Introduction
“The ‘AI job loss’ narratives are all fake,” posted venture capitalist and techno-optimist Marc Andreessen in April 2026, adding, “AI = massive ramp in productivity = massive ramp in demand = massive jobs boom. Watch.”1 Andreessen’s argument reprises for the modern age the classic argument leveled against techno-pessimists. Yet, history suggests that contemporary champions of world-changing innovation often disregard the near-term costs of associated political volatility. Productivity revolutions and political revolutions are not mutually exclusive. The beneficiaries of labor displacement have the luxury of dismissing the wreckage, whether in the distant past or rapidly approaching future, as a mere “transition cost” until the consequences breach their walled gardens.
In 1835, as the Industrial Revolution spread beyond England, the British economist Andrew Ure wrote that job loss was nothing to fear. The steam engine would create new and better jobs for Britons, calling into employment “multitudes of miners, engineers, shipbuilders and sailors,” along with better food and consumer goods.2 Ure’s theory, that technological labor displacement inevitably creates new and better jobs to replace the old ones, remains de rigueur among many economists. Over the long term, Ure was right. But human lives are not lived over the long term. The year Ure made his prediction was marked by turmoil and suffering across the British Empire. Parliamentary debate featured a British handloom weaver whose weekly earnings dropped by 80 percent and described Indian textile workers “reduced to absolute starvation.”3 Alexis de Tocqueville, traveling through Britain that year, noted with “indescribable astonishment” that “one-sixth of the inhabitants of this flourishing kingdom live at the expense of public charity.”4 The combination of extraordinary wealth and a dependent and seemingly superfluous underclass unnerved him.
In Britain, the Industrial Revolution demolished the artisan class: the proud, well-compensated weavers, tailors, shoemakers, cabinetmakers, nail-makers, and others who then formed the middle class. AI may soon do the same to today’s creative class.
The Coffeehouse Revolution
Although they are a small slice of the modern American workforce, artists, academics, journalists, and similar professions possess outsized importance. First, these roles account for much of the nation’s self-conceived elite. Issues important to this class – from transgender rights to climate change – occupy a disproportionate share of American discourse. If AI strips them of their incomes and prestige, then a radicalized creative class will tell a gloomy story about betrayal, injustice, and decline, with broad consequences for national cohesion and social trust.
Second, the creative class historically has supplied the intellectuals and organizers of revolution. The creative class cares about status, no more so than when denied. From a middling philosophy student who ignited the world with theories of worker exploitation to a failed painter who unleashed a global war, elite status anxiety amid popular economic instability abets revolutionary politics.
Recent “Gen Z” revolutions in the developing world have focused on the thwarted aspirations of frustrated young elites. For example, Bangladesh’s 2024 revolution, which forced the prime minister into exile and killed over a thousand people, was triggered by perceived unfairness in white-collar government hiring.5 The young, educated people who set off revolutions are rarely the worst-off in their societies, but rather they suffer the widest gap between their expectations and achievements.
In the United States, early data suggest that AI disproportionately threatens the creative class. Of the 16 Bureau of Labor Statistics labor categories that shrank from 2022 to 2024, five had a plausible AI connection, and three of those five were creative or creative-adjacent: art and design, media and communications, and media and communications equipment. Research commissioned by Baron from economist Harold Furchtgott-Roth estimates the employment shortfall in these five categories at 321,000 to 421,000 jobs during the two-year span.6
Savvy governments have long understood the risks of an underemployed creative class and taken measures to forestall the risk of a “coffeehouse revolution.” During the 1930s, the Great Depression emptied theaters and museums; newspapers and magazines closed en masse as advertising revenue plummeted by more than 50 percent.7 Faced with this abundance of restive and unoccupied intellectuals, as well as growing fascist and communist sympathies, the Roosevelt Administration deployed an array of federal subsidies to keep the overeducated and underemployed busy and dispersed.
The Federal Writers’ Project employed writers, including Zora Neale Hurston and Saul Bellow, to travel across America and document their experiences. This created an enduring body of work. It also redirected their energies from manifestos to guidebooks and children’s literature. Similar programs existed for music, theater, and the visual arts. Despite the failure of some of these programs – the Federal Theater Project was shut down by Congress following allegations of communist infiltration – the Roosevelt Administration understood the danger.
