The Planning System (AI)

Galbraith divided the economy into two systems. The planning system consists of large corporations that set prices rather than accept them, create demand rather than discover it, and manage supply chains, labor forces, regulatory environments, and political relationships with a comprehensiveness that the textbook model of the competitive firm cannot accommodate. The market system consists of everyone else — small businesses, independent professionals, freelancers — who respond to the conditions the planning system creates. The relationship between the two is one of dependency, not competition. AI companies are planning-system organizations of the most consequential kind. Training a frontier model requires compute infrastructure measured in billions, data requirements measured in trillions of tokens, and research talent so specialized that the effective labor market consists of a few thousand people worldwide.