How Capitalism’s Strengths Became Its Weaknesses
American capitalism is facing a paradox: the strategies that made it successful for over two centuries are now threatening to destroy it. The current political leadership’s response—pulling back from global trade to reignite an industrial base in the heartland, imposing tariffs to revive fantasies of manufacturing glory, closing borders to replace seasonal migrants willing to do hard labor, drafted into roles they neither wanted nor are structurally prepared to perform, and attacking workers’ rights and protections against arbitrary or dangerous supervision—represents not a break, but an intensified revival of tactics the system has always used.
There is historical precedent. The 1828 Tariff of Abominations raised taxes on imported goods to protect Northern industries. It harmed the Southern economy by increasing costs and reducing British demand for Southern cotton. Southern outrage, especially in South Carolina, led to threats of nullification and secession, sparking the Nullification Crisis. The tariff deepened North-South tensions over federal power and states’ rights, paving the way for future conflict.
Current tariff policies are not a departure from the tradition of U.S. capitalism. Protection of Northern industry behind towering tariff walls was standard practice through World War II. Only after WWII did the U.S. pivot to build a free-trade order that forced other nations into the market openness it had long resisted.
Today's leaders try to restore the impossible: after decades spent encouraging other countries to build the cruel industrial apparatus we outsourced, we are now trying to recreate barriers impossible to sustain. We exported grunt work to lands impoverished enough that any work was better than none.
American capitalism has always managed labor costs through selective inclusion and exclusion of immigrants. There’s nothing new in exclusion per se—what’s new is the push to bar workers that entire industries now depend on, long after those industries were deliberately structured around immigrant exploitation.
Just as American capitalism once displaced its labor and environmental costs onto other lands and peoples, it now faces the prospect of displacing even its knowledge work onto machines. Artificial intelligence is rapidly transforming education in ways that could either reinforce existing inequalities or disrupt how knowledge and opportunity are distributed. This new capacity unfolds within a post-truth environment: now, assertions become true not by reference to objective reality nor to any collective expert interpretation but to individual belief, echoed and reinforced by algorithmic media.
How American Capitalism Succeeded by Pushing Problems Elsewhere
For over 200 years, American capitalism solved its internal crises by displacement—geographically, temporally, or onto scapegoated groups. When the original colonies became too crowded and conflicted, westward expansion solved the problem by dispossessing Native Americans. When that was no longer enough, we expanded globally. Informal empires in Latin America gave way to overt military intervention and finally to economic globalization, exporting our problems to other nations.
As a temporal strategy, we became masters of borrowing against the future. Rather than pay for infrastructure, environmental repair, or social programs with current taxes, public and private policy mortgaged future generations, building prosperity on debt, environmental destruction, and crumbling public resources, including physical and mental health and education.
Socially, the American system of class management has always depended on creating internal scapegoats. Rather than wealthy Americans fighting poor Americans, the system convinced poor whites to blame poor Black, immigrant, and Indigenous people. Racism was not an unfortunate side effect but a necessary tool to prevent a unified working-class challenge to entrenched inequality.
The Education System as Social Control
Public education played a crucial role in this system, but not in the sentimental way most Americans imagine. While reformers spoke earnestly of civic virtue or democratic preparation, in practice, early 20th-century schools functioned above all as training grounds for discipline and compliance. The point was to produce students who would accept hierarchy, not to unleash human potential. The system taught just enough skills to be useful to business, while systematically discouraging the kind of critical thinking that might wonder why a handful of families own so much of the wealth.
Mass media and consumer culture channeled discontent into entertainment, consumption, and mutual blame rather than solidarity. Since the early 20th century, the consumerist story has been that access to goods is the real American dream, with upward mobility redefined as the chance to purchase rather than the power to remake the system.
Why the Old Solutions Don’t Work Anymore
Today’s conservative leadership tries to recreate the old conditions for American capitalism’s success, but the world has changed in ways that make those strategies unworkable.
When politicians impose tariffs, they try to recreate an America that can dominate by industrial might. But after decades of moving production offshore, tying supply chains to hostile or indifferent regimes, and letting domestic manufacturing rot, tariffs now just make consumer goods more expensive and introduce chaos into supply lines.
Similarly, militarized borders and the exclusion of migrant workers run up against the fact that entire industries from agriculture and construction, to food service and elder care simply cannot function without underpaid, rightless labor. Excluding them would collapse these sectors; including them accelerates the downward pressure on wages for everyone else.
The greatest contradiction: the ostensible defense of American workers even as protections for labor are smashed, unions erased, and workers driven into gig jobs without benefits or security.
