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arXiv · 2602.16078

AI as Coordination-Compressing Capital: Task Reallocation, Organizational Redesign, and the Regime Fork

Alex Farach
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Abstract

Task-based models of AI and labor hold organizational structure fixed. We introduce agent capital: AI that reduces coordination costs, expanding spans of control and enabling endogenous task creation. Five propositions characterize how coordination compression affects output, hierarchy, manager demand, wage dispersion, and the task frontier. The model generates a regime fork: the same technology produces broad-based gains or superstar concentration depending on who benefits from coordination compression. Simulations with heterogeneous workers confirm sharp regime divergence. Economy-wide inequality falls in all regimes through employment expansion, but the manager-worker wage gap widens universally. The distributional impact hinges on who controls organizational elasticity.

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Alex Farach. 2026-02-17. AI as Coordination-Compressing Capital: Task Reallocation, Organizational Redesign, and the Regime Fork. https://arxiv.org/abs/2602.16078

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