The Abundance Shock: Rethinking Market Logic and Societal Well-Being in the Age of Artificial Intelligence

This article argues that the defining challenge of the artificial intelligence (AI) era is not technological displacement per se, but a more fundamental structural discontinuity: the progressive erosion of scarcity conditions in specific cognitive and informational domains, and the resulting destabilization of institutions still organized around the assumption of generalized scarcity. Drawing on macromarketing theory, institutional economics, and sociological perspectives on identity and meaning, I develop the concept of the Abundance Shock, a condition in which the AI-driven near-zero marginal cost of producing knowledge, content, and cognitive work undermines the foundational assumptions of market systems, labor institutions, and social identities. I identify four interdependent mechanisms through which this shock propagates: (1) production-labor decoupling, (2) identity disruption, (3) epistemic fragmentation, and (4) institutional lag. I further propose that the real scarcity of the AI age is not informational or material, but cognitive and moral, centered on judgment, trust, and the capacity to define what constitutes a good life. I conclude by drawing implications for macromarketing scholarship, particularly around the adequacy of market-based solutions to abundance-era challenges and the need for governance frameworks that foreground societal well-being over efficiency optimization.