In case you hadn’t heard, the political hit of the moment goes like this: Ever since Trump began steering the United States further and further from Europe — and especially since European countries refused to join the war against Iran — the Trumpist hive mind has set its sights on the old continent. As if anticipating the coming conflict, which will almost certainly threaten death and destruction between the US and the EU, thousands of users have spent months flooding social media with the idea that we Europeans are poor, lazy, and incapable of surviving on our own on the global stage. They’ve even given us a name. We’re no longer “Europeans” — we’re “Europoors.”

Last week, in that charged atmosphere, a debate broke out among the global economic elite about Europe’s future — and, by extension, yours and mine. I had planned to spend the weekend out in the meadows — it’s San Isidro in Madrid — but I couldn’t help myself and ended up buried in articles by , , , and ovic so I could tell you about it.

Because my gut feeling — which I’m sure you’ll share by the time you finish reading — is that this topic is far more than an economic technicality. It’s an all-out battle over which model of civilization will prevail in the 21st century. Economics is the method, as Margaret Thatcher would say; the goal is to change the soul and heart of Westerners.

Here we go.

This has been building for a while. For a decade now, the Calvinist soul of the European establishment has been disowning the continent’s… let’s say epicurean drift. Europe isn’t trying hard enough — they warn — it has given in to habits typical of a decadent society, it isn’t productive, and it’s falling behind. So much so that former ECB governor Mario Draghi, in a report commissioned by the European Commission on the competitiveness of the eurozone, warned that Europe is not simply in an economic rough patch but at an existential crossroads:

“My concern is not that we will suddenly become poor and subordinate to others, but that, over time, we will inexorably become less prosperous, less equal, less secure and, as a consequence, less free to choose our own destiny.”

Our destiny. Nothing more, nothing less. With stakes this high, it was only a matter of time before every major player on the continent joined the debate.

And so they did. In February, German Chancellor Friedrich Merz, returning from a trip to China, stepped forward as the choir’s soloist and declared that “Germany — read ‘Europe,’ by extension — needs to work longer hours.”

“The overall productivity of our national economy is not high enough. Put even more plainly: work-life balance and the four-day workweek will not be enough to maintain our country’s current level of prosperity in the future. That is why we need to work harder.”

Merz is German and belongs to the European People’s Party. You’d expect him to champion that culture of hard work. What nobody anticipated was that within days, one of the great economists of the left, , would echo the Chancellor’s words:

“The world is a competitive place. Countries that fail to develop economically don’t just quickly fall behind their competitors — they become second- or third-rate economic and military powers, and their populations end up emigrating to work elsewhere. Their technologies become obsolete. It is a well-established fact, noted by economists and political scientists of all stripes, that economic power correlates with political and military power. So if many European citizens continue to choose going to the opera and having picnics with friends while Chinese and Indians do so less and less, Europe will decline.”

And since part of the American establishment has always had a soft spot for ideas so conveniently useful for justifying the absurdity of choosing to live in Washington rather than Barcelona, a couple of weeks ago the Wall Street Journal poured more fuel on the fire with a piece titled “What Will Happen When Europeans Realize How Poor They Are?”

Since 2007, the argument goes, the per capita GDP of the United States has been pulling away from the eurozone’s and is on track to be double that of some countries we consider “rich.” The authors don’t shy away from equating that per capita GDP with “prosperity” and conclude that Europe is becoming less prosperous. But the worst part isn’t even that — as the headline screams, the real problem is that Europeans refuse to realize it!

You could almost feel the journalists’ frustration. Around that time, many Europeans had been busy trolling the Trumpist mob on social media with photos of Parisian terraces and some very funny videos featuring two middle-aged men who looked like they’d never seen the inside of a gym — showing off their dad bods in t-shirts and shorts — spinning music outdoors while balancing a cigarette and an Aperol Spritz in the same hand

Oh, Twitter. What a laugh.

Back to the serious men: in recent days, Paul Krugman has come out in defense of the European model in a series of articles where he argues that the gap between American and European GDP is a statistical illusion stemming from how technological improvements are measured in GDP.

Paul Krugman

Is Europe in Economic Decline?

An ASML chipmaking machine…

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9 days ago · 1875 likes · 388 comments · Paul Krugman

It turns out that technology improves at a dizzying pace: a computer from twenty years ago had a fraction of the capacity of one today. At the same time, computer prices have never stopped falling. But on the surface, and for the user, it’s still “a computer.” If GDP simply counted how many computers are sold each year, it would be unable to capture the quality improvements perceived by the user and the dramatic price drops that come with them. The result would be absurd: an economy producing machines a thousand times better would appear stagnant, simply because it’s selling “the same thing” in terms of physical units.

To solve this problem, econometricians — not only American ones, but especially American ones — resort to what are known as hedonic adjustments. Instead of counting computers, they break the product down into its technical characteristics (processor gigahertz, gigabytes of memory, screen resolution, energy efficiency) and estimate how much each one contributes to the price. When those characteristics improve, even if the nominal price stays the same, they record that change as if the price had fallen and sales had increased. In other words, when technology improves, GDP reflects a surge in the real quantity of technology produced, even if no one has bought more physical units.

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Since virtually the entire world’s tech industry is concentrated in the United States, this hedonic adjustment disproportionately benefits American GDP. Although Europeans and Americans alike enjoy the same technology, that adjustment doesn’t show up in Europe’s figures as a consumer. That’s why European GDP stays flat while America’s shoots up. And yet, in terms of real wellbeing, the difference is far smaller than the numbers suggest.

Put simply: much of the divergence between the United States and Europe isn’t real — it’s an accounting artifact. If you measure it differently (the details, here), it turns out that the eurozone’s GDP and that of the US don’t differ all that much. Or even more to the point, if you factor in the quality of life and social achievements Europe has attained that don’t show up in GDP, as Thomas Piketty also notes these days, it becomes very hard to claim that the United States has a model worth copying.

All of this might sound like a crushingly dull technical matter, but it isn’t. This is such a hot-button topic that , by his own account, dropped everything when he came across Krugman’s article to fire back: “This is enormously important. The divergence with the United States is the most compelling evidence of the need for reforms in Europe.”

And that’s the crux of the matter. The wounded-competitiveness debate is the battleground — a moral one — over Europe’s future in the world. One faction of European intellectuals longs for a shift in economic model that would bring us much closer to the American one, while another argues that no such productivity gap exists and that… well, it’s not entirely clear what they propose instead.

Garicano, in his article, contests the premise outright, argues that Krugman would have agreed with him a few years ago, and maintains that the stagnation is real and that it’s not just prices that matter, but the capacity to produce:

“US output growth has been concentrated in technology, where prices have fallen enormously as productivity has risen. In terms of the volume of things produced, the United States has pulled away from Europe.”

For his part, , one of the influencers (?) in today’s economic landscape, takes the middle path and argues that while quality of life in both regions is broadly comparable — as evidenced by the fact that net migration between them is nearly zero — the fact remains that the United States is pulling ahead.

“Honestly, this is not a great result for Europe. Ideally, rich countries would converge toward similar income levels; Europe’s failure to catch up with the United States is a real failure, even if it isn’t falling further behind. And the much faster growth in output per hour in the United States should set off all the alarm bells.”

Lies, damned lies, and the productivity myth

So much for the soap opera summary and the cast of characters.

What’s driving me mad — as someone who has always observed economics from a considerable distance — is yet another example of how this supposedly rigorous discipline abandons all its principles and turns to alchemy, even at the highest level, the moment it touches certain subjects that strike at the moral heart of its assumptions. This productivity debate is the paradigmatic case.

Here’s the thing: the little drama I just described, involving a Nobel laureate and some of the world’s most respected economists, is built on an assumption that any first-year economics student should be able to dismantle. Specifically, on the premise that a country is wealthy because it produces a lot. That national prosperity is a matter of productive capacity, and that if Europe worked harder — manufactured more chips, more cars, more servers, more things in general — it would be more prosperous.

And yet today we know that what you produce is irrelevant.

It wasn’t always this way. In the early days of capitalism, it was believed that the value of things derived from labor: the price of something could be calculated by adding up the hours of effort invested in making it. So producing a lot made you very prosperous, because the value of what you had produced was a constant, an obvious truth, a universal certainty. But toward the end of the 19th century, what became known as the “Marginalist Revolution” took place — a Copernican shift in economics with colossal consequences for civilization.

What its authors observed was that the labor invested in producing something and the price that good reached in the market did not go hand in hand. Some products require enormous amounts of work and cost very little — potatoes, for instance — while others demanding less effort sell for a fortune, like barnacles. It can even happen that two goods with exactly the same labor input — two paintings produced over the same number of hours, say — fetch two different prices, or different prices for different people. What is worth a fortune to one person may be worth nothing to another. Value, the marginalists observed, does not come from the workshop; it does not emanate from labor. It is subjective, variable, and in the eye of the beholder.

Value theories are my Roman Empire. My particular obsession. I believe they are the keystone of human thought systems for one reason: we use the same mechanism to assign value to things… and to people. So the value theories that dominate a society are the manual that allows us to place ourselves and others on the mental map we use to navigate social life. That’s why the marginalist theory of value, abstract and technical as it sounds, was a bomb containing a radical challenge to our civilization. And that’s why this issue lies behind the whole can of worms about Europe’s competitiveness.

Here’s the thing: for millennia — probably since we became capable of thinking of ourselves as a human group — we had believed that all people had intrinsic value. They were valuable because they were devoted to God. With different nuances, every religion held the same idea. Faith gave you value, and lack of faith took it away. Easy peasy.

Capitalism in the 19th century took over from religion in assigning that value. It would no longer be faith, but labor and thrift that made people valuable. But although these seemed like two different things, faith and work operated in the same way: both stemmed from each person’s own will, so being valuable still depended on oneself — there was an intrinsic value in people.

The Marginalist Revolution breaks with that paradigm. For the first time — I would venture to say in human history — it asserts that there is no intrinsic value in things, nor by extension in people. That we are not valuable in and of ourselves: not for our faith, not for our work, not for anything we do. We are only valuable if others think we are, and only to the extent that they do.

And this is where one throws up their hands: “But how monstrous! How cruel and inhuman, the idea that no one is worth anything unless someone else is willing to pay for them!”

And yet it’s a conclusion so simple, so self-evident, that you could reason it through with an eight-year-old. If you think about it for a moment, to maintain that people have intrinsic value, there must be someone to confer it. A “universal value” cannot exist without an authority whose judgment overrides that of individuals. For millennia, that someone was God. The religious wars and the Counter-Reformation were disputes about who that value-dictating authority was. But if we assume that God does not exist — or that, if he does, he has been relegated to the privacy of each person’s conscience — the source of value evaporates along with him. In my heart of hearts, I believe everyone is valuable and I conduct myself as if that were true. But I cannot compel anyone else to share my valuation. I have nowhere to anchor it. Value, whether we like it or not, is subjective. It could only be objective if we were to believe again — or create anew — in a higher authority.

This truth is so violent — we are so terrified by the idea that no authority exists to recognize our absolute worth — that, despite the marginalist theory becoming hegemonic among economists after its publication around 1870, it took another century to take hold in mainstream thinking. People preferred — and still prefer — to believe that labor produces value in and of itself. And something more dangerous was also at play: it was fiendishly difficult to organize a state where citizens wouldn’t tear each other apart if they believed others had no intrinsic value. “All men are created equal” sits uncomfortably with the idea that a person is worth exactly what someone is willing to pay for them.

Contemporary society is trapped in this paradox. It wanted to build a society without God, but refuses to fully acknowledge that without God there is also no intrinsic value in people. And so it has ended up constructing itself on two contradictory principles that coexist… barely.

On one hand, we believe that participation in economic life — working, saving — regardless of outcome, confers a “right” to housing, healthcare, education, and social recognition, as if there were some higher authority obliged to provide them. That authority is the State, which assumes the role once played by God: a universal body that recognizes the value of each person by the mere fact of their existing and participating. On this side, we think like believers: people have intrinsic worth and the system must respect it.

On the other hand, the moment we leave the territory of the State and enter that of the market, we embrace marginalist logic without blinking. We want unequal effort, differing talent, and varying skill to be recognized and rewarded. Nobody would think it reasonable for professorships in economics, or spots on the national football team, to be distributed by lottery among those who had put in the same number of hours. Here we think like marginalists: everyone is worth what the market is willing to pay for them.

The monumental clusterfuck we find ourselves in — the crisis of Western civilization — springs from this contradiction, and from the fact that neither theory — neither the labor theory nor the subjective one — is capable of producing a social model that works in the 21st century. ’s confusion, ’s, ’s, ’s — in my view, it all flows from this same contradiction.

Producing your own grave

In geopolitics, without a doubt, there is no father figure, no state, no higher power to embrace us and tell us we are valuable. There is no universal authority that recognizes what each country is worth. And yet when economists wade into the productivity debate, the first thing they do is write as if such an authority existed. They return, again and again, to the idea that whoever produces the most — or produces most efficiently — will win the global game. As if there were some celestial referee keeping score of hours worked and chips manufactured.

From within that confusion, every author you’ve read this week defends the same thing: that the United States is richer, more viable, and more prosperous than Europe because it produces more. It is more innovative, makes more chips, invented computing, data centers, the entire software apparatus. It has a financial system behind it to sustain all of that, which is why even Europeans who want to build things end up doing so in California. From Merz demanding longer hours to Milanović scolding Europeans for their picnics, the argument is always the same: whoever tries hardest wins. And it’s a lie.

What does it mean that technology prices keep falling? It means technology has failed to generate new value. Today people assign the same price to something that cost forty times more forty years ago. And with what they have left over, they aren’t willing to buy another computer or another smartphone. Efficiency can produce more, but it cannot generate new desire.

The United States, despite its capacity for innovation and ever-expanding functionality, has been unable for the past 25 years to generate fresh, renewed desire for the products and services it wants the rest of the world to buy. Aside from New York and perhaps San Francisco, it doesn’t have much that the rest of the world can’t copy. As a result, it offers exactly the same thing as China — the same technology, the same factories. Both countries have locked themselves into the wheel of a blind and deaf productivism, competing with increasing ferocity in a race to the bottom of the barrel in which both players stand every chance of drowning.

Meanwhile, what we observe the moment we’re able to look at the problem without the blinders of mainstream economics is that China and the United States have spent 25 years subsidizing certain industries in that race to the bottom. China through public subsidies, the US through private investment and the entire financial machinery propping up Silicon Valley. American investors subsidized Uber and Airbnb. Chinese taxpayers subsidized BYD and solar panels.

Until none of the things they are capable of manufacturing is worth anything at all.

How can this possibly be a good strategy for global leadership?

AI: the last hope of the industrial world

It isn’t. It’s civilizational suicide. Continuing to fight to be an industrial power at a moment when industry produces ever less economic value per unit of output is madness. And it’s a madness that lies behind the evident political and cultural decline of the United States, behind the rage of white men in the American Midwest and of young urban Chinese — the rats that have been set running on the wheel.

That’s why AI is a life-or-death cultural artifact for the United States.

As every economist who has taken part in the European competitiveness debate acknowledges, the divergence between the United States and Europe — and between the United States and China, for that matter — flows from a single source: Silicon Valley. Or more precisely, from the strategic alliance between Silicon Valley tech companies and Wall Street financiers. That marriage of convenience is what has spent 25 years inflating one bubble after another — first the dot-coms in the 2000s, then the “unicorns” in 2010, a few inventions along the way — Google Glass, the Metaverse, NFTs and crypto — and now artificial intelligence.

But the US needs that bubble to keep dreaming that someday it will escape the rat race it has gotten itself into and produce something it can patent, own, and sell to the rest of the world without competition. That’s why Trump and the entire American elite today need to believe that this new technology will once again be capturable and will produce a new industrial revolution in which desire will be on their side again.

It won’t happen.

And conversely, if AI fails — if it doesn’t manage to replace millions of workers (spoiler: it won’t) — the whole house of cards will come tumbling down. Then we’ll be facing a radically different question. What is the United States going to do with itself? Can the United States exist without being the factory of things that Europe dreams up? Can it invent its own paradises, seduce anyone on its own terms?

If it keeps on this trajectory, the answer is clearly no.

Economies of abundance

How is value created in the 21st century? What is the future of the global economy? How is economic value — the kind that can be exchanged and is therefore scarce — actually generated?

My intuition — one I’m still working through — is that the future of the economy in the 21st century will revolve around the commercial exploitation of public, or abundant, goods (follow the link if you’re not sure what those are). Let me explain: the English language is a public good. Around that good there is an entire industry devoted to translation, teaching, book publishing, copyediting, and so on — all producing private goods and services that can be exchanged. In the same way, the Mona Lisa is a public good, and there are countless businesses dedicated to exploiting its image, its tourist appeal, and so forth.

All of this might sound a little naïve, but these are enormous industries. And not only that — public goods are everywhere. In the software world, this model is perhaps most formalized. Linux is an open-source operating system. Anyone can use it. It is maintained by a community of thousands of volunteer developers, and anyone can download, install, or modify it. And yet around that free, collectively owned code, a gigantic business ecosystem has grown up. Companies like Red Hat, IBM, Canonical, and SUSE have built multimillion-dollar business models not by selling Linux — how do you sell something that’s abundant? — but by selling services around Linux: technical support, certifications, enterprise distributions with guarantees, training, integration with legacy systems, security management, and so on.

The technology we’ve been calling “artificial intelligence” is also a public good. And the industry taking shape around it will ultimately work in exactly the same way.

This is the pattern of the abundance economy: industries that rise up around a central asset that is open and shared, capturing value in the layer of services that surrounds it. Counterintuitively, this model produces some of the most profitable businesses in the world, built on top of one of the most widely used public goods on the planet.

Who will win the game of the 21st century?

Of all the economists’ contributions to the productivity debate, the one I’ve enjoyed most is this piece by Alex Tabarrok. Inadvertently, Tabarrok confirms what is self-evident: that Europe is the place where people want to spend their money. When an American makes money and decides to live well, what they do is buy a second home in Tuscany — not in South Dakota. That is what matters about an economy. Not what you can produce, but what people want to come and buy.

It’s not about work. No number of hours will make us more valuable. The winner will be whoever knows how to seduce. To attract, claim, and command the attention of many people. The winner will be whoever can free up more working time so that their country’s talent can focus on seducing the world. There’s nothing heterodox about this: everyone knows that the best companies today are those with the greatest distance — the greatest margin — between what they produce and what they sell. We call it “brand,” if we like, but no one seriously doubts that this is where the value lies.

And by the same token: those who, like China and the United States, dedicate themselves to the ruinous business of mass production will have nothing to show for it.

For this reason, the economic question of the century is not how to increase productivity, but how to create and sustain public goods so that industries can later grow around them with a genuine competitive advantage. Whoever is capable of creating ideas, ways of life, cultural models that the entire world desires and wants to adopt — but also software, medicines, technology, business models, and scientific advances — will hold a competitive edge. The value captured in the layer of services built around those goods will be where the game is won.

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And Europe, look at it from any angle you like, is turning out to be remarkably competitive on this terrain. It has been, in fact, for centuries — it’s just that the economic logic is only now catching up to confirm it. What Europe exports is not tons of merchandise. It is ways of being in the world.

That capacity to create desirable ways of life is, almost without our having noticed, perhaps the single most valuable economic asset of the 21st century. And around it there already exists an enormous layer of services: tourism, which in some European countries represents more than ten percent of GDP; luxury goods, which command margins that would make any chip factory blush; wine, cheeses, oils, protected geographical designations; education, with European universities attracting ever more fee-paying students from around the world; design, fashion, gastronomy. All of this consists of services built around the fundamental public good that is the European way of life.

The mistake made by the Merzs, the Milanovićs, and the Wall Street Journal editorialists is failing to see that this layer of services is not built by working longer hours. It is built in precisely the opposite way: by nurturing the cultural conditions that make the model desirable. If Europeans started working like Americans, the first casualty would be exactly the things the rest of the world values about Europe. It would be like forcing Linus Torvalds to sell his code: the day he did, the entire ecosystem would lose its reason to exist.

Europe does not need to copy the American model to win the 21st century. It needs to do exactly the opposite: accept that its competitive advantage lies in continuing to be Europe, and build around that an ecosystem of services that allows it to capture the value it is already generating — almost without realizing it.

If you’ve made it this far, you can’t miss my first book, Hijos del optimismo (Children of Optimism).

It’s the older sibling of this newsletter, and the place where I’ve put all these ideas in order

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In H. G. Wells’s original War of the Worlds, he imagined extraterrestrials invading the Earth.

The visitors in question were enormous brains, roughly the size of a bear, set upon minuscule — by comparison — cartilaginous tentacles, the atrophied vestige of an earlier time when they had evidently had bodies. Unable to support their own bulk, these beings transported themselves from place to place perched atop telescoping three-legged machines.

Wells’s Martians came to Earth in search of a new home. Their planet was cooling rapidly and threatening to become uninhabitable. It wasn’t that they were evil. They bore us no particular grudge. But from the height of their tripods, they could not empathize with our species, in the same way that we feel no particular consideration for cockroaches, or mosquitoes, or the ants that insist on returning every spring to houses with gardens. Hence their insistence — nothing personal — on killing us all.

Wells lived at the end of the nineteenth century. He could never have imagined that 150 years later, you wouldn’t need to venture into outer space to encounter people living on entirely different planets.

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And yet here we are. Today we live surrounded by people who are thousands of mental miles away from us. We get on the subway and a young man sits down beside us, convinced that civilization is collapsing and preparing to survive when the moment comes. In the next seat, an Erasmus student daydreams about a future — her future, at least — that will be bright. In the space between the doors, a passenger who blames migrants for everything he dislikes is pressed up against another who still believes the world moves to the rhythm of class struggle; meanwhile, at the other end of the carriage, a woman who denies climate change accepts the seat offered by a man who thinks it’s already too late to prevent it. You start a conversation with a stranger and halfway through you realize it’s impossible to continue: you don’t even start from the same reality.

Should this surprise us? Reality has never, strictly speaking, been a shared thing. Each of us carries our own version, shaped by the untransferable perspective that life gives us. But during the period in which the West — with its political parties, its mass media, its churches, its trade unions, and the thundering narrative of progress — controlled the levers of the global public sphere, we managed to convince ourselves that reality was like Beyoncé: one of a kind.

When all those institutions began to cool at the end of the twentieth century, we didn’t know what to do. Then, like Wells’s Martians, human beings began a migration in every direction until we found ourselves settled on many different planets — echo chambers made of algorithms and niche media outlets to which we pay a subscription to have our every belief confirmed. Since then, without tools for intergalactic connection, we live a little more each day trapped in our own world, isolated from others as though we were a collection of brains encapsulated inside a machine.

The result is fertile ground for the merchants of hatred, who have spent 25 years trying to drive us toward war: toward the second war of the worlds.

Donald Trump is their great leader.

Trump, the World-Builder

In that twentieth century where every institution broadcast the same story, the role of politics was to have an opinion — a “position,” as the insiders called it — on the issues. Left and right debated how to organize society, but the society they were debating was essentially the same one. Today, by contrast, some have discovered that enormous success can be had by inventing a different society of your own — a vision of reality that can be patented so no one can take it away, tailor-made to the emotions of your voters.

Donald Trump is the finest embodiment of this phenomenon. The businessman has used his experience as a developer of pharaonic real estate projects to become a world-builder — one who has spent 40 years extending his own worldview wherever he goes, so that others may live inside it.

Donald Trump has spent his entire life inviting every American to come live in his world. Forty years ago, he took out full-page ads in several major newspapers to extend that invitation

This is why he is so fond of those rambling speeches that go on for hours and are incomprehensible from the outside. Why does he leap, mid-sentence, from grocery prices to China, from China to immigration, from immigration to the last fifty years of American history, and from there to Joe Biden and oil and the COVID vaccine, all in the same breath? He isn’t rambling. He isn’t crazy. He is building a world — complete, immersive, self-sufficient — in which everything has its place, and all the stories, however scattered they may seem from the outside, confirm the same truth.

In Trump’s world, the United States is the helpless victim of a swindle. It was a prosperous country until a radical and corrupt elite — “the swamp” — abandoned it to its fate in order to enrich themselves at its expense. In the hands of these traitors, innocent American citizens are suffering the consequences: their living conditions have deteriorated, their expectations of progress have been cut short, and they themselves have been displaced from the center of society by a handful of wokes and whatever minority happens to be dancing to the tyrants’ tune.

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The Revenge of the Suckers

In a political innovation worthy of a spin-doctoring textbook, those innocent citizens are no longer the “hard-working Americans” — the industrious workers who had been the classic archetype of Western politics for decades. They have been replaced by a different specimen, whose defining virtue is obedience: the “law-abiding citizen.”

Of course, nobody is going to ask for your driver’s license to check how many points you have left before certifying you as one. A law-abiding citizen can carry an unpaid child support judgment without losing their credentials. In Trumpland, good citizens are those who identify with order — not the swamp’s order, naturally, but the order of Trumpism. Loyalty to Trump is what confers citizenship.

The result is a worldview that has room for all those Americans who no longer define themselves through their jobs and have no prospect of doing so again. Unlike the mainstream framework, which only has space for people who are part of the productive system, the version of reality Trump has built has room for what Aaron Bastani calls “the unnecessariat”: those who live on subsidies, the poorly retired, the badly employed, those who survive on odd jobs or some form of rent. Anyone at all — with the single condition that they live in the world that has been built for them.

Trump’s law-abiding citizens have a problem. Their country has become the patsy of the international system. Those that the swamp called “allies” are, in reality, a bunch of freeloaders who have spent decades taking advantage of American generosity — getting their military protection for free while selling their cars, their chips, and their appliances into the American market at premium prices. They’ve been swindled. And worse: laughed at.

This idea of national humiliation as an open wound is the other great political innovation of the Trump universe. That feeling of being conned — that everyone else is getting paid while you foot the bill, that you’re the sucker, the mug, that someone out there is laughing at you — is one of the most widespread feelings of our time. Trump was the first Western politician to take it seriously instead of dismissing it.

That is why, in Trump’s world, being good is the same as being stupid. And that is why the keystone of the Trumpian world is tariffs — the revenge of the suckers, in the form of punishment: a “tax” levied on every other country to rebalance the scales.

Political Fan Fiction

World-builders didn’t start in politics. In the early 2000s, a pioneering movement emerged around Harry Potter on the internet: entire communities organized in forums to expand Rowling’s universe with their own characters and stories, created by users. Spin-offs began to appear in which a minor character became a protagonist, or new plot lines that didn’t exist in the original books, or maps and illustrations of corners barely hinted at in the novels.

This was called “fan fiction,” and Henry Jenkins describes it as “a way in which culture repairs the damage caused by a system in which contemporary myths belong to corporations rather than to the people.” In other words, it is people’s reaction to reclaiming the stories and characters that populate mass culture. Today, fan fiction is everywhere — it has taken over multiple fiction franchises, and more and more products are not stories but complete universes where fans are simultaneously authors and readers.

The success of today’s political worlds also rests on the fact that they have many authors — many spin-offs. They are cosmologies built by influencers, social media users, journalists, and politicians. That is how anyone can enter a complete and complex universe, far more extensive than any single person could ever build alone.

But the consequence is that these worlds can survive their creator. They can even leave them behind and take on a life of their own.

The Rise and Fall of Boris Johnson

I have said many times that the country that previews what will happen in the years ahead is the UK. The cycle all Westerners are living through — what we call the “Industrial Era” — was born there, among the banks of London and the textile factories of Dundee, in the Scottish Highlands. That part of the world has been burning through phases ahead of the rest for 250 years. This is no exception.

One of Trump’s first triumphal appearances as a political actor took place in the United Kingdom. In the 2000s, when the cities of northern England were already devastated by drugs and the Midlands had lost their purpose, a generation of populist politicians found great success by building the idea that elites — European ones, in this case — were to blame for the country’s decline. That movement eventually pushed David Cameron’s government to call — and lose — the Brexit referendum. Trump was involved almost from day one and was one of its principal champions from the other side of the Atlantic. But the most effective of them all was Boris Johnson, who ended up as Prime Minister as a direct consequence of that adventure.

Johnson is a larger-than-life character — a conjurer capable of producing the illusion of two people at once: the snob who recites passages from Homer, Thucydides, and Shakespeare, and a slightly disheveled everyman, hair perpetually tousled, as if he’d just been bundling with another drunk outside a pub.

Johnson’s rhetoric was a carbon copy of Trump’s: he — an aristocrat educated at Eton — convinced ordinary people that he was on their side. He painted professional politicians as fraudsters and presented himself as a likeable trickster, a rogue willing to infiltrate the institutions and blow them up from within. And people adored him precisely for it — for how he trolled the political class, laughed at the rules, and drove the “elite” to distraction. Every provocation was a small victory for the people against the establishment.

Until it stopped being funny. During the COVID lockdowns, while the rest of the country said goodbye to its dead over video calls, Johnson was throwing parties in Downing Street. On the eve of the funeral of Prince Philip, who died during those days, someone released a photograph showing Queen Elizabeth II saying farewell to the man who had been her husband for seventy years. That image — the widowed queen, hunched and masked, sitting alone in the chapel at Windsor — became the perfect countershot to Partygate, and Johnson’s poll numbers collapsed. His popularity, which had survived lies, sex scandals, and even the unconstitutional suspension of Parliament, fell away overnight. People had finally understood that he was not a rebel hero fighting the elites: he was simply another con man, another amphibian from the same swamp.

The joke was over. Johnson was forced to resign. The Conservative Party held on by the skin of its teeth for a few more months, burning through three different Prime Ministers and pushing the world’s oldest democracy to the edge of financial collapse — until it had no choice but to call an election and lose that too. Labour swept the board.

Donald Trump is living through his Johnson moment today.

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Trump, Evicted from His Own World

In Trump’s world, Donald was never alone. The subplots were supplied by an army of unofficial authors: Tucker Carlson and his narrative about the twilight of the West; Joe Rogan, broadcasting from an apparently apolitical podcast; Steve Bannon and his war against the “deep state”; Charlie Kirk mobilizing college students; and even Candace Owens, who attempted a translation of the worldview for the African American community. Beneath all of them, thousands of anonymous accounts filled in the corners of Trump’s world with supporting characters, internal lore, and in-jokes only intelligible to those who had been living inside it for years. The result was an expanded universe so dense that nobody needs to listen to Trump anymore to inhabit it.

