Atomic Economics
Sangeet Paul Choudary on designing an AI-first economies, the dangers of being locked into legacy atomic units of value and how building around fundamentals different atomic units of value unlock new sources of innovation, economic logic and institutional infrastructure:
Principles of new economic architecture
New economies emerge not simply when a technology speeds things up, but when the atomic unit of value shifts, and when its constraints are standardized, and when new systems of coordination and measurement grow around it.
Faster trains and faster messages mattered, but the real transformation came when the letter gave way to the coded message as the atomic unit of communication. The constraint of brevity in telegraph codes created the reliability that made larger systems workable, and managerial capitalism grew on top of that reliability.
The decisive change comes when
- A new atomic unit stabilizes,
- Its constraints and limits are widely accepted as the new standard, and
- Those constraints allow new markets and institutions to grow around it.
As for incumbents, the structures that made them strong are all tuned to the old atomic unit.
To adopt the new one, they would have had to dismantle the very systems that supported them. So they copy features and borrow tools but remain locked into old incentives.
It is not speed or vision that determines the outcome, but structural alignment.