Opinion | Why state capacity matters in an era of AI-driven inequality

Name: Overworked and underpaid: why is Japan’s animation industry still standing up against AI?
Uploaded: 2026-03-11T08:30:07.000Z
Duration: 8 min 58 s
Description: Overworked and underpaid: why is Japan’s animation industry still standing up against AI?

Warnings that AI-driven wealth concentration could trigger economic collapse overlook the state’s role – governments can renegotiate the social contract to preserve stability

3-MIN READ3-MIN

Listen

Shoppers walk past a humanoid robot selling toys in a shopping mall in Beijing on February 28. China’s common prosperity agenda, despite its imperfections, reflects an explicit recognition that unchecked inequality is a systemic risk. Photo: AP

Shaoshan Liu

Published: 4:30pm, 11 Mar 2026

Recent analysis by Citrini Research has sparked debate by arguing that artificial intelligence could trigger a severe economic crisis within the next few years. In a widely circulated essay titled “The 2028 Global Intelligence Crisis”, Citrini outlines a scenario in which AI-driven productivity rises rapidly while employment and wages collapse, producing what it calls “ghost GDP”: output without purchasing power, profits without consumers and growth statistics disconnected from lived economic reality.

The underlying economic mechanism could be internally coherent. AI is not simply another labour-saving technology; it is a capital-intensive, scale-driven system that concentrates economic power by design. By automating cognitive tasks that have historically sustained middle- and upper-middle-class income, such as software development, legal analysis, finance, research and management, AI shifts value creation away from individual labour and towards ownership of models, data, compute and distribution platforms.

As these systems scale, returns increasingly accrue to a small number of capital holders rather than a broad workforce. Aggregate gross domestic product may continue to rise, yet income distribution inevitably narrows. Because machines neither earn wages nor consume discretionary goods, an economy dominated by AI tends towards wealth concentration without corresponding demand, a structural imbalance that markets alone cannot resolve.

Where the Citrini argument becomes less convincing is not in its economic logic, but in its political premise. The scenario implicitly assumes that governments will respond to AI disruption with institutional inertia, that fiscal and distributive arrangements remain fixed even as the foundations of production shift. This assumption runs counter to the classical justification for government itself.

In social contract theory, whether set out in Leviathan by Thomas Hobbes, Two Treatises of Government by John Locke or The Social Contract by Jean-Jacques Rousseau, the legitimacy of the state rests on its capacity to sustain order, consent and social cohesion when unregulated arrangements generate outcomes that individuals cannot remedy on their own.

While markets are powerful mechanisms for allocating resources and coordinating activity, classical and modern political economy alike recognise that they do not, by themselves, produce socially stable distributional outcomes. When economic structures change, governments are therefore compelled to renegotiate the terms of the social contract to preserve legitimacy and stability.

08:58

Overworked and underpaid: why is Japan’s animation industry still standing up against AI?