In a 2020 email, Thiel argued that high student debt and unaffordable housing would leave millennials with no stake in the capitalist system, inevitably causing them to turn against it. This prediction highlights the economic roots of modern political shifts among younger generations.

Unlike previous generations who grew up believing liberal democracy was the final political form, Gen Z entered a world with no clear answers. This void, combined with infinite internet access, fueled a competitive explosion of fringe ideologies as they searched for new models.

Economic policies benefiting older, asset-owning generations at the expense of younger ones are reshaping politics. The traditional left-right divide is becoming less relevant than the conflict between classes, which is highly correlated with age, creating unusual political alliances between formerly opposed groups.

The growing appeal of socialism among the young is attributed to a "broken generational compact." As Peter Thiel predicted, when young people face crushing student debt and no path to homeownership, they lack a stake in the capitalist system and are more likely to turn against it, fueling movements like the one that elected a socialist mayor in NYC.

Pro-socialist views among millennials can be understood as a logical reaction to a "broken generational compact." When economic realities like crushing student debt and unaffordable housing prevent a generation from accumulating capital and gaining a stake in the system, they are naturally inclined to question or reject that system.

The traditional left-right political axis is obsolete. A better framework is the 'political horseshoe,' which captures the generational conflict where younger people, facing a future of deglobalization and AI job displacement, are forming new coalitions outside the established consensus upheld by older generations.

The prevalent Milton Friedman-style, shareholder-only capitalism has only been the dominant model since about 1970. This neoliberal approach is just one phase in capitalism's history, not its fundamental, unchanging definition. This historical context opens the door for a new consensus to form.

Recent election results reveal two distinct Americas defined by age. Younger voters are overwhelmingly rejecting the political establishment, feeling that policies created by and for older generations have left them with a diminished version of the country. This generational gap now supersedes many traditional political alignments.

The widening gap between the economic fortunes of the rich and the middle class is eroding faith in capitalism across the political spectrum. This sentiment is no longer confined to the left, as Republican pollsters find their own focus groups expressing deep skepticism of big business, mirroring progressive talking points and signaling a broad political realignment.