The Times They Are A-Changin’, 20th April 2026: Is Progress Impossible Without Change?

“We are programmed just to do
Anything you want us to” 

The Austrian political economist Joseph Schumpeter coined the term “creative destruction” to describe the capitalist process where innovation continuously dismantles old industries, creating new ones.

The theory being that continual transformation drives productivity and economic growth by replacing outdated technologies and business models with superior alternatives, though it causes temporary disruption and job losses. 

This has been true of change since the dawn of the industrial revolution as mechanisation first replaced workers. However, the onset of Artificial Intelligence (”AI”) with “smart machines”- able to both think and learn – the potential impact on jobs and economies will be profound. 

I have always feared that the impact deindustrialisation had on blue-collar jobs in developed economies, such as the UK and US, will be repeated by the impact of AI on white-collar jobs. 

The progress in AI has been such that governments are playing catch-up, trying to understand the potential changes in working practices. This is being exacerbated by already moribund economies suffering from rising unemployment, economic uncertainty, and minimal growth. 

‘the onset of Artificial Intelligence (”AI”) with “smart machines”- able to both think and learn – the potential impact on jobs and economies will be profound’

Trump’s futile and illegal war with Iran is causing higher energy prices and shortages of raw materials for use in industry and agriculture. This, in-turn, increases business costs which, coupled with the labor-saving technology offered by AI, could see unemployment rise considerably. 

Of course, technological progression is nothing new and, in the past, whilst some sectors suffered and even disappeared altogether, ultimately, more jobs were created than lost. Traditionally, progression, along with economic growth, has created, however, with AI it is hard to see where those opportunities are. 

There is the temptation to say it will be different this time. Whilst this has rarely been the case in economics, this time might be the exception. 

The jobs created by AI will be lower paid. Previously, mechanisation allowed workers to do more creative tasks, however, with AI, it might be machines doing the clever stuff leaving workers with more menial tasks. 

 A report by the research group Citrini suggest that “AI is now a general intelligence that improves at the very tasks humans would redeploy to. Displaced coders cannot simply move to “AI management” because AI is already capable of that.”  

In this scenario, white-collar workers are forced into the gig-economy jobs, which, in-turn suppresses wages in the sector. These job losses drive down consumer spending, leaving companies facing weakening demand, which forces them to further invest in AI rather than workers. 

‘any benefits from AI will benefit only the minority, with the majority facing the prospect of mass unemployment’

This is “a feedback loop with no natural brake”, Citrini writes. The consequences are far-reaching when the wallets of the 10% of US workers who account for 50% of consumer spending are suddenly shut. 

If this scenario plays out, job losses will ripple out into broader economy through defaults in private credit and a mortgage crisis. 

Private credit firms, or non-bank lenders, have financed a number of software businesses in recent years, with loans based on those businesses’ predicted annual revenue far into the future.  

As with 2008, these defaults would have far-reaching implications, as the capital on the balance sheets of the asset managers includes life insurance policies and “the savings of American households”. 

There will also be negative implications for private debt, as white-collar workers no longer have white-collar jobs and, as a result, are unable to make repayments on their mortgages home loans.  

‘white-collar workers no longer have white-collar jobs and, as a result, are unable to make repayments on their mortgages home loans’  

Citrini’s research concludes, with the prediction that no financial policy tools exist to address this crisis, because it is happening in the real economy – job losses and suppressed wages and spending – is not a result of tight financial conditions that central banks can address, but of investment in AI, which makes “human intelligence less scarce and less valuable”. 

The knock-on effect of all this is a market crash driven by the mortgage market, which sees the S&P fall 57%. 

Until now, the index has worried that AI might fail to live up to the hype, whereas the Citrini report shows what could happen if the claims for smart machines prove to be right. In which case, the US, which has been quickest to embrace AI, would be the most vulnerable. 

In the UK, our economy and stock market are less driven by AI, but, a crash of the nature Citrini suggests will, as with the GFC, have a global impact, and, along with other economies the impact of the Iran war means our own economy is far from robust 

‘a crash of the nature Citrini suggests will, as with the GFC, have a global impact’

Research by the EY Item Club finds that 250,000 people could lose their jobs by mid-2027 as Britain “flirts with recession” after business confidence was shattered by the US-Israel war on Iran. 

This would mean that 5.8% of the working population will be unemployed, up from the current five-year high of 5.2%. If this forecast is correct, that would increase the number of jobseekers from 1.87 million to more than 2.1 million. 

Growth is projected to halve from 1.4% in 2025 to 0.7% this year, choking off the gathering momentum that had been reflected in February’s better-than-expected rise in GDP. 

‘the unemployment and ghost towns created by the deindustrialisation of the 1980s pale into insignificance when compared with what AI might lead to’

My fears of a repeat of the unemployment and ghost towns created by the deindustrialisation of the 1980s pale into insignificance when compared with what AI might lead to. 

Politically, aside from demonstrations and anti-capitalism demos, what politicians will arise from the ashes?  

The current wave of right-wing populists in many countries have found support in deindustrialised regions such as the Rust Belt in the US and our own Red Wall. 

Inequality will be rife too; any benefits from AI will benefit only the minority, with the majority facing the prospect of mass unemployment. 

“Man Machine, pseudo human being
Man Machine, super human being 

Today, we consider the potential impact of AI, something that has worried me previously, but not in quite the way the Citrini report envisages.

Their thoughts contain much logic, and there are distinct parallels with the deindustrialisation of the 1980s. Then, traditional heavy industries such as iron and steel, shipbuilding, and coal mining suffered; today, the impact of AI will not be so localised.

I am a well-known Luddite, but this time around the impact on jobs truly scares me.

It’s hard not to foresee mass unemployment and social unrest as people search for solutions.

Lyrically, there was only one possible choice: Kraftwerk. We open with “The Robots”, and end with “The Man-Machine.”

Leisure will take on a whole new meaning, assuming we can afford it!

Philip.

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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