Fractal Inequality

Traditional distributional analysis organized itself around broad categories: capital versus labor, skilled versus unskilled, industrialized nations versus agricultural ones. The divisions were clean enough for collective action, large enough to identify and organize around, structured enough to build institutional responses for. The AI transition is producing a different kind of inequality—one that Milanovic describes as fractal because it reproduces itself at every level of social organization, from the global distribution between nations down through sectors, firms, teams, and ultimately to individual career trajectories. In a single team of twenty senior engineers, the AI transition produces winners and losers not between categories but within the category of “senior engineer,” separating those whose expertise is grounded in judgment from those whose expertise is grounded in execution. The result is a distributional structure that defies the categorical boundaries on which traditional institutional responses depend—because it operates within the groups that traditional politics organizes, between individuals whose diverging trajectories