AI Won’t Create a Permanent Underclass. Socialism Will.

Turtles All The Way Down

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AI Won’t Create a Permanent Underclass. Socialism Will.<br>The case for redistribution without socialism.

Ben<br>Jul 30, 2026

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“The same oligarchs who shipped jobs overseas now want to replace tens of millions of American workers with AI,” Bernie Sanders recently declared. “Our message to them is: Go to hell.”<br>The anger lands. Half of American workers are worried about the impact of AI on their workplace. A third think it will reduce their job prospects, while only 6% think it will create more.<br>Sanders has proposed a moratorium on AI data centers until worker protections are in place. Rhode Island now protects cashier jobs by law—one staffed lane per three self-checkout stations, plus employees whose only job is to watch the machines. Among Democrats, socialism now polls higher than capitalism, and the DSA’s new platform imagines food, energy, medicine, and transportation as public utilities rather than businesses.<br>Thanks for reading Turtles All The Way Down! Subscribe for free to receive new posts.

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People are scared AI will condemn them to a permanent underclass—and a socialist response is gaining ground. When disruption threatens something essential—your job, your wages, your ability to afford basic goods—government intervention offers immediate stability: preserve the job, cap the price, delay the technology. Each measure moves more of the means of production—the nitty-gritty of how problems get solved—under political control.<br>But it is these socialist policies, not disruption itself, that make disadvantage permanent. Markets do not merely destroy old arrangements; they replace them with better solutions. Move production out of the market, and you remove that problem-solving mechanism. The status quo survives while the rest of the world advances, and AI is about to accelerate that progress. For the people protected from change, stability becomes stagnation.<br>AI will be massively disruptive. We need an ambitious policy response that helps people weather the volatility without sacrificing the abundance the technology can create. We urgently need redistribution to give every American a stake in that abundance—because otherwise, they will burn it down before it arrives.<br>But redistribution does not require socialism. We can share wealth, put purchasing power in the hands of every American, and let private actors compete to solve everyone’s problems. We can protect people without freezing the economy in place, allowing markets to adapt as quickly as technology does.<br>To understand why, we need to stop treating redistribution and socialism as the same thing.<br>Redistribution ≠ Socialism

American political commentary often treats “redistribution” and “socialism” as interchangeable points in the middle of a flat economic spectrum. The usual line runs from laissez-faire capitalism at one end to communism at the other, with socialism somewhere in between.

The flat, over-simplified economic spectrum<br>This linear model collapses two entirely separate questions.<br>The first: Who controls production? Is economic activity directed from the top down by the state, or coordinated from the bottom up by competitive markets?<br>The second: How broadly is purchasing power distributed? How much of the wealth an economy produces is shared?

Placements are illustrative—every real economy is mixed.<br>Why are “communist” countries like Cuba and the Soviet Union low on the redistribution axis? Because we’re looking at redistribution of purchasing power. For the most part, each of these countries prioritized distribution of state-rationed goods over flexible purchasing power like cash transfers or vouchers.<br>Once you separate these questions, it becomes obvious that Denmark and Venezuela aren’t just using different amounts of socialism. Both have tried to give ordinary people greater security and a broader share of national wealth, but they pursue it through almost opposite mechanisms.<br>Denmark’s Nordic model combines a large welfare state with private ownership and a thriving market economy. Denmark enables that economy to create wealth, taxes a large share of it, and redistributes purchasing power so more people can benefit from and participate in the market. As former Danish prime minister Lars Løkke Rasmussen put it:<br>“Denmark is far from a socialist planned economy. Denmark is a market economy.”

Under Chávez and Maduro, Venezuela pursued those goals through much more direct state control: nationalizing industries, controlling prices and access to currency, and politically directing production. Instead of using redistribution to give more people leverage within the market, it has tried to replace market coordination with state control.<br>Socialism tries to solve people’s problems directly. The government runs the school, assigns the housing, controls the rent, or mandates the job—removing competition, consumer choice, and market...