ARTIFICIAL INTELLIGENCE, FINANCE, AND THE STATE
The End of the Illusion – When Matter Returns to Govern the World
Preface
For more than half a century, the global economic architecture has operated on an implicit assumption: that price was a sufficient mechanism to coordinate the production and distribution of resources.
That scarcity would, ultimately, be resolved through supply. That value would emerge spontaneously from the equilibrium between supply and demand, and that the State, in this process, would at most act as a regulator, never as a decision-maker.
This assumption was not wrong in an absolute sense. It was contingent. It functioned within a horizon of energy abundance, geopolitical stability, and uncontested supply chains—conditions that, over the span of two decades, have simultaneously disappeared.
The thesis of this analysis is that three historical processes
the material depletion of the resources that sustained industrial civilization, the implosion of a financial superstructure increasingly disconnected from physical reality, and the irruption of artificial intelligence as a tool for the disintermediation of human labor—are converging toward a breaking point that admits no incremental solutions.
Price, as a coordination mechanism, is yielding to political allocation.
Matter is returning to the center of power.
And the State, declared obsolete by the neoliberal narrative, is re-emerging as the only actor structurally incapable of ignoring the consequences of this transition.
Silver—a metal that is simultaneously monetary, industrial, and strategically critical—constitutes the empirical point of convergence of these fractures and offers a privileged analytical lens through which to grasp their scope.
“All that is solid melts into air.” — Karl Marx, The Manifesto
“But air does not turn turbines without copper.” — The present
I. The Technical Object and Its Genealogy: A Question of Power, Not Progress
The political philosopher Carlo Galli, in his work on technology and society, poses a question that the literature on artificial intelligence systematically avoids: who decided that AI constituted a necessity?
This is not a rhetorical provocation, but a genealogical inquiry in the strictest sense.
Every technical object, Galli observes—drawing on a tradition that runs from Heidegger to contemporary critiques of technology—originates in a decision: someone determines that a certain class of phenomena constitutes a problem to be solved.
This decision is never neutral. It contains power relations, reproduces them, and—once the technical object is inserted into the social fabric—constrains the future.
The technical object, once built, generates compulsion: once one possesses a rifle, the temptation is to solve problems with gunfire.
Productive infrastructures, entrenched interests, accumulated competencies—all conspire to preserve the initial trajectory.
Artificial intelligence is no exception to this logic.
It did not emerge as a response to a human need in the sense that fire or the plow did.
It is the product of a decision—that computational speed constituted a critical factor—made by specific actors, financed by specific capital, and oriented toward specific ends. The English term used to describe its introduction into productive systems—deployment—retains a military etymology more revealing than it intends.
What Galli identifies with particular acuity is the nexus between artificial intelligence and critical thought—or, more precisely, the absence of the latter as a condition of possibility for the former.
AI assembles data with unprecedented speed and scale. But it does not interrogate data. It does not ask who produced them, for what purpose, and for whose benefit.
It does not exercise what the Western philosophical tradition—from Plato to Hegel, from Marx to Adorno—has recognized as the irreducible core of intelligence: the capacity to negate the given, to suspect appearances, to seek essence.
The universe in which critical thought is excluded, Galli notes, is not exclusive to totalitarian regimes.
It is also the universe of neoliberalism, which shares with those regimes—despite radical differences on other planes—the assumption that what exists should not be interrogated, but optimized.
AI is the perfect instrument of this paradigm: not by conspiracy, but by structure.
This observation leads us to the theoretical core of the analysis.
Marx’s labor theory of value—the recognition that the price of a commodity does not emerge from horizontal bargaining among equivalent subjects, but from reified, expropriated labor embodied within it—has not been refuted by marginalism or the neoclassical revolution.
It has been obscured. Artificial intelligence represents the latest and most sophisticated instrument of this obscuration: it promises a world in which value is produced without labor, and thus without the structural contradiction between those who produce value and those who appropriate it.
But this promise, as we shall see, is an illusion—because value without matter does not exist, and the matter that sustains it is being exhausted.