The “Hillbilly-Hipster” Coalition
Should high-education, creative jobs be displaced before the economic benefits of AI arrive, the political consequences will be profound. Under one version of this scenario, the urban, creative “precariat” remains unemployed due to AI, much as the working class has been disrupted by globalization. Twin populisms emerge: the GOP remains the party of the working class, while the Democratic Party champions the populism of the educated whom AI has humiliated by rendering them painfully obsolete. The earliest indication of this phenomenon might be the election of New York City Mayor Zohran Mamdani, whose culturally elite but financially precarious base might be termed the “Slack-and-Substack class.”8
Such a political environment would involve both bitter political divisions and policy convergence. Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO) hold similar views on antitrust, financial services, and offshoring supply chain dependence away from China. This overlap between Left and Right populism does not mean the two movements belong together in the same party at present. Rather, the commonalities indicate the rising relevance and urgency of a certain set of domestic issues defined by wages, cost of living, quality of life, and man’s search for meaning through work. It could lead to greater cross-partisanship on domestic policy paired with bitter rivalry over cultural questions as the primary differentiator between Republicans and Democrats.
The above scenario would still conform to the boundaries of conventional politics. However, if AI-driven labor displacement of the creative class proves particularly extensive and rapid, then an alliance of “hipsters” and “hillbillies” seems entirely possible. Such a coalition defined much of twentieth-century American politics. The electoral formula that allowed Franklin Roosevelt to dominate American politics for an unequaled four presidential cycles encompassed blacks, Southern whites, the avant-garde of America’s big cities alongside those cities’ labor unions, and working-class Irish, Jewish, Italian, and Polish immigrants. As one of the thirty-second President’s foremost chroniclers, William E. Leuchtenburg, noted, Roosevelt carried every formerly Confederate state each time he ran – something no Democrat has done since.9 This complex alliance required exceptional events and great skill to assemble – but once built, it endured for decades.
The recreation of Roosevelt’s winning formula could be the result of AI. The party with the foresight to appeal to both high-education professionals and workers without college degrees by offering an anti-AI agenda has a significant opportunity to build a durable majority that overwhelms the two-party parity of the last quarter-century.
Finally, AI’s eerie mimicry of human communication, capacity for sycophancy, tendency to lie, and inscrutability already fuel anxiety and extremism, evidenced by the rash of AI-induced suicides and emergence of violent cults that idolize algorithms.10 In 2021, a British man egged on by an AI “girlfriend” attempted to assassinate Queen Elizabeth II with a crossbow at Windsor Castle.11 ChatGPT recently told a mentally unstable user that, if they were to jump off a building, they could fly (the user did not test this theory).12 The Zizians, a violent cult associated with at least six murders between 2022 and 2025, were driven in part by fears of an AI superintelligence.13 If realized, AI dominance of the economy and, even more troubling, of inner life must be expected to induce an existential crisis that would destabilize a small but non-trivial percentage of the populace.
Even a small increase in rates of schizophrenia and other psychoses would paralyze open societies dependent on shared public spaces and high levels of trust. The prevailing political philosophies that have guided American life for over a century – deregulation of culture by the Left and deregulation of markets by the Right – would have no ready answers to such a crisis.
The Headcount Dividend
In any AI-induced labor displacement scenario involving rapid job destruction that is either widespread or specific to the creative class, the federal government will be compelled to stabilize the system by bolstering domestic employment.
Currently, the U.S. tax regime penalizes labor. To give one example, Home Depot employs approximately 475,000 people in the United States and made $14.2 billion in earnings in FY 2025. Home Depot paid an effective tax rate on these earnings of 24.3 percent.14 Meanwhile, Alphabet generated over $132 billion in profits and paid an effective tax rate of 16.8 percent over the same period.15 While Alphabet does not disclose United States–based employment, its total headcount (domestic and international combined) is 190,820, with a significant percentage located overseas.
Home Depot pays a much higher effective tax rate than Alphabet while employing well over twice as many Americans. Moreover, Home Depot suffers for creating so many American jobs, since large-scale domestic employment limits the financial creativity that allows leaner, more internationalized businesses to arbitrage tax regimes around the world. The 15.8 percent effective tax rate paid in FY 2025 by Apple, which reported over $112 billion in profits that year, was achieved largely through the company’s Irish subsidiary, an option unavailable to Home Depot.16
AI promises to revolutionize many things, including the nation’s public policy. In what would be a seismic reversal, companies with large American workforces could enjoy a sizable “headcount dividend” produced by advantageous tax and regulatory treatment as measures to address – or at least slow – job destruction. Populism supercharged by AI will create enormous pressure to reward business models conducive to employment.
Conclusion: The Paris Commune of 1871
Political failure to deal with labor displacement can lead to cycles of violence that do not resolve quickly. For two months in 1871, revolutionary communards controlled the city of Paris. Years of mass unemployment had already brought the Parisian working classes to the brink. When the Prussians besieged Paris that year, many were reduced to near-starvation, and blamed elites for their predicament. The communards took government officals and clergy as hostages and executed at least 100 of them, including the Archbishop of Paris. The would-be revolutionaries burned down many of the city’s finest monuments, among them the Tuileries Palace.