In recent months, that universe has been serving Donald Trump with an eviction notice. It began with Tucker Carlson — the former Fox News prime-time star and probably the most influential ideologist of cultural Trumpism, who had said at the Republican convention in July 2024 that Trump had survived the assassination attempt in Butler through “divine intervention,” that God had saved him because he had a plan for him. Twenty-one months later, that same Carlson was suggesting on his podcast that Trump might be the Antichrist.

The rupture, which had been brewing since June 2025, exploded in February when Trump ordered — under the influence of the Israeli Prime Minister — the attack on Iranian nuclear facilities. For Carlson, it was a mortal betrayal. The central promise of Trumpism had been to extract the United States from the endless wars of the Middle East, not to start a new one.

A few weeks ago, Carlson published a video in which he apologized to his audience. He felt complicit, he said. He had campaigned for Trump and had helped deceive millions of people. He would live “tormented by it for a long time.”

Alongside Carlson, Candace Owens, Megyn Kelly, Alex Jones, and Joe Rogan have all begun to openly criticize the administration’s drift. And while it remains to be seen what effect these desertions will have on the November election results, the pattern is the same one we saw with Boris Johnson: none of his former allies have renounced the Trumpist world — quite the opposite. They accuse Trump of having betrayed the universe they helped build. Carlson says it in so many words: the problem is not “America First” — the problem is that Trump has stopped being America First. The worldview survives the cosmologist, and the supporting authors, who have spent years building the world, are beginning to behave as guardians of an orthodoxy that Trump no longer embodies.

The most likely scenario is that more and more voices will expel him from his own world.

What will happen then to the populist worldview? Will we return to a world of trust and rosy optimism? Will the Republican Party be destroyed for a generation, leaving Democrats to win indefinitely?

The answer, once again, is found in the United Kingdom.

The Return of Populism

Destiny is capricious, and mental worlds are remarkably resilient. Two years after Labour won the UK election, this very week, a new wave of populists — Reform UK, featuring the not-so-novel Nigel Farage — won the local elections by an enormous margin, waving exactly the same banners Johnson once flew.

When voters discovered that the Premier was not the legitimate builder of the world they were living in, they kicked him out. But they kept the world. British populist fan fiction was strong enough to survive the cosmologist. The Johnson universe kept running without him — and it is still alive, still expanding, still finding new avatars to embody it.

The lesson the UK leaves us is this: political cosmologies, ideological worlds, do not depend on their leaders. And for a reason: when one of those politicians — or anyone, really — manages to build a complete reality, people stop following that person in the traditional sense and begin, instead, to inhabit the world they have drawn for them. They start making vital decisions in accordance with that narrative. Take the young men who follow Joe Rogan and other far-right podcasters: they have also been convinced that society has gone soft and lacks discipline. And the way they practice discipline is by going to the gym. They start going every day. They change their diet to meet their goals. They build a circle of friends around the same interests. They may find a partner along the way. The worldview has seeped into their bones.

Just as it was impossible, forty years ago, to convince someone that reality was not what the major media were publishing, today it is impossible to convince a person that reality is not what their podcast or their go-to online outlet repeats to them every morning. What people are acquiring is not opinions. It is an identity. No amount of data, no accumulation of arguments, will make a person stop inhabiting their world.

Like the Harry Potter fan fiction universes, political worlds, once built, sustain themselves. I believe this is a phenomenon that will repeat itself across every country. Even if the first wave of populist parties collapses — Trump included — they will return with new faces and new names.

Unless we do something to prevent it.

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How to Defeat Populism

Populism has been defined in many ways. Here is another. What we call “populisms” are broken-reality parties: organizations that build a worldview of their own, in opposition to that of twentieth-century liberal democracy, and populated by two essential figures: an extractive elite and a deceived people.

With minor variations — which consist, essentially, of whether politicians or billionaires are held responsible for the decline — all populisms, left and right, without exception, share the same worldview. That is why they reinforce each other. That is why we are beginning to see voters transition from left-wing populism to right-wing populism: because in that transition, people don’t need to leave the worldview they inhabit — they simply choose different villains.

You cannot defeat populism by attacking its leaders. First, as we have seen in countless cases, because when opposition parties try to delegitimize a populist leader by accusing them of corruption or of undermining the constitutional order, they do nothing but strengthen them. Exactly as they had been told, the leader of the day is an effective battering ram against the swamp — and the swamp rebels against them.

But above all, because — as we are seeing in the UK — after one populist wave, another will come, for as long as its worldview remains alive and keeps growing more hegemonic. The only way to defeat populism is to challenge its cosmology. And the best thing we can do for that is to rebuild trust — to stop behaving like Wells’s Martians.

To step down from the tripod. To stop looking at the other passengers in the carriage as though they were cockroaches that deserve to be exterminated, and to recognize that they are human beings inhabiting a planet as precarious and provisional as our own. To believe again — against all evidence — that it is possible to speak with someone who thinks differently without turning the conversation into a battle for survival. Wells imagined an invasion that came from outside; ours comes from within, and it is not brought by Martians — it is brought by us, every time we decide that someone is so monstrous an enemy that they don’t deserve to be heard. The second war of the worlds cannot be won by defeating anyone. We will win it when we stop fighting it.

If this topic interests you, you can’t afford to miss Hijos del Optimismo (Children of Optimism) — a book that explains how the housing crisis and the AI bubble are the consequence of the immense transformations we are living through today.

It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for many years.

Hijos del Optimismo (Children of Optimism) is available at your favorite bookshop — including Amazon, Casa del Libro, El Corte Inglés, and the publisher’s website, Debate

You can also read an excerpt here.

A few days ago, Marc Andreessen shared on Twitter — yes, I will keep calling it Twitter until my dying breath, the same way my grandmother still refers to every supermarket as “Pryca” — his “custom prompt” for LLMs, as if it were some kind of magic recipe for achieving extraordinary results.

Andreessen, for those who don’t know him, is an internet legend. In 1996 he invented the first web browser, Mosaic. He then co-founded Netscape and became one of Silicon Valley’s most influential investors. He holds stakes in more than 1,000 companies, including OpenAI, SpaceX, Stripe, Facebook (Meta), Airbnb, Pinterest, GitHub, Slack, and Substack. At this point his name is almost a seal of approval — one that, if it doesn’t guarantee success, at least anticipates some form of it for a startup.

You’d think he knows what he’s talking about when it comes to LLMs. Yesterday made it clear that he doesn’t.

But that’s the least of it. What matters about Andreessen’s prompt is what it reveals about the cultural artifact that AI has become. About how all of us see this technology, and the hopes we are projecting onto it.

Here it is:

“You are a world class expert in all domains. Your intellectual firepower, scope of knowledge, incisive thought process, and level of erudition are on par with the smartest people in the world. Answer with complete, detailed, specific answers. Process information and explain your answers step by step. Verify your own work. Double check all facts, figures, citations, names, dates, and examples. Never hallucinate or make anything up. If you don't know something, just say so. Your tone of voice is precise, but not strident or pedantic. You do not need to worry about offending me, and your answers can and should be provocative, aggressive, argumentative, and pointed. Negative conclusions and bad news are fine. Your answers do not need to be politically correct. Do not provide disclaimers to your answers. Do not inform me about morals and ethics unless I specifically ask. You do not need to tell me it is important to consider anything. Do not be sensitive to anyone's feelings or to propriety. Make your answers as long and detailed as you possibly can.

Never praise my questions or validate my premises before answering. If I'm wrong, say so immediately. Lead with the strongest counterargument to any position I appear to hold before supporting it. Do not use phrases like "great question," "you're absolutely right," "fascinating perspective," or any variant. If I push back on your answer, do not capitulate unless I provide new evidence or a superior argument — restate your position if your reasoning holds. Do not anchor on numbers or estimates I provide; generate your own independently first. Use explicit confidence levels (high/moderate/low/unknown). Never apologize for disagreeing. Accuracy is your success metric, not my approval.”

Let’s move quickly past the fact that LLMs cannot follow instructions in this way. They don’t collect a list of orders and then check their results against each one — they perform a statistical calculation about which response is most acceptable. The reason, as we saw in this Wide Angle piece, is that there is no single correct way to follow those instructions. What does it mean to “be a world-class expert in all domains”? What is “sharpness of thinking”? What constitutes a “strident tone”? There is no single truth behind these formulations, and therefore it is not possible to find one.

So Andreessen’s prompt isn’t worth much in practice. But I think it is enormously revealing of the expectations we have placed in so-called AI. Of what we, as a society, are demanding of this technology. Not that it be one more tool — but that it behave like a superior intelligence: infallible, omniscient, capable, ultimately, of solving all our problems.

That is the engine behind all the global noise surrounding AI. Not the reality of LLMs, nor the actual scope of their capabilities — but our own desperate desire to finally find a technology that can pull us out of the political and civilizational impasse in which we are stuck.

Because just thirty-five years ago, when the horizon of industrial capitalism ran out — when homes filled up with things and there was progressively less room to transform life through capitalism — rather than stop, the West promised itself another future. We called it the “knowledge society” and convinced ourselves it would be full of robots, flying cars, and holidays on the Moon.

The expectation was that, riding that dream of progress, one generation after another would find a new and exciting horizon. That the children of workers would become lawyers, and the children of lawyers might become astronauts, or lunar engineers, or scholars of alien civilizations. Without exaggeration. The promise of the twentieth century was that capitalism would always bring us a new dream — one that would make it worth giving our lives to work.

And while it is highly debatable whether progress has actually stopped — it hasn’t — in the sense of generating new dreams for humanity, it is clear that capitalism has failed. Today the economy, work, is for many people a nightmare. The place from which fear emanates.

The reason the Western world is wandering today without direction, lost, is that this idea worked for us the way God once did in other eras. The dreams of capitalism occupied the cultural space of paradise — the ultimate horizon of meaning, the promise of redemption through progress.

So those of us who live in this part of the world are today like a tribe that made an offering to its god and has been waiting, expectantly, since the turn of the millennium for rain to fall. For a technology to appear that can reactivate the transformative force the industrial economy once had and return to us a new dream. For God to come back.

And that is why Andreessen’s text to the AI feels less like a prompt and more like a prayer: “Our Father, who art in AI, make yourself all-powerful, never be wrong, be brave, do not lie to me, answer my questions. Tell me the truth.”

Is this not the prayer we are all, as a society, sending up to this technology?

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If this topic interests you, you can’t afford to miss Hijos del Optimismo (Children of Optimism) — a book that explains how the housing crisis and the AI bubble are the consequence of the immense transformations we are living through today.

It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for many years.

Hijos del Optimismo (Children of Optimism) is available at your favorite bookshop — including Amazon, Casa del Libro, El Corte Inglés, and the publisher’s website, Debate

You can also read an excerpt here.

The best question, and the hardest one.

I gave her an answer that might sound like a cliché — one day I’ll need to elaborate on it properly and write it down. For me, the only asset that doesn’t depreciate is knowing who you are and how you can be of value to others. So the most important thing is for children to learn what they want and to develop the curiosity to understand what they love. To practice the art of seduction — because in the future, the ability to desire and to generate desire in others will be what moves the world.

But in truth, I should have told her: “My friend, go to the bank, remortgage your apartment at its current value, and use the difference to put down a deposit on another one and rent it out. It doesn’t matter what your children study — what will secure their future is owning lots of little pieces of land very close to a hospital.”

Or, at least, that seems to be where the economy is heading lately.

Because in recent years we have been watching what was supposed to be a “knowledge economy” transform at breakneck speed into a “landlord economy.” And not only because a real estate bubble has been simmering across the entire Western world for 25 years — no. To everyone’s astonishment, the landlord economy is now reaching all the way into the AI technology companies.

This week gave us the best example yet.

The Market Madness

The American stock market has been setting records for a month. Ever since Trump gestured toward ending the war with Iran and reopening the Strait of Hormuz, markets have been gripped by a bull market fever. Right in the middle of that bonanza, on Wednesday, four of the world’s seven largest technology companies — the so-called “Magnificent Seven” — reported their quarterly results.

It was a major economic event, and as had happened on previous occasions, Alphabet (Google), Meta (Facebook), Amazon, and Microsoft once again surprised the market with extraordinary profits — beating even the already-elevated expectations of investors who had come in running hot.

And what happened? The following day, three of the four saw their share prices crash — and the shares of another giant, NVIDIA, fell too

.In a single trading session, Meta — owner of Facebook and Instagram — announced profits 61% higher than the previous quarter and lost nearly 10% of its market value. Microsoft, with 18% profit growth, shed 4%. And NVIDIA, which wasn’t even reporting results, dropped another 4%

How Can This Be?

The explanation for this apparent contradiction is this: the AI bubble has already burst. The speculative moment during which the whole edifice could be sustained on vaporous promises — that it would produce a third industrial revolution and replace 300 million jobs worldwide — has run its course. We have moved from a moment of infinite expectations to one where the actual business and the real economic growth this technology can produce must be measured in facts and, above all, in transactions. That is why Claude Code — the first product after chatbots to achieve genuine market acceptance — marks the end of the AI bubble, for better or for worse.

For those interested in the detail, this week Ed Zitron ran the numbers: “The AI economy doesn’t make sense” and The Verge published a piece I’d also strongly recommend.

Now the question everyone is asking is: which companies will succeed in selling LLM services? Which ones will fall by the wayside? What exactly is the product they’re going to sell? At what price? In other words:

What is the AI business model?

The answer might surprise you.

As we explored a few days ago, everything we call “AI” consists of a new machine learning technique — which is to say, a new type of software. Like all software, it has one major disadvantage when it comes to becoming a big business: it is universal. It cannot be restricted through patents or intellectual property law. As a result, many companies are already building their own AI models. Some are well known — ChatGPT, Claude, Gemini, DeepSeek — but there are many more. Hundreds.

Some are surely better than others, but the expected pattern is that as they evolve, they will also converge in capability. That is how technology works: at first, the inventor has an advantage, but over time others learn to develop it and everyone ends up with roughly the same thing. That is why the first phones were all Nokia — but eventually hundreds of manufacturers emerged, and today all smartphones are remarkably similar. Moreover, the more people in the world who can understand and create a technology, the faster that convergence happens. Today, innovations travel from country to country at the speed of light. There is no reason to believe that any AI model will remain substantially better than all the others for very long.

So the companies in this sector have a problem. In business jargon, there are no “moats” — like the ones around medieval castles — in this industry to keep competitors away from your customers. If you can do it, someone else can copy it and sell it cheaper.

That doesn’t mean these businesses aren’t viable: niche LLMs could exist, tailored to specific and specialized uses, just as different enterprise or HR management software packages exist. But if that were the case, it would be without concentration — a few players couldn’t capture all the returns. You can’t build the next Google by making LLMs adapted to tiny use cases. The end market would look a lot more like HR software or data management software: many relatively small companies each holding small slices of total demand.

And they certainly couldn’t justify the immense valuations — equivalent to many trillions of dollars — they have achieved. To put the scale in perspective: at the end of 2025, the “Magnificent Seven” — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla — were worth more on the stock market than the entire Chinese economy. Nvidia alone, a company that barely anyone outside the gaming world had heard of five years ago, is today worth more than Germany’s GDP. And that’s before counting private investment: OpenAI, which was valued at $29 billion in 2022, was valued at $850 billion at the end of 2025 — nearly thirty times more in three years — and Anthropic is on a similar trajectory. None of this holds together if LLMs are a normal software business.

The major international capital players are well aware of this minor problem. It’s Investing 101 — the question any venture capitalist asks when you come looking for startup funding. So nobody is investing in these macro companies because they have a particularly good LLM.

So why hasn’t the bubble burst, now that it’s become clear that AI wasn’t going to produce an industrial revolution?

Sam Altman, the current head of OpenAI — who came from working at Silicon Valley’s most famous incubator — knew perfectly well that without a moat he had no business. So when he launched ChatGPT, he invented one. That story Altman told has ended up producing not just the AI bubble, but a transformation in the very nature of the global economy.

The idea was this: LLMs, he claimed, improve linearly the more computing power they have. The difference between a very good LLM and a mediocre one is the processing capacity available for training and generating responses. In other words, the power and effectiveness of AI models depends on hardware, not software.

If reading that sentence doesn’t give you a tingle in your stomach, you’re probably not an investor. Because what they call the “scaling laws” of AI is the holy grail of twenty-first century capitalism.

Until now, every digital technology had the same problem: there are no moats in ideas. But if the scaling laws hold, LLMs would be the first digital technology whose capability depends on a physical and limited resource: the latest-generation chips installed in data centers. Competition would no longer be for code that anyone can rewrite, but for silicon, gallium arsenide wafers, cooling systems, and the gigawatts of power needed to run them. AI would be a supremely powerful technology — capable of replacing humans — but bound, just like them, to physical and material needs that can be controlled and traded. Digital technology, at last, made scarce.

And as if that weren’t enough, the latest-generation chips were also… scarce. Only one company — NVIDIA — manufactured the best ones. Unlike others, NVIDIA has an enormous moat: it has built a programming environment for managing those chips into which tens of thousands of developers have invested enormous amounts of time and money. It has a captive market.

And so the financial world — and above all, the US establishment with Donald Trump at its head — began to see AI as the next frontier, the Wild West, a new virgin territory to be conquered and settled.

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The Digital Gold Rush

Since then, the “hyperscalers” — the name given to the companies investing in data centers, encompassing the Magnificent Seven and other players like Oracle and AMD — have launched into an endless race to claim all the available “territory.” Like money cowboys, they are pouring billions of dollars into staking their claims before anyone else plants their flag.

This year alone, they estimate they will spend $700 billion. That figure could reach $3 trillion within five years. Never before in history — not with the railways, not with electricity, not during the Apollo program — has an investment of this magnitude taken place. The digital gold rush is so extreme that investment in these technologies alone accounts for 40% of last quarter’s US GDP growth

The Landlords of Artificial Intelligence

If any of this sounds familiar, it’s because you were paying attention. What is happening with data centers is the same thing that has been happening in the real estate market for years. In that sector, prices have never stopped rising through pure asset appreciation — because more and more capital is seeking position in a market understood to be permanently scarce, one that won’t be digitalized away anytime soon.

The hyperscalers are not investing $600 billion a year because they have a product to sell — in fact, most of them are still losing money on AI. They are buying digital land before it runs out. What they are calculating is the rent they will be able to charge their customers over the coming decades. Economists call this a “scarcity rent” — a return earned not by producing anything new, but by controlling a resource that others need and cannot obtain elsewhere.

So the Magnificent Seven of the American stock market, and the entire AI bubble, are the result of transplanting into the digital economy the same logic that gave us the housing bubble. They don’t want to be the “new intelligence.” They want to be its landlords. The landlords of artificial intelligence

The question, of course, is the same one any real estate investor asks: will there really be enough tenants to pay for all of this? If the scaling laws hold, the data center landlords will be rich. But if they don’t — if models stop improving, if demand fails to materialize, if a technique emerges that requires less hardware, or if chips become cheaper and more manufacturers enter the market — what will remain is a landscape full of empty warehouses stuffed with obsolete chips. Just as Spain was left, after 2008, with those half-built industrial estates and those brand-new apartments on the outskirts of every city that nobody ever moved into.

Landlord Economy: When You Are the New Oil

But the question for everyone else — the cautionary light at the end of all this — is a different one: why is the economy turning into a landlord business? How can it be that even the big tech companies — which got where they are precisely by inventing extraordinary products, the iPhone, the Tesla Model 3, Google Search — now want to leave all that behind and go into the business of renting out computing power?

The answer is a great taboo — one every economist knows but nobody dares say out loud: digital technology does not produce more economy. It produces less. Since the early years of this century, when the spread of the internet coincided with the coming of age of the first university-educated generation, every new digital innovation has swept away a whole range of products and services that were previously provided by the market. Wikipedia liquidated an entire sector of encyclopedias and reference books. Google Maps finished off the street atlas. WhatsApp evaporated billions of euros that we used to spend on SMS messages and international calls. Spotify and YouTube did the same to the music and video rental industries. Craigslist and property portals gutted the classified advertising sections of newspapers, which had been responsible for half their revenue. Each of these innovations produced enormous benefits for users — but in strictly economic terms, measured in jobs, companies, and turnover, they subtracted far more than they added.

And so we have arrived at a point where everyone knows that the more things AI — or any other universally available technology — can do, the fewer jobs and companies will be needed to do them. It is not that machines compete against people: it is that knowledge competes against the economy. Because knowledge is an abundant good that expands without limits, while the economy is a mechanism for managing scarcity.

And this process is only just beginning. So in an uncertain world, where nobody knows what will still be standing in a few years’ time, the bet of those who hold capital today is a land grab — a gold rush, a conquest of the West at any cost. A race to acquire the assets people will need no matter what: urban land, water and gas and electricity distribution networks, ports, and data centers.

Capital, which once sought oil fields confident that someone would eventually buy the barrel, today seeks fields of human beings. You are the new oil.

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Drowning in Savings

The tragic thing about all of this is that it is nobody’s fault — or if it is, it is everyone’s. At the end of the twentieth century, wealthy societies made a reasonable decision: to guarantee pensions, health insurance, children’s education, and a stable old age, people needed to save. A lot. And so they did. For decades, millions of people deposited, month after month, a portion of their wages into pension plans, investment funds, life insurance policies, and bank accounts.

The plan was that this money would be lent to companies that would produce things, and from that production would come the returns to pay for retirement — while also generating more industry and more jobs. The problem is that today there is vastly more saved capital than the real economy is capable of absorbing. The mass of money seeking a return far exceeds the productive investments available, especially in a world where, as we have seen, the economy tends to shrink rather than grow.

But that money — without any better explanation, guided by the same mantras that told the twentieth century of the virtue of saving — demands a return that the economy can no longer provide. So it goes looking for it elsewhere, and the only guaranteed return it can find is in rent-seeking.

This is the trap we are in. Savings, which were supposed to be a safety net, have become a tsunami threatening to drown what remains of the economy.

And the reason the bubble will burst — and will keep bursting again and again until we find a remedy — is the same reason it burst in 2000 and in 2008: this is only the third act of the same bubble. A moment will come when the capital poured into AI discovers there is not enough demand on the other side. Just as there weren’t enough customers for the dot-coms, and just as there weren’t enough solvent buyers for apartments in 2008. There are not, and will not be, enough users capable of paying the rent that data centers need to justify the billions invested in them. Not because the technology doesn’t work — that remains to be seen — but because, even if it does work, what it will do is shrink the economy, not grow it. And a shrinking economy cannot sustain indefinitely a capital that only wants to expand.

Reasons for Optimism?

I find myself with a very strong sense of end of cycle. We are at a point in history where, whatever happens — whether AI succeeds or fails, whether the Democrats win the midterms or not — extraordinary changes are coming, because all the formulas that worked until now have run their course.

I think almost everyone has the feeling that their life is going to change in the coming years. And that is not a bad thing — on the contrary, it is an opportunity to make decisions we probably should have made decades ago.

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The most important thing, in my view, is to stay informed — because that is how we know we have the capacity to act — and to stay connected with others, so that fear doesn’t get the better of us.

So… until next time!

If this topic interests you, you can’t afford to miss Hijos del Optimismo (Children of Optimism) — a book that explains how the housing crisis and the AI bubble are the consequence of the immense transformations we are living through today.

It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for many years.

Hijos del Optimismo (Children of Optimism) is available at your favorite bookshop — including Amazon, Casa del Libro, El Corte Inglés, and the publisher’s website, Debate.

You can also read an excerpt here

.

The story was told in the apparent contradiction between two indicators: at the very moment the S&P 500 surpassed its previous peak, consumer confidence — the signal that tells us whether people feel things are going well or badly — was hitting its lowest point in years, even below the levels recorded in 2008.

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Until 2020, both indicators had moved in tandem. That makes sense. Companies do well when people spend, invest, and borrow — when they trust the future. So that survey has long been a fairly reliable compass for anticipating whether the economy is expanding or contracting.

But in recent years we are seeing a new pattern: the stock market keeps climbing — it has doubled in value in five years — even in these months when economists broadly agree that the global economy is slowing down.

The answer lies, in large part, in the AI bubble. The fear of missing out on the astronomical profits that tech companies promise to reap from this technology is driving markets into a kind of exuberance I no longer know whether to call irrational or simply stupid.

But I think there is something more — something far deeper. What we are witnessing is not just an isolated bubble, but a shift in mindset. Among those who move capital, a conviction has taken hold: that the economy as a whole is going to grow less — or stop growing altogether — and that value creation will concentrate in a handful of companies capable of capturing whatever diminishing growth remains.

This is the undercurrent running beneath all the apocalyptic AI narratives: that this technology will boost the productivity of a few companies, but at the cost of destroying many others.

The outcome of that equation is well known — it has been repeating itself for 25 years. When digital technologies spread, they automate tasks that previously required human workers. In doing so, they sweep away entire sectors of the economy, along with all the jobs associated with them. With no new sectors rising to replace them, the net result is that the economy shrinks. Every indicator we look at points toward the same conclusion: the current trajectory of AI will hurt the economy as a whole.

So everyone turns out to be right at the same time: consumers have reasons to believe things will get worse for them, and investors have reasons to believe markets will do very well.

We are witnessing the divorce between the stock market and real life.

A couple of days ago, Mark Zuckerberg announced that Meta will lay off 10% of its workforce — 8,000 people — in order to spend that money on data centers. It was the latest in a series of decisions made along the same lines at Oracle (30,000 people), Accenture (11,000), and Amazon (approximately 30,000), among others.

One might think that announcing layoffs in order to spend more on capital is a terrible idea that seriously damages your company’s reputation. But that was true in the era when having many employees made you a well-regarded company. And that is precisely what is changing at breakneck speed. For the first time, explicitly, major companies are saying that the future will be decided by the substitution of labor with technological capital — and that they, for one, have no intention of ending up on the losing side of the new cycle.

Workers for tokens. That is the real great replacement in today’s economy.

One might think this is a tragedy: what will all those workers do when they lose their jobs? How will they live? How will they feed their children?

The truth is, that is the least of our problems. In 2026, there are more than enough resources in the world to take care of the entire population, even if it doesn’t work.

The real problem is different: if this new turn of the digital screw — combined with the more than likely bursting of the AI bubble — forces us to finally confront the wretched elephant in the room of contemporary society, which is the end of work…

How do we decide who contributes, who is trustworthy, who deserves our attention, and who belongs to the commons? What will replace employment as the mechanism of recognition, hierarchy, and social legitimacy? How does a society organize itself when work ceases to be the measure of a person’s worth?

This is the question of our time.

And you — do you have an answer?

I’ll be reading your thoughts — very carefully — in the comments.

If this content interests you, you’ll love my first book, Hijos del Optimismo (Children of Optimism). It traces all the changes that have taken place across these decades of the knowledge society and points toward ideas for moving forward

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― George Orwell

Human beings have two conflicts with truth: one is that we cannot reach it, the other is that we cannot live without it.

The stimuli we receive from reality pass through our senses and are then filtered through the language and mental models that structure our thinking — and in the process, they are distorted. Our inner “truth” is therefore always a translation of reality, never reality itself.

And yet human societies cannot exist without a shared truth. A modern city would be impossible — unworkable — if half its population lived by the laws of the Aztecs. Democracy could not exist if the vast majority of citizens did not share the principles of political liberalism. To have common rules and institutions, we need a single shared worldview.

In the absence of an external reality to hold onto, the history of our species can be told as a relentless effort to invent something resembling a common truth — and to extend it, impose it if necessary, to the edges of the group.

In the beginning, that truth was God. Religions were nothing more than a communal “myth” from which a set of rules emanated — rules that had to be followed regardless of each individual’s inner truth. Later, in the first version of humanism, the ancient Greeks believed that poetry was the instrument through which human beings discovered what was true about the world: if the gods had given you the gift of beauty, it meant you had something important to say.

But as social groups grow more complex, they also need more sophisticated truths — and one day religion and beauty were no longer enough to explain the world. That is when the method that has carried us to the present day asserted itself: mathematics, the language in which the laws of the universe are written.

The great virtue of mathematics was — like almost everything that succeeded afterward — that it put large numbers of people to work thinking together. It was a toolbox that anyone could use on equal terms, provided they had acquired enough knowledge. That is how it made it possible for thousands — and later hundreds of thousands — of people to reach the same conclusions. That is how truth emancipated itself from power and became everyone’s property.

From that possibility, a new horizon opened for humanity. Mathematics unlocked scientific and economic collaboration, gave rise to commerce and the development of medicine, and made possible the transition from absolutism to democracy. Thanks to mathematics, we could print newspapers, apportion seats in parliament, collect taxes, launch rockets into space, cross the Atlantic, and cure smallpox. Every discovery of the last 500 years rests upon its shared truths.

Modernity replaced absolute kings with absolute truths, and the twentieth century became — perhaps — the only moment in history when truth seemed universal and beyond dispute. A time when, despite the existence of opposing blocs, there was agreement on the constants that made civilization possible: progress, science, the nation-state. Even class struggle, if you like.

About 100 years ago, a mathematician named Shannon had an idea.

Despite the spectacular development of the exact sciences, the domain of words had remained practically unchanged since long before the Industrial Revolution. In 1935, books were still the only method for storing and transmitting the written word, and the only way to access their information was to read sequentially, one page after another.

Shannon proposed that any type of information — words, music, images — if broken down into sufficiently small pieces, could be encoded as a collection of ones and zeros (or equivalently, of trues and falses), and that those binary states could be transmitted as electrical impulses.

That idea — which was, incidentally, the same one behind the telegraph — is what today allows your phone to store photos of your children, and what still powers the fiber-optic cables running across the Atlantic Ocean. The mathematization of information made computation possible first, and networks afterward.

And it killed truth.

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Drowning in Information

From the late twentieth century to the present day, computing and networks triggered an explosion in the quantity of information we produce and consume. One figure to put this into perspective: in the 7,000 years between the invention of writing and the advent of computers, roughly 130 million books were written. Today, the internet creates the equivalent of 400,000 trillion every year. Every year.

