One Idea for How To Quell the Coming Unrest

When Henry Ford became a millionaire over a century ago, he didn’t get wealthier in isolation. Thousands of his assembly line workers entered the middle class for the first time.

Industrial capitalism spread prosperity partly because growth required large workforces. Digital technologies increasingly scale with very few workers.

Consider that when Instagram was purchased for $1 billion, it had a mere twelve employees. 

The gap between the richest and poorest has been widening for decades, and it’s accelerating. The AI revolution is about to create a trillionaire class.

Wealth disparities, in and of themselves, are not a societal failing. This is where the left (always) gets it wrong. To the contrary, they are the natural result of a free society where hard work, ingenuity, and even luck are rewarded. 

The problem is in how societies can respond if the disparities become acute. Periods of economic displacement have historically generated populist movements and social instability. 

While the implications of AI are still being sorted out, one probable scenario will see the older, equity-holding class get richer, leaving behind the young who see their jobs being replaced by AI. 

This already appears to be happening.

The natural response, reasonable or not, will be class-driven anger and finger pointing. Politically, it will mean more AOCs and Mamdanis. Wealth taxes and asset seizures will be the least of it. These are now routine policy preferences in the emerging Democrat base.

Worse, Luigi Mangione-style political violence will be normalized.

It’s not hard to see how disastrous this would be for our nation. The question is, how do we avoid it?

There is one approach that would help, and the mechanics are already in place. It's called Trump accounts.

But first, it’s important to state what not to do. 

Large tax increases would be a mistake. Not only do they hinder economic growth, but they channel money through the government, which is highly inefficient at best and corrupt at worst.

Universal Basic Income, something a few frightened conservatives are even talking up, is another mistake. Nothing can possibly be more disincentivizing than “free money now.”

Lastly, channeling money through NGOs is aanother horrible idea. They, too, are inefficient, and if there’s anything the last year has shown us, it’s that NGOs are frequently corrupt, too.

The challenge becomes: how to transfer (some) wealth without destroying personal incentive and without routing money through self-interested intermediaries?

The answer I propose is expanding the use of Trump accounts. The federal government is currently seeding these with $1,000. That money gets invested in index funds until age 18, at which point it converts to a standard IRA.

Michael Dell and other wealthy individuals have contributed $7 billion to the program to boost the amounts kids receive. These accounts will compound into meaningful amounts over time and give our young a vested interest in our economy, creating “skin in the game.”

So rich people: instead of "giving pledges" that make vague promises to someday give money to the NGO Industrial Complex, why not be Michael Dell? You have an interest in social and economic stability. You can even tailor the gift, like Ray Dalio did, to specific states or Zip Codes. Let’s build a generation of young who have a nest egg and care about markets.

One caveat. There will be those tempted to bust their accounts on their 18^th birthdays just to party. This will cost income taxes plus a 10% penalty, but the there are plent of stupid people out there. The solution to this is to increase the pain at ealier ages. The penalty should be increased to, say, 30%, and phased down over time.

How Colleges Can Save Themselves

 

As the collegiate calendar winds down soon for the summer, it's worth asking, how many will reopen in the fall?

Forty-eight have closed in the last five years, and it's all but certain that many more, particularly small liberal arts ones, are on a collision course with extinction.

Consider the demographics. The number of high school graduates peaked last year and will decline annually for as far as the eye can see. Insiders call it the "enrollment cliff."

Additionally, fewer high schoolers will choose to go at all. The ROI on $250,000 simply isn't there, particular as AI savages early-career white collar jobs.

Worse, universities have seen a decline in donations while simultaneously tapping endowments at a higher rate. Both Moody's and Standard & Poors have issued negative fiscal outlooks.

In short, universities have a failing business model, one bloated with fatuous majors and legions of useless administrators. Elon Musk fired 80% of the Twitter staff and the platform is more robust than ever. Imagine what could be done with the academy.

None of this is news. The question is, what can colleges do about it? What role can they play to justify a small fortune and four years of a person's life?

Let's start with the obvious, which is what they need to stop doing: charging the GDP of small countries to attend. To do this, they need to radically reduce overhead. Yale has almost the same number of administrators as it does undergraduates. That's insane.

Then they can excise every department that ends in the word "studies." You know, the grievance factory.

But charging less still leaves the question, charging for what? 

If they are to be saved from themselves, there are strengths colleges can play to, and it's no longer conveying information. It's social development.

Today's teens are increasingly isolated, locked into their screens, gaming or scrolling. They date less, party less. Teen girls, in particular, are seeing huge spikes in mental health issues. Loneliness is endemic.

I learned plenty in college. I've also forgotten most of it. What I kept are lifelong friends, and there are few things I value more. The process of making them involved sports, clubs, parties, and conversations over lingering meals in the dining hall. 

Social things.

Colleges must lean into this on multiple fronts. Start with the pedagogy. The traditional model of professors giving lectures is toast. Information is now free and unlimited. You don't have to go to Harvard to get it. 

Learning must be more interactive and collaborative, with viewpoints actively challenged. Class participation is a must. This will increase retention and teach students how to think for themselves, not just relying on AI for all the answers. 

Outside the classroom, colleges should heavily promote clubs, debating societies, religious organizations, and yes, Greek life. (That last one will be hard after decades of administrative hostility.) Anything that promotes personal connection and interaction.

Sports are equally important, and not just at the varsity level. Club and intramural sports play a role. The pickle ball club at UVA has seven hundred members. How many friendships are being forged on those courts?

Those friendships are a support network in college and long after.

Importantly, it must not be college administrators who "engineer" the social environment, because their ideas will be DEI-tinged nonsense. They need to just get out of the way.

The trend towards off-campus housing solutions also needs to be reversed. Campus is the social hub, and students should be there as much as possible, learning to deal with difficult roommates.

School spirit, treated by some liberal arts schools as vaguely embarrassing, should be embraced. I can accurately assess the cultural health of a university by how well-attended their sporting events are. Top administrators should be seen in the stands.

These experiences can produce socially functional, free thinking, emotionally healthy adults, something AI can never do. Colleges need to understand their abiding strength and run with it. 

The alternative is irrelevance and bankruptcy.