History shows that transformative technologies—the industrial revolution, electricity, the internet—create massive long-term value. However, they also render the skills of one to two generations of workers obsolete, leading to widespread career and economic disruption for those individuals before their grandchildren reap the benefits.

History's major technological shifts—industrialization, electrification, the internet—each wiped out the careers of one to two generations. Those workers suffered while their grandchildren benefited. AI is likely to repeat this pattern, creating a generational chasm between those who lose and those who gain.

The wealth gap between asset owners and wage earners, once seen as a temporary economic trend, is solidifying into a permanent societal structure due to AI. This shift makes upward mobility nearly impossible for the 90% of people who do not own a diversified portfolio of assets.

The same general-purpose technologies, like social media or AI, function as a wedge. They create massive productivity gains and wealth for a minority who leverage them effectively, while simultaneously distracting and disadvantaging the majority who passively consume them.

The negative reaction of recent graduates to AI is rooted in the historical reality that major technological shifts cause brutal, multi-generational disruption. Precedents like the Industrial Revolution show that it can take until the third generation (grandkids) for society to fully adapt and reap the benefits.

AI is driving a K-shaped economy. At the macro level, the AI sector booms while others decline. At the corporate level, AI stocks soar past others. At the individual level, a skills gap is widening between those who can leverage AI and those who can't.

AI is not a great equalizer; it's a productivity multiplier for those who are already highly skilled. A top-tier engineer or writer can double or triple their output, while an average performer sees smaller gains. This dynamic is set to exacerbate the K-shaped economy, making the rich richer and the poor comparatively poorer.

Unlike the industrial economy's bell-curve wealth distribution, the digital economy operates on a power law. A small percentage of participants capture a majority of the rewards, whether in e-commerce or online dating. This inherently shrinks the middle class.

Technological shifts can create a period where national productivity soars but real wages for skilled workers fall. We are in a modern 'Engels Pause,' similar to the 19th-century Industrial Revolution, which historically led to revolutions in ownership, education, and political power.