II. Human Surplus: The Consequence No One Names
Capitalism, in its classical form, operated on a coherent cycle: capital employs workers; workers produce commodities; workers, through wages, purchase commodities; capital realizes profit and reinvests. The post-war welfare state—what Galli defines as the greatest political compromise in Western history—stabilized this cycle through redistribution: workers renounced revolution in exchange for real inclusion within the State, with voting rights, access to education, healthcare, and pensions.
Artificial intelligence intervenes in this cycle as an agent of dissolution. If capital can produce without workers, the need to pay wages disappears. Without wages, consumers do not form. Without consumers, demand does not materialize. Without demand, profit cannot be realized. Capital, in pursuing efficiency maximization through automation, is eliminating the very condition of its own reproduction.
But the scope of the phenomenon transcends the economic paradox.
The principle of comparative advantage, formulated by David Ricardo in 1817, constituted for two centuries the theoretical foundation of international trade: each nation specializes in what it does relatively best, and exchange generates mutual benefit. India in software, China in manufacturing, Germany in precision engineering, Bangladesh in textiles.
This principle presupposed that specialized human labor was intrinsically non-transportable: skill was tied to place, cost, and demographic scale.
AI invalidates this presupposition at its root. Cognitive labor becomes instantly transportable and reproducible at near-zero marginal cost. A specialized population is no longer required; computational infrastructure and energy access suffice. Comparative advantage thus shifts from human competence to geology—from knowledge to subsoil. What matters is no longer what a nation knows how to do, but what it physically possesses.
The consequence—systematically elided in public debate—is what may be defined as structural human surplus. Not cyclical unemployment, a conjunctural phenomenon addressable through policy tools, but the irreversible loss of the economic function of entire populations within the global system. India without IT, Bangladesh without textiles, China without labor-cost differentials: hundreds of millions of people for whom the global system has no structural reason to integrate.
Galli formulates this with a biological metaphor of extraordinary precision: capital is indifferent to social capital as DNA is indifferent to individual species. Mass extinctions have erased 80 percent of living species, and from the remaining 20 percent a completely different biosphere emerged—with great suffering for the extinct, but in perfect indifference of the genetic code that continues to evolve. Capital operates according to the same logic. It is not interested in this or that civilization. Its vocation is the reproduction of profit. If that reproduction requires the dissolution of a society, dissolution occurs.
But the State cannot operate according to this logic.
The State is bound to a territory, a population, and a function of integration that cannot be externalized or delocalized. Finance can exist without a people. The State cannot. This renders them structurally antagonistic at the moment when AI renders populations economically superfluous.
III. Material Limits: When a Finite Planet Meets Infinite Ambition
In 1972, the Club of Rome published The Limits to Growth. In 2008, Graham Turner overlaid thirty years of empirical data onto the original model and observed a disturbing convergence: the world was following the standard run—the baseline scenario predicting peak and subsequent decline in productive, demographic, and food systems.
The work of Simon Michaux, associated with the Geological Survey of Finland, has given these projections a quantitative precision that admits no rhetorical evasion.
On the energy front: global GDP correlates with oil consumption with an R² of 0.92—a correlation without national exceptions. Conventional oil peaked in November 2018. Subsequent production has been sustained by natural gas liquids and biofuels—less efficient substitutes whose compensatory capacity is projected to be exhausted around 2027. The current ratio between nominal GDP and oil production shows a divergence of 17:1 compared to 1971—the year of decoupling from the gold standard—a divergence entirely attributable to financial mass expansion.
When the fiat currency experiment runs its course, Michaux observes, the two curves must reconverge: either oil rises, or GDP collapses.
On the mineral front, the data are even more severe.
The planned energy transition—replacing fossil fuels with renewables by 2050—requires quantities of metals exceeding known availability.
The copper required for the first generation of renewable infrastructure alone amounts to 6.1 billion tonnes.
From the Bronze Age to today, humanity has extracted approximately 700 million tonnes. Current economic reserves cover about 880 million tonnes. Demand is 8.8 times the total cumulative historical production of human civilization.
For nickel, estimates indicate 532 years of production at current rates. For lithium, 13,000 years. For germanium—proposed for solid-state batteries—29,000 years.
