Artificial intelligence is shaping our present and future, our jobs and hobbies, wages and investments, even our blogs. A few months ago, Zagreb hosted Yuval Noah Harari to share his views on AI’s impact on humanity. More recently, Nenad Bakić warned that AI could replace not only jobs, but even institutions such as education and question its societal role. On the other hand, Velimir Šonje urged caution, arguing that concrete empirical evidence and peer-reviewed analyses of AI’s real economic impact are still limited. Everyone agrees that AI is already influencing our lives, but the question remains – how?
Just to make some things clear at the beginning, this blog is not intended as a political, ideological or any such statement, but rather as an argumentative essay, trying to examine multiple angles of the structural challenges we are facing. The primary inspiration comes from the discussion between Mr. Bakić and Mr. Šonje, whose blogs I encourage everyone to read as well on the following links: Bakić blog, Šonje blog. They are in Croatian, but for those who are not fluent there shouldn’t be much problem translating it – thanks AI, of course.
Returning to their debate, one of the key points concerns the structural shift in the labor market. Unlike previous industrial revolutions (whether the first, second, or third), this technological wave appears to be targeting white-collar professions rather than primarily blue-collar ones, and at the moment there are no clearly identifiable absorber sectors or institutions capable of cushioning large-scale displacement, should it occur. It will be interesting to watch how this trend unfolds for countries like Philippines or Bangladesh, economies highly dependent on service sectors outsourced from more developed markets, and first in line to feel the AI-revolution’s impact. As it is with every transformative technology, either you learn to use it or risk being left behind. However, this time may indeed be different, as highly indebted, service-oriented economies may be particularly exposed if AI alters the demand for cognitive labor at scale.
One response often raised in discussions of inequality and labor disruption is universal basic income, an unconditional cash transfer to individuals. The idea is not new, it draws intellectual roots from Milton Friedman’s negative income tax, alongside various other theoretical and practical redistribution frameworks. Broader policy tools range from progressive taxation and national dividend schemes to expanded public employment and other social programs.
However, there is clear evidence that pursuit of social stability through redistribution alone has not delivered sustainable outcomes in many developed economies. Much of the Global North faces similar structural pressures such as stagnating growth, demographic aging, rising life expectancy (good for individual, not so much for the economy), fiscal strain, increasing public spending and social security systems under stress. These trends are often accompanied by labor shortages on one end and persistently high youth unemployment on the other, while debt-financed stimulus plans attempt to postpone structural adjustments like putting a band aid on an amputated leg. France is one of the most visible examples of this tension, but even more stable and prosperous societies like Switzerland remain heavily dependent on immigration to sustain their economic models, although with tighter controls and stronger institutional frameworks.
Public debt and budget deficit of selected EU countries (% of GDP, 2024)
Source: Eurostat, InterCapital Research
Most of these challenges are structural and common across developed nations, but there is one recurring factor that tends to amplify them – elections. In the coming months, parliamentary elections will take place in two of our neighboring countries, Slovenia and Hungary. Although their political and economic landscapes differ, the pre-election spending and redistributive policies often follow a similar pattern across regimes. Romania has already demonstrated how election-driven fiscal expansion, combined with structural inefficiencies, can destabilize a national budget. So, history seems to be repeating itself, as Hungary’s budget deficit has climbed to around 6%, while Slovenia has increased minimum wages by 16% at a time when inflation is hovering near 2%, and fuel price caps still remain in place. Such interventions inevitably affect local companies and market dynamics. While state action can sometimes be justified (or needed) for short-term political or social reasons, prolonged misalignment with underlying market conditions always risks damaging productivity, competitiveness, and long-term growth.
Old-age dependency ratio of selected European countries (population 65+ years vs population 15-64 years per 100, 2025)
Source: Eurostat, InterCapital Research
Demographic arithmetic, fiscal rigidity, and political incentives are central to understanding these policies. The issue is not necessarily the policy instrument itself, but rather the short-term horizon that often accompanies it. Artificially raising wages does not automatically increase productivity. Redistributing output does not expand it. Dependency ratios cannot be resolved simply by importing unskilled (non)workers. At least not proportionally or sustainably.
When AI is added to this equation, uncertainty (one of the most popular words today) increases. If labor’s contribution to overall capital generation decreases, or just becomes less predictable, the structural tension intensifies. While society may ultimately move toward some variation of AI dividends, (even more) progressive taxation, or alternative redistributive models, it would be wiser for individuals not to wait for a systemic solution. One practical response, though not the only one, is investing. Regardless of what kind of redistribution future policies lean toward, individual participation in capital markets can mitigate part of the structural risk. Develop practical skills, strengthen critical thinking, and manage your capital responsibly.
Beyond our brokerage services and detailed equity analyses for more experienced investors, we are also addressing financial illiteracy through more accessible, risk-tailored investment solutions via our Genius app. So, rather than waiting to see whether or how governments will secure your future wages or pensions, begin managing your capital responsibly.