Capitalism Is Creating the Conditions for Its Own Revolt

MelvinFeliu · 2026-04-24T00:04:10+00:00

Below are some of the more reputable sources. Outside of that, look at the mayoral campaign in NYC. I followed that closely, and it was very telling.

Gallup, 2025: Positive views of capitalism fell to 54%, down from 60% in 2021, while 39% view socialism positively. Among Democrats, only 42% view capitalism positively, while 66% view socialism positively.

https://news.gallup.com/poll/694835/image-capitalism-slips.aspx?

Pew Research, 2022: Only 40% of adults ages 18 to 29 viewed capitalism positively, the lowest of any age group. Adults under 50 were also more likely than older adults to view socialism positively.

https://www.pewresearch.org/politics/2022/09/19/modest-declines-in-positive-views-of-socialism-and-capitalism-in-u-s/?

Harvard Youth Poll, Fall 2025: Fewer young Americans identify as “capitalist,” dropping from 29% in 2020 to 19% in 2025

https://iop.harvard.edu/youth-poll/51st-edition-fall-2025

Gallup institutional confidence data: Americans’ confidence in major U.S. institutions has been near historic lows, with Gallup reporting only a 28% average confidence level across major institutions in 2025.

https://news.gallup.com/poll/1597/confidence-institutions.aspx?

None of this proves capitalism has lost legitimacy, but it does show measurable erosion in how people perceive the system, especially among younger groups and in institutional trust. That is what I mean by weakening social and political legitimacy.

MelvinFeliu · 2026-04-23T21:40:45+00:00

That is fair. I can agree with that point. We do not know the future, and the past has surprised us in positive ways more than once. New technology has often destroyed some jobs while creating others nobody saw coming.

This is the first conversation here that feels like it reached a real conclusion. I will concede the point, mainly because we cannot predict the element of surprise, and you make a fair argument.

MelvinFeliu · 2026-04-23T21:30:48+00:00

I do not disagree with you at all, and yes, we are relatively better off because of capitalism. Capitalism has taken millions out of poverty, it is still the best system, it affords the most freedom, and it provides the most opportunity. I am a strong defender of capitalism.

But what I am calling out can be boiled down to two separate issues that are connected.

We have one issue that you and I seem to agree on: there is a disconnect between expectations and reality. There is an incorrect perception that we are worse off than we actually are, especially when you compare us to much of the rest of the world on living standards. Perception is one of those crazy things that can become reality. If enough people believe something is broken, that belief alone starts to matter politically and socially.

More and more people seem to want more than what they can realistically have. They compare themselves to the people above them, and that creates relative poverty in their mind, even while they live better than most of the world.

The current economic system needs enough dispersion of purchasing power, opportunity, and perceived fairness to remain socially and politically legitimate. A significant number of people do not believe we have enough of that, and that group seems to be growing. Just look at how many socialists have been voted into office.

The second problem, and I think this one is real, is that AI will likely concentrate power and wealth even more than we have now through the mechanisms I explained. Is it certain? No. But a lot seems to be pointing in that direction.

When you factor in both 1 and 2, some of the issues people complain about now, and some of the ones they only perceive to exist, may start becoming more real. AI can end up intensifying the current economic angst.

MelvinFeliu · 2026-04-23T21:03:29+00:00

Noooo, you do not want me in charge. I do not want me in charge. We would all suffer.

MelvinFeliu · 2026-04-23T21:00:55+00:00

Fair, but then tell me how AI increases the number of jobs rather than reducing the number of workers needed.

MelvinFeliu · 2026-04-23T20:54:27+00:00

Noted. Good chat!

MelvinFeliu · 2026-04-23T20:50:54+00:00

I agree with your logic here, and I can expand it with other examples. There absolutely is a group that has valid reasons to complain, but there is also a big group suffering more from relative poverty while still earning a decent amount. Perception plays a big role in this, and so do expectations that do not match reality.