Silver occupies a position of particular criticality in this context. Between 1950 and 2000, 34.57 percent of all silver ever extracted in history was mined. Since then, ore grades have declined steadily and production has stagnated.
Unlike gold—which is accumulated and rarely consumed—silver is irreversibly consumed by industry: every ounce used in photovoltaics, electronics, semiconductors, nuclear or aerospace applications is permanently removed from global availability.
Here the structural paradox becomes clear: artificial intelligence, which should represent the apex of economic dematerialization, is the most materially intensive technology ever developed. Data centers consume the energy equivalent of mid-sized cities. Semiconductors require silver, copper, lithium, rare earths, ultra-pure water. The technology that promises to transcend matter depends on matter more than any previous technology. A system aspiring to infinite growth confronts a planet that is irreducibly finite.
IV. The Paper Architecture and Its Breaking Point
To understand how the financial system could operate for decades in ignorance—or repression—of the material constraints described above, it is necessary to analyze the mechanism by which finance masked scarcity: the creation of synthetic supply through derivatives. The silver market represents the most extreme and best-documented case of this dynamic.
Major investment banks have built, over decades, structural short positions in silver of a magnitude that radically alters market functioning. Estimates suggest 300–400 paper contracts exist for every physical ounce actually held in registered COMEX warehouses. Four to eight entities control 40–50 percent of all short positions. The mechanism is structural, not episodic: banks sell promises of future delivery without possessing the underlying metal, generating synthetic supply that depresses prices and discourages physical investment.
The system rests on a fragile assumption: that the vast majority of contracts are cash-settled, without physical delivery requests. As long as this convention holds, the non-existence of the underlying metal is irrelevant. But two structural developments are eroding this assumption.
The first is the executive implementation of Basel III in January 2026, which recognizes physical gold and silver as valid bank reserves while simultaneously downgrading paper instruments. The resulting question is unavoidable: if banks are required to liquidate paper positions, and paper circulation exceeds physical metal by orders of magnitude, what exactly are they liquidating?
The second is the introduction of instantaneous settlement (T+0), associated with tokenized deposits—essentially prototypes of CBDCs such as those tested by the Bank of England.
Instant settlement requires margin calls to be met in real time, eliminating the temporal buffer that legacy systems used to absorb shocks gradually.
Analyst Miles Harris articulated the resulting mechanism precisely: physical silver cannot move instantaneously, but digital money can.
When prices fall abruptly, leveraged positions are liquidated in cascade to meet obligations that the previous system would have spread over time. Monetary velocity has become structurally incompatible with the slowness of matter.
The violent move at the end of January 2026—one of the most extreme ever recorded in silver—perfectly illustrates this dynamic. It was not a signal of banks exiting short positions: had they been closing shorts, they would have had to buy, and prices would have risen.
The collapse was a tactical control operation: CME margin hikes (+36 percent), forced liquidation of long positions, and the cleansing of smaller operators. The classic defensive pattern of a system protecting its architecture—with increasingly limited room to maneuver.
V. Paradigm Inversion: From Global Governance to Fragmented Sovereignty
A distinction our time is rendering unavoidable is that between digitalization as infrastructure and globalization as governance.
For three decades, from the fall of the Berlin Wall to the 2020 pandemic, the two concepts were systematically conflated. Today they are separating, and this separation constitutes one of the most structurally significant events of the era.
Globalization as governance implied a transfer of decision-making power from the State to supranational institutions, common standards, clearing mechanisms, sanctions systems, unified financial infrastructures. It was not merely trade; it was a cession of sovereignty.
Digitalization as infrastructure—digital payments, tokenized deposits, cloud computing, artificial intelligence, logistical traceability—is instead a set of operational tools: means to move money, data, goods, authorizations. Like roads, ports, or electrical grids. It is not politics per se; it is operational capacity.
States—at least those retaining strategic lucidity—have understood that ceding governance to globalization rendered them structurally vulnerable. The response is not rejecting the digital, but rejecting dependence. The future is not less digital. It is less globally governed.
This separation produces a paradigmatic inversion in the world economy. In the previous system, supply chains followed price: whoever controlled price formation—through derivatives, futures, swaps—controlled the market.
