AI and the Physical Economy

AI and the Physical Economy examines how artificial intelligence increasingly alters the physical-resource environment required for its own expansion. It develops the concept of endogenous resource drag to explain how physical resources such as power, grid capacity, semiconductors, cooling, water, land, materials and industrial capacity can become shifting and interacting constraints on technological velocity. The essay argues that the central allocation problem is not scarcity alone, but identifying which resource or combination of resources is exerting the greatest marginal drag at a given point in time.