CONCEPT
r > g in the Age of AI
Thomas Piketty’s formula for the arithmetic of wealth concentration—when the rate of return on capital exceeds economic growth, inequality compounds—applied to
machine intelligence capital, where the gap between r and g is not two percentage points but an order of magnitude.
Three centuries of tax records yield a single formula: when the rate of return on capital (
r) exceeds the rate of economic growth (
g), the capital owner’s share of national income rises relative to everyone else’s, compounding over decades into the inherited-wealth-dominated societies of the Belle Époque and the Gilded Age.
Thomas Piketty derived this formula from data, not theory, and its power lies in its mechanism: the formula does not require malice, monopoly, or even unusually high returns—a gap of two to three percentage points, compounded over generations, is sufficient to reproduce the inequality structures of the ancien régime. What the AI transition introduces is not a new formula but a new and dramatically more extreme set of parameters.
Large language models are trained at enormous fixed cost and deployed at near-zero marginal cost to millions of users simultaneously; the implied rate