On July 9, 2026, Luis Garicano joined Markus’ Academy to discuss his new book with Jin Li and Yanhui Wu, Messy Jobs. Luis is a Professor at the London School of Economics and a former Member of the European Parliament.
Watch the full talk and read the summary. You can also check out Luis’ Substack on Europe, Technology, and AI: Silicon Continent.
Timestamps:
[02:43] Tasks are not jobs: the autonomy threshold
[12:48] Three tiers of jobs, three kinds of AI impact
[30:06] Hierarchies and which jobs will survive
[46:31] The value of organization
[1:00:57] Three tiers, three economies
Highlights
[02:43] Tasks are not jobs: the autonomy threshold
- Exposure to AI may be highest for workers with the highest wages, but task exposure does not entail job displacement
- The autonomy threshold is the level of ability at which AI can complete tasks alone and replace humans. Below the threshold AI complements humans (e.g. the difference between cruise control and autonomous driving)
- The threshold increases with messiness, and messiness increases as tasks become bundled and jobs involve relationships
[12:48] Three tiers of jobs, three kinds of AI impact
- Tier 1: jobs based on clean, verifiable tasks. The jobs Silicon Valley warns us of. AI crosses the threshold fast and the price for the task collapses, unless demand or regulation or a humanness premium protects the job
- Tier 2: jobs with strong bundles. Bundles of tasks can be held together by the need to synchronize actions, knowledge spillovers, or the joint measurement of outcomes. Despite Geoffrey Hinton (2016)’s warning that radiologists would be displaced, radiology is among the highest-paid and record-hiring specialties. The job involves a bundle of tasks like talking to patients, consulting surgeons, and deciding over hard cases
- Garicano et al. (2026) build on Coase (1937)’s theory of the firm and Becker and Murphy (1992)’s study of the division of labor across workers to formalize AI and the bundling of tasks. The real threat to workers is unbundling, not automation. If coordination costs decline the AI will do more tasks and only shells of jobs remain, increasing their supply and collapsing worker rents
- Tier 3: jobs that rest on authority, human initiative, and relationships
[30:06] Hierarchies and which jobs will survive
- We lack good research on which bundles will survive, but it is likely that they will combine high cognitive and social skills (Deming 2017)
- AI will rewire hierarchies in two ways (Ide & Talamàs 2025, see our webinar):
- AI below: one expert leverages many AIs (the one-person company)
- AI above: expertise-in-a-box lifts less-trained workers who retain decision making, compressing inequality (Brynjolfsson, Li & Raymond 2025).
- The middle of the wage distribution will then split in two: the routine, cognitive part will be squeezed out, while the “AI above” part might rebuild the middle class because emotional and physical skills are spread more evenly across the population (Autor, 2024)
[46:31] The value of organization
- Organizations are coalitions of individuals with conflicting goals. Tier 3 jobs will be based around organizational authority and decision making
- Why AI cannot hold authority:
- (1) Tacit relational knowledge. In many settings, unless there is trust people will protect their private information and refuse to share what they know.
- (2) Accountability and liability: who pays when an agent breaches a contract or harms a third party?
- (3) Procedural fairness: when people cannot judge the outcome, they judge the process
- The key near-term scarcity is organization-level AI implementation. Those who jointly grasp the workflows, the tools and the stakeholders will benefit
[1:00:57] Three tiers, three economies
- The algorithmic economy (Tier 1), where cognition costs almost nothing and the value is captured by whoever owns the platform, stays small (a few percent of jobs).
- Relational work (Tier 3) of authority, implementation, and authenticity retains a double digit share of work.
- Most careers sit in the messy middle (Tier 2), where a job survives because its cognitive part is bundled with social, physical and relational tasks.
- As cognition becomes abundant its price falls toward zero and it shrinks as a share of the economy. Productivity still rises: Tier 1 automates and Tier 2 is augmented, but Tier 3 bottlenecks will cap the gains. Societies that are better able to restructure their organizations (and politics) around AI will see faster TFP growth