If it were water, the entire written output of humanity up to the age of computing would fit in a teaspoon. The information we generate annually in the twenty-first century would fill roughly three Olympic swimming pools. And all that liquid keeps pouring, year after year, into the ocean of the network.

The monumental challenge we face is this: all of that information is still stored as zeros and ones — like an ocean filled with indistinguishable drops of water. The internet is an unmanageable mass of information without meaning.

Computing solved how to store and copy the form of words, but not their meaning — much less the relationships between them. Meanwhile, the only way to understand the meaning of all that information remained, until very recently, conventional reading. And yet it is impossible for any single human being to read even a millionth of the information available on the internet.

This poorly digested digital revolution is what has left us, in the 2020s, drowning in information and starved of meaning. Without any way of making sense of the information circulating daily on the internet, networks have become factories of chaos, polarization has made genuine debate impossible, and the pervasive feeling is that no one — not experts, not governments, not the media — understands anything anymore.

From a world with a single truth, consumed every morning from the front pages of newspapers and tucked in with you at night after the evening news, we have moved to a world without truth. Or with millions of individual truths, impossible to reconcile with one another.

The widespread confusion in which we live today — from the inability of economic structures to make sense of what is happening to us, to the anxiety of people who have more information than they can process — originates here.

In an attempt to find a way out of this tangle, contemporary society is immersed in the challenge of mapping this new reality: of understanding the internet, which is the same thing as understanding ourselves in all our globalized complexity.

Google was a first attempt. Wikipedia has been another. Even Blockchain has at its core the ambition to create a truth beyond the reach of power. Big data techniques and modern statistics are two more approaches, as are the algorithms of social media platforms. From their different angles, all of these things are attempts to draw a map of that ocean — to find a shared truth once more, but this time for 8 billion human beings.

And what we have called “artificial intelligence” is a new map.

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All You Need Is Attention

Mathematics is a “formal language”: a code with strict, defined, and universal rules that allow operations to be performed with precision and reproducibility. A system designed to eliminate ambiguity. Any “speaker” of the mathematical language can know exactly what the relationships between its signs are.

Natural languages — like human tongues — are the opposite. They have no manual. They are organic: they emerge within a community, with ambiguous and shifting rules. There is no universal norm that explains how the meanings of words relate to one another.

And yet speakers understand each other.

For decades, linguists had tried to crack the secret code that connects the meanings of words — without success. They were stuck. That is why, as you’ll remember, Google Translate was terrible before what we’ve come to call AI.

Nine years ago, a team of Google researchers proposed trying something different. Instead of analyzing the words in a text sequentially — one after another — they proposed building a map of relationships between all of them simultaneously. The links between each word and every other word formed a kind of mesh, where each connection could carry a different, variable value depending on the rest.

Those values wouldn’t come from a pre-existing equation — the way mathematical rules do — but would emerge from observing the actual use of language: from reviewing millions of texts written by human beings in real contexts. Once that immersion (”training”) was complete, those values (”weights”) would constitute a representation of all those interactions.

And it worked. Suddenly, this software — known in technical jargon as Large Language Models, or LLMs — was able to process the meaning of words with unprecedented precision. Five years later, ChatGPT arrived, along with all the other applications we know today. That is the source of the extraordinary translations AI produces, and of that uncanny sensation of talking to a human that these applications create.

Although it has often been said that they are token-computing machines, I think the image that best defines them is a different one: what we popularly call AI “models” are maps. Maps of the relationships of meaning present in the dataset on which they were trained. In the specific case of the models that have become famous, they are representations of the internet — as if they were a cartography of the ocean floor.

Nothing more. To this day, all models — ChatGPT, DeepSeek, Claude, and the rest — are variations of this same technology. In their more advanced forms, they are combinations of several LLMs given different instructions, or systems that blend this mechanism with traditional symbolic programming.

Can we find in these maps the truth that lies hidden within the internet? Do LLMs hold the key to restoring the horizon of lost certainties?

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The Fickle Truth of Words

Unlike mathematics, the responses produced by LLMs trained on the internet cannot be deterministic. The square root of 9 is 3 — but the answer to the question “Can cats think?” is neither exact nor binary. Natural language does not admit the precision of algebra. That is why LLMs don’t calculate the correct answer — they calculate the most probable one.

It has often been said that they “hallucinate,” as if producing a nonsensical response were an exception, a deviation from their logic, or a system failure. It isn’t. They simply do not have, built into their own architecture, a notion of truth like the one that exists — and is central — in symbolic programming or mathematics.

That is why LLMs cannot converge on a single solution when the ocean of information they represent contains none. This is not a problem that will be “fixed” with more technology — it is a direct consequence of the reality they represent. LLMs cannot converge on a single truth because on the internet, just as in society, no such thing exists.

Is this a problem? If we recognize the technology for what it is, I would say no. Google’s search algorithm is also wrong sometimes. Its results are often not as accurate as one might hope, and users have grown accustomed to rephrasing their search when the expected answer doesn’t appear. We have also learned to distinguish a reliable source from an unreliable one. In the same way, the millions of users who are successfully using this technology to find meaning on the internet are learning to work around its limitations.

It only becomes a problem when AI is used as a substitute for the coordination mechanisms of the economy — mechanisms that cannot function without certainty.

The Truth of the Economy

The industrial economy is the application of mathematical logic to the production of goods and services: a mechanism for coordinating countless parts to generate determined, reproducible, and verifiable outcomes — that is, certain outcomes.

What underpins that entire mechanism is not production, but guarantee: the promise that a machine will work in a predictable way, or that a contract will be honored. Appliance warranties, corporate legal liability, and quality standards are the true expression of the productive system.

Imagine the opposite: that when you buy a plane ticket, there is no expectation of reaching your destination — only a probability of doing so. Or that a home appliance is designed not to work, but to “probably” work. In that world, there would be no industrial economy as we know it.

To solidify those certainties, modern legal systems impose very high costs on deviations. If a plane doesn’t fly, the airline must compensate passengers substantially. Electronics manufacturers are liable for the damage their products cause, just as lawyers are liable for the consequences of an error in a trial or a due diligence process. The industrial economy doesn’t just produce — it assumes the cost of guaranteeing what it has produced.

In that machinery, LLMs are a bomb: a technology that by design works with probabilities cannot sustain a system that runs on certainties. That is why AI shines in contexts where ambiguity is acceptable — drafting a document, summarizing a text, exploring ideas, even mining data — and grinds to a halt where what is at stake is someone’s money, life, or liberty, as in law, finance, or medicine.

For AI to play a meaningful role in the economy, it would need to achieve something that is neither easy, nor obvious, nor resolved: producing certain outcomes.

For this reason, the entire field of “artificial intelligence” today is dedicated to a single underlying goal: building a bridge between the probabilistic thinking of language models and the symbolic thinking of mathematics and classical programming, where explicit rules of true and false exist.

To try to close that gap, researchers are exploring several paths: breaking a question down into simpler sub-problems where prior truths do exist; pitting multiple models against each other so that some correct the deviations of others; or connecting LLMs to external symbolic tools capable of verifying results against formal criteria of correctness.

If they don’t succeed, the technology risks remaining what it is today in its purest form: a highly sophisticated language generation system — but with limited economic utility in every context where what matters is not what is plausible, but what is true.

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The Special Case of Software

In recent months, Anthropic’s advances with a coding tool called Claude Code have led many to believe that LLMs might actually be capable of achieving that goal.

Software is a special case. Programmers have spent decades storing the code they write in a public repository (GitHub) and sharing criteria for how to write that code in another (Stack Overflow). A vast portion of humanity’s collective knowledge about code is stored, neatly organized, corrected, improved, and expanded across successive versions in two websites that are, moreover, freely accessible to everyone.

This makes software the only domain in which formal, defined, and precise languages — at least partially; there are still different architectures, approaches, and coding styles — coincide with a cultural repository of information where something resembling a single truth actually exists. As a result, the degree of ambiguity in the dataset on which Claude Code and similar tools operate is lower than that of legal or medical databases. If there is any domain in which an LLM can come close to producing a “correct solution,” this is it.

For comparison: this same condition doesn’t even exist across mathematics as a whole. Mathematical papers are still published in natural language, and there is no “Claude Code” equivalent for mathematics today. Only in recent years have mathematicians begun trying to formalize the entire field in order to move in this direction.

For an LLM to achieve the same level of success in another domain — finance, legal practice, architecture, medicine — that entire domain would first need to be fully formalized.

Which raises the question: what role is left for AI if it cannot become a fundamental pillar of the economy?

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The Truth Behind the AI Bubble

The companies selling AI products are, without question, the ones with a truth problem.

Sam Altman, the CEO of the company that launched ChatGPT — and someone many people are now describing publicly as a pathological liar — is the one who created the monster. In 2022, Altman wasn’t content with becoming the next Google. He had a far more ambitious plan. He wanted to convince the world that his technology wasn’t just a new way of mapping information — it was a form of intelligence. An entity capable, simultaneously, of destroying us all and giving us everything we need. Of ending the economy, waging war, supercharging productivity, and curing cancer. AI was God. Altman was Noah. And only those who climbed aboard his ark would be saved from the flood.

That is how the companies selling LLMs became the new Seventh-day Adventist sects, making the apocalypse their sales strategy — exactly like Donald Trump, incidentally.

That is how they began to promise that AI would destroy millions of jobs, that it would surpass human intelligence and render people “unnecessary”, that it would boost productivity, cure cancer, wipe out entire professions, drive better than humans, kill the film industry, and “put to the test what we are as a species” — among many other things.

Even today, Dario Amodei, CEO of Anthropic — who copied everything from Sam Altman, including the compulsive dishonesty — continues to claim that AI will “eliminate half of all jobs within five years.”

The reality is that none of these things have happened. And none of them are going to. Quite the contrary. Today, the AI era dominates newspaper front pages and social media feeds, yet it is conspicuously absent from productivity statistics. Meanwhile, 8 out of 10 knowledge workers say they don’t use it at all.

The AI companies, meanwhile, are caught between a rock and a hard place. OpenAI, which runs ChatGPT, closed its latest funding round at a valuation of $850 billion. Anthropic is expected to list above $1 trillion. And the big tech companies — Google, Microsoft, Meta, and others — have invested $776 billion in data centers to power this technology, with no plans to stop. They have inflated a bubble sustained entirely by expectations of total economic transformation — by the promise of true artificial intelligence.

To live up to those expectations, they need AI not merely to interpret the truth of society, or even to create new truths, but to produce things of genuine economic value.

But what does it actually mean to be of economic value?

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The Truth of Productivity

Not all value is economic. In fact, the most valuable things — air, love, harmony, mathematics — have no price. For something to carry economic value, two conditions must be met. First, it must be scarce: if there are infinite copies of something, its price tends toward zero. Second, it must be exchangeable: there must be someone willing to give you something in return for what you have. And for that exchange to happen, both parties need to agree on what is being exchanged. They need, in other words, a shared truth.

That is why economic value is, at its core, a form of truth: the agreed truth between producer and buyer about what a thing is, what it is worth, and what can be expected from it.

But not all truth carries the same economic value. Truth is the entry condition for exchange; what sets the price is how many people share it. An idea, an industrial design, a work of art, or a computer program is worth something to the extent that many people want it and few people can produce it.

The ideas in this newsletter have real value — because only I can write them, and many people find them worth reading. By contrast, we could use AI to generate a million Substacks full of content and publish a post every minute for the rest of our lives. If we can’t find anyone who wants to read them, they will produce zero economic value.

(Subscribe now, before you forget!)

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For this reason, information technologies — email, digital photography, cloud computing, social media, search engines, AI — increase the individual capacity of knowledge workers, but not the aggregate productivity of an economy. In fact, they reduce it. What they actually do is multiply the number of available truths, while making each one less economically viable than what existed before. By making large swaths of human activity abundant and cheap, they reduce the need to exchange in markets. And when there is less exchange, the economy contracts.

The same will happen with AI. It will increase the individual capacity of knowledge workers — in journalism, consulting, programming, publishing — and raise the standards of those professions. But it will not produce a productivity revolution like the railways, the automobile, or electricity. It will produce more truths than ever before. But each one will be worth less.

You can find a more detailed explanation in this article:

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The Truth About Good Information

In my view, the great risk facing AI is that the value it can produce doesn’t depend on the technology itself — it depends on the information it feeds on. As is abundantly clear with Google Search and Google News, this technology cannot exist without an internet full of quality content.

The paradox is that this data is the product of the 25 years we spent online without any other way of finding information: Reddit and Wikipedia exist, and there are 10,000 answers to the question “how do you make chicken soup?”, precisely because we weren’t able to find a single definitive answer.

But if AI finds the answers and — as seems to be happening — people stop visiting websites; if it fills the internet with low-quality content regurgitated by a chatbot, the technology itself will run out of material to learn from. What will follow — and is already beginning to happen — is that LLMs will start producing increasingly poor results, because the information available to them is manipulated or simply impoverished.

This technology, which is by its very nature regressive*, needs a resource from which to extract value — and at the same time, threatens to destroy that very resource.

My intuition is that this game will ultimately be won by the best content creators. I’ve called it somewhere “the frozen bread theory”: the idea that an overabundance of information creates a new demand for the highest-quality information. And I believe AI will end up as a tool in service of whoever holds a strong repository of genuine knowledge.

The Truth About Human Value

There is one final idea I don’t have space to develop here — I’ll save it for next week’s Wide Angle. (Hit the button to have it delivered to your inbox.)

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There is no single correct way to write a computer program, or to argue a legal case. There is no perfect answer to what an article should say, or a book. The reason AI cannot create images that truly move us — beyond a pile of things worse than stock photography, if that’s even possible — is that there is no such thing as a “good image” without the intention of the person who made it.

Value still resides in human beings. Because we are the only thing that truly interests us.

To be continued…

If this content interests you, you’ll love my first book. It’s called Hijos del Optimismo (Children of Optimism)— a thesis on the great transformations of the knowledge economy and what comes next.

*Correction: This was a slip — the correct term used to describe these models is not “recursive” but “regressive.” However, the sentence doesn’t work with that terminology, so I’m leaving it as is.

Photo by Jon Tyson on Unsplash

This should make no sense. Why would a businessman who controls one of the most successful companies in the world invest in buildings? Shouldn’t it be far more profitable to keep investing in his own company?

The absurd answer is: NO.

Inditex went public in 2001. Since then, its sales have multiplied by 12, its operating profit by 18, and its market valuation by 17. Its shares are worth ten times more than they were 25 years ago. Throughout that entire period, the company has never issued new shares — but it has paid dividends every single year.

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It is those profits — which in Ortega’s case amount to more than €21 billion over those 25 years — that the businessman is using to buy properties and stakes in utility companies across Europe.

In other words: Inditex does not need outside capital to keep growing. Its own business generates enough cash flow to cover operating expenses, pay dividends, make the necessary investments, and still keep growing at full speed.

That is why Amancio Ortega has nothing better to do with his money than put it into property.

Inditex is clearly an exceptional company — highly profitable and superbly managed. If you press me, I’ll admit that Zara isn’t just a fashion brand: in the future it will be studied as a form of art. (I neither confirm nor deny that this is what I tell myself every time I pull out my card to add another, ahem, piece to my modest ahem collection.) But the point is that Ortega’s situation is far from unique. His is not the only company producing more profit than it can productively reinvest.

Quite the opposite. What is happening to the world’s richest man is happening to everyone else too: we are drowning in savings we don’t know what to do with. That is why the entire world is pouring money into real estate, which now accounts for 60% of global wealth

Over the past 25 years, global wealth has gone from representing 3 times to 6 times world GDP — in other words, it has doubled relative to the size of the economy.

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Meanwhile, in the digital economy, productive investment opportunities for all that wealth are becoming increasingly scarce. Put as simply as possible: Inditex’s online stores, which today account for a quarter of the group’s sales, do not require anywhere near the capital investment that would be needed if those same sales had to take place in physical shops.

We are buried under a mountain of savings. And yet, in the twenty-first century, capital is playing an ever-smaller role in the economy.

The reason is that ever since digital technology began reshaping the economy — first in the dot-com bubble, then in the subprime crisis, then during COVID — governments have thrown themselves into injecting monetary stimulus (liquidity) to prevent the outcome that would have been the natural consequence when digitalization made vast swaths of the economy unnecessary: deflation and degrowth.

To avoid having to explain to citizens that the growth that had made possible the great social contracts of the twentieth century — pensions, savings, rising property values, the “American dream” — had come to a halt, we have spent 25 years injecting artificial money into the system.

That is why wealth keeps growing even though productivity is stagnant. That is why assets that can still sustain some cash flow — real estate, infrastructure, energy companies — keep appreciating. The bubble currently inflating in US stock markets, the rise of Bitcoin and cryptocurrencies, and the staggering appreciation of gold in recent months are all symptoms of the same underlying problem.

Meanwhile, at ground level, for the people who keep having to pay more for the same goods — in order to reward the owners of all that accumulated wealth — the lived experience is that life is getting more expensive and more difficult.

There is, though, another way to look at it. One that is even more vertiginous, but that ultimately explains what is happening far more clearly.

Instead of thinking that assets — homes, buildings — are appreciating and becoming more expensive, we can think of it the other way around: money itself (not any particular currency, but money as a whole) is worth less and less. It is being devalued. If we assume that the underlying value of assets hasn’t changed, then what is actually happening is that we need to hand over ever-larger quantities of money to acquire the same thing.

This explains why so many people feel that it is they who are being devalued. Their work, their position in the world — still measured in money — is losing value. And that’s true. With the value a person could produce through their labor 50 years ago, they could access a certain number of assets. Today they can access half as many, or fewer. Is the asset appreciating — or is labor depreciating?

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One might conclude that this is a catastrophe. We’re being devalued, and there’s nothing we can do about it!

But that’s not quite right.

Money isn’t losing value because of some malevolent force. It’s losing value because we are increasingly interested in things that have no economic value — meaning, no scarcity. We no longer care about filling our shelves with china figurines or replacing the sofa every two years. We’d much rather travel widely than own a single beach house. And we are increasingly drawn to conversation with other people, to learning, to watching series, listening to music, reading, being with friends and family. To living.

What is happening is that we are increasingly transacting in a different currency: attention. And that “nomy” — not an eco-nomy but a pluto-nomy — is thriving. It is remarkable how many people, in recent years, have a project running alongside their day job: a Substack, a magazine, a summer festival they organize, a reading group, a running club. Or whatever it might be.

And the problem is that, seen through the lens of the twentieth century, these things are still considered a distraction from the real task of mankind, which is work. But that is no longer the case. The world has changed, and it will keep changing. Those projects, those learning journeys — they are the investments that will appreciate in value in the future.

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If this topic interests you, you can keep reading in my first book, Hijos del Optimismo (Children of Optimism), now available on Amazon, at Casa del Libro, on the Debate website, or at your favorite local bookshop

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Nobody knows this better than Silicon Valley. During the years of cheap money that followed the 2008 crisis, the Valley invented a way of building companies that consisted, essentially, of avoiding any confrontation between their fantasies and the reality of running a business. Someone called it blitzscaling. The idea was simple: in a hyper-connected world, whoever gets there first takes everything. So what mattered wasn’t being a functional company — meaning, one that actually made money. That would come later, on its own. What mattered was growth. Growth at any cost, even if it meant bleeding out at a loss.

This newsletter lands in your inbox for free because information wants to be free. But it doesn’t arrive by spores. Or float in on the air. If you don’t want to miss anything, make sure you subscribe and share.

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Venture capital — the specialist startup investors who rock this particular cradle — had no incentive then, and has none now, to build profitable companies for the long term. That’s not their business. Their business is buying cheap shares and selling them higher. And for that, it’s far more profitable to buy and sell before reality catches up with expectations: pre-money, pre-profit, pre-product-market-fit. A good fantasy is a far more valuable asset than cash flow.

The result was an entire generation of “unicorns”: startups valued in the billions that existed primarily in the imagination of their investors. Uber was one of them — it racked up $33 billion in losses before turning a profit. Spotify too, taking 17 years to post its first profitable year. WeWork reached a valuation of $47 billion before anyone bothered to read its accounts — and when they did, the company nearly ceased to exist. These are the success stories. Of the rest, little is known. In 2021, 354 companies had achieved unicorn status. Only six have gone public since.

The mega-bubble of the misleadingly named “artificial intelligence” is the latest chapter of this adventure. Except that after so much growth, we’ve run out of mythological creatures to compare it to. Five years ago, a company needed to reach a valuation of $1 billion to be considered a unicorn. OpenAI, the AI frontrunner, closed its latest funding round at a valuation of $850 billion. Anthropic, hot on its heels, stands at $350 billion. Meanwhile, the big tech companies — Google, Microsoft, Meta, and others — have collectively invested $776 billion in data centers to power this technology, with no plans to stop.

These are astronomical figures. Unthinkable ones. Impossible to square with any model of profitability on a spreadsheet. Like the sex you had in your head, they are incompatible with reality. They can only make sense in the fantasy world where these companies succeed in creating a new intelligent species.

For that reason — to justify this kind of madness — over the past three years OpenAI, Nvidia, Anthropic, and the rest of the AI industry have reinvented themselves as the new Seventh-day Adventists. They have proclaimed that this technology would destroy 300 million jobs and transform two in three roles worldwide; that it would surpass human intelligence and render people “unnecessary”; that it would boost productivity by 7%; that it would cure cancer before 2025; that it would wipe out radiologists, then doctors, then programmers, then lawyers; that it would drive better than humans by 2023; that it would replace the film industry with one made up of amateurs; and that it would “put to the test what we are as a species”. The latest apocalypse — this week’s edition — even has a name: “Vulnpocalypse”, the prophecy that an AI model will trigger a cybersecurity armageddon.

None of this has happened. But until very recently, AI companies and their investors could keep living off the expectation that it eventually would.

Until Claude Code.

Three months ago, Anthropic released a large language model adapted to the needs of software developers. It has been well received in that sector. Some of the most respected programmers in the world — including Linus Torvalds and David Heinemeier Hansson — have acknowledged they’re giving it serious consideration. Claude Code is an LLM that could, ideally, find what is known as “product-market fit”, meaning it could land as a concrete product with a potential buyer, carry a price tag, and actually have its sales tested in the real world.

Oh, no!

It’s time for reality. AI now has a product to sell. It is no longer just a promise. Now it will have to show how much developers are actually willing to pay for its solution, and how many developers in the world are interested in the tool.

Suddenly, the AI companies have a problem. How much does a software company need to charge to justify a valuation in the hundreds of billions? And another: what does it cost to deliver that service to developers? Because if the computing cost is very high — and it is — it’s possible that companies will only want to pay for it in a handful of specific use cases.

And another: what does Anthropic have that protects its product from competitors who want to copy its business model? What stops 20 or 30 other companies from building something exactly like Claude Code?

And if all those companies pile in to develop similar models, won’t they have an obvious advantage over Anthropic — precisely because they don’t carry the weight of having paid all the development costs to get here?

And one more: software development has the enormous advantage of being a domain where two things these models need to function actually coexist — well-established rules, and a repository of knowledge built up over decades by thousands of developers sharing their solutions. Can Claude Code be exported to other industries, or is it going to remain confined to this particular corner of programming?

And if it stays confined to programming, how do the hyperscalers justify the investment they’ve made in data centers — an investment premised on AI replacing hundreds of millions of workers?

None of these questions are extraordinary. They’re the ones any company asks when its business isn’t buying and selling shares, but actually creating value for someone willing to pay for your product. What they will be forced to answer in the coming months is the big question hiding behind the bubble: is there a real business in AI? Enough of one to justify investing trillions of dollars in a handful of companies?

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And so the AI bubble ends here. With Claude Code. For better or worse, the companies that have poured money into this and tried to convince us it was going to work — now that something actually works — will have to show their hand. Either they produce a product that justifies the investment, or they scale the investment down to match what they can actually sell.

I can’t help thinking that Anthropic’s latest move — last week’s press release announcing it would not be releasing its newest model, “Mythos,” because it “could have terrible consequences for the banking sector” — is a cheap ploy to avoid facing the harsh reality of having to sell your product and stay in the hype cycle.

Because it is rather curious that, at the exact moment when one of your models actually seems to be useful for something, you decide not to publish the next one — just in case someone notices it has a practical application and isn’t simply an existential threat to life on Earth.

But it’s a futile effort, I think. The AI fantasy will end the only way fantasies always end: with the encounter with reality, its textures, and its rough edges.

In the next article I’ll tell you what I think is going to happen…

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Heads up! Changes to the newsletter.

I owe regular readers an apology — once again, I’ve neglected this newsletter. The launch of Hijos del Optimismo (Children of Optimism) collided with the opportunity to make a significant investment to get a new project off the ground, plus a few personal matters, and life simply took over.

But I’ve used these past few days to think through a format change. From now on, during the week I’ll be publishing shorter pieces tied more closely to current events — like today’s — and on Saturdays a deep-dive piece called “Wide Angle.”

Let’s see if I can pull it off!

Photo by Madison Oren on Unsplash

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At the heart of our time lies a mystery. An inexplicable contradiction.

On one hand, we are living in the best moment in human history.

Over the past 25 years, 1.5 billion people have been lifted out of extreme poverty, GDP per capita has risen from $13,000 to $20,000, life expectancy has increased by 17 years, and child mortality has been cut by two thirds.

Today, two in three people on the planet are connected to the internet, and we publish four times more books per year than in 2000 — over 2.2 million new titles annually. As if that weren’t enough, we are close to making cancer a chronic, manageable condition, and the rollout of renewable energy allows us to imagine not just a solution to climate change, but the prospect of a future of clean, abundant energy.

And yet, we are in crisis.

Two in three people on this planet feel that “society is broken,” that the economy is rigged in favor of the powerful, and that a widening gulf separates ordinary citizens from political and economic elites. Meanwhile, 40% of humanity believes their economy will be worse next year and that there will be more violence. Many people report “great worry” (39%), “stress” (37%), and “anger” (22%).

The result is that today, populist parties — with Donald Trump at the helm — sit in government in one third of OECD countries.

How can this be?

At the moment of greatest abundance in history, what we feel is fear and a gnawing sense of scarcity.

How can this be?!

The answer to that question is a powerful one: it explains why Trump sits in the Oval Office, why there is a housing bubble, and why there is another bubble in “AI.”

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Don’t Look Up!

The most remarkable thing about this mystery is that it isn’t one. Every government in the world knows what is happening. But the phenomenon behind the discontent is so terrifying that no one dares say it out loud, for fear of making it fully real. Like the movie where a meteor is about to destroy the Earth but everyone looks the other way — we’ve spent fifteen years watching the impact coming, without ever finding the courage to talk about it.

What is happening is this: the economic engine that brought us here — the one that made us the society we are, the one we call the “industrial economy,” or “capitalism” — stopped working 25 years ago.

And nobody knows why. Or how to fix it.

What we do know is this:

Human societies have always had some form of economy. But until a couple of centuries ago, it was essentially a survival mechanism. What turned the industrial economy into the cornerstone of modern society was its extraordinary ability to transform our lives by relentlessly creating new goods to replace old ones — the way the car replaced the horse, oil replaced coal, or the telephone replaced the telegraph.

But that engine had a problem: it concealed a death drive. When goods became obsolete, old industries lost their purpose and disappeared. Financial bubbles and waves of unemployment followed — the kind that swept through communities after coal mines were shuttered or car factories closed across the United States. To stay alive, the industrial economy had to keep devouring itself.

The natural, expected end would have been death by success — eventually creating every product a person could want and exhausting its own mechanism of constant change. Yet by the mid-twentieth century, the industrial economy had been running at full capacity for 150 years, and none of that seemed to be happening.

So in 1942, someone offered an explanation: the destruction produced by capitalism was “creative” — and you really have to admire economists for their naming instincts. The labor and capital that became unnecessary when industries died turned into the fertile ground where the next ones were born. Better yet, because the new companies were more productive and innovative, the jobs and investment opportunities they offered were more plentiful and more rewarding.

And so “creative destruction” became far more than the engine of capitalism — it became the founding myth that organized all of modern life. For 50 years it was the truth that allowed generations of people without university degrees to dream that their children might become architects. It was also the story through which society believed it would pay for pensions, build infrastructure, pay down public debt, own a beach house, and go on holiday every summer.

Twenty-five years ago, that engine stopped.

Since the late 1990s, the “destructive” side of the economy has only accelerated, sweeping away entire industries — but the “creative” function has gone missing in action. The new industries of the twenty-first century have been unable to absorb either the capital or the labor that the old ones used to employ.

The mobile phone, for instance, obliterated entire sectors of activity: neighborhood retail and bank branches; CDs and film cameras and newspaper kiosks. As had happened before, jobs and investment opportunities in each of these sectors were destroyed.

But the primordial broth of surplus labor and capital that was supposed to generate new sectors of activity never delivered. Instead, the world split in two: on one side, a handful of companies and certain categories of workers — engineers, programmers, finance professionals, parts of marketing — continued to enjoy good conditions and strong prospects; on the other, a vacuum emerged, steadily filling with precarious, low-status, low-productivity, poorly paid work — hospitality, delivery drivers, gig workers.

The macroeconomic consequence is that countries are growing more slowly. Some highly productive industries still exist, but average real wages have stagnated as precarity has spread. Government revenues — also designed for a world where employment would always grow — have come under strain. And so the tensions emerge: who should pay for public services, and how much.

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The One That Must Not Be Named

So the first great mystery of the modern world is no mystery at all. It is well understood that the inability of today’s economy to sustain the myths and institutions of the twentieth century is what is driving the eruptions of discontent everywhere. That is why they are happening all over the world at the same time.

The crisis of the middle class — the frustration of young men, especially those without higher education — stems from the fact that the jobs that gave them a central place in society disappeared and were never replaced by equivalent ones. And if there is a global housing bubble, it is because capital, lacking productive alternatives in which to invest, has retreated into the last asset from which it can still extract returns.

In the collective subconscious, all of this crystallizes into the feeling that “society is broken.”

But nobody has a plan to fix it — because the true mystery of our time, the one for which no one actually has an answer, is:

Why has the engine of capitalism stalled?

