CONCEPT
Kuznets Waves
Milanovic's generalization of Simon Kuznets's inverted-U hypothesis into a theory of recurring inequality cycles — each major technological transition producing a rise in inequality later moderated by institutional responses, then the next wave arriving before the previous has fully flattened.
Simon Kuznets hypothesized in 1955 that inequality follows an inverted-U shape during industrialization: rising as economies develop, then falling as institutions mature and redistribute gains. Milanovic extended this into a theory of recurring waves, each driven by a major technological transition — the first industrial revolution, the second (electrification, chemistry), globalization, and now AI. Each wave has its own rise, plateau, and institutionally induced moderation; each wave arrives before the previous has fully completed. The AI transition is the latest, and its unprecedented speed means the rise phase is compressed to a degree that makes the institutional moderation phase structurally difficult to construct on time. The framework provides a longer historical perspective on what would otherwise appear as unprecedented AI disruption: it is not unprecedented, but its compression is.
In The You On AI Field Guide
The first Kuznets wave, associated with the British Industrial Revolution, produced severe inequality through the early nineteenth century before institutional responses