CONCEPT
Natural and Market Price
Smith's distinction between the <em>natural price</em> of a commodity (the cost of producing it) and its <em>market price</em> (what it actually fetches) — applied here to the divergence between the falling market price of execution and the rising market price of judgment in the AI economy.
Smith distinguished the natural price of a commodity — determined by the cost of the labor, capital, and rent required to produce it — from its market price, determined by the effectual demand relative to the quantity available. The two normally converge over time as supply adjusts to demand, but in periods of rapid change they can diverge substantially, and the direction of divergence reveals what is scarce and what is abundant in a given economic moment.
In The You On AI Field Guide
The AI transition produces a striking example of this divergence. The cost of producing creative execution — code, copy, design, analysis — is collapsing toward zero as language models absorb the operations that used to require specialized labor. The market price of execution is correspondingly falling. But the cost of producing judgment — the capacity to evaluate, to discern, to know what should be produced