In the emerging system, price follows supply chains: whoever controls physical access—refineries, storage, routes, bilateral alliances—sets conditions, and prices adjust.
Supply chains cease to be purely executive infrastructure and become decision-making infrastructure. Gold already provides empirical evidence: the Shanghai Gold Exchange has become the marginal global price setter, while Western markets—COMEX and LBMA—operate as price takers. Asia determines; the West absorbs.
The consequences are systemic. In a world fragmented into sovereign blocs with divergent standards, regulations, and alliances, a single global commodity price ceases to exist. Price differentials emerge between markets, back orders stretch weeks or months, and stock shortages that price mechanisms cannot resolve—because the problem is not price, but access. Operators in physical markets—shipping, industry, commodities—are already observing these signals: small, perhaps statistically marginal, but structurally unequivocal.
VI. The Geopolitics of Resources: Imperial Designs and Real Scarcity
The ongoing transition is not comparable to a cyclical crisis. In scale and depth, the most appropriate parallel is the fall of Constantinople in 1453: an event that redrew trade routes, devastated consolidated mercantile powers, and forced entire civilizations to reinvent their position in the world. It was not the end of the world. It was the end of a world.
The three main geopolitical actors are positioning accordingly.
China pursues the longest and most coherent strategy: the so-called Hundred-Year Marathon (1949–2049), aimed at controlling the global industrial chain.
It already controls 60–70 percent of global silver refining, dominates smelter production, accumulates rare earths and physical gold through the Shanghai Gold Exchange, and is building a parallel monetary system anchored to gold reserves. It has injected over $1.1 trillion into its monetary markets in twelve months. Gold priced in yuan is at all-time highs.
On silver, China plays an intrinsically contradictory game: its industries want low prices—a Chinese billionaire shorted 450 metric tonnes while simultaneously being long gold—but the state knows gold and silver are structurally correlated.
If it wants high gold prices, it must accept high silver prices as an unavoidable cost.
The United States is retreating from global imperial architecture toward consolidation of the Western Hemisphere. The November 2025 National Security Strategy reasserts the Monroe Doctrine: Greenland, Canada, Mexico, Venezuela, Panama. Not for Greenland’s rare earths—less than 1 percent of global reserves—but for oil, gas, critical minerals, and strategic position. Price floors for critical minerals and the VAULT project aim to repatriate refining capacity.
The logic is transparent: without sufficiently high silver prices, no American operator will invest in domestic extraction, because China structurally undercuts prices. The U.S. is also preparing to revalue Treasury gold reserves—8,133 tonnes currently booked at $42.22 per ounce—to market prices, an operation that at $8,000–$10,000 per ounce would generate roughly $2 trillion in fiscal space.
Europe, in this scenario, is the first actor confronting structural irrelevance. Devoid of energy resources, mining industry, technological autonomy, and unified strategic vision, it resembles sixteenth-century Venice: a commercial power discovering its lack of function when routes change. Galli notes that Europe never developed a strategic self-conception beyond the “space of rights”—a concept presupposing the absence of conflict.
With that condition gone, Europe lacks a voice. Its impotence is the product of a choice: delegating security to the United States, energy to Russia, manufacturing to China, technology to Silicon Valley.
Now that all these pillars are simultaneously withdrawn, the edifice reveals itself as foundationless.
VII. The State Versus Finance: Anatomy of a Structural Conflict
Finance is not a neutral capital allocation mechanism.
It is an actor with its own political project: it determines which sectors grow or decline, which states may borrow and which may not, which resources are extracted and which remain inaccessible. When it invests trillions in artificial intelligence rather than healthcare, education, or energy infrastructure, it makes a political choice. When it maintains paper short positions masking real scarcity of a critical resource, it makes a political choice. When it privatizes profits and socializes losses, it makes a political choice.
The paradigmatic precedent is the confrontation between the Obama administration and Wall Street after the 2008 crisis. As Galli documents, the U.S. president engaged in an open challenge with the banking system—and lost.
Banks knew they could not be allowed to fail, because their failure would drag society into the abyss. They were rescued with public money. They were asked to change behavior. They refused. The pattern reproduces itself, amplified, with artificial intelligence.