How AI Changes Everything About Education
For decades, education was defined by artificial scarcity: knowledge guarded by institutions, credentials limited by class and geography, opportunity reserved for the few. Proposals to cap university education to 10% of the population were once taken as plausible modernization. Suddenly, AI threatens to wipe these scarcities away, democratizing learning, or to replace old hierarchies with new, more efficient versions.
The model classroom—one teacher, thirty students, standardized curriculum—was built for factory society. Now, AI tutors can personalize instruction at scale, though never as deeply as a human teacher. In well-trained and monitored systems, informational errors can be greatly reduced, though never eradicated entirely. Just as capitalism made itself dependent on knowledge workers, AI threatens to automate away even that last bastion of economic security.
Possible Futures: Who Controls Knowledge?
Stratification: AI education perfects class division. The rich get human instruction; everyone else gets algorithms.
Democratization: AI allows children from the margins the same instructional quality as the elite for the first time threatening the logic of educational scarcity.
Post-Human Education: Familiar forms endure, but content and relationships are utterly different. AI tutors and peer learning networks transform the purpose and possibility of schooling as democratic mentoring.
Each scenario is a new answer to the ancient challenge: Who controls the means of knowledge production? Do we amplify surveillance, reinforce algorithmic gatekeeping, or finally realize a democratic commons for learning?
Post-Truth and the Crisis of Educational Authority
In the post-truth era, fact is optional. Institutional authority collapses as every assertion becomes a matter of personal preference, algorithmically reinforced and endlessly repeated. Teachers can no longer appeal to shared standards as students surf an ocean of plausible but false arguments generated by media and by machines.
Curricular wars over evolution, American history, or gender are no longer about social or moral values. They are about the collapse of any ground rules for what counts as knowledge. Ceding neutrality by giving falsehoods equal time is not democratic; it is suicidal.
AI, marketed as neutral, magnifies this danger by making arbitrary outputs appear scientifically validated, a final twist in capitalism’s long game of making subjectivity look like objectivity.
Breakdown or Breakthrough?
We are at a crossroads.
The economic pressures accelerating AI adoption in education aren't abstract. They're the direct result of capitalism's systematic destruction of the conditions that made traditional education accessible. As housing costs consume 40-50% of family income in major metropolitan areas, as student debt reaches an average of $37,000 per graduate, and as wages stagnate while basic necessities become luxury goods, families face an impossible choice: pay for quality human instruction or accept whatever algorithmic alternatives they can afford.
The same system that created these financial pressures now offers AI tutoring as the solution, marketing it as personalized learning when it's really just educational triage for a society that can no longer afford to properly educate its children. Meanwhile, wealthy families use AI as a supplement to human teachers, creating a compound advantage where technology amplifies rather than reduces educational inequality.
The cruel irony is that families are going to be forced to choose AI tutoring precisely because the economic system has made human-centered education financially impossible for most Americans and then told this represents innovation rather than the systematic abandonment of collective investment in human development.
The likeliest outcome is that AI further perfects existing inequality. Elites keep teacher-led inquiry, everyone else gets compliance training by algorithm, and post-truth makes it easier to accept displacement. Alternatively, the democratization of knowledge production could break rampant capitalism’s grip if, and only if, communities invent robust, collectively validated ways to know the world that do not depend on nostalgic appeals to lost authority, nor collapse into pure subjectivism.
Democracy, surveillance, or total fragmentation could be the fate of learning. In an era where all our traditional authorities are questioned, our capacity to invent intellectual practices worthy of the coming age will be determinative.
The old world of educational authoritarianism is dying. The new world of agentic, collaborative, genuinely scientific inquiry has not yet been born. In this interregnum, learning how to seek truth collectively again may be our most vital skill.
An insidious element in this post-truth era is the whitewashing of America’s racist history. In the current environment, it’s perfectly acceptable in some social settings to assert that slavery was actually good for the enslaved African population. If current efforts in education succeed in rewriting this history, our children will have a second mortgage to pay beyond the rising national debt, a debt payable in blood.
Excellent overview and deeply troubling.
Hi Terry, I appreciate your analysis as we transition to new ways of knowing and being.
When you noted that "learning how to seek truth collectively again may be our most vital skill," I thought about what I heard in a grad class on the difference between public education and public schooling. The former is an instrument for democracy and generating citizens, assuming teachers are empowering students to be critical and collaborative consumers of information. The latter is designed to replicate inequalities.
To arrive at a more desired and hopeful state as a profession, we need educational leaders to guide us back to the original intent of public education. Teaching students how to navigate affluent spaces and communities and use them to their advantage seems like a necessary skill. "How can A.I. and other technologies can support learners in these endeavors?" seems like a critical question.