CONCEPT
Endogenous Fragility in the AI Economy
The specific mechanisms by which the AI boom is generating its own fragility — through the erosion of deep expertise, the dissolution of specialist knowledge, and the proliferation of untested organizational structures.
Endogenous fragility is the Minskyan insight that dangerous system vulnerabilities are produced from inside the system by its own success, not imported from outside by shocks. The Opus 4.6 simulation identifies four specific mechanisms through which the AI boom is generating systemic fragility: the erosion of deep expertise as AI tools eliminate the friction that historically built it; the dissolution of specialist knowledge as integrators replace specialists; the proliferation of untested organizational structures optimized for current AI capability; and the reduction of institutional diversity as organizations converge on similar tools, workflows, and dependencies. Each mechanism is driven by individually rational decisions. The aggregate is a system increasingly optimized for conditions that may not persist and increasingly exposed to any change in those conditions.
In The You On AI Field Guide
The concept adapts Minsky's financial analysis to domains he did not examine directly. Minsky focused on balance sheets, cash flows, and the financial structure