Dream machine -- the next creative economy

How can we design a market of human-generated content for use in training AI models that both enables technological progress and preserves individual incentives for high-quality content creation? Existing approaches take polar positions: a "free-for-all" model based on fair use and a "strong intellectual property rights" model. We show that both fail: Free-for-all does not compensate creators, and -- by modeling as a static Stackelberg game -- strong intellectual property rights also underpower creative incentives. We find this especially true for more innovative creators, a phenomenon we term the "originality penalty." Extending this insight to a dynamic model, we find another market failure undermining AI model performance, even for an initially good model: Such a model induces greater reliance by humans on AI-assisted creation, resulting in homogenized content feeding back into training, which degrades the model performance -- a "curse of precision." We further propose a market design with a data intermediary internalizing cross-creator externalities and subsidizing innovative contributions, thereby restoring efficiency.

Recent AI systems can generate texts, software architectures, hypotheses, designs, and scientific workflows that appear creative. This paper asks under what conditions a machine can be called genuinely creative, and how human agency can be preserved within shared cognitive and creative environments. It develops a requirement framework derived from Designics, the science of meaning-bearing intentional change. The paper argues that genuine machine creativity should not be defined by output novelty, current performance, or transient architecture alone. Instead, creativity is understood as the structural transformation of incomplete situations through recursive intervention dynamics. On this view, it depends on ten requirements: environment representation, scoped perception, conflict identification, intervention capability, consequence observation, knowledge and environment update, rescoping, local-to-global unfolding, value-based scoping, and human-AI co-living. These are organized through the three laws of Designics: perception, conflict, and capability. The paper illustrates the computational tractability of these requirements through selected cyber-physical and cyber-biological studies, including recursive element extraction, autonomous mesh generation, and neurophysiological and workload analysis. It then treats open-ended systems, automated discovery frameworks, self-modifying agents, foundation models, and agentic workflows as pressure cases: they demonstrate powerful generative means but do not by themselves establish genuine machine creativity. Finally, the paper argues that proactive AI ethics is internal to genuine machine creativity rather than an after-the-fact filter. Value-based scoping and human-AI co-living must shape how creative machines perceive environments, identify conflicts, select interventions, observe consequences, update knowledge, and rescope future action.

This paper frames Generative Artificial Intelligence (AI) not as an unprecedented technological rupture, but as an industrial-scale manifestation of a deeply rooted historical process. Through a genealogy of generative arts, it shows how AI's questions on authorship and creativity have precise historical precedents. A taxonomy of generative systems is proposed across three functional categories (medium, artwork, instrument), the attribution of which is editorial rather than ontological. From individual cognitive atrophy to Model Collapse, the systemic risks of creative automation are identified; environmental enrichment is proposed as an antidote. The role of the artist undergoes a radical metamorphosis: from craftsman of the object to entropic agent, systems designer, explorer, and negentropic curator. This pipeline-based taxonomy rests on a specific premise: the algorithmic system remains medium, instrument, or artwork, while creative agency resides in the humans distributed along it. Algorithmic Repetition is introduced as the aesthetic degeneration of aligned generative systems; the Benjaminian aura does not dissolve in the generative era but condenses upon the productive system. Manifestation is proposed as a third ontological status for generative works, transcending the dichotomy between original and copy. To support the proposed theses, two complementary aspects are examined: the radicalization of distributed authorship; and the reevaluation of older generative models, whose instability constitutes an aesthetic degree of freedom lost by recent ones.