Barbell Society
It is becoming increasingly obvious, just as AI imbedded in Google's Blogger helps predict my next words, that society has undergone some fundamental changes in just the past several years. Perhaps the biggest is the emergence of what I consider to be a "barbell society."
In the traditional sense, barbell economics means a concentration of wealth or economic activity at two ends of an economic spectrum; ie your working poor and your working rich. The Middle Class was the thick bar in the middle holding up both given its size, asset ownership, and political power. But with the rapid adoption of AI in the workforce, academia, logistics, fulfillment, food prep, etc., etc. combined with a monopolistic concentration of assets (read cash, gold, bitcoin, stocks, real estate, pensions, 401Ks, business ownership, IP assets, political power, etc.) in the hands of a single generation what has emerged is a barbell society.
This barbell society is new in the annuals of history; typically there was a pyramid type of structure where a few controlled or owned everything and the vast majority of people led lives of serfdom. This has drastically changed over the past two thousand years via successive revolutions. Up until recently in fact, almost every successive generation looked forward to a better standard of living than their parents. That is no longer the case, as "The American Dream" is poised to succumb to a barbell society.
The question that arises now with the arrival of AI in society is where on the barbell is AI? I propose that it is actually the left "BELL" increasingly responsible for more work utility (task importance times volume.) The left BELL is growing insanely fast, replacing mundane, dangerous, and increasingly knowledge-based tasks, jobs, and marketing/sales. The left BELL needs no sleep, no comp, no medical insurance, files no lawsuits, and works for the cost of its coding and electricity. The left Bell grows stronger by the second.
The BAR is what once was the working poor and middle class which have essentially are doing less task importance times volume work, but there are much more of them. Society today resembles more of hockey stick lying on the ice with five feet of it nearly flat and the last foot shooting up.
Mathematically the vast majority of Americans could not pay for health insurance without subsidies or employer contributions. Most Americans do not own their own homes. Most Americans could not round up $400 in an emergency. Simply put, most Americans are poor not middle class.
In terms of asset concentration, the BAR represents the working poor and middle class with some tinge of upper middle class. Yes, all of these segments have varying degrees of ready cash, bitcoin, stocks, real estate, and perhaps political power but they are fragmented and hence the BAR appearance, flat and linear. The right BELL however is a completely different story.
The right BELL (and make no mistake, this does not imply a singular political party, both Democrats and Republicans transcend into the right Bell) not only controls vast swaths of assets, but also has managed to create wide moats to entry (think Prop 13 in California.) We are seeing the rise of socialism because of this very development. When the odds seemed stacked (and they are), younger generations embrace forceful redistribution of assets.
Consider: Baby Boomers own over 54% of stocks. Likewise with real estate. Small businesses. Obviously nearly 100% of Social Security cash flow. And political power? Well there has never been a Gen X or Millennial President. Average age of U.S. Senator? 65. That used to be the mandatory retirement age! As the poster child of his generation, Warren Buffett is finally retiring (sort of) at age 95 at the end of this year.
Modern medicine, healthy living habits, and unwillingness to "pass the torch" has led to some unusual societal developments...combine this with the rise of AI and what we see is a true barbell society. Think about this: Over 33% of someone's LIFETIME medical costs occur in the last 5 years of their lives. There are approximately 75 million Baby Boomers in the United States. The average Baby Boomer is 68 years old with a life expectancy increasing daily. With miracle drugs like GLPs many in this generation have a good chance of living into their 90s. "Centurion" is one of the fastest going demographics.
From a societal standpoint, it will become increasingly difficult to support the largest demographic. If both the left BELL does not significantly increase economic productivity and the BAR does see real wage growth healthcare costs will drive this country bankrupt. Let me say that again, AI (the left BELL) needs to drastically increase productivity while the working poor, middle class, and upper middle class (the BAR) needs to drastically increases their real wages.