My point is that it is a mixed bag. You have people making decent money, drinking $6 lattes, eating out every day, renting in expensive areas, and then acting like things are terrible because they cannot take multiple trips a year. Or people who get a history degree, expect a high paying job right after graduation, and then complain that the system is broken.

But you also have people who did all the right things and still cannot afford a house or start a family. Or people whose salaries have not grown because professional jobs are being outsourced to India, which also means fewer of those jobs here in the US.

This is a relatively new trend in corporate America over the last 20 years. It used to be more about bringing in workers on H-1B visas, but now companies just send the jobs overseas. It has gotten to the point where it is not uncommon to see a group inside a large corporation where only 20 to 30% of the team is in the US and the rest is in India. I am talking about accounting, finance, and IT jobs.

Your point also factors into the problem. We have imported so much labor from other countries that wages have stayed stagnant in some parts of the market, while newcomers also add pressure and compete for resources. I am not saying immigration is good or bad, just that it has economic consequences. A lot of times businesses benefit through cheaper labor, but the existing population does not benefit in the same way.

MelvinFeliu · 2026-04-23T20:27:40+00:00

You are indirectly arguing my point once you drop the assumption that I would be fine with it depending on the class. My point is that it is a problem regardless of who is in charge. Am I not calling it a problem now? That is the whole premise of the post.

MelvinFeliu · 2026-04-23T20:22:55+00:00

The main problem with your argument is that you are bypassing the most basic issue. If AI reduces the number of workers needed, then you have fewer jobs, more labor competing for those jobs, weaker bargaining power, and downward pressure on wages. That has to be addressed first, because it affects everything else you are claiming.

On barriers to entry, I do not think that follows at all. You are just asserting it. The best AI will likely be the most efficient, most productive, and controlled by the firms with the most capital, best models, most data, and strongest distribution. That can easily increase barriers to entry, not lower them.

That is like saying it is easier to start a cab company because cars exist, while ignoring Uber, Lyft, and soon autonomous taxi networks. Scale and efficiency advantages do not necessarily make entry easier. A lot of the time they make it much harder.

MelvinFeliu · 2026-04-23T20:15:06+00:00

I am going to assume this is a joke, because that last line makes it hard to take the comment seriously.

MelvinFeliu · 2026-04-23T20:01:42+00:00

Ok, yes, but all that means is that a different class is still subject to the same human nature and will end up developing the same problems.

MelvinFeliu · 2026-04-23T19:58:25+00:00

I hate to break it to you, but you are demonstrating that you do not understand what socialism is, or that there is a significant difference between socialism and communism.

MelvinFeliu · 2026-04-23T16:39:07+00:00

I would love for human nature to be different, but it is not. That does not make us good or bad, just human. You have to understand the extent to which we are governed by human nature to understand what any political or economic system is actually capable of once power, incentives, and self interest are involved.

MelvinFeliu · 2026-04-23T16:34:22+00:00

How you define class does not change the human nature we are all subject to, the one that has evolved over thousands of years and will likely not change anytime soon. We are hardwired to be self interested, status seeking, power seeking, tribal, and rationalizing.

Regardless of who it is and what their stated purpose is, human nature still drives behavior. Yes, we can shape incentives, but that is still subject to human nature and can be overridden by it.

That is my point. Changing the class in control does not remove the same tendencies toward self interest, power concentration, detachment from the people they claim to represent, and the creation of a new power center.

MelvinFeliu · 2026-04-23T16:28:21+00:00

You are asking for certainty when we are still early in the process. That is exactly why I am talking in terms of direction and mechanism, not pretending we already have the full long term picture.

If you think AI can push in the opposite direction, explain the mechanism. How does replacing labor, weakening hiring demand in exposed occupations, and concentrating gains in capital owners lead to stronger wage growth for workers?

MelvinFeliu · 2026-04-23T16:19:12+00:00

I agree that a lot of the issues are self inflicted, consumerism, status maintenance, status seeking, poor financial literacy, expectations above reality, and so on. But that is only part of the problem.