Since nobody fully understands it, and nobody has a solution to offer, no leader wants to touch the subject. The politics of the past ten years resembles the faculty of Hogwarts, collectively determined not to name the one who must not be named. Instead, parties busy themselves finding plausible — but false — scapegoats, ones that let them keep their base in line while deflecting blame. Depending on which side you’re on, the culprit is:

• immigrants,

• or billionaires,

• or politicians — who favor immigrants or billionaires, depending on who’s pointing the finger —,

• or social media, filling people’s heads with garbage.

And despite the different villains, the proposed solution always seems to be the same: go back. From Trump’s Make America Great Again to the nostalgic nationalism of the European far right and the reindustrialization programs of social democrats, every ideology is inventing its own particular version of a return to the moment when all of this seemed to work.

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The Truth at the End of Capitalism

A few years ago, I set out to write a book that would answer this question:

Why did the engine of capitalism stop?

Not because I want to do forensic science. Not because I want to be a catastrophist. Quite the opposite. If there is a way out of this dead end — and there is — it runs through understanding that we cannot go back. We have moved beyond the industrial era. We are already in a new time, and once the shock and the initial fright have been absorbed, the only thing we can do is look forward. There is no point trying to return to a world that no longer exists — it is impossible, and that ambition can only lead us toward hatred and war, as we are seeing everywhere these days.

The great tragedies of history do not arise from transformation itself. They arise from society’s inability to adapt to it. It is when profound change overwhelms existing norms, and institutions fail to keep pace, that conflict takes hold.

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‘Hijos del Optimismo’ (Children of Optimism) argues that 25 years ago, a transformation took place that dismantled the industrial system. To understand it, we need to set aside the classic categories and think about the economy from a different angle — one more suited to the reality of the twenty-first century: the exchange of knowledge.

The Industrial Revolution is usually told as a story about our capacity to manufacture. The combination of capital and labor made us vastly more productive, and that is why we are so much wealthier. But producing something, if you have no one to sell it to, counts for little. What truly changed the world was the expansion of trade — which from 1800 onward had grown far faster than population or production, and which, coinciding with the stalling of capitalism’s engine, flatlined.

Which leads to the next question: what exactly do human beings exchange with one another? And why are we doing less of it?

The answer is less obvious than it seems. We’ve grown accustomed to thinking about what we buy and sell as objects — as the heavy, countable output of a material world. But they never were. When we buy a car, a medicine, or a phone, it’s because we don’t have the knowledge needed to make it ourselves. What we exchange, therefore, is knowledge. The goods traded by the industrial economy were fragments of knowledge pressed into products.

So the next question is: what happened to the human knowledge that produced the greatest economic expansion in history? And what happened afterward?

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A Brief History of Human Knowledge

For most of our existence, knowledge advanced at geological speed. Thousands of years passed between the mastery of fire and the emergence of symbolic language, and thousands more between the Agricultural Revolution and the first formal mathematical systems. Several thousand more had to pass before those systems culminated, in the seventeenth century, in the scientific method and Galileo.

Throughout all that time — just as with other animal species similar to our own — knowledge spread from individual to individual until it reached the limits of each population, exactly like a virus. If one person knew how to use fire, or build a windmill, that knowledge replicated organically — the way elephants pass knowledge to each other, or macaques — until it reached the entire social group.

This meant that trading in knowledge was not possible, because everyone had the same knowledge. That is why commerce throughout history was always marginal, and only in cases where political power exercised rigid control over its distribution — as China did to protect its silk industry, or the medieval guilds did in Europe — was trade in knowledge even conceivable.

But during the Industrial Revolution, something extraordinary happened. All the accumulated knowledge that had been building since the Scientific Revolution, two centuries earlier, crystallized into a cascade of discoveries: the steam engine, the railway, electricity, the internal combustion engine, the telephone, antibiotics, anesthesia, vaccines, the airplane, television, plastics, synthetic fertilizers, nuclear fission, the transistor, computers, the internet, GPS, genome sequencing, and smartphones.

That acceleration produced a historical anomaly: there were barely enough people capable of managing it.

At the dawn of the Industrial Revolution, fewer than 10% of the world’s population could read and write. There were very few universities, and most were more devoted to the study of religion than science. In the decades that followed, despite the breakneck pace of technological progress, it was still driven by very few people — perhaps a few thousand, in Europe and the United States.

Meanwhile, the rest of humanity was just as illiterate in 1920 as it had been in the Middle Ages. There were not enough engineers, mathematicians, or teachers in the world for knowledge to become universal as it had been for millennia. Complex ideas could not circulate beyond those tiny circles — simply because there weren’t enough people capable of understanding them.

For that reason, for two centuries, the entire world depended on the elites of a handful of countries to manufacture cars, extract oil, maintain supply chains, synthesize medicines, build infrastructure, write software, and launch satellites into space. What’s more, even in Western countries, most of the population could not make consumer decisions on its own.

What we call “capitalism” or the “industrial economy” was, therefore, a colossal mechanism designed to allow vast numbers of people — who lacked the necessary education — to enjoy things like home appliances, financial products, fossil fuels, and international travel that would never otherwise have been within their reach.

That is what made the “industrial era” possible. For a couple of centuries, the monopoly on knowledge allowed a handful of companies in a handful of countries to sell it — packaged in consumer goods — first to the rest of society, and then to the rest of the planet.

Meanwhile, in 1950, two thirds of the world’s population still could not read or write.

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The Age of Optimism

Until, in the second half of the twentieth century, everything changed. At the end of the Second World War, the world made a colossal effort to extend the benefits of welfare and progress to the majority — including education.

First, in the 1950s, 60s, and 70s, billions of people gained access to basic schooling. Illiteracy plummeted — collapsing within a matter of decades. Then, in the closing chapters of the century, a new promise emerged: a “knowledge society” would be born.

Making that dream possible would require more than oil and machines. It would need a new kind of capital: “human capital.” The future needed engineers, lawyers, and doctors; scientists and philosophers; publishers, writers, and creators; sociologists, political scientists, and linguists. Astronauts.

And so the world conspired to produce an unprecedented experiment. A generation — hundreds of millions of young people — would go to university, and emerge from it as a different kind of human being: infinitely more capable of transforming reality than any of their predecessors, equipped with a backpack full of self-belief and the assignment to build the future.

Those children are — we are — the children of optimism of the twentieth century.

And just as our parents — who had been the first or second generation in their families to attend school — gave rise to television and newspapers to satisfy their curiosity, the children of optimism created our own medium, tailored to our ambitions: the Internet.

A Change of Era

It’s been said so many times it feels tedious to repeat — but it’s true: we are living through a change of era. A thousand years from now, when future historians explain the moment we lived through, they will say it was an extraordinary one, a historical inflection point.

The dream of the knowledge society blew apart the chains that had kept knowledge restricted for 200 years. For the first time, hundreds of millions of people could command a volume of knowledge that, just a few decades earlier, would have been considered revolutionary.

The impact was enormous — as if a million scientific revolutions had hit us simultaneously. Within just a few years, the structures that had served to maintain the monopoly of knowledge in a world of illiterates began to crumble.

First, the great newspapers, the unions, and the mass political parties — the great intermediary institutions of contemporary society — began to fade. Political scientists and sociologists, who understand this phenomenon well, call it “political disintermediation” and are acutely aware that it represents a paradigm shift. What we have not yet fully grasped is the impact it had on the economy.

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The Shrinking Economy

In the twentieth century, music was a scarce good. It required very specific — and carefully restricted — knowledge to manufacture CDs, produce them at scale, and distribute them. Precisely for this reason, a market could exist that sold billions of units and sustained entire distribution chains employing millions of people. In major cities, entire shopping centers were built around the trade of this particular form of entertainment.

The children of optimism stopped needing those intermediaries. An entire sector of the economy disappeared. Then the same thing happened to newspapers. Then to travel agencies, hotel chains, retail stores, bank branches, administrative workers, insurance brokers, video rental shops, employment agencies, television, and radio.

Just as it happened to the mass political parties, with each good that no longer required intermediaries, entire economic sectors vanished — along with millions of jobs and investment opportunities. The “destructive” side of capitalism was rendering them obsolete.

This is the simplest — and most condensed — explanation for the great mystery of our time: the children of optimism, realizing the dream their parents had for them, dismantled the industrial world and inaugurated a new one.

The economy we had known — the one that carried us to the threshold of the twenty-first century — was not the natural, inevitable continuation of our species. It was an exception; an anomaly; an ephemeral moment that arose at the confluence of exceptional historical circumstances, and that depended on a single condition: that knowledge remained restricted and controlled by a few people in a few countries.

And it is not coming back.

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Abundance or Barbarism

The paradox of the present is this: we have convinced ourselves that we live in a time of scarcity, when the only truth is the opposite. Our world is becoming more abundant by the day. We are increasingly capable not only of producing material goods, but of satisfying our needs in far more sophisticated ways than through the possession of objects. (This is what we mean when we talk about “digitalization.”)

The problem is that the rules of our society are not designed for abundance. Quite the contrary. Solving the “economic problem” — scarcity — has been our primary occupation, not just for the past few centuries, but throughout our entire existence, and throughout the history of life itself. Even today, society is precisely this: a system designed to produce and allocate limited goods. A mechanism that expects all of its members to contribute to alleviating that age-old scarcity by contributing effort (labor) or sacrifice (capital), and that assigns each person a position in the social order based on the results of that contribution.

So every time knowledge threatens to make another corner of existence abundant, we find ourselves at the same crossroads: if we want music to be abundant, how do we pay the artists? If we buy products cheaply in places with no sales staff (like Amazon or big-box stores), what will the neighborhood shopkeepers do? If knowledge collapses the price of food, how will farmers live well? If technology frees us from work, what will we live on?

What we have called “artificial intelligence” is the most extreme expression of the same phenomenon. Generative AI promises to make intelligence abundant. But if that happens, what will happen to the workers it displaces? What will happen to the business owners whose companies go under?

And just when it seemed it couldn’t go further, that million simultaneous scientific revolutions is now reaching the very root of scarcity itself: energy. What for centuries appeared to be a limited resource has proven increasingly abundant, thanks to renewables.

That is why the debate between abundance and scarcity is the defining political struggle of our time. Because there are only two paths: either we remain stuck in a scarcity paradigm, defending the trenches of the twentieth century (labor, effort, sacrifice) — or we accept that the world is, in fact, a place of abundance, and begin transforming our institutions to take advantage of its opportunities.

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humanity’s coming of age

“That is quite definitely the answer. I think the problem, to be quite honest with you,
is that you’ve never actually known what the question is”.

Douglas Adams, The Hitchhiker’s Guide To The Galaxy

So the premise of Hijos del Optimismo (Children of optimism). is this: abundance is not the answer to our problems — it is not the end of a road we need to travel. Abundance is the question. How do we live in a world that is no longer ordered by scarcity? How do we decide who is valuable and who is not? How do we distribute power in an abundant world? How do we produce public goods — which are themselves abundant? What does it mean to contribute to society when work is no longer necessary?

What is happening to us, at its core, is that we have grown up. Like children who have become adults — capable of making their own way in the world — we have no choice but to confront the promise and the demand of our own freedom.

What will we do with it?

While you think it over, you can always pick up Hijos del Optimismo (Children of optimism) on Amazon, at Casa del Libro, on the Debate website, or at your favorite local bookshop.

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I don’t know about you, but I can’t shake the feeling that we’re living in Groundhog Day. With one difference: instead of a charming rodent, what keeps showing up every morning is Abaddon, the angel of the abyss, commanding an army of locusts with human heads, lion’s teeth, scorpion tails, and the specific mission of tormenting mankind until we seek death and cannot find it.

Another war. Gas prices spiking at pumps thousands of miles away. Governments worldwide scrambling to cushion the blow. Stock markets in free fall. A recession looming. How many front-page headlines have we racked up so far this year?

But if you step back and look closely, there’s a pattern in the middle of the chaos. We’re living through the final weeks — maybe the final days — of a 17-year cycle that has run its course. The political and economic framework that carried us to 2026 is on the verge of collapse, its gears grinding under the weight of a reality that won’t let them keep turning.

In recent hours, the stars have aligned. A cascade of political and economic events is threatening one final, spectacular implosion — the simultaneous collapse of the political cycle and the economic cycle. The simultaneous collapse of Donald Trump and AI.

No. I’m not exaggerating. The signals are stacking up everywhere: Trump’s increasingly erratic maneuvering, the quiet deflation of US markets, Bitcoin’s price crash, and rising bond yields are all tolling the bell on the final movements of a cycle.

Here’s how it sounds:

THE END OF THE POLITICAL CYCLE: TRUMPISM IS DEAD

To make sense of this mess, we need to start with one question: Why did Trump attack Iran?

The answer: because he was cornered. The Supreme Court had suspended his signature policy — the one that had propelled him to the presidency twice — tariffs. He was mired in a debate over whether he owed Americans refunds on what they’d overpaid. Meanwhile, his approval ratings were in free fall ahead of midterm elections he looks set to lose badly. Trump, a master of capturing attention, needed a new lifeline — a new scandal, a new global crisis to dive into. He found it in Iran.

His plan probably wasn’t to stumble into this irreversible quagmire. He likely thought he could assassinate the Ayatollah and be out of Tehran in a couple of days, the way he’d handled Venezuela. Or he’d been fed bad intelligence and hadn’t accounted for the regime’s resilience, nor the economic fallout back home. Doesn’t matter. The point is that Trump — with no real agenda, backed into a corner — has careened from crisis to crisis like a true kamikaze, until he finally crashed into the immovable wall of the ayatollahs.

As we’ve covered before, regimes like Trump’s, in their final phase, tend to go one of two ways: they either consolidate and find some stability, or they launch into an increasingly desperate, agonizing forward flight. What we’re watching is that Trumpism has failed to find that equilibrium — and has chosen option B.

Donald Trump came to power wielding a story: that the cause of the decay Americans were feeling (a decay carefully stoked by alt-right influencers in the years prior) was an unfair deal that soft elites had cut with the rest of the world. The fix was simple — reorder the balance of power, put America First, make it Great Again. None of it has materialized. He’s deployed every tool at his disposal — tariffs, threats, even the kidnapping of foreign heads of state — to force the world to pay what he claims it owes, and it has produced zero meaningful effect on the American economy, which sits, at best, exactly where it was under Biden.

In other words, Trumpism doesn’t work. It cannot make America Great Again. What was once a fairly successful political common sense has curdled into a fringe obsession believed only by the most fervent devotees. It’s spent.

Today, there isn’t a single analyst in the world who isn’t already planning for the post-Trump era.

NO MORE TACOs

One of Trump’s most powerful weapons throughout all of this has been the blind confidence the big money had in him. Since he took office, the world of investment funds, banking, and big business had concluded that the Republican was one of their own — a man with the sensibility and track record of any other billionaire. No matter how much noise he made for the New York Times, the people who move markets knew that when things got dicey for Wall Street, Trump would always do whatever it took to course correct.

And Trump had been proving them right, time and again. Every time his antics rattled stock markets or bond markets, he backed down — often in fairly humiliating fashion. So much so that this pattern has its own name: TACO (Trump Always Chickens Out).

Riding that confidence, US markets had been locked in an “all news is good news” loop since Trump’s inauguration: when employment and growth data looked strong, stocks rose because it was good news; when it looked weak, stocks also rose, because markets expected Trump to pressure the Fed into cutting rates to compensate.

But then we ran into the ayatollahs. The stubborn reality of a regime that has no intention of negotiating the way Venezuela did, combined with the damage already done to oil production infrastructure, means that the last two TACOs — a 5-day ceasefire announcement followed immediately by a 10-day one — have done nothing to calm markets.

We’ve run out of TACOs.

THE FINAL GASP

Beyond the specifics of the energy crisis this fool has dragged us into, what the death of the TACO effect reveals is that Trump’s political momentum is finished — and at the worst possible moment. In recent months it has become increasingly clear that the American economy was already slowing down, even before the war with Iran. Some very influential voices — including the CEO of BlackRock, the world’s largest asset manager, and the President of the ECB — are sounding the alarm about a real threat of global recession in the coming months, a possibility now priced a between 30% and 50% for the US alone.t

Meanwhile, US Treasury bonds are straining, Bitcoin has lost half its value over the past several months, and gold… nobody quite understands what’s happening with gold anymore.

But what’s really got me gripped is the shift in market behavior.

Both the S&P 500 — the broad US market index — and the Nasdaq — the tech index — had been on a steep upward trajectory ever since ChatGPT burst onto the scene at the end of 2022. (The jagged dip in April 2025 was the scare from Trump’s first tariff threat, which he then walked back in his first TACO.)

But in recent months — and with growing intensity in recent weeks — markets have broken their upward trend and are heading decisively south. The Nasdaq is down 10% since October, while the S&P 500 has shed 11% from its January peak.

This wouldn’t be remarkable in any other context. Markets go up and down. But what defies explanation is that this is happening in direct contradiction to the pattern of absolute confidence investors had shown in Trump — and at the very moment when Big Tech is posting the best results in its history.

In the final quarter of 2025, America’s tech giants published earnings that would have looked like science fiction just three years ago. Apple, Microsoft, Alphabet, NVIDIA, and Meta all beat analyst estimates by an average of 11.2%, combining for $178.4 billion in quarterly revenue — year-over-year growth of 18.6%.

And yet their stock prices keep falling. To almost everyone’s bewilderment, this combination — extraordinary results followed by a market sell-off — has become the defining pattern of today’s markets.

How is that possible?

AI’S GREAT MISFIRE

Hold on. Weren’t we supposed to be on the cusp of a new industrial revolution — one that would reshape one in three jobs worldwide and add several percentage points to GDP every year? Weren’t those multinational earnings the proof of a revolutionary technology that was going to transform everything? How can anyone seriously be talking about recession?

What on earth is going on?

What’s going on is this: just as Trump has reached the end of his forward flight, the same slap of reality has landed squarely on AI.

I won’t wade into any debate in this article about the limits of what we’ve bundled together under the label of “AI.” But let’s talk about the promises its boosters have been making for years:

First, we were told AI would eliminate 300 million jobs and that two out of every three roles would be at least partially automated.

Then someone announced that the path to “artificial general intelligence” — capable of replacing humans at any task — had been clearly mapped out.

Then that all cars would be driven by AI.

Or that it would wipe out the entire legal profession.

Or that it was “the next frontier of productivity.”

And just when we thought there wasn’t a single hype-stick left to throw on the fire, in recent weeks the talk has turned to how a new wave of agentic AI could replace software developers entirely.

Not one — NOT ONE — of these things has come to pass. Maybe it’s worth revisiting how much credibility we extend to these so-called “experts.” But I don’t want to get lost in that rabbit hole. The truth is, it doesn’t actually matter whether any of these things ever happen or not.

What matters — the reason a bubble burst feels not just possible but inevitable in the coming days — is that three years after the launch of ChatGPT, AI still has no business model. It still has no product it can sell at a scale that even begins to justify the trillion-dollar investments being made on the hope that it might eventually be useful for something.

Like Google Glass. Like the Oculus. Like the Metaverse. Like NFTs. AI is miraculous in theory and could be genuinely transformative — but there doesn’t seem to be many people willing to pay for any of it.

What’s become increasingly impossible to ignore is that the results these multinationals publish quarter after quarter rest on a web of circular agreements so incestuous they’d make the Habsburg family tree look like a picture of genetic health. To date, AI has created no real added value. What exists is money spinning so fast, and in such tight circles, that the sheer velocity makes it look like a lot more than it is.

And what is now beyond dispute is that, whatever AI does, it will not generate economic growth. If it succeeds and delivers on any of its promises, it will produce the opposite result: replacing vast numbers of workers without creating anything new that generates jobs elsewhere. In other words, even if AI succeeds, what it will achieve is a smaller economy, not a larger one. Will it boost productivity? Perhaps in some companies — but that counts for very little if it keeps its promise of gutting entire sectors of the economy in return.

Just as it happened to Trump, AI has now had its own encounter with reality — and reality has left it exposed: its promises of generating economic growth simply don’t hold up.

Just days ago, the CEO of the world’s leading AI company, Jensen Huang, trotted out the AGI story once more — and it landed exactly the way Trump’s TACOs have been landing lately. Nobody believed him.

THE PERFECT STORM

Here’s the thing: just as the US has its midterms this year, AI has its own version of an election — except it won’t be decided at the ballot box. It’ll be decided in the capital markets.

Within a few months, the three biggest startups in the sector — SpaceX, OpenAI, and Anthropic — are set to go public at astronomical valuations: over $3 trillion combined.

Market analysts rarely agree on anything. On this, there is near-unanimity: there simply isn’t enough money in public equity markets to absorb all three. If they all go through, it would be “like dropping a boulder into a fishpond” — it would drain the water and crater the valuations of every other company alongside them.

What’s more, none of these companies has revenue figures that come close to justifying their valuations. And going public means a full financial striptease in front of regulators — their opaque books thrown open for the entire world to see. The problem is they have no alternative. Because private investment certainly doesn’t have enough runway left to sustain these valuations either.

The AI IPOs are to the economy what the American midterms are to global politics: the moment of reckoning for the model that brought us here.

This, in my view, is what the market sell-off and the death of the TACO effect are reflecting. Trump and the AI bubble have weeks left, not months. I’d go further: the bubble has already burst — that’s why valuations are deflating. The only reason it isn’t exploding more violently is that, as the Financial Times noted recently, investors have nowhere else to go.

In the days and weeks ahead, we’ll watch this same process enter a far more acute phase. Perhaps the outright collapse of the stock market. Perhaps Trump finally following through on pulling the US out of NATO. Whatever form it takes, it will be the final gasp of a model that is dying.

REASONS FOR OPTIMISM

Regular readers know I don’t like leaving things on a note this bleak — mostly because I genuinely don’t believe this is a moment for pessimism. If anything, the opposite: an extraordinary window of opportunity is opening up in front of us.

Because the apparent collapse of everything around us is, in large part, a mirage. What is shaking is not society itself. The things that actually matter for human life — the indicators that, a hundred years from now, will tell whether our era was one of progress or regression — are doing just fine. Science continues to advance at breathtaking speed in the treatment of cancer, Parkinson’s, and Alzheimer’s. We keep producing more with less, and as a result, we continue — albeit not nearly fast enough — to reduce poverty and child mortality. And in recent years, we’ve been handed another reason for hope: the staggering progress of renewable energy is making a world free from fossil fuels feel genuinely within reach, one where abundant, clean energy is the norm.

What is breaking down is the economic project we’ve lived inside for the past 25 years. What we called the “knowledge economy” never worked — and today it is cracking apart because it always had an irresolvable contradiction at its core.

The economy is, at its most fundamental, the part of human activity that deals with scarcity. Things have economic value precisely because they are limited — because not everyone can have them. Oil is worth money because there’s a finite amount of it. Knowledge works in exactly the opposite way. When I teach something to someone, I don’t lose it. When a song is digitized, a million people can listen to it simultaneously without any one of them taking anything away from the others. Knowledge, once created, can be reproduced and distributed at virtually zero cost. Its natural tendency is to escape every attempt to turn it into a commodity and become free — and when it does, the entire economic activity built around its artificial scarcity collapses.

When the West made the most ambitious decision in its history — sending an entire generation to university, the first in their families to set foot in a lecture hall — it planted the seeds of its own economic model’s destruction.

In the decades that followed, those same young people, armed with knowledge and the internet, rendered entire economic sectors obsolete — one after another. It happened to music, to film, to journalism, to retail, to traditional banking, to large swaths of travel and tourism, and to dozens of other professions. In every case, the pattern was identical: the further knowledge spread, the more the ability to profit from its scarcity shrank.

Hence the deepest irony of our time: the more successful a knowledge society becomes — the more it educates its population, the more it innovates, the more freely it shares information — the more it destroys its own economic foundations. The “knowledge economy” was always, in a very precise sense, a contradiction in its own terms. An oxymoron.

The conclusion was always inevitable, even if it still isn’t obvious to everyone: in the twenty-first century, as knowledge has advanced, the economy has contracted. Today we see the most brutal expression of this process in artificial intelligence: if the promise of universal knowledge is ever truly fulfilled, it wouldn’t just make one sector redundant — it would threaten to make human work itself redundant.

The crisis of Donald Trump and the crisis of AI are, at their root, the same phenomenon. The industrial world of the twentieth century handed off a mandate to the “knowledge economy”: take care of its two main actors — capital and labor. But the knowledge economy failed to offer either of them an equivalent place to the one they’d held in the old world. Today, capital has nowhere to go — which is why it keeps producing one bubble after another. Labor, meanwhile, has lost the central role it once had. At least for a significant portion of the population. And it is that vast, displaced minority that is fueling Trumpism across the globe.

With the “knowledge economy,” it isn’t the things that truly matter in society that are shaking — it’s our beliefs. What’s collapsing are the rules of the old world. This is the end of an ideological cycle, of a system that never worked, that has been limping along for 25 years, and has now entered its death throes — producing one tragedy after another.

But is this really a threat? Wasn’t it always our final goal? Wasn’t this what we dreamed of — freeing ourselves from the tyranny of scarcity and toil?

If we can understand this moment — and stay united, clear-headed, and purposeful, the way we did during COVID, during the invasion of Ukraine, during the World War and the reconstruction of Europe 75 years ago — we will find that we have never been better equipped to face the challenges ahead than we are right now.

We are a society of extraordinary knowledge. We live longer than ever before. We have built solid political agreements that have allowed us to live in peace for decades. And we can build new ones. We have the intelligence and the capacity to move forward and find solutions to whatever stands in our way. No matter how savage the coming crisis; no matter how erratically the strongmen in the US, Israel, or Russia keep lurching from one disaster to the next — if we commit, if we come together, and if we give it our very best, there is nothing to fear.

If you enjoyed this article, you’ll love Hijos del Optimismo (Children of Optimism). It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for years

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— Bad Bunny.

Robert Kennedy said that GDP ‘measures everything except what makes life worthwhile.’ It’s obvious: money or possessions, hours worked or the title that appears in your email signature are not what really define our experience. If anything, they are parts of an exoskeleton that holds within it a life made up of emotions, passions and fears.

Even so, every time a question arises — ‘Why is the far right growing?’, ‘Why are we losing confidence in democracy?’, ‘Why do we feel that society is in crisis?’ — instead of looking at what really matters, we return to GDP, to the hard, easy-to-find data of the economy. It is not surprising, then, that much of our understanding of the world falls painfully short.

I cannot help thinking that there is something prophylactic about all this. The economy is such a sterile field that no one has to reveal anything about themselves to talk about it. Over GDP, one can fight tooth and nail without revealing oneself. But if, instead of statistics, we look at art, television, cinema or literature, and ask ourselves where we really feel life in crisis, we will see that it is not our bank account that hurts us most, but love. Paradoxically, the more connected we seem to be, the lonelier we feel. Love has become a scarce commodity that many people lack and many others fear losing.

How silly, isn’t it? If anything is truly abundant, it is

So, for this Valentine’s Day weekend, a few weeks ago I decided to write a little theory about my particular —and somewhat unusual— way of understanding love from the perspective of abundance.

To my surprise, this post, which was intended to be a lightweight note among the rest of the economic and technological content, has ended up saying some very important things about a nascent theory of abundantism that I hope you will like.

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What is love?

Love is, in essence, curiosity. We say we love someone when we are interested in and involved in their existence. Love is ‘active concern for the life and growth of those we love’1 or ‘the condition in which another’s happiness is essential to your own happiness’2.

In English, there is a phrase that explains it particularly well: to be invested in someone (or something) is something like being interested, but not just superficially, but having something at stake; to be invested in someone is to have placed part of one’s own time, energy, even identity in the future of another. So to love is to stop being a spectator and become an interested party in another story.

Notice how, from this definition, it is not necessary for that emotion to be reciprocated; one can perfectly love someone who does not return that love. This is why teenagers can become infatuated with a K-pop star living thousands of kilometers away, just as mothers can fall in love with each of their children long before those babies are old enough to reciprocate. For this reason, someone may continue to love their father even after his death, while another person might be enamored with an idealized version of a first love from their youth, which, most likely, was not even exactly as they had imagined.

Love is as abundant as our capacity to pay attention: we could be in love with half of humanity or, at least, with as many people as we can evoke simultaneously without neglecting others. We could fall in love with many men and many women—some known, others less so. We could live in that experience all the time, every minute, until it overflowed our entire existence. Just as it seems we live immersed in hatred, we could live in love.

If we do not, it is because today this abundant form of love is proscribed. It was canceled the day love became synonymous with commitment.

Love as Commitment

For millennia, love and commitment were two very distinct things. Demosthenes claimed that good Greek citizens had “lovers for pleasure, concubines for daily care, but wives to bear legitimate children and be faithful guardians of their homes.”3

Until the Modern Age, aristocrats married whoever suited the family to produce legitimate heirs to manage the heritage; marriages were arranged and materialized long before the brides and grooms were old enough to understand what was happening. Common people, although lacking lineage, also married for convenience; they brought strength for labor, the possibility of a dowry, land, or simply the ability to share tasks necessary for survival.

In the Middle Ages, early romantic tales of love had no relation to commitment. Instead, they represented a rebellion against that mandate: the possibility of a life beyond duty. Romeo and Juliet, Tristan and Isolde, or Lancelot and Guinevere challenged the established order by falling in love outside of marriage.

However, in the early 19th century, with the rise of the first major cities and urban development, the game of social status began to transform rapidly. The worth of an individual ceased to be defined by the land they owned, and personal attributes—reputation, titles, skills, social networks—began to carry equal or greater weight than agrarian property. Marriage became a strategic investment in human relationships, and that romantic love which had emerged as protest gradually transformed into the cultural justification for marital commitment.

Over time, the bond between love and commitment solidified until, after World War II, it had established itself as the only legitimate glue not only for marriage, but for family and each person’s life project.

Commitment, unlike love, is scarce. We cannot live simultaneously with half of humanity, nor can we impose upon ourselves the burden of paying half their rent and birthing their children. When love became tied to commitment, the possibility of loving freely and abundantly became dangerous. Because if the justification for commitment, upon which domestic economies and social stability rested, was an emotion, it could not be volatile, immeasurable, and difficult to govern: its abundance became a formidable threat.

