Post-AGI Economies: Autonomy and the First Fundamental Theorem of Welfare Economics

Abstract

The First Fundamental Theorem of Welfare Economics assumes that welfare-bearing agents are autonomous and implicitly relies on a binary distinction between autonomy and instrumentality. Welfare subjects are those who have autonomy and therefore the capacity to choose and enter into utility comparisons, while everything else does not. In post-AGI economies this presupposition becomes nontrivial because artificial systems may exhibit varying degrees of autonomy, functioning as tools, delegates, strategic market actors, manipulators of choice environments, or possible welfare subjects. We argue that the theorem ought to be subject to an autonomy qualification where the impact of these changes in autonomy assumptions is incorporated. Using a minimal general-equilibrium model with autonomy-conditioned welfare, welfare-status assignment, delegation accounting, and verification institutions, we set out conditions for which autonomy-complete competitive equilibrium is autonomy-Pareto efficient. The classical theorem is recovered as the low-autonomy limit.