That seems like a wrong economic theory to me. The economy is based on differential of value. I can make furniture, so it's worth less to me than it is to you. Therefore we can trade. That's what supply/demand is. If AGI somehow exists, then the value of intelligence drops to zero for both of us, there's nothing to trade.

AGI would not make knowledge work valueless, it would move all the knowledge work value to the AGI companies.