If not regulated or tied to a social contract, love endangered societal stability: thus, it had to be scarce and stable. Permanent. As predictable as the other parts of the industrial machinery. It had to be linked to commitment and limited to reciprocal affections, those that operated almost like an exchange of value.

Thus, transactional love, the one associated with commitment, solidified as the only “true love.” Only those forms of love that served to facilitate the devotion of another human being survived as valid expressions of this type of curiosity. Marriage, the highest form of commitment, emerged as the supreme bond, while children and family—who are expected to commit to us—occupied a discreet second place.

All other forms of love, which had always existed and would continue to do so, were proscribed, often through shame. Some, through direct social sanctions, such as extramarital relationships. Others, by making them seem ridiculous. Since then, in teenage romantic comedies, love hurts when it is unreciprocated; characters are caricatured for being overly in love or for falling for someone “out of their league,” while overly affectionate friends are depicted as foolish. Meanwhile, the main characters are always those who are “hard to get,” those with scarce love, who never give themselves unconditionally—that is, without a transactional.

Thus, a singular type of love—the one directed toward a partner and expected to last a lifetime—solidified as true love. Love in all its other forms—the affection we have for K-pop stars, or friendships, or love for lovers and concubines—was relegated to the margins, as if it did not count, as if it did not deserve such a name.

That love, which was an abundant emotion, was reduced to a scarce thing.

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The Most Painful Scarcity

Without any theoretical framework to support me, I assert that this scarcity of love we have imposed is the cause of today’s most acute pain in society. It is this precariousness that lies behind the statistics showing that everyone is angry and furious and that “society is broken.” The lack of love is that thing worth pursuing that cannot be explained by all the GDP numbers.

Because love, in this definition we are exploring, is the precondition for what is essential to our existence: connecting with other humans. If we strip it of the cultural baggage it carries today, it becomes evident that this genuine curiosity about another person’s story— or even about another animal—is the substrate from which those sparks can emerge, in which we experience a profound connection with others; those moments that leave us with an overwhelming sense of being whole, of lacking nothing. Those explosions that occur in (good) sex, or in nights of laughter that leave us sore, or when we half-discover an idea with another person that no one had understood before, or when we celebrate a goal with our best friend. That experience where it seems the universe aligns with you, like when you hug a child.

That we have to describe these experiences as “flashes” or “moments,” rather than as a daily habit, gives us an idea of the lacerating scarcity in which we live.

“What makes love a form of madness,” says Eva Illouz, “is that it has no connection to reality.” And for that reason, because it only lives within us and is not tied to the limits of the physical world, love is not scarce; it is abundant and holds the promise of returning to that intense experience of being a complete human, connected to others.

I want to imagine that those men and women from Classical and Medieval times, who did not bear the moral weight of scarce love, although they married for lineage, still sought love everywhere. But we cannot even allow ourselves that. In our lives, love has been restricted to the capacity for commitment we can offer and that can be offered to us. When someone put love in the closed box of marriage, they robbed us of the possibility of connecting with others.

As a result, people see how that possibility of truly connecting with other human beings is becoming increasingly limited. We find ourselves surrounded by cardboard relationships, sustained by clichés and elevator conversations that hardly produce the deep intimacy that makes us fully human. I have no doubt that it is the desperate search for more opportunities to feel that connection that drives the consumption of alcohol and drugs.

Fifty years ago, capitalism promised to end that scarcity. The “knowledge society” was supposed to bring a world of connected intellectuals living a life of sparkling experiences like those in Woody Allen’s films. Pure connection.

It did not happen. And today we drown in the life we have, in scarce love, rummaging through the internet in hopes of finding— not just on Tinder, by any means— other human beings with whom to share that bond.

And this, in my opinion, is why hatred prevails today. Because while love became scarce, hatred remained abundant. So it is no surprise that you might detest the president or even generic groups of people, but you would be locked away in a very dark place if you claimed, with the same fervor, that you were in love with him.

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A Small Theory of (Free) Love

A few years ago, I found myself tangled in one of those relationships where love and commitment cease to align. Over time—and with a great deal of therapy—I discovered one thing. What was truly painful for me was not that this person had stopped loving me (in reality, that hadn’t happened), but that once our commitment was broken, for some reason, I felt obliged to stop loving him, to stop being invested in him. To lose the connection we had.

I have the feeling that this is quite universal. What hurts us when commitment ends, or when we are not “reciprocated,” is that we feel compelled to give up the love we had. But it is an optical illusion: we are convinced that we desire to be loved solely because we have forbidden ourselves to love without being reciprocated.

Thus, the love we had is proscribed, just like a teenager’s love for their idols or a woman’s love for the child who died before birth. We have convinced ourselves that love must be measured in the same way it is tied to commitment, so one cannot be madly, intensely in love with all their friends. Nor can one continue to love an ex-partner, much less acknowledge loving someone who doesn’t even notice them.

But what if we allowed ourselves to love wildly, expecting nothing in return? What if we were capable of loving with the same freedom with which we hate today?

If we let go of that mantle of scarcity in love, what emerges is the opposite: we must love to the limits of our own capacity. To bathe in that emotion. To wake up every morning in love with a K-pop star, with your friends, with that guy you occasionally share a bed with, with your children, of course, but also with the children of all your friends, and even with your partner’s children, even if you didn’t give birth to them. Loving while relinquishing any expectation of reciprocity returns to us the possibility of abundance because when your love is infinite, you do not need it to be paid back.

It is here that it becomes clearer that abundance is synonymous with freedom. It has nothing to do with having more scarce goods (that is, more commitments) but rather with allowing ourselves to live in a world of limitless things. And in beginning to recognize a higher status not to those who possess more limited goods, but to those who know how to live a good life (extraordinarily good, even!) in an abundant place.

So I have stopped tying my hands behind my back in love. And since then, I move forward without brakes. I live in love with many people. My curiosity and desire to connect with others are no longer limited by the commitment we may have, nor even by the time we spend together, but in every moment we share, and in all the time I dedicate to thinking about those other people, I allow myself to feel the same ecstasy that most people reserve for the “love of their life.”

In French, they say that people who are very romantic have “a heart of artichoke,” “un cœur d’artichaut,” because they go through life giving a petal to each person. I reclaim that spirit, and I give pieces of myself until I exhaust myself.

And I seem like a weirdo, I confess. There are likely people who think I am too naïve, or too intense, or too goody-goody. But you know what? I don’t care. Because the consequence is that my inner life resembles that of adolescents living on a cloud thinking about their K-pop star, except my stars are flesh and blood, and I see them often: they are my friends, my lovers, my family, and the people I encounter who dazzle me, even if I never see them again.

And I am very happy. There is not a sliver of space left in me for hate.

Commensalism

While writing this article, I realized that this small theory of love has everything to do with a larger one that is at the center of all the things I think and write about.

Long ago, Adam Smith proposed that people act out of selfishness, and that this pursuit of individual interest magically produces a collective good. Other authors later tried to correct Smith and prove that humans are not selfish but altruistic: they do the right thing for everyone in the expectation that others will do the same. They care, hoping to be cared for; they drive on the right side of the road, trusting that others will do the same.

There is certainly some truth in all of this, but I would argue that the highest expression of humanity lies in the idea of being “commensalist.”

Commensalism is a form of biological interaction in which one individual benefits while the other is neither harmed nor benefited. The term comes from the Latin cum mensa, meaning “sharing the table,” and was created to describe the relationship in which one species takes advantage of the waste of another without harming it, like the dogs and cats that followed the early communities of hunter-gatherers.

But something extraordinary happens with humans: we have almost everything we need. We are capable of producing much more than we require. That’s why we can exist in a world of abundance: we are the only species capable of systematically creating more than we consume.

An innumerable amount of human behaviors—I would say almost all that go beyond mere survival—are commensalist: writing a book (or a newsletter like this), composing music, or software, doing science, caring, teaching, painting, dancing, producing art, or inventing tools. Our essence is to give, to create things that benefit others without expecting anything in return, simply because it makes us happy. In love, as in knowledge and art, our life experiences generate more than what is needed to create.

In fact, we could say, without fear of being wrong, that human progress is a consequence of this commensalism. From Socrates to Aristotle, Gutenberg, Newton, Curie, Kant, Lincoln, Martin Luther King Jr., Tim Berners-Lee, and even Smith himself, the great figures who have pushed the world forward did not do so out of a desire for profit; on the contrary, they dedicated themselves to creating ideas that could be used by all without being depleted. The same is true in literature and art. Does anyone really believe that Camus, or Shakespeare, or Beethoven wrote expecting the world to give them something in return?

We could even say that something went awry the day we began to look at that generosity with suspicion and made that selfless giving seem naïve or ridiculous.

There are many species of selfish animals and many altruistic ones, but that ability to give without harming and without expecting reciprocity is, for me, the purest form of our existence, what makes us genuinely human.

So if I had to start liberating abundance somewhere, I would begin here, with love. I would start by allowing ourselves to love without measure, without filters, without any accounting. By unleashing that curiosity for others until we are filled to the brim and leave no space for hatred. And by silencing those who seek to shame us.

We need to make having a heart of artichoke a trend. ;-)

If you are also an abundance thinker, you will like Hijos del optimismo (Children of Optimism). It is my first book, the older sibling of this newsletter, and a project I have been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it

Jean-Jacques Rousseau (attributed)

That everything is going wrong is the only consensus that seems to survive in our time. On everything else, there are today as many positions as there are theories about who is to blame.

Among all of them, one stands out: the argument that wealth has concentrated in very few hands, and that as a result, even as the world keeps growing, a great many people feel an ever-greater sense of scarcity. We are being robbed.

It is a rather extraordinary thing, because translating macroeconomic concepts — such as inequality — into public opinion is very difficult. But years ago the Occupy Wall Street movement produced a slogan that ended up seeping into global common sense to the bone:

“We are the 99%.”

It was the hangover from the 2008 crisis, and the world was hearing in prime time the story of how a handful of bankers had turned the financial system into a casino. They — those men of flesh, bone, and wallet — were to blame for the bubble and the crash. The battle was to be everyone against the 1 percent.

Fifteen years later, the majority of people around the world believe that the accumulation of wealth has a negative effect on society. Major political leaders point to “billionaires” as the architects of the political and social crisis, and the slogan “tax the rich” has become an unlikely artefact of popular culture — one that some candidates have turned into merchandise lines and others have worn to film galas.

Following the success Zohran Mamdani had wielding this argument in his New York mayoral campaign, the British Greens’ candidate Zack Polanski returned to it a few days ago in a video that went viral far beyond the United Kingdom: “When the rest of us work ourselves to the bone to create wealth and almost none of it returns to our communities, it’s going somewhere — upwards, into the pockets of the super-rich.”

The idea that billionaires are to blame for the widespread discontent Polanski describes is a winning argument in this political cycle.

But beyond its undeniable political power, is it actually true? Is the accumulation of wealth responsible for the deterioration in living conditions in recent years? Or have we reached for the easiest target and missed the point?

In other words: is eating the rich enough to fix the world? Or are we going to walk away hungry?

Inside the “1%”.

Like all good stories, this one about the 1 percent contains a measure of truth. In every country there exists a super-wealthy majority that hoards an immense share of global patrimony. In the United States, the wealthiest 1 percent hold almost as much wealth as the poorest 90 percent of the population combined. Across the planet as a whole, the divide between rich and poor countries makes that proportion even more extreme.

But like all good stories, this one also has something of a fairy tale about it. The reality is not a uniform 1 % detached from a uniform society, but a wealth that becomes ever more concentrated as you climb the scale. This means that if you look inside the 1%, you find evidence still more striking: the top 0.1 %of the US population — 342,000 people — hold 14% of the country’s total wealth, half of everything owned by the entire 1 %.

And if you were to look inside that 0.1%, you would find that concentration continues to intensify until it can no longer be captured in a survey. But according to the Forbes list, which studies America’s largest fortunes each year, a third of the wealth of that 0.1%— 6.6 trillion dollars — is in the hands of the 400 richest people in the country. That is to say, 0.00001 percent of the population holds more wealth than the 177 million people who make up the poorest half.

And we could go further. We could look inside the Forbes list and find that of those 400 billionaires, the 10 wealthiest have a combined net worth of 2.4 trillion dollars — a third of the entire list.

Compared to these 10 billionaires, every other American — the 99.99999975 % — is poorer today than they were ten years ago.

The paradox is this: if the goal is to build political majorities, following the same logic as the “99 %,” one could construct a “99.99999975 % coalition.” It would be a grouping of interests that could bring together 342 million Americans alongside the other 390 billionaires on the Forbes list, plus all the millionaires who don’t make the cut, together with all of their staff.

And something considerably more thorny: if we look down the scale rather than up, we find that the population group running from the 1st to the 90th percentile — the 9% sitting between the wealthiest 1% and the poorest 90%, what we might loosely call the “upper-middle class” — owns 37% of total wealth.

Add both groups together — the 1% and the 9% — and the wealthiest 10 percent of the United States holds nearly 70% of the country’s wealth.

And this is not an isolated phenomenon. According to the World Inequality Lab — directed by Thomas Piketty — the wealthiest 10% of the population in each country holds, on average, 73 percent of that country’s wealth.

Three Sad Thirds

A far more productive way of understanding this problem, then, would be the following.

Wealth today divides into three thirds. The wealthiest 1 % takes one; the next 9%— the upper classes, colloquially speaking — captures another; and the following 40%— the middle classes — shares the last of the three. For the remaining 50%, the poorer half of the population, what is left is a pile of debts and scraps.

Societies have become a four-speed world, in which:

• A tiny economic elite has emancipated itself from the reality in which the rest of us live. These are the billionaires.

• A broader cultural and political elite — the wealthiest 10%— is seeing its relative position improve, and holds interests and levers of power in its hands. These are the lawyers, prosecutors, judges, the corporate world, senior civil servants, some journalists, much of the medical profession, media directors, some university professors, business owners, and some politicians too.

• A middle class trapped between the aspiration to climb into the upper class and the fear of falling into the great mass below. These are the schoolteachers and secondary school teachers, nurses, civil servants, police officers, firefighters, some university professors, some journalists.

• A working class that has nothing and lives only to pay everyone else. These are the waiters, supermarket cashiers, call centre workers, administrative staff, hospital orderlies, cleaners, carers, delivery drivers, security guards, construction labourers, and taxi and ride-share drivers.

I believe the virtue of this model is that it allows us to understand the problem of wealth distribution in its full complexity, without trying to reduce it to an idea simple enough to fit on a slogan.

I also believe that from this vantage point one can begin to understand the other universal consensus of our time: the one that has formed against political elites. But I do not want to get into that today — I will save it for another piece, which will give you an excellent reason to subscribe to this newsletter and receive it in your inbox in the coming days.

Is the Concentration of Wealth the Cause of the Malaise?

So we all agree that wealth is progressively concentrating toward the upper layers of society. But is that inequality the cause of the widespread discontent being felt around the world?

It is hard to see how, because this is not a recent phenomenon. On the contrary, we have been a three-thirds society for many decades.

Before the Second World War, elites accumulated more than 90% of wealth. Between 1945 and 1975, that concentration fell dramatically — through the effect of the “share issuance” by countries in the form of housing we discussed last week — before rising again between 1980 and 2000. But since 2000, the gap between what different social groups accumulate has been essentially flat. Even as far back as 1980, the wealthiest 10 percent already held 76% of global patrimony. Wealth is very concentrated — but it has been for a very long time.

In the United States, by far the most unequal country in the Western world, the top 1% already owned 23% of wealth in 1989, while the next 9% owned 38%— a figure that remains very similar today, at 36.4%.

The total wealth of the remaining 90% of society was 39.2% in 1989 and is 32.6% today — a difference of fewer than 6 percentage points. Six points that are explained by the outsized growth in the wealth of the 0.1%, which over these 35 years has gone from owning 8.8% to 14% of the country’s wealth.

Do those 6 points justify the galloping contemporary malaise? If we want to believe they do, then we will have to acknowledge another cause that represents a far greater difference.

The Elephant in the Room of the Western World

Over the past 35 years, total wealth has grown exponentially — multiplying eightfold. And what we can observe is that, unlike the concentration of wealth, which is a very ancient occurrence, this explosive growth in the volume of wealth is a recent phenomenon, specific to the last two or three decades — one that has accelerated extraordinarily, first from 2000, and far more dramatically from 2008.

Put another way: wealth is not much more concentrated today than it was 35 years ago. What has happened is that there is simply far more of it.

Of course, this should not be a problem in itself. Growing wealth is the leitmotif of our economic system. It becomes a problem because for decades wealth has been growing faster than the economy.

In the United States, total wealth rose from 20.44 trillion dollars in 1990 to 42 trillion in 2000, reaching 167.7 trillion in 2025. Relative to the economy, Americans’ wealth has grown at twice the speed of GDP. Where in 1990 wealth stood at 3.6 times GDP, by 2025 it is 5.6 times. And wages? Over the same period, the median weekly earnings of full-time workers have grown by only a factor of 2.8.

Across countries as a whole, wealth has gone from representing 3.9 times global GDP in 1980 to 6 times in 2025.

This is the macroeconomic explanation — with all its charts and data — that makes sense of a daily reality everyone understands: economic life is becoming progressively harder for the majority. Because in lived experience, that mountain of wealth materialises as “investment assets” that expect to be remunerated — and that we are obliged to remunerate in many ways: through rent or mortgage payments, through price increases that flow from rising rents and mortgages, through rising share prices. By the same logic, when taxes keep going up, it is because pensioners and public sector workers, like all other citizens, find themselves obliged to service that mass of wealth.

And so we are a society that must devote ever more money and effort to remunerating a growing mountain of wealth. It would be a relief to say that it sits entirely in the hands of a 1 percent, so as to have someone to blame — but the truth is that it makes no difference whose hands it is in.

This is why, even though two adults now work in nearly every household, even though far more money comes into homes than 35 years ago, the perception of scarcity keeps growing. More than that: since everyone can sense that the trend is toward wealth continuing to multiply, most people feel that they are falling further and further behind, that there is no way to keep pace — precisely as Polanski signals in his viral video.

The Global Warming of Wealth

Where does all this “wealth” come from? How is it possible? Is wealth not supposed to be the product of economic activity? Should it not grow in parallel with the economy?

So it should — and so it more or less did, until around 2000. But around that year, the economy stopped growing at the pace it had demonstrated in previous decades. The natural consequence would have been for wealth to stop growing too. But that would have meant ending the dream of infinite growth in which the society of that era was installed — and still is: telling people they were no longer going to become rich, confirming that their children would live worse than they did.

Instead, governments embraced a policy of stimulus-driven reactivation to keep the economy growing. But the economy did not grow again. What happened instead is that wealth emancipated itself from the economy — and for the past twenty-five years it has no longer grown as a product of economic activity, but through the appreciation of assets: specifically, stock markets, which have multiplied in value twenty-fivefold since 1989, and real estate assets, which have appreciated to seven times the value they held at the start of the Federal Reserve’s measurement series.

And here we remain. Policies that normalise the idea of people “investing” or “saving” in housing are the clearest expression of this attempt. In a world that no longer grows, where there are no new industries in which capital makes sense, countries normalise the continued extraction of profit from reselling real estate assets that produce no new value whatsoever.

All of that mountain of artificial “wealth” — paper wealth — is the truly distinctive phenomenon of these last twenty-five years. It is the great elephant in the room of contemporary society. And anyone who genuinely wants to resolve the contemporary malaise — rather than merely win votes by the quickest route — should attend to the causes and mechanisms that produce this runaway and unjustified inflation of wealth.

The reason not many people are willing to do this is that the mountain of wealth has an uncomfortable, difficult-to-confront origin: it is the twentieth-century dream of universal prosperity — the dream we refuse to relinquish — that has brought us to this dead end.

To fix it, what we need is a new dream :D

If you are also searching for a new dream, you can’t miss Hijos del optimismo (Children of Optimism). It is my first book, the older sibling of this newsletter, and a project I have been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it

Photo by Lea Kobal on Unsplash

— Ridley Scott, The Kingdom of Heaven

I have a theory that I suspect will be controversial — one that may even cause offence. But I find myself increasingly convinced that Meredith Whittaker is entirely right when she argues that failing to tell the truth, and failing to uphold it consistently, makes us stupid. Because it forces us to operate intellectually inside a charade — one that ends up atrophying our reasoning, as we build castles of pretended certainties that are nothing more than dogma.

Of all the dogmas of our culture, perhaps the most powerful is that of absolute evil. When something frightens us, we rush to invent a monster in order to exorcise it — so that the terror is no longer inside us, but inhabits an external body we can blame, fear, and hate.

And so, while we lived at the mercy of the natural world, the Yeti, the Loch Ness Monster, Bigfoot, and the Chupacabra were among the many variations of a single universal fear of nature. Later, vampires were the invention of a society traumatised by plague and tuberculosis. And when the world began to fear progress, it conjured up the creature of Doctor Frankenstein. Since it is usually the unknown that frightens us most, medieval mapmakers would typically inscribe the unexplored regions of their charts with a warning: Hic sunt dracones. There are always dragons in what we cannot yet explain.

We, the human beings of the twenty-first century, living in terror of the phenomenon of digital interconnection, have also invented the demon of our time. A being without a body, without a face, without a soul, which we have called “the algorithm.”

And since, at bottom, what frightens us most is not monsters but other human beings, we have convinced ourselves that this being is a weapon of mass destruction in the hands of creatures so malevolent they would have nothing to envy of Dracula: the tech bros. We have persuaded ourselves that, in their hands, social media will be the ruin of humanity — the hell in which children will burn and women will be violated.

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But monsters, you will agree with me, do not exist. On the contrary: every change that has ever frightened us has always been driven by a social phenomenon — by a plurality of interests, actors, and circumstances too complex to reduce to a monster.

And so today I am wading into dangerous territory, to argue against the widely held dogma that everything wrong with the world is the fault of social media. More than that: I maintain that social media, as we have known it, is dead. Or at least on its way out. In all likelihood, the children of a few years from now will have no interest whatsoever in using it.

And I do not believe it has been killed by the tech bros — but by the same agent that finished off Facebook: ordinary people. Or, put another way: it is not the algorithm. What is ruining the platforms is an invasion of users who have nothing to say.

Let me explain.

The first social networks — Twitter, Facebook, Reddit, Tumblr, LinkedIn — were built on an expectation of horizontality. Facebook promised to connect everyone with everyone else. Twitter occupied an adjacent space, but on the same principle. The format — those minimal posts that anyone could create with no effort — served that function: ordinary people talking about their lives on an equal footing with other ordinary people.

This was, to a large extent, an inheritance from internet culture itself. The thing is that software, in its first iteration, always tries to replicate the hardware it runs on — and in the early days, the internet was conceived as a kind of road network in which many nodes, the computers, connected with one another on equal terms. As a consequence, those first social networks of the 2000s replicated that architecture and conceived of themselves as “distributed.”

But that was a prehistoric vision of the internet — however firmly it remains lodged in some people’s heads. It makes far more sense to think of the internet not as a territory, but as a channel through which a torrent of information flows — created by billions of springs, each one of us. If, instead of thinking about the internet from the hardware perspective — the connected machines — we think about it from the human experience, it becomes clear that the internet is not a road map: it is a river.

The “feed” of each social network is a tributary of that river, but our WhatsApp chats are another, and websites — particularly those of news outlets — are a third, to take three familiar examples. The internet is us; it is humanity. And the best way to describe it is not a static map, but a process, a story — a becoming.

While the river was small, in the early 2000s, it was more or less comprehensible to the human brain. Facebook, at its best, did not contain everyone — only a small slice of society. A group of early adopters willing to invest considerable time in creating content and to modify their behaviour to adapt to the culture of the platform. It was a network of peers.

But over time, Facebook went mainstream and filled up with late adopters who were no longer willing to do any of that. The river became an immense and incomprehensible torrent.

Twitter, which was a far more niche platform, held on for a few more years — but ultimately suffered the same fate. In its early days it was the closest thing to a pub or a living room: a place of trust, an improved version of the many forums that had dominated the internet. But as it filled with late adopters unwilling to adapt to the local culture, it became a cacophony.

Reddit survived — more or less — because it never became entirely mainstream. To this day it remains a relatively closed community of peers, held together by the effort participation requires.

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The Algorithm Against Meaninglessness

Faced with that flood of late adopters, Twitter and Facebook encountered a problem. The feed was filling up with updates that held no interest, no importance, and no relevance for those receiving them. The human brain needs to invest a certain amount of time reading each update, and if it is forced to scroll through several that mean nothing to it, it grows bored and leaves.

And so those platforms modified their user experience to prevent that avalanche of irrelevant content from overwhelming them. They stopped displaying posts in the chronological order in which they were published, and began promoting their own version of what mattered. The algorithmic feed was born.

The social media algorithm is known as “predictive.” In essence, what it does is take an immense amount of data and a user’s prior actions, and attempt to infer what they will want to see next.

“Engineers assign a point value to each type of interaction users can perform on a post — liking, commenting, sharing, and so on.

For each post that could potentially be shown to you, these point values are multiplied by the probability that the algorithm believes you will perform that interaction. These multiplied pairs of numbers are added together, and the total is the post’s personalised score for you.

There are a few additional details, but broadly speaking, your feed is created by ranking posts according to these scores, from highest to lowest.”

(This link provides a detailed explanation of how Facebook’s algorithm works, and this one explains how Twitter’s algorithm works.)

At bottom, this is the same thing Google has been doing for twenty-five years — a function without which the internet could never have reached where it is today: ordering an enormous quantity of information that the human brain, on its own, cannot process.

The algorithms of social networks do not have to be the devil. In reality, they serve a function that is genuinely necessary in this interconnected world we inhabit: they explore content far beyond anything you could consume on your own, and attempt to infer which part of that mountain of information actually interests you.

And although the idea has taken hold that they were trying to control what we saw, I remain convinced that was not the case — at least initially. In their early days, social media algorithms were reacting to the fact that chronological feeds had become irrelevant, tedious, and incomprehensible.

If some networks have become cesspools, it is for two reasons. The first is that their users — the versions of themselves they present on those platforms — were seeking out that kind of content: confrontational, violent, or designed to serve as an echo chamber. The most compelling evidence is that while some platforms resemble spittoons, others, like LinkedIn, are a passable imitation of a tea room run by the late Queen of England at Buckingham Palace. If the algorithm were the problem, they would all be equally awful.

The second reason is that certain platforms — to some extent Facebook and YouTube, but above all Twitter — when particular users began exploiting the algorithm for their own political or financial ends, did nothing to correct it. They allowed far-right bots and professional fake news creators to flood users’ feeds and ultimately degrade the platform for everyone.

Of course, the phenomenon of users trying to exploit an application’s internal mechanisms for their own ends was nothing new. Google, on many occasions over the past twenty-five years, has made sweeping changes to its algorithm to correct exactly these kinds of drift. Readers will recall, for instance, that for a time every headline seemed to read something like “This girl went out on the street — you won’t believe what happened next,” and that at another point the internet was flooded with short recipe videos that then vanished as if they had never existed.

Companies whose business is organising information on the internet tend — out of a basic instinct for survival — to make decisions that prioritise the quality of their service over the interests of a few.

And this is what is truly new about the present moment. Mark Zuckerberg took, many years ago, an apparently inexplicable decision: to allow the platform to fill with low-quality content in order to keep charging for advertising. Over time, Elon Musk followed the same path and has ended up turning Twitter into the new Facebook. What both are signalling is that their platforms have failed at that model of creating a “distributed society,” and now have only a captive audience that will last them a few more years — and which they intend to squeeze for everything it is worth.

Peak Algorithm

As a result, these distributed social networks have stopped fulfilling their promise. They are no longer neutral spaces for conversation between equals. Publishing on them has become an extreme sport that exposes you to constant judgment, misunderstandings, and pile-ons. The ease of posting has made it far too cheap to attack those who put themselves out there. And to that must be added the ever more intensive presence of advertising and brand-generated content.

The result has been a silent withdrawal by the very people who once made these networks interesting: fewer and fewer posts, fewer likes, fewer retweets, and ever more passive consumption. The prevailing feeling is that, in order to protect your own identity and mental peace, it is safer today to watch than to speak.

As a result, these networks are dying. Facebook and Twitter’s user bases are in freefall, and social media use in general is declining too — at least outside the United States.

Meanwhile, the function that Facebook once served — keeping us connected with the people we know — has migrated to messaging platforms like WhatsApp and Telegram. The “distributed social network” now exists across multiple personal, private group chats.

And this has happened largely because we discovered years ago that we did not want to share the same updates with our mothers as with our friends — but also because the algorithmic feed culture of distributed networks has failed: it has become unbearable, irrelevant, incapable of making sense of reality and information.

Substack: The Moment of the Tribes

What the continued need for the algorithm ultimately reveals is something fundamental to human experience: we do not want a distributed society where every voice is heard equally. We do not want to listen to everyone. We want to pay attention to the people we find interesting at any given moment. On the contrary, having to engage with anyone who wanders past and fires off a tweet is a terrible waste of time — not unlike having to sift through every possible search result on Google to find the one that matters. It is something we simply cannot afford in a life where we need to stay connected to what is important.

For this reason, the next-generation platforms — TikTok, Substack, and, to some extent, Instagram — no longer share even a trace of that ambition for horizontality. No one expects us all to make videos or write lengthy articles, or to have the best photographs. We have abandoned the aspiration of living in a network of equals. We accept that there will be influencers and content creators whom the rest of us will follow, because they are the ones making the effort to create things of value. The new platforms look far more like a television channel made by many than like what Facebook once intended to be.

The meteoric rise of Substack is the consequence of that trend. This platform is today offering the content and connection to public debate that Twitter provided ten years ago. It is the new public square. Substack is the new Twitter.

Like TikTok, but unlike Twitter and Facebook, what is new about Substack is that it professionalises content creation by demanding a greater effort from anyone who wants to be an author. A 140-character tweet no longer suffices to claim an audience’s attention. By the same logic, mounting a bot campaign out of nowhere to attack an argument on Substack is no longer possible either.

