Somewhere in an introductory economics class, most of us absorbed a simple idea: in a competitive market, your wage reflects your marginal contribution. Work hard, build skills, create value — and the market will reward you accordingly.
It’s clean. It’s motivating. And after a decade of building AI systems in financial services, I’m fairly sure it’s wrong.
What wages actually reflect is a three-variable equation: how hard you are to replace, how much the buyer can afford to pay, and who has leverage at the negotiation table. Notice what’s missing from that list — any mention of how much value you create.
I’ve seen this from the inside. I build AI systems — AML models that flag suspicious transactions, tools that help analysts make better decisions. The work is genuinely useful. But the traders sitting two floors up, whose contribution to society is genuinely debatable, earn multiples of what I do. Not because they create more value, but because they’re scarcer, their revenue attribution is direct, and they can credibly threaten to leave.
The nurse example makes it sharper. Nurses create enormous, unambiguous value. But the supply is large, hospitals are cost-constrained, and withdrawing labour means people die — which eliminates their bargaining power entirely. Scarcity, willingness-to-pay, leverage. Not value.
As someone who builds AI, I find this framework uncomfortably relevant. The current premium on AI skills isn’t because AI practitioners are more valuable than, say, infrastructure engineers. It’s because we’re temporarily scarce. When the tooling matures and the supply catches up — and it will — the premium will shrink. The value of the work won’t change. The scarcity will.
This isn’t an argument against working hard or building skills. I do both, because I have a family to support in one of the most expensive cities on earth, and the system rewards scarcity whether or not it’s fair. But I’ve stopped telling myself the comforting story that my salary is a measure of my worth. It’s a measure of my position in a market that doesn’t care about worth.
The most successful piece of propaganda in modern economics isn’t any specific policy. It’s the quiet conflation of price with value — the idea that what the market pays you is what you deserve. Once you see through it, you can still play the game. You just stop mistaking the score for the point.