The Nature of the Club – demonstrandom■

The Nature of the Club

Essays

Speculative

Published

July 23, 2026

Each new need immediately awakens the idea of association.1

— Alexis de Tocqueville, Democracy in America

Introduction

The characteristic institution of industrial capitalism is the firm. A firm brings together land, labor, capital, machinery, and knowledge in order to produce outputs that consumers value. This essay will argue that the dominant institution of the post-AGI economy will instead be the “club”: a bounded constituency with continuing authority to form and revise common ends, govern their evolving specifications, commit demand behind them, and commission the corresponding production.

In previous essays I considered how value will change in a post-AGI society, and also thought about what happens when demand becomes a constraint on value rather than supply. I argued that if AI makes the supply side vastly more efficient, there will be both immediate-term and long-term constraints on how much demand is available.

Although it is difficult to imagine a total limit to human desire, several mechanisms can constrain demand locally or temporarily. In the short term, the supply of new goods can simply grow faster than people can discover, evaluate, finance, and absorb it. At the limit, we might expect some asymptote beyond which the value of a marginal good for a human diminishes to a very low level.

More concretely, we can consider “satiable goods.” By analogy with rivalrous goods (whose available supply can be exhausted through consumption), a satiable good has a stock of demand that can eventually be exhausted through provision. Even if human wants remain infinite in the abstract, demand for particular satiable goods need not be. For rivalrous goods, available supply is finite, so competition among buyers for a fixed stock can become zero-sum: one buyer’s acquisition leaves less supply for others. For satiable goods, remaining demand is finite, so competition among sellers for that demand can likewise become zero-sum: one seller’s sale leaves less demand for others2.

If the bottlenecks in value creation migrate from the production of goods to the production, discovery, aggregation, and organization of demand, then institutions built around the supply and manufacture of goods should lose relative importance3. In their place, we would therefore expect new organizations to form around the now-scarce demand-side activities, such as identifying what people want, coordinating their choices, and turning those choices into commitments on which producers can act. These organizations are clubs.

The essay proceeds in two stages. The sections on the firm, industrial production, cybernetic production, and the barbell economy explain why AI may make execution portable and shift value toward organized demand. The Social Construction of Demand then explains why forming that demand remains a social and institutional problem. Readers willing to grant these prerequisites may skip directly to The Nature of the Club, which develops the club’s economics and governance. The Future of the Club considers its likely economic and political development, while Galaxy Brain collects the more speculative consequences.

This is a comparative-static claim, not a forecast of one particular world: as execution becomes more portable, durable organization migrates from control of productive means toward the formation, governance, and commitment of ends, with the extent of that migration depending on how portable the relevant execution becomes. The post-AGI club is the limiting case of this process, and the projections that follow should be read as illustrations of its mechanisms rather than as a definitive forecast.

The Nature of the Firm

Before considering clubs in detail, let us first consider their highly theorized dual institution, the firm. Why do firms exist in the first place? Why not simply engage the market directly for all transactions? In theory, all production could be coordinated through prices and contracts. But in reality, a lot of economic activity occurs inside firms.

The creation and sale of complex goods (or the complex production of simple goods at scale) is made more efficient through cooperation among various agents. Historically, we think of these agents as people, but they also include animals and, increasingly, computerized systems. However, participants in the collective may have different objectives or private information, or act under uncertainty. Since every action, contingency, and state of the world cannot reasonably be specified, all contracts are in practice costly, uncertain, and incomplete4. A product may result from thousands of complementary actions by different agents, none of which has material value in isolation. Even when the final value is known, there may be no unambiguous way to determine how much of the value was created by each participant. This makes it difficult to...