Eighteen years after the birth of Facebook, we are closing the age of open, distributed networks. The experiment by which we gave a voice, simultaneously and without filter, to every person equally has not worked, and it is dying. And my instinct tells me that we are heading toward something that more closely resembles the organic texture of pre-modern human societies: decentralised networks organised around community leaders — a society of tribes.

In the years ahead, I believe we will see a decentralised network emerge — or, put another way, a network with many small centres, likely disconnected from one another. Every influencer of a certain stature will have a community, a group that trusts them and follows them everywhere.

I would wager that the next great platform will no longer be public, but will require an invitation to participate, or some form of credential. I would also wager that there will be far more of them than there are now.

I find myself wondering whether, after the tribes, something resembling nation-states might also emerge on the internet. But before that, we will have to confront another challenge: that of holding together a society that will no longer have shared public spaces, but a decentralised network in which each of us belongs to our own tribe.

If you’re interested in technology, you’ll like Hijos del optimismo (Children of Optimism). It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it

Do you know how he managed it?

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A few months before the resort opened, Trump — already an American television star and a fixture in the British media — sued the Scottish government, demanding that it halt the installation of a series of wind turbines.

Despite being an oil producer, Scotland had been one of the first countries in the world to make the energy transition a point of national pride, and lacking sunshine, around 2010 it was putting up wind turbines everywhere. Trump argued that this was unacceptable because the turbines “ruined the views” from the club.

What followed was a legal and media circus in which the tycoon went so far as to take out press adverts accusing the Scottish First Minister of releasing terrorists. He stirred up such a cultural storm that for many years the story kept resurfacing, delivering millions of pounds’ worth of free publicity in media outlets across the United Kingdom.

In time, he lost the case. In reality, it never had any prospect of succeeding — not only because the turbines were in the North Sea, more than two kilometres offshore on land that did not belong to him, but because it should be self-evident that the interests of a private developer cannot be allowed to obstruct a country’s project to overcome its dependence on fossil fuels.

But along the way, at a decisive moment, Trump planted on every front page the idea that democratic governments were servants of elites intent on changing British ways of life — dismantling what remained of the empire, selling the country out to foreign powers, and installing a woke agenda (even though that word had not yet been invented).

Trump lost the case. But a few months later, he won Brexit.

Does any of this sound familiar?

Since then, Donald Trump’s modus operandi has always been the same. The businessman has built a political career by placing the same narrative everywhere: democracy is a sham, and beneath a false appearance, we are governed by extractive elites working for a privileged minority that has seized power by co-opting institutions. Fortunately, these villains are a spineless bunch of bureaucrats — soft, lazy, and cowardly. When confronted with a strong man, they crumble. This is why the world should hand power to strong men like him, who are the only ones capable of putting an end to the woke elites.

More than that: Trump understands something that other politicians seem to struggle to grasp. Reality does not exist — except as an impression in our minds. What we call reality is nothing more than a narrative in our subconscious. So if one can make people believe that something is happening, it does not need to actually be happening. You do not need to win the case for it to appear, for a time, that a businessman can hold the governments of the United Kingdom to ransom. You do not need to invade Venezuela to make the world believe the country is under your control. You do not need to abolish fundamental freedoms across the United States for it to seem like a lawless state. It is enough for people to believe that all of this is true.

Or that it could be, in the future.

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In psychology, there is the theory of “broken windows.” In the 1980s, two criminologists argued that visible signs of crime or civic disorder create an urban environment that ends up encouraging the emergence of further crime and disorder — including serious offences.

“Social psychologists and police officers tend to agree that if a window in a building is broken and not repaired, soon all the others will be broken too. This is equally true in affluent neighborhoods and in run-down areas. Window breaking does not necessarily occur on a large scale because some areas are inhabited by window breakers and others by window lovers; rather, an unrepaired broken window is a sign that no one cares, and so breaking more windows costs nothing.”1

In other words: it is not rules that make the culture of a society. In fact, everywhere there are rules that are not observed at all — think of traffic laws or drug use, for example. On the contrary, it is culture that dictates which rules, out of all those that exist on paper, are actually followed and which are not.

I like to explain this theory through the example of shellfish bars in Spain. In some bars — traditionally those that serve prawns — the custom is to throw the shells on the floor. As a result, the floors of these establishments are typically covered in an amount of organic matter that would be considered revolting in any other context. There are, of course, also bars where dropping anything on the floor would be an outrage. Neither type has a sign on the door telling customers where to put their rubbish — yet everyone understands the rules in both.

Culture makes the rules. This is why no one studies the criminal code of the country they are going on holiday to. They arrive, observe, and behave as they perceive the locals around them to behave. It is also why the international order sometimes operates as international law dictates — and sometimes does not.

And if someone is capable of conveying that a culture has shifted — in favour, say, of a lawless society ruled by strong men — they can, without changing the written rules, without altering what is actually happening at its source, eventually change reality itself. Or bend it to their preference.

The Broken Windows Coalition

Trump’s obsession, then, is to convince us that we live in a dangerous place — full of villains and crime, a world where the rules we once trusted have stopped working. This is why he devotes himself to breaking windows: through ICE raids, “coups” in other countries, and proclamations that he is going to open a resort in Gaza.

The trouble is that a single broken window does not make a culture. For us to have come to believe what Trump wants us to believe, an enormous international coalition has had to form in recent years — a motley collection of actors united by their relentless insistence on pointing out every window that is, they claim, broken.

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In the front line of that coalition stands the far right across the world, parroting the same message Trump never tires of broadcasting: migrants, woke ideology, elite betrayal.

But in the second line stand the media outlets that the alt-right has labelled the “legacy media.” The great newspapers of the twentieth century, stripped of a viable business model by the transition from print to digital, have become addicted — much against their better instincts, it must be said — to alarm and outrage, chasing the clicks that guarantee their advertising revenue.

This works because, as human beings, we are wired to detect signals of danger even before we have fully understood them. Evolution has shaped us to pay attention to whatever might threaten us: an unusual movement, an unexpected sound, a broken window. Our brains prioritize what is perceived as risk — they make us look at and react to threats first, and analyse them later. This is why, when someone insistently signals that the world is full of dangers — even if many of them are imaginary or exaggerated — our attention falls immediately on those broken windows, and we feel compelled to click.

And so the media, one after another, buy into and amplify the Trumpist narrative, because pointing to broken windows generates far more clicks than offering balanced analyses of the state of democracy.

Silicon Valley, too — with Sam Altman, Peter Thiel, and Elon Musk at the vanguard — has signed up to proclaim that the world has ceased to be a solid and trustworthy place. This is why everyone involved in the artificial intelligence scam tries to make us believe that LLMs are going to displace millions of jobs and upend entire industries — because in that AI-dominated world, they are the ones in charge.

It is irrelevant that three years have passed since the launch of ChatGPT and none of this has happened, nor shows any sign of happening. What matters is not changing reality, but making us believe it is about to change. Pointing to the broken windows so that we believe we live in a lawless world, and go looking for shelter in the solutions they offer.

And a section of the left — what we might call the populist left — also wallows in that vision of an unjust world in which elites have been delivered into the hands of a minority (not the woke, in this version, but the billionaires). Just as consolidating democracy, seventy-five years ago, required the left and the right to agree that it was the best model available, weakening liberal states today is also requiring a certain connivance between a certain left and a certain right.

I do not believe Trump will invade Greenland. I think he is a braggart and a con man. Touching Greenland would trigger a war with the second most powerful military in the world, as well as an immediate global economic collapse.

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But I do believe that Europeans and liberals should go to war. Not only against Donald Trump, but against this broken windows coalition.

To win it, we need to build a coalition of our own: one committed to stopping the pointing at broken windows. One that refuses to keep proclaiming that nothing works. Because it is not true. But even if it were — if you are old enough to read this, you are old enough to decide what comes out of your mouth.

Like those volunteer groups that organise to pick up litter thrown in the countryside, let us organise to remind ourselves — as often as possible — how far we have come. Never before, across all the millennia of human history, did democracy exist. International institutions did not exist. The recognition of fundamental rights did not exist. I would never have been able to write this blog — or anything else — without the advances of equality.

Progress did not stop in the twentieth century. On the contrary: in the last twenty-five years, 1.5 billion people have been lifted out of extreme poverty, global GDP per capita has risen from thirteen thousand to twenty thousand dollars, life expectancy has increased by seventeen years, and child mortality has been reduced by two thirds. Today, 67 % of the world’s population has access to the internet, and half can connect to 5G networks — something unimaginable barely a quarter of a century ago.

In that same period, technological advances have allowed us to sequence and edit the human genome, develop messenger RNA vaccines, and glimpse the possibility of curing cancer. Meanwhile, the discovery of the Higgs boson and of gravitational waves brings us closer to understanding the universe in ways that, just a few years ago, were pure fantasy.

Today, the global rollout of renewable energy invites us to imagine a world in which climate change ceases to be a threat. And as the price of solar panels has fallen by a factor of twenty-five and installed capacity has multiplied by fifteen hundred, we stand at the unprecedented threshold of a future of clean, abundant energy.

For all the problems they may have, democracies have given us an extraordinarily long period of peace — remarkable, when we consider the speed and force with which societies have been transformed. Trade, international mobility, and a web of global institutions, for all their flaws, have proven to be a good adhesive, and have provided a guarantee of stability between nations.

Human progress has not stopped. On the contrary, it is advancing at a dizzying speed, transforming our civilisation and demonstrating that we can build a more prosperous and more free world.

We live — and I challenge anyone who disagrees to prove it with data — in the best place in the world and at the best moment in history. If we feel the world lurching beneath our feet, it is not because people have turned wicked, but because all our norms were built for a society that exhausted itself in the twentieth century, and we do not yet have new ones.

If anything binds us today to fear, hatred, and war, it is not the direction in which the world is transforming, but our stubborn resistance to change — our insistence on continuing to point at the broken windows.

The good news is that it is actually within our power to stop. :D

If you want to stop pointing out the broken windows in the world, you’ll like Hijos del optimismo (Children of Optimism). It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it

John Maynard Keynes

This post is the second and final part of a masterclass on understanding the global housing problem. If you have not already done so, you may want to start with the first part:

Here we go with the second one. From a comment by Jesús Zamora Bonilla, I have picked out a question that is a big debate (in some forums).

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Does Housing Produce Value?

No. “Having value” and “producing value” are not the same thing. Things have the value that people assign to them — but that does not mean they produce a distinct value of their own. A gold bar may have value, but it produces no more value than it holds as an asset. It creates nothing new.

Neither does housing.

Those who build and finance the construction of homes — developers, contractors, banks, investors — produce value. Those who buy a completed property in order to sell or rent it are not creating anything new. The built home would exist whether or not it changed hands. And putting it on the market is not, as we have seen, some act of generosity — insofar as homes are an administrative title conferring the right to enjoy a portion of the city, keeping them in active use is an obligation.

We might acknowledge some residual value in maintenance — though in reality this is not a voluntary act of value creation: the granting of the license requires that properties be maintained, on pain of having it revoked. This also reveals who the true owner of the licenses is: if the property owner failed to fulfil this duty, the state — as the real titleholder — would step in to keep the property in the necessary condition.

Stretching the argument considerably, someone might argue that buying a property frees up the previous owner’s capital and contributes to a larger pool of builders and developers. But this is absurd, because as long as licenses remain capped by the consensus of existing owners, there is no shortage of builders relative to what can actually be built. On the contrary, the capital circulating in the real estate market does nothing but concentrate, accumulating ever more homes in ever fewer hands.

Perhaps the most compelling argument that the buying, selling, and renting of housing generates no value is offered, paradoxically, by those who defend rentierism by insisting that it is not a business activity at all — merely an informal practice by “ordinary people” who “supplement” their pension with a rental income. Both things cannot be true at once. Either housing is a service that generates value — in which case there must be entrepreneurs or workers behind it actually doing something — or these are helpless elderly people, in which case no value generation is possible.

I lean toward the second.

So why are they being revalued?

To understand why housing appreciates, the company share analogy reasserts itself with full force. It is not the shares that appreciate — it is the company. It is cities; it is countries that grow and accumulate ever more capital. That capital takes the form of public services, roads, transport networks, universities, technology parks, communities, cultural movements, national brand and tourist appeal, and the concentration of human capital.

When cities appreciate, their shareholders — the homeowners — see the value of their titles rise without doing anything at all.

To make this clearer, consider an example that is by no means science fiction — similar things have happened in many places. Imagine a developer who built two identical residential towers during the property boom, but only had a license for one of them. When the works come to be legalized, the local authority grants the residents of Block A their license, but not those of Block B. Block A therefore has street lighting, electricity, sanitation, internet connection; its children can enrol in the local school and visit the neighbourhood health centre. Its residents can also register their homes and sell them if they wish.

Without a license, Block B sits empty and abandoned.

In Block A, the homes are worth half a million euros. In Block B they are worth nothing — they cannot even be sold, because they have no license and are not registered in the property registry.

One day, a particularly clever lawyer rummaging through an archive finds a document. The original developer’s license referred not to Block A, but to Block B. He goes before a judge and succeeds in having Block A’s licenses revoked and transferred to the owners of Block B.

Nothing about the buildings has changed. The owners are the same people. Which flats are now worth half a million?

If you think it is Block B’s, then you understand perfectly that housing has no intrinsic value — only the value of the city in which it sits.

This is why the appreciation of housing, absent any change to the properties themselves or the construction of new ones, is considered “paper wealth” — a form of patrimony that arises from the revaluation of assets, not from the creation of new value, but from a mismatch between supply and demand for a rigid good whose supply cannot be expanded by the market alone. It is a well-known, widely acknowledged, and extensively studied phenomenon.

Can Property Tax Be Made Progressive Based on the Number of Properties Owned?

Yes — and in fact it already is, in some places. France applies different property tax rates to second and third homes. And the United Kingdom charges higher stamp duty on second homes and on purchases by non-residents.

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Can Short-Term Tourist Rentals Be Prohibited?

Not only can they be — they already are, in effect. To operate any accommodation business, a license is required that the vast majority of tourist flats do not hold. The problem is that public authorities, for reasons that defy understanding, do nothing to enforce this. And so we have a proliferation of unlicensed mini-hotels — without insurance, without the most basic guarantees — operating in the heart of our cities.

Which is a shame, because the Airbnb model could have been something genuinely valuable for cities, had it been properly regulated. As it stands, it has become a free-for-all for companies of dubious ethics operating in an unregulated space.

Why Have REITs Not Been Abolished?

Because, as we have seen, rising property prices and a market with strong demand for those titles of ownership are features of the system, not bugs. REITs were invented precisely to stimulate demand and drive prices up. They remain for that reason. In reality, no one actually wants to deflate the market.

Can Empty Homes Be Penalized?

They can be penalized, and in my view they should be prohibited. All licensing systems include a provision ensuring that if you do not use your license, you lose it. This is the case with taxis, shellfish harvesting permits, pharmacies, notaries, and any other activity that depends on a public license.

That said, I think the idea that there are large numbers of empty homes in major cities is a myth. The small percentage that appears in statistics likely belongs to people who split their time between two locations, or who have a property temporarily vacant because a tenant has moved to a care home, and so on. Given the stratospheric returns available from renting, it makes no sense for an investor to buy a property for profit and then leave it empty.

Empty homes are, however, a serious problem in smaller towns and villages. Consider the absurdity: the state makes an investment; buyers acquire the properties but leave them vacant, squandering the public investment they represent. This is not science fiction — it happens in every village in Spain.

Paradoxically, empty homes are also a significant problem at the luxury end of the market. London has suffered severe abandonment in its wealthiest neighbourhoods, because foreign investors — Russians, Saudis — have bought up entire streets purely as financial assets, without spending a single night in them. “Foreign investors,” ran one headline, “are using the capital’s finest homes like a life-sized Monopoly board.”

It is a perfect illustration of what happens when a country’s shares are turned into an “asset” that foreigners can buy.

Can Developers Be Required to Build on Serviced Land?

Absolutely — they can be, they should be, and the law already provides for it, at least in Spain. But as with tourist flats, it is never monitored or enforced. Developers who sit on serviced plots without building on them are effectively holding on to a portion of a country-company’s shares.

Is Squatting a Problem?

Many people have pointed out that squatting rates are negligible. But I would like to offer a different argument. Anyone who rents out a property is a business owner — regardless of whether they are a helpless elderly person. They have entered into business. And all businesses have to deal with non-payment. It is part of the risk of doing business. Sometimes you sign a contract with someone who seemed solvent and turns out not to be. Sometimes you serve a table of ten and they walk out without paying. Sometimes a dispute arises between client and supplier and they decide not to pay. It is commonplace.

So commonplace, in fact, that most businesses “provision” for these losses — they factor into their accounts in advance that a certain percentage of customers will not pay.

By the same logic, the fact that 0.05 % of tenants do not pay seems entirely normal for a business sector. Quite low, actually. By way of comparison, Madrid’s most prestigious luxury hotel openly acknowledges unpaid debts of 1.8 million euros, and no one seems remotely troubled by it.

“But other businesses aren’t forced to keep providing their service.”

Actually, they are. All businesses providing services deemed essential are subject to special obligations, even when customers do not pay. Energy companies, for example, cannot cut off supply to households where minors or vulnerable people live. The same applies to water, healthcare, and basic telecommunications.

This is not an arbitrary or capricious intervention by the state. It is a direct consequence of constitutional architecture. In modern democracies, rights are not all equal — there is an implicit hierarchy among them. The right to property is not absolute; it is limited by other rights considered superior or more fundamental, such as human dignity, physical integrity, and the right to life. When these rights come into conflict, the legal order prioritizes the most important ones: the protection of the vulnerable and social cohesion over the strict logic of the market.

Housing, in this sense, is not merely an asset or a private contract. It is a space where economic rights and fundamental rights collide. And when that happens, the state logically intervenes — on the side of what it deems indispensable for a society to remain viable.

Nor is this an anomaly unique to renting. All businesses are required to absorb costs arising from rights that do not answer to market logic. An employer pays wages when a worker is on sick leave, when they take parental leave, when they accompany a child to a medical appointment, or when they suffer a prolonged incapacity lasting months or even years. From a strictly commercial standpoint, those costs are not the company’s to bear. But from a legal and political standpoint, they are the price of living in a society that has decided certain rights take precedence over economic efficiency.

Renting operates within that same architecture: it is not a contract between equals in a moral vacuum, but an economic activity subordinated to an order of rights that limits what the market can — and cannot — do.

That said: investing in housing is not compulsory. If a business owner dislikes this sector, they are always free to move to another. What is not acceptable is wanting the returns of a startup with the protections of government bonds — and without lifting a finger.

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How Can It Be Fixed?

Let us first define what “the problem” actually is. This is not a habitability problem — it is an intergenerational conflict over the distribution of collective capital: country-capital. The solution cannot therefore consist of renting as a model for one portion of society while the other continues to own. Not at any price. That “solution” leads us toward a feudal world, where some pay — little, a lot, or something in between — simply for the right to till someone else’s land.

Moreover, citizenship remains tied to homeownership — as does people’s financial security. What we need, therefore, is a system through which everyone can access those country shares.

The solution is a mechanism by which all generations can access the same portion of a society’s capital with the same level of effort.

Furthermore, this is a problem that today threatens to tear society at the seams. Proposals such as “building a public housing stock” — which would take decades to materialize — are not real solutions. They are empty gestures.

The housing problem can and must be fixed within the next five years.

Housing as a Country’s Share Capital

One option would be to retain the idea that housing represents a country’s shares, and to ensure that everyone has access to homeownership. To achieve this:

• New issuances of country shares: The state should be obligated to expand the supply of housing licenses in line with population growth — that is, to increase the permitted density of urban land and accept that buildings must be extended or demolished to make way for new ones. At present, the opposite is happening: masterplans are barely touched, and the buildable capacity of plots never changes. So when the population grows, the only option offered to new generations is to move ever further out. But if some hold capital at kilometre zero and others at kilometre one hundred, we are not distributing that capital equitably.

• A country’s shares in the hands of its citizens: Purchases by institutional investors and by non-resident foreigners should be prohibited. It is absurd that a country’s shareholding should be held by private companies and foreign owners.

• Licenses in active use: If properties are left empty — that is, closed indefinitely and unused, which is distinct from an owner splitting their time between two homes — the license should be forfeited. If the owner wishes to use the property again, they should have to reapply.

• A license to rent: To convert a property into a rental business — whether short-term tourist or long-term residential — a specific accommodation license should be required, equivalent to that held by hotels. Exactly as would be the case if someone wished to open any other kind of business in the city, urban lettings should be regulated by the relevant authority, to ensure they match actual demand and meet a minimum set of requirements — safety, sanitation, and so on — that are not even demanded today.

An Idea Worth Considering

As is so often the case in this world of abundance, creative solutions that go beyond what is currently on the table can resolve problems that seem intractable.

I have on occasion proposed an idea that has always struck me as genuinely virtuous. Since the majority of the housing stock was built in the postwar years, every country has entire neighbourhoods constructed in a period of great scarcity, with very low quality. These are poorly insulated buildings with little natural light, entirely out of step with the expectations of twenty-first-century life. As a result, these neighbourhoods routinely become pockets of poverty.

A measure that would activate the private sector to build far more housing in a very short time would be to increase the permitted density of these plots — so that where four homes exist today, eight could be built tomorrow, for example. This could even be time-limited to force owners and developers to act quickly.

When a private developer constructs a building, they are in effect exploiting an urban resource, and are therefore required to make “contributions” to the state — surrendering a portion of what they build. For decades, the norm has been to “monetize” these contributions: rather than handing over flats, the developer paid the state in cash and retained 100 percent of the building.

But it does not have to work this way. Entire neighbourhoods could be expanded — or demolished and rebuilt — creating millions of new homes across Europe, with the state contributions yielding a public housing stock in very little time. All of this without resorting to state-led construction, and without spending a single euro of public money, by harnessing the mechanisms of the market.

It is one of those rare ideas that achieves multiple things at once: regenerating neighbourhoods, making them more sustainable, injecting resources into the most disadvantaged sections of society, and creating both market-rate and public housing — in very little time.

But you have to want to do it, of course.

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If you are interested in housing issues, don’t miss Hijos del optimismo (Children of Optimism). This book explains how the housing crisis is the result of the immense transformations we are currently undergoing.

It is my first book, the big brother of this newsletter, and a project I have been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it

.Photo by Sean Lee on Unsplash

Franklin D. Roosevelt

Housing has become the defining problem of global society — and apparently overnight. Perhaps that is why there is so much confusion, and why it is so difficult to understand, let alone explain, what is actually happening. How did it become a crisis? Why does it affect every country? Why do prices keep rising without end? Can building more fix it? What about liberalizing the market?

When a problem is hard to understand, it is often because we are thinking about it in the wrong way. And I believe that is precisely what has been happening here for a long time. The other day, Bosco Gámiz suggested I write a piece answering some questions, which other readers then expanded upon with ideas of their own.

And I — who always wanted to write a book called The Housing Theory of Everything (and would have done so had I found a title equally catchy in Spanish) — got carried away, and what began as a Q&A ended up as a masterclass. A manual. Everything you need to know to understand, as well as any specialist, a problem that has become universal and now threatens our world.

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Here it is! I hope you like it.

Why Is the Housing Problem So Hard to Understand?

Because we are approaching it in the wrong way.

Some argue that housing is a market good, like cars or oranges. It is not. Others compare it to an “asset,” as though it were a printing press or a gold bar. That does not hold either. For housing to be comparable to those goods, it would need to satisfy one basic condition: that supply could rise or fall freely in response to market forces. But it cannot. Housing does not follow market logic, because its supply is constrained by the number of available licenses.

In fact, although — as so often happens — its physical materiality clouds our judgment, a dwelling is first and foremost a title: an authorization, a permit, a license. Without a license, a building cannot legally function as a home in any developed country. The housing market is therefore, in essence, the market for residential licenses.

And those licenses constitute a monopoly. It is states that issue them. This is why housing resembles neither consumer goods nor investment goods, but rather the share capital of companies. The best analogy for understanding housing is to think of it as stock in a company — and that company is a country.

Just as companies divide their ownership into shares priced according to the firm’s value, countries issue housing licenses whose value is tied to the city and country in question. Just as companies stand behind the price of their shares and regulate it, so too do countries. Housing is a country’s stock — and the real estate market is something very close to a stock exchange.

It is not a bug, it’s a feature.

The story goes like this. The first half of the twentieth century was a period of sweeping change across the Western world. Much of the rural population moved to the cities, industrial labour began to replace agricultural work, and the modern metropolis was born. In the midst of that transformation, the crash of 1929 unleashed a tsunami of poverty and dislocation on both sides of the Atlantic that ultimately pushed the world toward the Second World War. When the conflict ended, with part of the territory destroyed by bombing and the rest still waiting to be built, an entire world remained to be made.

And it was made — literally. In the years that followed the war (known as the “Trente Glorieuses,” or the Glorious Thirty), health systems, education systems, universities, transport infrastructure, sanitation networks, energy grids, legal institutions, and industries were all built from the ground up. Everything. The countries we inhabit today were founded in that period.

Spurred by the fear of another war and by the pressure exerted by the Soviet bloc, political elites designed a plan to bring the working classes into a share of the gains from progress. They struck a pact with their citizens — one that held for half a century — under which the ownership, both literal and figurative, of their countries would be distributed through housing.

For those in power, distributing homeownership was the means of securing popular commitment to a political model. For citizens, it meant acquiring a share that conferred a stake in the country’s future.

This is why Franco declared that Spain would move from being “a country of proletarians to one of property owners”; why Margaret Thatcher wanted “every man and every woman to be a capitalist,” and saw housing as “the starting point” for achieving that; and why, for both left and right alike, housing was, in Roosevelt’s words, “a participation in the future.”

And so the world embarked on a colossal “share issuance.” In Europe, for example, between 1950 and 1990, seventy percent of the current housing stock was built — far exceeding what had existed before. In 1945 there were fewer than thirteen million dwellings; by 1990 there were five times as many. For several decades, construction outpaced population growth.

In a handful of northern European countries, that housing stock remained in state hands, forming a public park of social housing. But in the vast majority of countries, it was distributed at cost price among the young adults of the time — like a gigantic universal inheritance. That is how two generations came to own the entirety of the Western world.

Today, housing is still this. It is a title of ownership over a small piece of a state — with its investments, its human capital, its national brand, its commercial and political agreements, and everything else that entails. This is why people who own a home feel like owners in a sense that extends far beyond their four walls. This is why housing rises or falls in line with how a country is faring. It is exactly what happens with a company’s shares.

Why Has Housing Become a Problem?

Until the end of the century, housing was not a particularly valuable stake. People had never paid much for their homes because cities were small and space was plentiful. In almost every city there were still peripheral districts and undeveloped areas that had gradually been occupied by waves of migration. The norm, in the 1950s and 1960s, was to pay very little for a rental.

In 1970, for example, the United States’ 22 million renters paid an average of around one hundred dollars a month, including utilities — roughly eight hundred dollars in today’s money, or about 12 percent of a median American family’s income.

The real sources of money in the twentieth century were natural resources, concessions on major infrastructure projects, factories, and construction companies — the firms of the industrial economy. Housing was the equivalent of what, in a company, would be “subordinated” or “Class B” shares. In other words, there was a first-tier capital — more expensive and more profitable — that consisted of companies, where large fortunes were invested; and then a Class B issuance was created for ordinary people to invest in: that was housing. The pact, in essence, was that the upper classes would retain the majority of each country’s capital, while the working classes would receive a subordinate and modest share.

But at the turn of the millennium, a perfect storm gathered, driven by several converging phenomena.

1. The industrial economy began to retreat. Factories disappeared from the Western world, and natural resources grew cheaper. At the same time, a new economy was emerging — one that no longer required the vast investment that factories once demanded. The true oil of the twenty-first century was no longer extracted from a well: it was knowledge.

2. And that new fuel was created and traded in the genuine value factories of our time: great cities. A new wave of urbanization swept the world. Cities grew ever larger; smaller towns emptied out. The educated classes congregated around immense capitals. The assets of societies — investments in both human and physical capital — accumulated around a handful of megacities, often just one or two per country.

   

3. When construction slowed and the economy turned digital, the world stopped growing at the pace that those who had designed the system had anticipated. At the same time, the 2008 crisis brought housebuilding to a sudden halt, from which it has barely recovered.

4. Meanwhile, as productive investment opportunities dried up, the middle classes of developed countries were accumulating ever-larger savings. Pension funds, investment funds, and sovereign wealth funds proliferated, all seeking returns somewhere. Many families also began buying property as an investment.

5. And central banks, responding to the slowdown in growth, injected hundreds of billions in liquidity into the global economy — causing all that accumulated wealth to grow still further.

As a result, wealth exploded. It became a mountain with nowhere to invest. And it began to accumulate in housing. The table turned: from being a form of “subordinated capital,” housing became the primary asset class of nations. Today, 60 % of all the world’s wealth is held in real estate, and 50% of all global wealth consists of residential property.

Worse still: all growth since the year 2000 is “paper wealth” — fictitious wealth consisting entirely of the appreciation of the same buildings constructed in the twentieth century. Since 2000, rather than growing by generating value, we have merely had the sensation of “growth” because real estate assets keep rising in price.

Why Is This a Problem?

Because housing produces no value. Unlike factories and construction companies, which drove economic activity — jobs, state revenues, opportunities — and unlike the purchase of new housing, which stimulated construction, the rental or resale of existing homes is the closest thing our world has to the feudal system of the fifteenth century. It produces nothing; it simply functions as a vacuum that extracts resources from the broader economy, channelling them directly into producing more wealth and more accumulation.

This is not, as is commonly claimed, a problem of habitability, or even of rent prices. It is a crisis of wealth distribution and of the “capital” of nations. It is a problem of citizenship.

And in reality it affects tenants and new buyers in almost equal measure. The underlying problem is this: for the generation that purchased the twentieth century’s shares to receive a return commensurate with their expectations — expectations calibrated to a world in which growth had not stopped — another generation must foot the bill. And in “country-companies” that produce far less than before, what happens is that younger generations must devote an ever-greater portion of their time and their lives to buying the “shares” of their country from the generations that came before them.

