This Industrial Revolution Is Not Like the Last One

When SpaceX went public with the highest valuation ever seen, Elon Musk became the first trillionaire in history, while during the same period the average American worker lost a year and a half of wage earnings. Behind these numbers lies an unprecedented divide: the industrial revolution driven by artificial intelligence is not only creating immense wealth for a few, but is also pulling the rug out from under the feet of millions of people in cognitive roles, and no longer just in factories. And here comes the point that no one wants to see: the plan that governments are re-proposing, the one used for the old automation — that is, retraining courses, unemployment benefits, incentives to keep jobs — never really worked well even then, and today it risks being even harmful. The classic reasoning is reassuring: machines took away heavy and repetitive jobs, but then people moved on to better, more creative, and better-paid jobs. But now AI is doing exactly the opposite: it is affecting precisely those office, analysis, and writing jobs, especially among people with degrees and advanced skills. It is no longer the assembly line that is being replaced, but the desk. And the promise that AI will “augment” these roles often turns out to be an illusion, because the same tasks that AI can enhance are also those that it can automate in an instant, leaving no time to adapt. One of the key figures in this story is Bhaskar Chakravorti, dean of the Fletcher School at Tufts, who led research on how different this wave is from previous ones. His team estimated that over the next five years, up to 19 million jobs in the United States are at risk of disappearing if AI adoption accelerates, with a potential loss of $1.5 trillion in income. A striking detail: while the tax system in rich countries is based mainly on payroll taxes, which finance social safety nets, AI shifts profits from workers to business owners, draining the very tax base that should protect those who lose their jobs. This creates a vicious circle: fewer wages to tax, less money to help those left behind, more wealth accumulating at the top. Chakravorti says that most of the current measures — reskilling courses, training incentives, even cutting-edge programs like those in Singapore or Estonia — risk being too slow or too small compared to the speed and scale of the transition. And he provides concrete examples: in South Korea, the government has even threatened companies that lay off too quickly because of AI, while in France every worker has a portable "training account" that follows them throughout their life. But all this is of little use if the heart of the problem is not addressed: the redistribution of benefits. His most radical suggestion is that we need to treat human skills and time as a resource from which AI derives value and recognize a kind of "AI dividend" for everyone, modeled on Alaska's oil funds, where citizens receive a share of the profits extracted from the common territory. There is a paradox that makes everything more urgent: while the CEOs of OpenAI, Microsoft, and other giants testify before the U.S. Senate — and Musk celebrates his IPO — the workers affected by AI are often the ones most skilled at communicating, organizing campaigns, and influencing public debate. The political game, therefore, is wide open. So far, the debate has focused on how to "cushion" the blow, instead of asking who decides how the gains from this revolution are distributed. An idea that turns everything upside down: the real AI revolution is not only technological, but fiscal and political, and the old factory manual is not only insufficient, but risks widening the gap. If AI replaces office jobs and empties the tax coffers, repeating the same old recipes is like fighting a fire with a leaky bucket. So, the next time you hear about reskilling courses as a panacea, ask yourself: who really pays the price and who collects the dividend? If this story has changed your perspective, you can mark it on Lara Notes with I'm In — choose whether it's an interest, an experience, or a belief. And if in the next few days you discuss with someone how AI is rewriting the rules of work and taxes, on Lara Notes you can tag that person with Shared Offline: this way the conversation remains, even when the topic seems already old. This content comes from Foreign Policy and saves you 9 minutes.