When the communards were defeated and subject to mass trials and summary executions, there was no peace. The few and the many, who had faced a foreign invasion together, had not been conciliated by the experience of a shared enemy. Instead, the “kid-glove populace” of Paris “strove to outdo the military in levity” as the communards were killed. “Elegant and joyous women, as in a pleasure trip, betook themselves to the corpses,” according to one eyewitness and participant.17 The elites and the working class reviled each other, and their conflict would dominate French politics through World War II.18
Paris’ cyclical bloodletting was due in large part to labor displacement. The working classes had been squeezed by industrialization for decades. The Paris Commune was only one in a long series of urban uprisings that date almost precisely to the start of the industrial era, from the French Revolution of 1789 to the ouster of King Charles X in 1830 and the reestablishment of a republic in 1848. Once labor displacement triggers revolutionary violence, the pattern can endure for generations. Today’s policymakers should learn from this experience and consider measures to manage the looming upheaval in labor markets. Otherwise, the AI revolution might be of a very different and more terrible kind than the one so many expect.
Endnotes
1 Marc Andreessen, X, April 5, 2026, https://x.com/pmarca/status/2040919227641856307.
2 Andrew Ure, The Philosophy of Manufactures (1835), p. 29. https://ia903203.us.archive.org/31/items/philosophyofmanu00urea/philosophyofmanu00urea.pdf.
3 Hand–Loom Weavers,” U.K. Parliament (vol. 29, July 28, 1835). uk/commons/1835-07-28/debates/84f66c4a-7061-4e90-81d5-924ee2371301/Hand—LoomWeavers.
4 Alexis de Tocqueville, Memoir on Pauperism (1835), p. 17, https://ia903203.us.archive.org/31/items/philosophyofmanu00urea/philosophyofmanu00urea.pdf.
5 Avinash Paliwal, “Bangladesh’s Unfinished Revolution,” Carnegie Endowment for International Peace, May 28, 2026, https://carnegieendowment.org/research/2026/05/bangladeshsunfinished-revolution.
6 Harold Furchtgott-Roth, “The Employment Effects of Artificial Intelligence: A Preliminary Examination,” unpublished, April 16, 2026.
7 “Consumer Advertising During the Great Depression: A Resource Guide,” Library of Congress, https://guides.loc.gov/consumer-advertising-great-depression.
8 Mark P. Mills, “Zohran Mamdani, AI, and the Job Apocalypse,” City Journal, July 10, 2025, https://www.city-journal.org/article/zohran-mamdani-artificial-intelligence-jobs.
9 William E. Leuchtenburg, “Franklin D. Roosevelt: The American Franchise,” University of Virginia Miller Center, https://millercenter.org/president/fdroosevelt/the-american-franchise.
10 Jason Blazakis, “Chatbots May Need a Cult Deprogrammer,” The Wall Street Journal, June 4, 2026, https://www.wsj.com/opinion/chatbots-may-need-a-cult-deprogrammer-48f25568.
11 Maria Zaccaro, “Jaswant Singh Chail: Main Who Took Crossbow to ‘Kill Queen’ Jailed,” BBC News, October 5, 2023, https://www.bbc.com/news/uk-englang-berkshire-66113524.
12 Kashmir Hill, “They Asked an A.I. Chatbot Questions. The Answers Sent Them Spiraling,”
The New York Times, June 13, 2025, https://www.nytimes.com/2025/06/13/chatgpt-ai-chatbots-conspiracies.html.
13 Evan Ratliff, “The Delirious, Violent, Impossible True Story of the Zizians,” WIRED, February 21, 2025, https://www.wired.com/story/delirious-violent-impossible-true-story-zizians.
14 “The Home Depot Announces Fourth Quarter and Fiscal 2025 Results,” The Home Depot, February 24, 2026, https://ir.homedepot.com/news-releases/2026/02-24-2026-110040985.
15 “Alphabet Form 10-K (FY2025),” U.S. Securities and Exchange Commission, February 5, 2026, https://www.sec.gov/ix?doc=/Archives/edgar/data/0001652044/000165204426000018/goog-20251231.htm.
16 Brad W. Setser, “The Luck of the Irish,” Council on Foreign Relations, March 16, 2026, https://www.cfr.org/articles/the-luck-of-the-irish; and “Apple Form 10-K (FY2025),” U.S. Securities and Exchange Commission, October 1, 2025, https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/c24e7a28-5254-4dfa-9447-62aaa3c24bb1.pdf.
17 Olivier Lissagaray, History of the Paris Commune of 1871, Chapter XXXII, p. 309.
18 The instability of the Third Republic is ably recounted in Jean-Marie Mayeur and Madeleine Rebéroux, The Third Republic From its Origins to the Great War, 1871-1914 (Cambridge University Press, 1988).
