A 160-year-old paradox explains why AI will create more lawyers and accountants—not fewer, top economist says

In 1865, English economist William Stanley Jevons observed that the invention of the Watt steam engine — which improved the efficiency of the coal-fired steam engine — made coal a more effective energy source. Jevons called it “a confusion of ideas” to assume the efficiency born from this invention would reduce coal consumption. That efficiency actually dramatically increased consumption even as the total amount of coal required for a particular task fell. There’s now a term for this seemingly contradictory idea: the Jevons paradox.

In a note on Tuesday, Apollo Global Management’s influential chief economist Torsten Slok applied the Jevons paradox to the AI age. In this scenario, labor is playing the role of coal, meaning as AI adoption increases, the technology will beget more jobs, not fewer. Slok calls this the Jevons employment effect. As the cost of professional work falls as AI makes tasks more efficient, the market for those tasks will actually expand. The total number of firms and workers in those fields—from law to accounting to consulting—will grow.

“When steam engines made coal more efficient, Britain didn’t burn less coal, it burned more,” Slok wrote in a note. “The same pattern is happening for cheaper legal services, consulting services and financial services.”

Slok’s assertion flies in the face of Silicon Valley’s conventional wisdom for the age of AI. More and more leaders are predicting AI will replace large swaths of the white-collar workforce as AI models become more sophisticated, making work more efficient. A recent Anthropic study found that AI is already capable of automating tasks associated with a handful of white-collar jobs, including management, law, and accounting.

The problem is that the future, to paraphrase a common saying, is like a foreign country. The Jevons paradox works when a cheaper input unlocks new demand that didn’t previously exist. Steam engines didn’t just make existing coal uses more........

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