Engels' Pause and the Permanent Underclass
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Engels' Pause and the Permanent Underclass<br>Mythos means John Henry lost<br>Doug O'Laughlin<br>Apr 15, 2026
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Mythos to me is yet another game changer. It is interesting to see that the naysayers of bubble talk have started to abate, while general optimism (and paranoia) about model improvement continues.<br>Mythos is actually some kind of step change, and the fact that anyone with access to the model could in theory find zero day exploits with a simple prompt is ground breaking. I’d argue that a machine that can find zero day exploits at scale is proof of human cybersecurity researcher displacement. And Project Glasswing from this perspective (as well as saving compute) seems like a worthy cause.<br>Fabricated Knowledge is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
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I think we continue and will continue to underestimate this different kind of intelligence. It is truly novel to hold the entire problem to solve in a single context window and run attention over the entire context simultaneously rather than sequential human analysis. It’s clear there is a big breakthrough that will augment and partially displace labor.<br>Mythos is a level of performance that leads to meaningful disruption. The Mythos model found thousands of critical vulnerabilities that survived decades of review. The John Henry moment of man versus machine has already passed. The machine is likely at superhuman levels of performance, especially when it comes to information processing.<br>So today I want to talk about and introduce a concept that I think will become a much broader phrase in the public sphere in the coming month. And that is "Engels’ Pause.”<br>What is Engels’ Pause
Engels’ pause is a term coined by economic historian Robert C. Allen to describe the period from 1780 to 1840 when a curious pattern happened during the midst of the industrial revolution. British working-class wages stagnated while per-capita GDP expanded rapidly during the industrial revolution, aka the most consequential technology transition in human history to date.<br>The math is something like this: economists Charles Harley and Nicholas Crafts estimated per-capita growth at 46% between 1780 and 1840. Charles Feinstein found that working-class wages during the period increased by only 12%. That’s a meaningful gap for workers during one of the most transformative periods in human history. So what caused it?<br>This is actually a bit of a debate. The analysis suggests that Artisan workers in the domestic system were replaced by machines, often tended by children. The displacement effect was high earning middle class artisans got displaced by capital and the cheapest labor possible. The returns of this output were extremely uneven, corporate profits were captured by industrialists who reinvested them heavily into more factories and more machines.<br>The destruction in wages was not about unskilled workers, but rather hyper focused on a specific class of skilled artisan middle class workers who commanded a hefty premium. There actually was a bit of a golden age for handloom workers, where the premium was 100% over broader workers. This higher wage created an incentive to displace this labor rapidly. The high premium on this kind of work encouraged its destruction first.
Source: Knowable Magazine<br>In just one generation, handloom workers wages got halved. And as one activity after another was mechanized, hand workers experienced falling earnings because they competed against mechanized output, and then eventually a flood of displaced workers from other parts of the economy. The average wage of workers did not start to increase until after the full displacement of handiwork.<br>Pretty much this period of time had returns of technology exclusively accrue to capital. And I think given that we just got a new revolutionary tool that can replace previously hand-churned information work, Engels’ Pause is likely the single most powerful analogy for today and the coming decades.<br>The Information Artisan Class - Who’s at Risk?
Here comes the unfun part. We have to answer the question, who is the modern handloom weaver?<br>The information artisan class in my view is around ~70.7 million workers in the “management, professional, and related occupations” industries and represents about 43.9% of the US workforce. They account for about 40-45% of GDP, and if we add broader definitions of office & admin support as well as sales, we can push that number to ~100 million workers of the 161.3 million employed individuals in the US. This is the richest and most valuable part of the economy, and the golden age of information work might have been from 1993 to 2020.<br>A helpful (AI generated graphic!) is below.
I would go one step at a time over whose most at risk as well as who has the highest average wage.
From the perspective of most...