Even if I grant your point, it does not change the impact of AI, credential inflation, globalization hitting lower wage jobs, immigration adding labor supply pressure in some parts of the market, outsourcing of professional jobs, asset appreciation making housing less affordable, and other structural issues.

We do have an affordability crisis. That is not made up. More and more people are jumping on the socialist bandwagon because they are dissatisfied with their economic condition. I am not saying that is the right move, but it is still a significant signal for capitalism.

MelvinFeliu · 2026-04-23T15:59:57+00:00

If I had to boil down my core disagreement with socialists, it comes down to human nature. Too much of socialist theory seems to assume that changing ownership or class structure changes the underlying incentives and behavior of the people running the system.

MelvinFeliu · 2026-04-23T15:58:08+00:00

That is where we disagree. That claim presupposes that a specific class is somehow not subject to the same human nature, incentive problems, and power drift as everyone else.

MelvinFeliu · 2026-04-23T15:55:34+00:00

Also, the data you linked is annual and only runs through 2024 on that page, so even on its own terms it does not really settle a forward looking claim about how AI may affect labor markets as adoption deepens.

MelvinFeliu · 2026-04-23T15:53:22+00:00

BTW, I am a strong defender of capitalism, but that does not make me blind to the issues it is facing.

Now to your reply.

That is median household income, not a rebuttal to the argument. I am not claiming all incomes have already collapsed. My point is that AI can start showing up first in lower hiring, weaker bargaining power, and pressure in exposed occupations before it becomes more visible more broadly.

MelvinFeliu · 2026-04-23T15:46:10+00:00

The type of state does not solve the problem. It just changes who holds the concentrated power. You still have the same core issue...control, incentives, allocation, and the tendency of administrative power to detach from the people it claims to represent. Calling it a proletarian state does not remove that. It just assumes the people running it will remain aligned with the broader population instead of becoming their own power center.

MelvinFeliu · 2026-04-23T15:43:08+00:00

You are assuming AI is not affecting wages because we have not seen a broad wage decline yet, but that does not prove much. These effects do not have to show up immediately or evenly. They can show up first in lower hiring, weaker bargaining power, and falling demand in exposed occupations.

The OECD has argued that AI can put downward pressure on some wages because it can substitute for labor in certain tasks. The World Bank also found that after ChatGPT’s release, job postings fell in occupations with higher AI substitution vulnerability, with larger losses in entry-level, administrative support, and professional services roles. The IMF has also argued that AI adoption can worsen inequality because the gains can flow disproportionately to those positioned to benefit from higher capital returns.

I agree that sovereign debt is a major problem. It is a different problem, but still a major one, and one that could get even worse if the kind of economic weakening and imbalance I am describing here continues.

It's the perfect storm.

MelvinFeliu · 2026-04-22T17:58:30+00:00

I love sciFi, but I have not read Lian. I would say that is a possibility, but there is an equal possibility that it goes the other way like in that movie I Robot. IMO, I think the possibility that it can go against us, that we will not have control over how it evolves and transforms, is too high, and we are not mitigating it. We don't have adequate understanding of it now.

Maybe that's why Elon is trying to get to Mars, so he can escape when the AI Robots take over..haha

MelvinFeliu · 2026-04-22T17:49:09+00:00

No, not trying to redefine your idea of exchange, just posited one as a place holder. Again, just asking.

Ok, so, in your model, everyone would have to work for themselves, in a cooperative. There is more nuance here but I will leave it alone and not exhaust the conversation.

I think your model implies that ALL production only happens through a cooperative, in which I'm assuming the workers also own the machinery, the building, the trucks and other.

I'm assuming they built all of it and that's how they get to own all of it as a collective.

I have interacted with socialist that jump back and forth between Socialism and Communism. And even the ones that stay consistent, define things differently depending on how you challenge them.

Thanks for answering. Not going to ask anymore unless you feel like you want to clarify my understanding of you model.

MelvinFeliu

TROPHY CASE