go away, due to the capabilities of the AIs. Whether or not that is true, if the number of humans continues to shrink, the elimination of human jobs will be less of a concern. It might sound crazy, but maybe our gardeners and (non-famous) stand-up comedians will earn half a million dollars a year. People who were displaced as computer programmers did not leave enough descendants for that to be a permanent problem.

So the jobs that will be left will be those that “require the manipulation of the physical world.” That is to say, manual laborers. But at least they will be well paid for once. I do not at all begrudge gardeners making half a million dollars a year. Finally, blue collar workers will draw a high salary. And that those will be pretty much the only jobs for most Americans will be good for their characters.

But what about people who are no good with their hands? Who have no manual skills? Or who hate gardening, despite the high financial returns? What about people whose only talents are in the soon-to-be-obsolete white collar fields? Yes, they had their moment when they were the ones raking in the big bucks, so it’s only fair that they switch places on the social and economic pecking order with the proletariat, but we should still wonder what will happen to them.

The only other career track will be jobs that “require the expression of human charisma and persuasion.” So we will still have politicians, entertainers, and bad stand up comedians. (I wonder if we will still need entertainers, since AI can generate all the music, books, art, movies, and actors necessary to keep all the wealthy gardeners entertained. Also comedians, since the Chatbots can generate jokes that will probably be funnier.)

So our society will consist of well-paid manual laborers, plus politicians and entrepreneurs to think of more uses for AI. No one will really need an education of any kind. Unlike Cowen, I am not an economist, but I don’t understand how AI will create so much wealth if there are very few people to consume what they make. Or how paying gardeners and bad comedians a half million dollars–without regard to their productivity, that is, what they contribute to the economy–can be sustainable. If the supply increases, while the market shrinks, doesn’t that mean the prices go down? I suppose that could make things affordable even for the out of work scientists, teachers, and computer programmers, but how could the entrepreneurs make money?

And where will the $500,000 to pay the gardener come from? The only people who will be able to afford gardeners will be other gardeners!

Cowan also says that the shrinking population will bring housing costs down, since we will have this huge stock of houses with fewer people to live in them. He is surely right there, though it will also mean that since most people’s wealth today is tied up in the value of their homes, the original owners and their heirs will lose pretty much everything they have.

Cowan also thinks this shrunken society will become a friendlier place:

Each individual will be seen as something special by the other humans. Public spaces will be emptier, so anyone out in public will attract more notice. If you are waiting in line at the movie theater, you will be more likely to start talking to the person next to you. After all, you already have had the option of talking to the AIs all day long.

It has long been the norm in American small towns that you say hi to the people you pass on the sidewalk, or perhaps start chatting with customers in your store who appear to be outsiders. Those kinds of practices will spread to the large cities of today, which will become like smaller towns due to lower population density.

That would be nice. But then Cowan seems to contradict himself:

Many of these humans will invest heavily in their appearances, in their charisma, and in their “vibes.” After all, the AIs will, and already do, perform so many useful informational functions. If you, as a human, wish to draw attention to yourself and be seen as noteworthy, you will have to specialize in the remaining human functions. That may include “touching grass,” giving warm and appropriate hugs, looking good or at least looking interesting, and having some kind of unique identity that either is visible upon meeting or which AI smart glasses will communicate during social interactions. (“This guy has sailed around the world three times and punched a shark on the nose.”)

Cowen goes on to say that the “looksmaxxing” of today’s YouTube influencer Clavicular will become the norm, as people will invest more in clothes, makeup, plastic surgery, and weight loss drugs. “A lot of ordinary social interactions will become more like a gala,” Cowen says, “where everyone shows up wanting to look a very particular way to draw attention.”

But if “each individual will be seen as something special,” why would you have to go to special trouble to stand out?

He says that in this world, one’s reputation will become highly important. Hopefully, he says, this will incentivize better behavior. It should; otherwise, in this new small town climate, malicious gossip will flourish, the dark side of small town culture.

But what will be the basis of reputation? No one will really have much of an opportunity to accomplish much or contribute to society, since AI will take care of that burden. I suppose looks and charisma would be all that remains, as Cowen says. Thus the few human beings still remaining would be rendered shallow.

Cowen’s optimism makes me even more pessimistic. What he sees as a utopia sounds more to me like a dystopia.

Photo: Tyler Cowan. The uploader on Wikimedia Commons received this from the author/copyright holder., CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=2563869

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