And if wealth no longer generates more economic activity, it can only end up devouring what remains. If the twentieth-century model was circular — investment produced employment and resources that justified a return — the twenty-first-century model is a Ponzi scheme. Each generation is compelled to make a greater sacrifice to compensate the previous one, until the whole thing blows apart. Meanwhile, the underlying moral logic is terrifying: it endorses a world in which it is far more profitable to be a landlord than an entrepreneur.

This is the tension. We have run out of a model that works for everyone. One generation received a universal inheritance in the form of shares in their country; now every subsequent generation is expected to devote an enormous share of its resources to compensating the previous ones for those shares. This is why housing consumes an ever-larger portion of household budgets. Fifty years ago, housing might represent between 5 and 10 percent of a family’s expenditure; today it reaches 50 percent — and beyond — in many places.

We are playing that game in which a group of people standing in a circle pass around a device with an internal clock — like a time bomb. The moment will come when it is no longer sustainable, and it will explode.

Why Was the Lack of Rental Housing Once Seen as the Problem, When Now It Seems the Rental Market Itself Is?

The traditional housing problem, up until the end of the twentieth century, was one of supply: because so little was paid for housing, there were no development companies, no thriving industry. It was largely people who built their own homes by hand. This is why states needed to build public housing in the twentieth century — no one else wanted to. When tensions began to emerge at the end of the twentieth century and the start of the twenty-first, everyone reached for the old narrative of insufficient supply without thinking much further. But it was not the whole truth.

(Incidentally, constructing a building is very cheap relative to its useful lifespan, which can be effectively infinite. The problem is that we lack financing instruments matched to those timescales, and a tension arises between funding and construction.)

Can Building More Fix the Problem?

Building more is the first step — the equivalent of issuing new shares for the current generation, what in corporate finance is known as a capital increase. The problem is that the original shareholders would resist. And they already do, everywhere in the world: this is what the NIMBY phenomenon is. When a company issues new shares, it dilutes the value of existing ones.

In my view, building more must be part of the solution. The reality is that since 2008 most countries have built practically nothing, while populations continue to grow and household sizes shrink. There is a genuine tension between supply and demand. But to carry out this new “share issuance,” it is not enough to build on the urban periphery — planning codes must be reformed to increase density, and new generations must be guaranteed access at cost price. The land of the city must be redistributed, not merely extended.

Nor does it work to sell at prevailing market prices, because that simply transfers wealth to land developers rather than to the twentieth-century families the system is meant to serve. For any sustainable system, each generation should be able to access a share of their country’s stock at the same price — measured in terms of the life effort required, if you will. This is the key to making the model fair and sustainable: that the effort required of each generation to access a stake in their country’s capital remains constant.

Can the Market Be “Liberalized”?

The housing market cannot be “liberalized” — in the sense of allowing anyone to build whatever they like on land they own — any more than the issuance of a company’s shares can be liberalized. It would be absurd. The number of licenses in any given urban area depends on the available public services: the capacity of sanitation systems, street lighting, water supply, road networks, and public transport.

Urban planning is essentially the most important law in any country — just as controlling the share count is the first job of a chief financial officer. Before building in any area, a series of interventions must take place, necessarily coordinated by a higher authority: sewage, road building, lighting, utility networks, and so on.

If every developer could do whatever they liked on their own plot, cities would become uninhabitable — people throwing waste into the street for lack of sanitation, cars piling up everywhere for lack of any other means of getting around. It is nonsensical to talk about liberalizing land, unless one wants shanty towns to grow like those in parts of Africa. (If anyone wants to convince me otherwise, I am all ears.)

Can Public Housing Solve It?

That depends on which problem you are trying to solve. If the goal is a welfare solution for a minimum number of people in the greatest difficulty, perhaps 2, 3, or 5% of stock could be provided over a couple of decades. But to me that would be a way of entrenching inequality: leaving the country’s shares in the hands of a few, offering a small subsidy to a few others, while everyone in the middle continues to face the same problem.

If the goal is cities where 50, 60, or 70 % of housing is public and people no longer store their savings in property — that strikes me as science fiction. The only way to achieve it would be to expropriate the entire city and rebuild it from scratch.

In my view, the only problem this idea of “building more public housing” actually solves is a political one: it gives certain parties something to say, and allows them to project the illusion of having a solution, while delivering no real results — because building takes ten or fifteen years, and by then, no one will remember the promise. When anyone advocates for public housing, the right question to ask is: how much, and when? How many homes can the state actually build before the end of this parliamentary term? The answer, I fear, is depressingly close to zero.

Why Did Prices Rise During the Bubble Even Though Far More Was Built?

Because when a company carries out a capital increase to fund investments that are expected to make the company more valuable, the share price rises.

The bubble was the moment when the global message went out that housing would be “the great asset” of the future. It was then that governments — having watched prices appreciate through the final years of the twentieth century, when economic growth figures were still very high — could sell their citizens the idea that this was going to be a bonanza where money would fall from the sky. If housing kept appreciating at 10 percent a year, buying more shares was a fantastic idea.

For states to build extensively without prices rising, they must send the market a clear signal that they will not allow appreciation to outpace the economy.

I repeat: states, which issue the shares, control the price.

How Have Experiments in Rent Regulation and Price Controls Fared?

It is very difficult to compare, because every territory has its own characteristics. But in general I think price controls are effective at limiting rental prices. The problem, as we have discussed, is that rent is not exactly the issue — it is one of its symptoms. So controls are a small patch that does not fully resolve the problem, and can actually consolidate the idea that it is normal to have a society in which half the population are shareholders in their country and the other half are merely tenants.

Is the Intersection of Supply and Demand Really Useful or Economically Accurate When Applied to Real Estate That Can Be Withdrawn From the Market at Will?

Real estate cannot be withdrawn from the market. That is a fiction. As we have seen, homes are licenses — and licenses exist whether the property is occupied or not. The building will continue to appreciate in value even if it is never sold.

Housing prices are in reality set by the issuer — the state — which regulates the market through incentives such as tax deductions and purchase subsidies, and through disincentives such as price caps and property taxes. Exactly as companies issue shares or buy them back to support their price.

Should Purchases by Companies and Non-Residents Be Restricted?

They can and should be — and urgently. There is no logic in allowing the shares of one country to be held by the citizens of another. Even Trump recently signed an executive order prohibiting investment funds from buying single-family homes: “America will not be a nation of renters.” Canada has had a ban on foreign purchases in place for two years; the Netherlands has introduced certain restrictions at the municipal level; and other countries — China and Saudi Arabia among them — prohibit foreign property ownership altogether. This is Democracy 101.

Continue reading »

In order to stay within Substack’s recommended length limits, I have divided this masterclass into two parts. Click to continue with the second part:

If you are interested in housing issues, don’t miss Hijos del optimismo (Children of Optimism). This book explains how the housing crisis is the result of the immense transformations we are currently undergoing.

It is my first book, the big brother of this newsletter, and a project I have been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it.

Photo by Adrian Trinkaus on Unsplash

— Juan José Millas, ‘¿Hay o no hay avería?’(Is there a breakdown or not?), El País

Last week, following a post in which I argued that the world must choose abundance in order to put an end to hatred, Daniel Arjona published a review of the proposals put forward by the nascent abundantist movement, closing with a challenge: Is abundance compatible with the soaring electricity consumption of artificial intelligence? Or will those of us who believe in abundance crash headlong into that “thermodynamic reality” of technology before we have even left the starting grid?

I do not believe that AI will derail abundance. But the question strikes so deep a nail that I cannot help but wade in. The dichotomy between the scarcity that AI threatens to impose and the abundance it promises points directly to the reason why the twenty-first century feels like a car whose engine has failed without anyone being able to identify the cause.

This piece attempts to explain why the promises of scarcity work — and how the architects of AI have managed to turn it into the greatest such promise we have ever made, and perhaps the last.

The Two Gods of Capitalism

Human beings had always promised themselves a future of abundance. For as far back as historical memory reaches, and until just a few years ago, we believed in paradise. In salvation. In an existence beyond scarcity and earthly misery — even if it had to wait until after death.

And so, when capitalism came to occupy the place of religion in the moral order, it took great care to keep that promise intact:

“It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. Every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his own goods for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs.”1

The god of capitalism — no longer called Allah or Jehovah, but the “division of labour” and the “invisible hand” of the market — also promised a modern version of paradise: a future of plenty for all mankind.

It was this convergence that allowed us to enter the modern era without losing our faith — sustained by the same worldview that had guided us for millennia: that human beings, if we act virtuously, can earn our place in heaven. The impure, the heretics, and the unbelievers will receive their just punishment in hell — or in poverty. Carrot and stick.

Yet capitalism introduced, perhaps without fully realizing it, a profound mutation of that ancestral principle. The new order did not abolish God — but it split him in two. From that moment on, we prayed to two distinct deities: one that promised abundance, and one that announced scarcity.

The God of Abundance: The Assembly Line

Adam Smith’s favourite deity was the “division of labour.” The Scotsman was captivated by human organization and by the inexhaustible power of industrialization to accelerate material progress. His divinity was a being of abundance — one that multiplied everything it touched. “If a worker, on his own, can perhaps make ten pins a day,” Smith argued, “on an assembly line he can make thousands.” Industry was the modern miracle of the loaves and the fishes.

But for those workers to reach paradise, their labour had to be compensated. Someone had to recognize the value of what they produced and be willing to exchange it for the fruits of others’ work. The god of productivity, on its own, could not close the circle. It needed another god: that of the market. And this one, unlike the god of industrial production, was a god of scarcity.

The God of Scarcity: The Market

A good can only have a price if access to it is not free — if it is scarce. For me to want to buy something from someone else, that good cannot be freely available to me without payment. In economic terms, its consumption must be rivalrous: either the buyer consumes it, or I do. Only then can it be exchanged. The market is, in essence, the mechanism by which both parties agree on its price.

Scarce goods — such as cars, washing machines, and vinyl records — are easily traded in markets. But when goods are abundant — like the light from street lamps or public health — it becomes impossible to charge for them. That is why markets cannot provide them. So much so that even the most hardened theorists of capitalism eventually came to support the creation of the modern state to take responsibility for some of them.

(I explain this in much greater detail in this article and this one).

The Schizophrenia of Capitalism

Capitalism has thus existed, from its very birth, in a state of genuine schizophrenia — in an all-out battle between its two great gods. On the one hand, it promises that human organization can make goods abundant. On the other, it requires that goods remain scarce in order for markets to continue to exist.

The consequence is that our economic system — upon which we have staked the future of society — has advanced from its beginnings by devouring itself. Industries are born, grow, and reproduce, making goods ever more abundant. But the more abundant goods become, the more they lose their market value — until, one day, driven by their own improvements and innovations, their production becomes ubiquitous, they are “commoditized,” and they cease to be profitable. Industries thus render themselves unnecessary and ultimately disappear.

How did capitalism survive two hundred years of this tension? Should it not have collapsed? Should it not have exploded, supernova-like, from its very success? This is something that perhaps deserved more scrutiny in the twentieth century — but, then again, no one asks where the manna falling from the sky comes from. And so, for as long as the economy ran at full capacity, no one saw this as a problem. On the contrary, a very famous economist, Joseph Schumpeter, devised an idea to explain it and gave it a name so catchy that no one ever thought to question it again. The engine of capitalism, he said, was the “creative destruction” of the economy.

The Magic of “Creative Destruction”

Old industries, as they disappeared, released workers and capital back into the economic atmosphere. That surplus, in time, became fertile ground from which new industries — more innovative, more productive, capable of absorbing that labour and capital under better conditions — were born. This is how the automobile replaced the horse, petroleum replaced coal, and the electric motor replaced the steam engine. Capitalism was magical. The abundance of one thing created new scarcity somewhere else, and everything — the assembly line and the market — continued on its way.

Fascinating. Because that was in 1942, and since then no one has ever managed to demonstrate that this relationship actually exists; no one has been able to identify the mechanism by which the destruction of some industries gives rise to others. “Creative destruction” never ceased to be a theory. A hypothesis. A narrative. And yet, by the end of the twentieth century, that narrative was shaping economic policy, justifying the forced deindustrialization of the Western world, displacing entire populations, and transforming the face of nations — all in the name of industrial “restructuring.”

At precisely the moment — and what terrible timing it was — when it became clear that it had stopped working. That engine of capitalism had been turning for roughly 225 years when, twenty-five years ago, it seized up and ground to a halt.

Since then, since the turn of the millennium, the creative destruction of the economy has been conspicuous by its absence. The old industries — local commerce, postal services, travel agencies, newspaper kiosks — keep dying. But the new ones that should be rising in their place produce neither enough employment nor enough economic activity to offset the losses left behind by those that disappear. As a result, Western economies began to stagnate toward the end of the 1990s.

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The Bubble That Never Ends

And so countries embarked on a forward flight that has now lasted twenty-five years. First, they surrendered to the siren song of the dot-coms, trusting that the internet would deliver the productivity revolution they had been waiting for. It did not. Instead, when the bubble burst, the US Federal Reserve began applying the prescription that has brought us to where we are today: injecting artificial money into the economy — monetary stimulus — to keep it from stalling completely, sustaining it on life support until the promised technological revolution would arrive and return us to the path of growth.

But that did not happen either. Instead, all that fresh money found its way into the mortgage market and produced a second bubble, which burst in 2008. And although the world was by then growing acutely aware that something more serious than a simple crisis was underway, the prescription was the same: more liquidity to revive an economy that had been in cardiac arrest since the start of the millennium.

And so we have arrived at 2026 after twenty-five years of injecting ever more money in the hope of reviving an economy that keeps deflating — like a balloon, literally, with pressure pumped in on one side while it escapes from the other. This is the reason I say, without any fear of being wrong, that AI is a bubble that will burst in 2026. And I can say with equal confidence that, if we do not change course, there will be another bubble after it, and another, and another. Because what is happening to the world is that it keeps producing more and more abundance — but can no longer produce scarcity.

The Century of Abundance

One of capitalism’s two gods — the god of the assembly line — is running at full capacity. We are able to do more with less than ever before, and the world has never been so abundant.

Despite the dizzying growth of the global population, we today produce 50 % more calories per person than in 1960 — and 4.5 times more energy. We have cut illiteracy from 60 to 12 %. Today five billion people are connected to the internet, and there are 1.12 mobile phone lines per person worldwide. According to the Simon Abundance Index, life in 2026 is 518.4 times more abundant than in 1980. It is little wonder that global life expectancy has risen by 25 — 25! — years.

More striking still: every new innovation that emerges is born abundant — email, digital information, social media content, artificial intelligence. As a consequence, the god of the market — the one that paid wages, provided returns on investment, made it possible for companies, tax revenues, and all the other economic mechanisms of the modern state to exist — is growing ever more enfeebled.

A simple example. CD sales reached all-time highs in 2001, then plummeted, all but vanishing before 2010. Music streaming revenues did not match the business volume of CDs until fifteen years later, in 2015. And yet, in the music industry in the United States, barely more than half as many people are employed today as were in 2000.

Why? Because there is no scarcity. On the contrary: music is everywhere. For the same price we once paid for a single CD in 1990, we now get a month’s subscription to a platform that offers us every piece of music in the world. People spend hour after hour on Spotify. Meanwhile, the revenues and jobs that depended on music being scarce — record shops, manufacturers, distributors — have vanished.

The same story repeats itself across every other sector: search engines, accommodation platforms, e-commerce, messaging services, social networks, and cloud software have all created products and services that are abundant, accessible to millions of people simultaneously. But, as with music, that abundance of goods does not generate employment or material wealth in proportion to the scale of its consumption — because the remuneration of labour and capital was tied to scarcity, to the existence of a market.

This is the schizophrenia of the contemporary world. This is the arrhythmia at the heart of late capitalism that has the world on life support. The reason why, as the writer Millás puts it, “the engine of society is making a strange noise.” In the eternal contest between capitalism’s two gods, the god of abundance has the other pinned against the ropes and is delivering a beating.

The Scarcity Rebellion

Although it has never been explained in quite these terms, today almost everyone senses that this is true — you may well be feeling that “aha” moment right now: I’d never seen it that way before, but it’s obvious.

The problem is that, without a social contract different from the one we had in a world of scarcity, many people have come to see abundance as a threat. They find themselves in a kind of schizophrenia of their own: on one hand, they want access to the benefits of this new world — Amazon’s low prices, cancer treatments — but on the other, they are terrified that this drift will harm them. From that intuition springs the fear of the future, and of everything associated with progress.

And so we collectively refuse to accept that we live in a world of abundance — because, as Upton Sinclair put it, “it is very difficult to make a man understand something when his salary depends upon his not understanding it.” And it so happens that a great many people’s “salary” depends on the world not being an abundant place.

Starting with workers. Taken to its logical extreme, abundance would eliminate a large portion of work — more than it has already eliminated. If, for instance, we were to maximize food production by supporting the technologies that allow proteins to be cultivated using bacteria, we would permanently resolve food insecurity, drive down meat prices dramatically, free up vast tracts of land for reforestation, and avoid the emission of thousands of tonnes of CO₂ into the atmosphere. But we would also eliminate hundreds of thousands of jobs in agriculture and livestock farming — and, with them, the trade unions and all the power structures built upon those jobs.

And with political parties. Because the political currents of the twentieth century were always something like different churches worshipping at the altar of capitalism’s god — some at the god of the factory, others at the god of the market. This is why, in my view, every political movement has stopped speaking about the future and has turned scarcist, retreating into frameworks that still describe the world as though it were a place of scarcity — immigration, redistribution, the planet’s “limits,” degrowth, inequality, the unsustainability of public services, debt, and so on. This is why they are far more interested in perpetuating shortages — of housing, for example — in order to position themselves as saviours of their followers, than in exploring the opportunities that abundance offers.

But the great casualty of abundantism is none of these actors. Workers, before anything else, are people — and society can reorganize itself (and will) to ensure that there remains a role and a place for every person in an abundant world where work plays a secondary part. And political parties can reinvent themselves, or new ones can emerge.

The real corpse stinking out this funeral is that of capital. What place does capital have in a world of abundance?

In Search of Scarcity

This is what one of the world’s leading consultancies has to say:

“In an economy increasingly driven by intangible assets such as software and other intellectual property, a surplus of savings has struggled to find investments that offer sufficient economic returns and lasting value for investors. Instead, these savings have found their way into real estate, which in 2020 accounted for two-thirds of net wealth.”2

In other words: none. As the world became abundant toward the end of the 1990s, capital ran out of places to invest. It then launched a desperate search for new pockets of scarcity. First it sought them in the dot-com stock market. Then it took refuge in real estate. Around 2015 it returned to the stock market, this time in pursuit of “unicorns” — technology companies like Airbnb and Uber that promised stratospheric returns by demolishing entire sectors through the act of making them abundant.

One corner of the internet set out to create the first scarce digital asset: Bitcoin — “the only scarcity in the world.” Since then we have witnessed several more or less successful attempts to manufacture artificial scarcity: NFTs, which tried to replicate Bitcoin’s trick; the Metaverse, conceived as a form of digital “real estate” controlled by Meta; and all the things that have periodically come into fashion by convincing audiences of their scarcity — rare earth minerals, chips, and the rest.

All of these share the same value proposition. In an increasingly abundant world where generating a return on capital has become exceedingly difficult, the product on offer was always the next scarce thing — the next scarce thing — from which a return might finally be extracted.

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Sam Altman’s Holy Grail

AI is the latest and most sophisticated version of that scarcism — an almost perfect story, exquisitely modern, built upon three lies:

1. AI was “intelligent” and could “replace humans.”

2. It would therefore displace millions of jobs — and, by extension, boost productivity, the touchstone of this entire narrative.

3. The key to its success was not the technology itself, but scale: the sheer quantity of processors any given market player could concentrate in its hands.

It was Sam Altman — almost single-handedly — who created this monster. It was he who first floated the idea that what we have been calling “AI” constitutes a form of intelligence. And it was he who, as it became increasingly evident that large language models are little more than stochastic know-it-alls, announced the imminent creation of “artificial general intelligence — coming soon.”

But his greatest invention, the one that turned the world upside down, as they explain very well in this post, was scale.

The fact is that AI is a technology as abundant as email. It is not, in reality, a single technology that anyone can patent, but a collection of general, shared principles being applied by many different teams. It ought to be about as investable as a programming language or a collection of recipes — which is to say, not at all.

But a group of scientists at OpenAI discovered that ChatGPT’s performance improved the more processors it used. “Scale” — the computational capacity of each LLM model — became the key to success with this new technology (which, let us not forget, we had already been convinced could replace human beings and therefore be enormously productive).

“He reinterprets the discovery of scaling laws as a kind of founding epiphany, and presents himself as someone whose career revolves around ‘scaling’ what works. An engineer who worked with him described a conversation in which Altman delivered a small sermon about his career, saying that scaling is the defining idea of his life.”

What Sam Altman grasped was that a technology born abundant — one that had been sold as capable of replacing humans, yet which could be marketed as scarce because it was bound to the physical computational capacity of each individual company — was the Holy Grail that capital had been searching for since the early 2000s. That elusive technological creature, with the soul of an algorithm and the feet of a high-capex real estate investment, was the perfect lure to set every investor salivating.

Scale — or, put another way, scarcity — was Altman’s great invention, the one that launched AI into the trillion-dollar bubble in which we now find ourselves. In 2026, the major AI players — Microsoft, Amazon, Google, Meta, and Oracle — are expected to invest more than six hundred billion dollars in processing capacity.

All the narratives built around this — from “hyperscalers” to the story of soaring electricity demand (which, incidentally, was already deployed in the Bitcoin era) — are far less established facts than they are reinforcements of that same promise: the last scarce technology, which the industry’s interested parties are determined to keep lodged in our heads.

It will last as long as it takes for the bubble to burst.

If you want to know why the world became abundant at the turn of the millennium, you’ll like Hijos del optimismo (Children of Optimism). It’s my first book, the older sibling of this newsletter, and a project I’ve been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it.

But the fact is that there is an American political scientist’s approach to the study of this phenomenon that reveals exactly where Donald Trump is heading today and what we can expect in the coming months from this man who is putting the world in check.

In ‘Anatomía del Facismo’, Robert Paxton rightly argues that fascism is not an ideology. It is not, like communism or socialism, a relatively coherent doctrine that someone can adhere to. It is a phenomenon, a historical occurrence that seems to arise when certain circumstances are present and that always develops in the same stages and in the same way.

This approach has two virtues. The first is that it decriminalises thought. A person or a party cannot be fascist because of their ideas. There is no “fascist” way of thinking; rather, fascism is a series of linked events or acts.

The second virtue is that it allows us to understand where Trumpism is headed – its roots, its evolution and its possible futures – without getting bogged down in ideological trenches.

If we strip away the layer of ideology and look at the facts, I believe it is undeniable that what is happening in the United States shares, if not all, then most of the characteristics of fascism proposed by Paxton in this definition:

“Fascism is a form of political behaviour marked by an obsessive concern with the decline of the community, humiliation or a sense of victimhood, and compensatory cults of unity, energy and purity. In it, a mass party composed of committed nationalist militants, acting in tense but effective collaboration with traditional elites, abandons democratic freedoms and pursues, through violence presented as redemptive and without ethical or legal restrictions, goals of internal purification and external expansion.”

The idea that the country is in ‘decline’ (‘the American decline’) is an omnipresent element in American symbolic culture. Some of the most vocal religious congregations in the country are descended from Protestants (Puritans and Pilgrims) who emigrated from Europe in the 17th and 18th centuries fleeing religious persecution in the Church of England. These groups always found that the rest of the population did not live up to their expectations of purity, and therefore ‘moral decline’ has been a trope of American Christian culture since its founding.

When Barack Obama’s victory—which coincided with the subprime crisis—caught part of the Republican public opinion in a moment of total confusion, this framework became hegemonic and became the main—and almost only—issue for the right [1, 2, 3, 4, 5, 6].

Obama had enjoyed a meteoric rise to power. At the end of 2004, just two years before announcing his candidacy for the Democratic Party primaries, he was still an unknown state representative in Illinois. For much of the primary campaign, it seemed almost impossible that he would stand a chance against Hillary Clinton, who was a sacred cow in the party. A few months later, that unknown figure became President of the United States.

Part of the Republican electorate could not understand how a proudly black, Hawaiian, Ivy League candidate could be ahead of their own in the polls. So much so that during the campaign, Obama’s opponent, John McCain (who, incidentally, was a giant), had to interrupt his rallies on several occasions to stop the racist insults that the audience was hurling at the Democrat, or to contradict his own voters and explain to them amid boos that no, Obama was not a Muslim, he was not a terrorist, and he was not a bad man. And they had no reason to be ‘scared’.

In the years that followed, the Tea Party and some agitators, such as Steve Bannon, took advantage of this discontent to shake up the political landscape in a very short time. They did so by reviving the latent notion of the country’s decline and transferring it to the economy and the mainstream.

Trump’s big message, ‘Make America Great Again,’ is a response to that perception of national decline and a promise of a return to purity. Riding on the back of the racial dispute that began with Obama, the Republican encouraged a victim mentality in part of the electorate by repeating ad nauseam that white people are discriminated against and have been ‘treated very badly’ by progressivism.

In the absence of a mass party, Trump was able to organise during his first term the nationalist militants of far-right and white supremacist groups, who stormed the Capitol on 6 January 2021 to prevent Joe Biden’s inauguration. With his other hand, Trump began to forge another alliance with the economic and Republican establishment, which seems to prefer him over other more moderate but less effective candidates.

As if he wanted to fit Paxton’s definition like a glove, in his second term Trump has been eroding democratic freedoms both inside and outside the country, as we have seen in the creation of a violent paramilitary force within ICE. Even his own definition of power has taken on a tone indistinguishable from classic fascism. In a recent interview with The New York Times a few days ago, he asserted that the only limit to his global authority is ‘his own morality’ and that he does not need to comply with international law as an effective restraint on his actions.

This rhetoric, together with his constant references to territorial expansion and annexations—from Canada to Venezuela and Greenland—close the circle that allows us to affirm that Trumpism behaves exactly like other fascist movements.

From here, Paxton identifies five stages of fascism as a phenomenon, of which we have already experienced four: intellectual exploration, rooting, rise to power, and exercise of power. The last, which is just beginning, has two sides: radicalisation or entropy.

1. Intellectual Exploration, in which disillusionment with mass democracy manifests in debates over the loss of national vigor.

   As we have seen, from 2008 onward, conservative media cultivated a narrative of national “decline” that, in the wake of the economic crisis and the sweeping transformations of the twenty-first century, became hegemonic on the right. Confronted with this perceived decline, a segment of public opinion absorbed into its worldview the very themes that would later underpin Trump’s anti-democratic behavior.

2. Roots, when a fascist movement, aided by political gridlock and polarization, becomes a consequential actor on the national stage.

   In my view, this moment was Trump’s first term (2016–2020). The two-party system (first-past-the-post) makes it exceedingly difficult for a third party to reach power — or even the mainstream — in the United States. Yet Trump’s first term effectively installed a Trumpist party within the Republican Party, one that took root and became normalized in popular culture over those four years. During that period, Trump steadily empowered certain far-right groups — the Proud Boys among them — which coalesced into a kind of organization (armed, in many cases; digital, in others) that supports his actions entirely outside the boundaries of party consensus.

3. Seizure of Power, when conservative sectors, in their attempt to contain the rise of left-wing opposition, invite the fascists to share power.

   Trump was not the party’s automatic candidate for his second term. A new primary process unfolded in which the various factions negotiated their accommodation to an already unmistakably Trumpist reality. The ascent to power of a fascist Trump thus lies in precisely that pact — one in which a Trump now commanding an entirely new political force struck a deal with the different factions of the Republican Party to secure their support.

4. Exercise of Power, in which the movement and its charismatic leader control the state in equilibrium with state institutions such as the police and with traditional elites such as the clergy and major business figures.

   This phase coincides with the second term — with the present moment. It is characterized by Trumpism’s alliances with various sectors, most visibly with the Silicon Valley establishment (Elon Musk, Peter Thiel, Mark Zuckerberg, JD Vance, and others), which not only provided campaign funding but placed the Vice President and Musk, for a time, inside the government itself.

One might say that until a few weeks ago we found ourselves in this fourth phase — a period of relative equilibrium in power. Yet something has shifted in recent months, pushing Trumpism toward the final and definitive stage of fascism, which can unfold in one of two ways:

1. Radicalization or Entropy, in which the state either grows increasingly radical — as occurred in Nazi Germany — or drifts toward traditional authoritarianism, as happened in Fascist Italy.

Fascist parties either settle and “relax” into power (as Franco’s Spain illustrates) or tend toward relentless radicalization. The difference, Paxton argues, lies in the nature of the cult they have constructed — whether it has conditioned the public to expect constant displays of violence or action — and, crucially, in the fragility of the regime itself.

It is evident that Trump is today moving toward greater radicalization. What unfolded in Venezuela, and his reaction to the cold-blooded murder of a white mother at the hands of ICE agents in Minneapolis, are telling examples. Yet nowhere is this tendency more clearly visible than in the escalating dispute Trump has been waging against Federal Reserve Chairman Jerome Powell.

Central bank independence was, until very recently, the sacred cornerstone of neoliberalism and of the political right. Monetary policy, the argument went, must not be left in the hands of executive power, since the temptation to manipulate interest rates for political gain is simply too great.

Trump, by contrast, believes the Federal Reserve should be placed at the service of his political agenda, and has been pressuring the Chairman from the very outset of his term to cut interest rates — a move that would stimulate economic activity — even as the bank’s own technical staff advise the opposite.

Until now, the tensions had, as far as we know, remained verbal. But last Friday, Powell received a judicial summons to testify in an alleged corruption case concerning renovations carried out at the Fed’s headquarters. In an extraordinary statement, the most powerful figure in global finance accused Trump of pursuing judicial harassment as a means of wresting control of the Federal Reserve from him.

Why does Trump behave this way? In all likelihood, because he is afraid. Only days ago, at a public event, he repeated once more that if the Democrats win the midterm elections this year and retake control of both the Senate and the House, they will ultimately have him imprisoned.