Finance is investing unprecedented capital in a technology whose returns are projected on narrative horizons rather than verifiable fundamentals, and whose material, energy, and social costs are systematically excluded from economic calculation.
The structural consequences—particularly the production of mass human surplus—are not denied, but simply externalized beyond the perimeter of financial responsibility.
If the project succeeds, a narrow technological elite accumulates historically unprecedented wealth. If it fails, the cost is absorbed by the State—by taxpayers, by society as a whole. The incentive structure mirrors that which produced the 2008 crisis, but on an incomparably larger scale and with far deeper systemic implications.
Corporate adoption of AI reproduces the same dynamic at the microeconomic level.
A firm that replaces a worker with an external platform—Salesforce, Microsoft, Google—is not reducing costs. It is transferring a predictable, controllable cost (wages) into an uncontrollable external dependency (provider infrastructure, energy costs, operational stability, pricing policies).
It has exchanged cost for systemic risk. In doing so, it has irreversibly destroyed internal human capital—competence, experience, tacit knowledge—that cannot be reconstructed when the platform raises prices, fails, or collapses.
It is telling that corporate management systems already classify employees as resources—allocable, measurable, optimizable, substitutable. This is not lexical imprecision. It is an ontological declaration: the human being has been reclassified as a fungible input, like copper or energy. And an input costing more than its substitute is deallocated—not fired, deallocated—according to managerial logic governing all other resources.
But the State cannot reason in these terms. The State does not deallocate its citizens. It cannot ignore human surplus as finance ignores externalities. The conflict between State and finance is therefore not ideological; it is structural. Finance can function without a people. The State exists only because it has one. When AI renders the population economically superfluous, the two actors collide—not by choice, but by necessity.
Hegel grasped this point with a depth that remains unsurpassed in Western political thought. The interest and right of individuals, he writes in the Philosophy of Right, are posited as a vanishing moment. The individual is not the fundamental element of politics. Freedom is not realized in the atomized individual—it is perfected in the State, the entity capable of giving form to contingency, of reducing chaos to rule. This vision is radically distant from liberal sensibilities. But it precisely describes the historical movement we are witnessing: the return of the State not as an agent of oppression, but as the sole institutional barrier against disorder produced by unconstrained capital.
VIII. Silver as an Empirical Point of Convergence
Silver is neither the largest market nor the most discussed asset. But it is the exact point at which all the contradictions analyzed in this essay manifest simultaneously—and it is this convergence that grants it privileged analytical function.
Positioned on the fault line between money, industry, and strategic security, silver is where these fractures become visible first.
This is not speculation: it is the thermometer of a systemic fever that paper markets were able to mask for decades, but which the convergence of Basel III, T+0 settlement, rising physical demand, and geological scarcity is rendering impossible to conceal.
Conclusions: The Return of Matter and of History
The convergence of the processes analyzed in this essay admits no comforting interpretations. The material depletion of resources, the implosion of the paper financial superstructure, and the acceleration of artificial intelligence are not separate phenomena. They are manifestations of a single process: capital’s attempt to transcend its own structural limits—labor, matter, the State—and the failure of that attempt.
The AI that was meant to dematerialize the economy is the most materially intensive technology ever conceived. Finance, which was meant to render the State obsolete, is bringing it back to the center as the sole guarantor of access to resources. The market that was meant to coordinate global allocation is yielding to political allocation, because price ceases to function as a coordination mechanism when resources become scarce, concentrated, and non-substitutable.
This essay offers no predictions. It identifies the internal logic of processes already underway, whose consequences—the redefinition of geopolitical hierarchies, structural human surplus, the end of a single global price, and the return of the State as a decision-making actor—will unfold over the coming decade.
Galli reminds us that critical thought—the capacity to negate the given, interrogate appearances, and seek essence—is something no machine will ever possess. That capacity is, today, the only form of intellectual resistance against a system that seeks to present as inevitable what is, in reality, the product of decisions made by specific actors, for specific purposes, with consequences borne by the collective.
Understanding those decisions, their genesis, and their consequences is not an intellectual exercise.
It is the only form of sovereignty that remains to the individual in a world that has already reclassified them as a resource.