CONCEPT
The Inequality Spiral
Stiglitz's name for the self-reinforcing cycle by which concentration of wealth produces political power, political power shapes institutions in favor of further concentration, and the resulting institutions produce more inequality — now operating in the AI transition with unprecedented speed and force.
The inequality spiral is the mechanism that distinguishes Stiglitz's framework from the standard economic story of technology and distribution. Standard accounts treat inequality as a side effect of technological change that institutions can, in principle, correct. Stiglitz's demonstration is darker: the wealth generated by the technology funds the political activity that prevents the institutional corrections, producing a feedback loop in which the very success of the technology makes its governance more difficult. The AI transition accelerates the spiral because the technology concentrates wealth at unprecedented speed and, simultaneously, amplifies the political resources available to the concentrators. The broligarchs of the AI industry are not coincidentally advocating for smaller government; they are advocating for the structural conditions that preserve their capture of the surplus.
In The You On AI Field Guide
The spiral operates through four linked stages, each feeding the next. First, concentration: AI generates extraordinary productivity gains that, under