We Built a Mirror and Mistook It for a Mind: Causal Liability and the Fallacy of AI Consciousness

The contemporary debate over machine consciousness begins from a concealed assumption: that the object called "AI" already constitutes the kind of entity to which consciousness could belong. This paper challenges that assumption by separating phenomenal consciousness, introspective report, and human projective introspection, then arguing that generative systems can return linguistic traces of human interiority in first-person form without thereby identifying a phenomenal bearer. We call the resulting inference the AI Consciousness Fallacy. We then introduce Causal Liability Theory (CLT). CLT-I proposes liability closure as a criterion for individuating a candidate bearer: a physically continuing process becomes the non-delegable inheritor of constraints generated by its own endogenous discriminations. CLT-II advances the stronger conjecture that liability closure is necessary and sufficient for minimal phenomenal subjecthood. An open-weight causal audit operationalizes CLT-I across multiple model families. Forced discriminations produced persistent downstream divergence; activation patching showed strong causal mediation; live and copied adaptive states were behaviorally identical under matched randomness; and detached reconstruction preserved computational state across process replacement while, by protocol, breaking constitutive continuity and non-delegable inheritance. These results show that CLT-I distinctions are experimentally tractable and can dissociate causal bearer structure from first-person performance. The framework therefore separates consciousness attribution, causal bearer individuation, and the independent metaphysical question of consciousness constitution.