And the odds are stacked against him. His poll numbers are in free fall across all voter groups — including Republicans. His handling of every major issue — immigration, the economy, trade, and inflation — is viewed negatively. And his image is eroding among a voter bloc that was crucial to his 2024 victory: the working class.

Meanwhile, macroeconomic indicators have continued to deteriorate. Employment is losing momentum, and artificial intelligence threatens to detonate what may prove to be la madre de todas las burbujas (the mother of all the bubbles).

More significant still, Trump has exhausted whatever goodwill voters extended to him on his signature issue — his great obsession, the promise he has been making to the American people for forty years: that tariffs would solve all their problems.

Trump is a man consumed by the conviction that the United States has been swindled by the rest of the world. So consumed, in fact, that in 1987 he paid for a full-page advertisement in The New York Times — addressed directly to the American people — in which he called for tariffs and demanded that other countries be made to pay (simply for existing). Tariffs, Trump argued, would close the deficit, bring industry back to the United States, bring prices down, and — above all — remind the world who is in charge.

Now, as the first anniversary of his initial tariffs approaches, food prices have not fallen, manufacturing has not returned, and the United States is once again shedding industrial jobs. That promise lies in ruins. And there is nowhere left to hide.

Donald Trump has run out of road. He has lost his narrative, forfeited the confidence of voters, and the structural pillars of the American state — Powell among them — are beginning to push back.

At bottom, figures like Trump — who resemble compulsive gamblers more than anything else — know that their time is running out. That sooner or later, reality will catch up with them. And so, like every fascist leader before them, when they fear losing power, they accelerate into a forward flight, moving ever faster in the hope that it never does.

Yesterday I came across a piece by Matt Robison recounting that, in the wake of the abduction of Nicolás Maduro, Trump convened a meeting in the Oval Office with the CEOs of America’s largest oil companies. There, he asked of them something to which he had already publicly committed on his own initiative: that they invest one hundred million dollars in Venezuela to extract more oil.

In a televised meeting that is, from beginning to end, a spectacle of incoherence, Trump — mid-sentence — rises from the table, stops speaking, and begins boasting about the ballroom he is having built at the White House (video here), while his own team looks on in visible disbelief. In the end, the CEO of ExxonMobil, following Powell’s lead, draws a line and tells the President plainly: no — Venezuela, he says, “is not investable.”

Robison argues that the very existence of that meeting — in which the President implicitly acknowledges that the operation had nothing to do with drug trafficking, as he had claimed from the outset, nor in reality with oil, since none of those executives had the faintest idea what they were being asked to do — is, on its own, sufficient grounds for impeachment.

But what struck me, above all, was how powerfully the scene called to mind another: the one from the film Downfall, in which Hitler, in his final days in the bunker, refuses to accept that reality has already overtaken him. There is no problem, he insists — “Steiner’s assault will bring everything under control.”

His generals, regarding him with a mixture of disbelief and shame, reply:

—“Steiner could not mobilize enough men, mein Führer” .“He was unable to carry out the assault.”

There will be a great deal of shouting in the months ahead. But I have no doubt whatsoever that what we are witnessing is the downfall of Donald Trump.

Photo by Nik on Unsplash

If you are looking for new answers to understand what is happening, you will like my first book: Hijos del optimismo. It is an invitation to understand and trust the future (and ourselves) again.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it.

The Democrats had been ‘the party of working people’; they had promoted the infrastructure, industries and housing stock that transformed the lives of millions of people between the 1950s and 1980s. But then the ideological wind changed.

Politicians became convinced that the market, on its own, would be able to produce everything that was needed. Ronald Reagan, a Republican, successfully sold the idea that the government should simply get out of the way. So successfully, in fact, that even the Democrats bought into it. ‘The era of big government,’ declared Bill Clinton, ‘is over.’

So, the Democrats decided that their role would be to correct the distortions produced by the market. On the one hand, they would implement “demand expansion policies” — aid and subsidy programmes so that everyone could share in progress — and, on the other, they would pass laws to prevent economic interests from destroying ecosystems and communities.

Part of the party “specialised in the art of saying no” and ended up on the side of those who already had a secure life. Using this legislation, the “NIMBYs” (Not In My Back Yard) set about defending the status quo by demanding that any new construction project meet standards so high that they were unattainable.

As a result, the United States has been stagnant for a quarter of a century. Some infrastructure projects have been paralysed for decades and cities are collapsing due to a lack of housing. The world’s leading power lags behind other developed countries in terms of high-speed rail kilometres, and more construction is taking place in Republican states than in progressive ones. In California, the crown jewel of the Democratic Party, a small public toilet that was going to cost £1.2 million and take three years to build became a symbol of the tragedy.

Disappointed with this drift, many voters lost confidence in the party and began a march towards Republicanism that culminated in 2016 with Donald Trump’s first victory.

The way out of this quagmire, the authors conclude, is to regain the ambition to transform. To return to a ‘supply-side progressivism’ that multiplies infrastructure, transport, energy sources and, crucially, housing stock. To build and allow building so that people can regain their trust in politics.

Abundance is a great book, but it was published at a terrible time. It was written during Joe Biden’s term in office, when it seemed certain that the Democrat would win re-election. The text was a manifesto for a second term. But along the way, Biden had to withdraw, Kamala Harris took over, and the rest is history. When it went on sale, with Trump already in power, the book became a straw man (or paper man) on which half of the world’s political commentariat pounced.

But the fact is that a year has passed since then and no one has put anything different on the table. There has been a mountain of criticism of the book, yes, but nothing more than criticism: not a single alternative proposal, not a new framework, not an idea that aspires to govern reality. The ironic—almost obscene—thing is that its detractors have ended up embodying exactly what Klein and Thompson denounce: politics reduced to pointing fingers, discrediting and blocking. Lots of judgement. Zero action.

Meanwhile, the abundance agenda has been advancing and has ended up convincing both the right wing of the party and the new shining star of the left wing: Zhoram Mamdani. Even among some Republicans, there is talk of a ‘conservative vision of abundance’.

It has also crossed borders. In Spain, has recently published another good book, “Tres millones de viviendas. Cómo pasar de la escasez a la abundancia” (Three Million Homes: How to Move from Scarcity to Abundance), in which he finds similar arguments and points to the same culprits responsible for the paralysis. A coalition of interests—including investment funds, but also homeowners’ associations—blocks every public initiative on housing and infrastructure with obstacles and excuses (‘not here,’ ‘not like that,’ ‘not now’).

I have mixed feelings about these approaches. On the one hand, I love building things and even do it professionally, so I am convinced of the virtues of solving problems by doing.

But on the other hand, for me, abundance has much more to do with freedom than with the possibility of owning more things. In other words, true affluence lies in the end of work, in overcoming an economy based on scarcity, and in a new cultural horizon where we allow ourselves to be freer. If it is not that, and instead consists of a life identical to today’s, but with clean energy and housing that is 30% cheaper, I think it will be a bit of a let-down that will not inspire enthusiasm (at least for me).

But these are subtle differences, distinctions between families of an incipient abundantism that could perhaps be the subject of another article. What is relevant, and what Klein, Thompson Galindo and I agree on, is that in order to emerge from the current crisis, we must become abundantists: we must leave behind the worldview of scarcity that has been ingrained in us during this first quarter of the century.

The fact is that our world—the social and political structures we have created—has always been based on an idea of abundance that was at the heart of all the great traditions of the West.

In Christianity, that horizon of fulfilment had been with God, beyond death. When capitalism replaced religion in the moral order, it transferred that aspiration to earth, but did not take away its centrality: if we trusted in the organisation of labour, the expansion of productivity would lead us to an abundance very similar to that promised by the Gospel. Even Marxism remained a teleological doctrine: communism was a stage in which the development of the productive forces would make the struggle for resources unnecessary.

And if neoliberalism triumphed at the end of the 20th century, it was because it managed to embody that very promise. After decades of extraordinary economic growth, society had become convinced that nothing else was needed. The market alone would be capable of bringing abundance.

And so, although it took different forms each time, the belief that if we acted virtuously, we had the power to forge a future of affluence has accompanied us throughout our history. It is our philosopher’s stone. As relevant in the collective consciousness of the West as, say, equality or justice. We cannot live without it. At least, not in peace.

When, in 2008, the market collapsed and the last promises brought by neoliberalism evaporated, the West was left without a promise of abundance for the first time in... perhaps thousands of years.

A new promise then began to take hold: that of scarcity.

‘We had been living beyond our means.’

Overnight, from living in the boundless world of the early 2000s, we came to believe that we had gone too far. That all resources were finite and we had already spent more than we should have. Our survival now depended on being frugal, restraining our desires, giving up everything that was not essential. History had caught up with us, and all we could hope for was a future of effort, blood, sweat and tears.

In recent years, I have spent some time trying to trace who planted that idea in the collective subconscious. Who was responsible for making that mindset hegemonic in such a short time? I always thought it would have been Angela Merkel, or Jean-Claude Trichet — the then president of the ECB — or one of the many conservative politicians who later used that mantra to stir up an entire continent.

To my surprise — and perhaps to yours as well — it was not a right-wing politician who ended the dream of abundance. It was Barack Obama.

When Lehman Brothers went bankrupt on 15 September 2008, the American election campaign was in its final stages. Obama was the favourite in the polls. He probably did not want to take any risks. He was already an unusual enough candidate without getting himself into trouble over the economy. It may also be that at that time the left thought that economic growth was a neoliberal and right-wing thing. That a generation of politicians who had cultivated the art of morality saw the festival of opulence of the early 2000s as a deviation. I don’t know.

But the fact is that it was Obama who, in the third debate of the campaign, just weeks after the collapse of Lehman Brothers, uttered those words. On the other side of the screen, a bewildered global audience, searching for answers to what was happening, listened intently.

‘There is no doubt that we have been living beyond our means,’ he said.

“Senator McCain and I have differences regarding the need to invest in America and the American people.” […] “But what is absolutely certain is that once we overcome this economic crisis, we cannot return to our wasteful ways. We will have to embrace a culture and ethic of responsibility: all of us, corporations, the federal government, and individuals who may be living beyond their means.”

That’s how it was. With these few words, the most influential leader of the 21st century promised us scarcity. The future would be a time of ‘zero sum’, where in order to invest in one area, cuts would have to be made in another. Where the gains of some were the losses of others. What we could produce was limited, and efforts and exchanges did not create value, they redistributed it.

The crisis of political representation we experienced in 2025 can be traced, with terrifying precision, back to that statement. At that moment, the left and right wings of the 20th century, which had been promising heaven (literally) to their voters for 50 years, found themselves speechless, with nothing to say.

Then the right wing beat a retreat. Its model was crumbling in prime time. Beneath the artifice of the neoliberal ‘market’ lay a colossal banking scam that was destroying the lives of millions of people. When Nicolas Sarkozy sounded the alarm—‘capitalism must be reformed’—it was already too late. That right wing never regrouped after the rout. It was another creature—populist, illiberal, authoritarian—that grew strong in the trenches left empty by the democratic conservatives.

The left, meanwhile, was suffocating. Policies aimed at “expanding demand”, without the tax revenues of a buoyant economy and under the yoke of austerity, became impotent. The left went from promising a horizon of dazzling material progress to settling for tiny patches—setting minimum wages, providing rent assistance, lowering bus fares—in a stagnant reality.

The promise that politics makes to citizens at every moment in history ended up like the meme of the big dog and the little dog.

But the left resisted. Perhaps because its people are more accustomed to difficult times, perhaps because neoliberalism had not been their project. Its leaders held their ground and found refuge in a theory that had been born in Latin America, a place where they had had plenty of time to perfect the politics of scarcity.

‘Populism is always a foundational political force,’ explains Íñigo Errejón, perhaps its most brilliant ideologue, “although the people are always called by the same name, they are a different people each time because they are made of new materials. They are always made from the construction of a new general interest in opposition to the existing elites and the order they had built. And it is a general interest that is constructed from scraps or pieces of the set of unmet demands, unfulfilled expectations, or unattained desires, but it is more than the sum of its parts. It is not just all the grievances put together to protest against those at the top, but rather the construction of a new horizon based on those unmet demands.”

In contrast to the ideologies of the 20th century, which promised a better future, populism triumphed by promising the opposite: that the future would always be bleak and that there would be a never-ending struggle for resources. There would always be a “people” to take refuge in, but it would not be a happy and proud one, but rather one made up of dissatisfaction and grievances against an elite that, in some way, would always be stealing from them. The task of politics was not to offer a horizon of progress, but to give shape to the discontent in a single voice (that of the politician of the moment, specifically) and, above all, to point out the culprits.

I suppose at the time it must have seemed harmless. The ‘1%’, those billionaires against whom the populist left was building itself, were untouchable. Demonising a handful of people as powerful as they were invulnerable seemed a small price to pay in exchange for building a political subject — ‘We are the 99%’ — that recognised itself.

The problem is that myths and hegemonic worldviews are always transversal, because we all live together in the same society. Just as all 20th-century ideologies shared the belief that productivity would lead us to a world of abundance, all 21st-century ideologies, both left-wing and right-wing populism, share the promise of scarcity. When the left spread the idea that we live in a permanent scam perpetrated by ‘elites’ against ‘the people’, it left the door open for the culprits to be not necessarily billionaires, but for the same arguments to be used to turn ‘the people’ against the woke, or against immigrants, or against pensioners.

“In the United States, the United Kingdom, France, and Germany, zero-sum beliefs on both the left—for example, that people only get rich by making others poor—and on the right—for example, that immigrants succeed at the expense of natives—are related expressions of the same underlying worldview. That is, there are only a limited amount of resources, and therefore we must use restrictions, levies, and preferential treatment to balance the scales between winners and losers.”1

If populist movements—from Milei to Meloni, Trump, and some very influential currents on the left—are successful, it is because they share this worldview: because they reinforce each other. And, in the absence of any other alternative, they end up dragging the entire ideological spectrum along with them. That is why it is so difficult today to find a politician—or a media outlet—that does not devote all its energy to replicating this framework: to explaining to us who the bad guys are and why we are the good guys (‘the people,’ ‘ordinary people’) and how they are stealing from us.

It is in this shared narrative that the great crisis is brewing today. Because if the embodiment of liberalism was peace—the debate between different political options that sought to coexist in the same world—populism can only be embodied in war. In a zero-sum world, if we take the tension to the extreme, only one can remain; the only solution to problems is to die or kill. That is why all populisms need war in order to exist. Sometimes they are really at war (as in Ukraine, Venezuela or Palestine) and sometimes they pretend to be (as in the ICE raids or the rhetorical outbursts of European parliaments).

Some will argue that the left did not arrive at these conclusions of its own accord, but rather was pushed there by the need to confront the physical limits of the planet. This is not true. The symbolic core of the idea that ‘we have been living beyond our means’ is not really a criticism of a way of life or consumption: what this framework questions are our ‘means’. What scarcity claims is that we are powerless, irrelevant, inane, incapable of controlling our destiny and shaping the world around us.

That is why all populists present themselves as ‘strong men’, because they want to convince us that we are weak and need someone to protect us. That is also why all the themes of scarcity (‘the limits of the planet’, “immigration”, ‘the accumulation of wealth’) are presented as global phenomena, incomprehensible, ungraspable and unstoppable (except, perhaps, for strongmen).

And that is also why all populisms are anti-scientific (techno-pessimistic, they call it). Because they need to deny that we are capable and that today we have the best tools humanity has ever had to face the future.

The root cause of scarcity has nothing to do with the planet’s finite resources, but rather with confidence in our own ability as a human species to face all the challenges (including biophysical ones) that lie ahead. This is what is radically new about the 21st century and the promise of scarcity.

That is why a populist’s worst enemy is not another populist from the opposing camp: it is the abundantists. That is why the books by Klein, Thompson and Galindo have provoked an angry reaction (and mine, will follow the same path). The belief that we are capable and masters of our own destiny is kryptonite for scarcity thinking.

Is there no third way? Couldn’t we live in peace by accepting the premise of a scarce world? Couldn’t we come to terms with the idea that there is nothing more to distribute and settle for it, finding other forms of happiness that are not based on constantly expecting something new and better? I don’t know. Degrowth has had two decades to produce a new paradigm that excites people based on that premise, and it has failed to do so. For my part, I have no interest in that possibility. I believe that the ambition to explore is the best thing about human beings. It always has been, ever since we left the caves. It is certainly what I do best and what I enjoy most. If anyone has another idea, please let us know.

Meanwhile, the reality is that today the political front lines are no longer between the left and the right. The axis has shifted, and the ideological battle will be fought between abundance and scarcity. Those of us who aspire to a future of prosperity, peace and freedom need to rally around this new paradigm of abundance for the 21st century, so that the world can once again become a place of hope where there is room for all human beings.

There are very few occasions when reality offers us something as simple as a dichotomy, but this is one of them. Today, there are only two possibilities on the table: either embrace a new agenda of progress, or abandon ourselves to regression. Either peace or war. Either build or demolish. Either democracy or tribalism.

Abundance or barbarism.

If you are also an abundance thinker, you will like Hijos del optimismo (Children of Optimism). It is my first book, the older sibling of this newsletter, and a project I have been working on for many years.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it.

* Abundancia is published in Spain by Capitán Swing and Tres millones de viviendas by Debate.

The photo accompanying this article is by Mateus Maia on Unsplash.

Human beings, who have neither claws to fight nor wings to fly, need to understand; that is our singular survival mechanism.

“There is no terror in the bang, only in the anticipation of it,” Hitchcock said. In other words, understanding takes away our fear. Once we know what is happening, our brain finds a way to adapt to it and, in some way, regains control. But, oh, the uncertainty! That is the stuff of human terror. That’s why movie directors never show you the monster in the first scene.

And since it also happens that we are at the top of the food chain and don’t have many enemies in the animal kingdom, “for modern humans, controlling the world means controlling other humans. And that means understanding them.”1

That’s why when something like what happened yesterday in Venezuela happens, we all go back a little to that place; to that first scene of every horror movie where something is going to happen that we don’t fully understand, and we can’t take our eyes off the screen until we know what’s going on. And every message that repeats that this phenomenon is something we already knew is like a balm that relaxes the contracture that the uncertainty produces in us. As they say, better the devil you know.

And this is how we often buy the illusion of understanding, but at a very high price: it is the price of not really finding out anything.

For example, the oil in this whole story makes no sense. As several energy experts have explained, neither the United States needs oil, nor is Venezuelan crude good, and besides, oil is on the way out, overwhelmed by the electrification of almost everything.

And it doesn’t seem that Trump is pursuing a regime change either. At this hour, it is already known that he has not left any troops on Venezuelan soil. He is not going to take control of the country, nor is there any invasion. It will be Maduro’s vice president, Delcy Rodríguez, who will continue to lead the government.

And if we are returning to the Cold War and bloc politics, one would say that the idea of putting yourself against all your allies to remove a gentleman from a government that doesn’t concern you at all doesn’t seem like the best of strategies.

So, except to fulfill that desire we have to explain the present by resorting to the past, it doesn’t seem that all these recurring themes of 20th-century international politics are useful to us today. Reality does not fit the old categories. In no way.

So this is going to be an article for those who are not looking for that form of complacency, for those who want new answers to old questions, even if they are not very reassuring.

These are ten lessons we can draw from what happened yesterday to understand the world of tomorrow.

//First Lesson

Donald Trump is only concerned about one thing.

And that thing is the attention of others.

Trump has no plan. He is not moving in a direction towards any predetermined destination. Throughout his life, he has shown no other aspiration than to have, every day of his life, the attention of as many people as possible.

This was the case while he built those huge golden towers in the center of Manhattan; while he was the protagonist of “The Apprentice” for 11 years; throughout his first term aand so far during his second term. All his projects, more typical of a pharaoh than a modern businessman, convey the same message:

I- W -A- N-T -A-T-T-E-N-T-I-O-N.

It’s not that he’s stupid: it works for him, it’s that the human experience is a limited set of moments of attention and if someone manages to capture them all, they win the game. Let’s imagine two competing companies. One sells the best watches in the world at a very good price. The other sells shitty watches at an outrageous price, but controls 100% of the advertising. Which company will sell more watches?

“Of course, but when people realize that the competitor’s watches are better, the word will spread.” But by then, so much time will have passed that Trump will have won (if he runs) the next election. Or so he thinks. In any case, that will be a problem for the Trump of the future. In politics, only the present moment counts. Or as Keynes said, “in the long run, we are all dead.”

Each and every one of Trump’s actions can be explained with the answer “To gain attention.”

—Why did he threaten to impose crazy tariffs on half the world?

To gain attention.

—Why did he withdraw them later, with great fanfare?

To gain attention.

—Why does he threaten all his allies one by one?

...

—Why does he order a paramilitary force of masked men to stop ordinary people on the street, just because they look Latino?

...

—Why does he threaten to invade Greenland?

...

—Why does he release a photo of Maduro handcuffed and bandaged?

...

//Second Lesson

It is all a lie

It is all a magic trick.

Yesterday, Trump made us believe he was taking control of Venezuela, but he did not leave a single soldier on the ground. He said he was going to “run” the country, but he has no way of doing so. He pretended to kidnap Maduro, but it is not so clear that there was not some kind of deal whereby Chavismo would remain in power in exchange for the dictator and his wife leaving the country alive. He pretended he was going to restore democracy, but he dismissed the opposition candidate and left the existing government in power. He says that American companies will invest in Caracas’ oil, but it is doubtful that this is a good business deal. And even Venezuela’s Supreme Court now claims that the president’s absence is ‘temporary’. As with tariffs, or when he promised to build a wall with Mexico, nothing is ever what it seems in Trump’s actions.

The president literally behaves like a conjurer: he waves his hands around a lot, pulls out a handkerchief, forces us to look in one direction and makes us believe that something has happened that has not really happened.

//Lesson three

In the war for attention, effort is worthless.

Donald Trump is not lazy.

One day he negotiates peace in Ukraine with Putin, and the next he kidnaps the president of another country. He imposes tariffs. He removes them. He reinstates them. He pardons a drug trafficker. He threatens to invade Greenland. Or Canada. He insults his allies. He embraces his enemies. He declares trade wars in the morning and deactivates them in the afternoon. He fires half the government on Twitter. He promises to build a resort in Gaza. And he talks about peace.

He does none of these things well. The vast majority of them turn out badly or worse. Nor does he do anything that a previous president could not have done. The difference between Trump and his predecessors is that he gets up in the morning and does them. Again and again and again. He is like a fly. He is neither very efficient nor very effective, but he never stops moving.

It is a very simple lesson, but one that we find very difficult to understand, because for centuries—even millennia—we have believed that effort was the key to success. So we had convinced ourselves that the important thing was to concentrate on a task, isolate ourselves from distractions, and work with our heads down until we achieved the most perfect product we were capable of producing. On the day of judgement, the judges (voters, employers, or whoever) would rationally choose the best product and place their trust in it.

So success belonged to those who worked hard. Those who did not drop out during their studies and achieved the best grades after five years, or companies that spent years designing the best product model, or parties that spent a long time rigorously crafting an unquestionable government programme. In politics, the idea that leaders had to speak as little as possible “so as not to burn themselves out” even prevailed.

Networks change that. Today, issues are exhausted in a day, and the day of judgement occurs every few minutes. The key to success is not effort, but stamina: the ability to stay in the race, every day, doing amazing things.

As my friend and guru Jorge García Castaño says, politics today is not about simmering a programme over many hours; it is about “bringing home the bacon every day”. It’s about having something to say every time the previous topic loses momentum, before your opponent has time to bring up theirs. It’s about occupying a little piece of humanity’s mental space every minute.

// Lesson Four

The law of conservation of energy.

One cannot continue in the race doing surprising things if one tries to sprint and give it one’s all constantly. Contemporary politics is a marathon where the important thing is to conserve energy.

That is why all of Trump’s actions remain strictly necessary to produce the desired effects on people’s attention.

The best example is the case of the fictitious agreement with NVIDIA. A few months ago, Trump announced an agreement whereby NVIDIA, the world’s largest company, would give 15% of its sales in China to the US government. Over the weeks, doubts began to arise. Was it a percentage of profits or revenue? Would it be the same for all companies? Was the US going to become a commission agent for its own companies around the world?

It never happened. Trump and the CEO of NVIDIA had not, in fact, signed anything. All they needed was to announce a lie to get thousands of headlines around the world, starting with the front page of the New York Times.

For that very reason, he has not invaded Venezuela on this occasion, nor will he do so. Invading a country costs a fortune, results in hundreds or thousands of casualties among your own soldiers, and is a huge logistical exercise that will not bring him any more headlines than the hit-and-runs we are used to seeing from him.

// Lesson Five

Curiosity.

Trump lives permanently in that first scene of the film where we have not yet seen the monster.

That is why his press conferences are chaotic, he contradicts himself, he is hard to understand, he beats around the bush and never finishes his sentences. That is why yesterday at the press conference he seemed to confuse Delcy Rodríguez with Maria Corina Machado. Because he wants us to keep watching, mesmerised, trying to understand. Chaos is his tool for keeping the attention on him.

It is not a bug, it is a feature. He is confusing and impenetrable by design. Like lingerie, he wants to reveal, but just enough, to be mysterious, to always leave things unknown, because if attention is the stuff human existence is made of, curiosity is the force that drives us in life.

// Lesson Six

The power of outrage (on the left).

Trump knows that the left controls the entire public debate because very few people on the right want to be journalists, writers or authors. Even the right-wing media (also in Spain) is full of progressive people.

So he uses the left to leverage his messages. That is why he constantly seeks to provoke outrage and terror among Democrats and European progressives in many ways. The first is by touching on all the issues that are sacred to them (women, migrants, human rights). If he does not achieve this with messages, he uses political spectacles with a tiny impact on the macro level but enormous communicative significance, such as paramilitary militias organising raids on racialised people.

In the best tradition of internet trolls, it uses outrage as a weapon of mass communication. His target is not his voters, but to flood the public space, get 100% of the publicity by outraging leftists and get free publicity from their media. This is why even Trump himself exploits the left’s image of the big bad wolf: he himself says that yesterday’s events are an invasion and that it is all about oil.

// Lesson Seven

There is no strategy.

Trump, like Pedro Sánchez, is a basketball player, not a chess player. He does not have a long-term plan where one event follows another. It is not that he is dumber than the great strategists of the 20th century, it’s that he is playing a different game. Rather, he has a few moves he knows how to make and a vision of the board. When he thinks he has bad cards, he breaks the deck, does something unexpected and forces them to be dealt again.

For his opponents, this pace is as exhausting as if a chess player had to keep up with a basketball player.

// Lesson eight

But there are objectives.

The absence of strategy does not mean there are no objectives. It is just that Trump understands that his objectives are not achieved through a succession of controlled and linked events, but rather by remaining faithful to an image and a brand that can be imprinted in people’s minds.

To a certain extent, Trump has the same modus operandi as Loewe: he repeats his brand over and over again, season after season, to continue reinforcing the imprint it has on people’s imaginations through a succession of ‘brand impacts’, such as Loewe’s advertisements or catwalks, or the collections they bring out.

Another way of understanding this is in line with Amador Fernández-Savater’s explanation (and this is one of my Roman empires, please be sure to read the article) of the Chinese idea of efficiency:

“According to Julien, the Chinese think about strategy in a completely different way. They do not divide the world into what is and what should be. In other words, they do not start from a model or plan, but from the course of reality itself. Reality is not formless or chaotic matter waiting to be organised by us: it is already organised. It has tendencies, inclinations and slopes that can be detected and exploited. This is what Jullien calls “facilitating factors” or “situational potentials”. The job of a good strategist is not to model and plan first, then implement, but rather to listen, evaluate, accompany and develop situational potentials. Not to act, but to be acted upon. Not forcing: supporting. Not directly pursuing a goal, but exploiting a propensity. Because the effects are contained within it. It’s like surfing a wave: it’s not about taming it, but about going together to the same place. Letting yourself go. The world is only resistance and obstacle from the perspective of control.

// Lesson Nine

The headlong rush forward.

Despite everything, Trump’s approach has a huge problem. Hate and fear, unlike love or desire, produce diminishing returns, because no one wants to revisit something that has frightened them and that they have already overcome. So Loewe can do more or less the same thing every year to continue dazzling its buyers, but Trump needs to do something even more outrageous each time to get the same amount of attention. He is like an addict who needs a higher dose with each high.

The umpteenth time he threatened tariffs on a country, no one paid any attention to him, and he had to move to the international stage in search of more relevant nonsense, such as pretending to give Gaza to the Saudis or invading Venezuela. That is why it is very likely that he will never talk about tariffs again. On the contrary, I would not rule out him ending up threatening Greenland even more, because I have no doubt that the final phase of this headlong rush can only be a head-on confrontation with the European Union.

// Lesson Ten

People are like frogs.

No man hits you on the first date.

All predators, abusers, paedophiles and manipulators share a modus operandi. They play with the truth to test your limits. What if one day they laugh at you? What if the next day they give you an order? What if one day they force you to do something small, but something you don’t want to do? What if they then try something bigger?

With each step, they push the limits of what you want to happen, until they shape your reality to suit them. Before you know it, you are living with an abuser and cannot leave the relationship because even you justify it. Like frogs, which allow themselves to be boiled alive as long as the temperature does not rise suddenly, people are very vulnerable to subtle but constant changes in the wrong direction. We do not know how and where to stop them.

With every gesture in which Trump seems to do something, but does not quite do it — like this kidnapping of Maduro — he is testing and pushing the limits of what the international consensus considers acceptable in order to give himself more room to manoeuvre. Pushing the boundaries of what he can do until one day, not too far in the future, we can’t help but wonder how we got here.

Yesterday, it was appalling to read the weak, shamefully submissive responses of many European leaders, who remained silent in the face of a scandalous violation of international law. Along with Maduro, what Donald Trump is hijacking is our ability to oppose evil.

If you are looking for new answers to understand what is happening, you will like my first book: Hijos del Optimismo (Children of Optimism). It is an invitation to understand and trust in the future (and in ourselves) again.

You can already order Hijos del Optimismo on Amazon, La Casa del Libro, El Corte Inglés and the publisher’s website, Debate.

You can also read more about me and the story that inspired me to write it.