The debate over artificial intelligence (AI) is being framed as a false choice. On one side, Senator Bernie Sanders (I-VT) warns that AI will crush workers unless government intervenes aggressively. On the other, Silicon Valley voices insist that any attempt to slow or shape AI will backfire and leave America behind.
After watching Sanders on CNN's State of the Union program on Dec. 28, listening to Chamath Palihapitiya on the All-In podcast on Dec. 19, and following their exchange on X over wealth taxes, it became clear that both sides are missing the point.
This debate is not actually about AI or wealth taxes. It’s about what happens every time a powerful new system reshapes the economy: innovation moves fast, disruption hits first, wealth concentrates quickly, and responsibility becomes a political fight only after legitimacy has been eroded.
Sanders is responding to a real and justified anger. Workers absorb disruption first while wealth piles up at the top. Chamath is responding to a different danger: open-ended government power that begins by targeting elites and eventually works its way down to everyone else.
Both are reacting to the same underlying failure. And both are offering answers that arrive only after the damage is done.
Why This Pattern Keeps Repeating
Most people are not anti-technology. What they distrust is the pattern they have lived through repeatedly. Productivity rises, profits concentrate, jobs become less stable, and the cost of living climbs. The promised upside is always deferred, conditional, or invisible.
In manufacturing, automation increased output while communities hollowed out. In the digital economy, productivity surged while profits concentrated and stable jobs gave way to contract work. In housing, financial efficiency benefited asset owners while rents and home prices soared.
Each time, the promise was the same. The upside would come later. For many families, it never did.
With regard to AI, that pattern is no longer theoretical. It is already showing up in the labor market. Employers across multiple industries are freezing hiring, not because demand has collapsed, but because AI is allowing firms to increase productivity without expanding payrolls. Even as output and efficiency improve, headcount remains flat or shrinks, and workers feel this immediately through fewer opportunities, stalled wage growth, and greater uncertainty.
That is why warnings about AI resonate. Not because people want to stop progress, but because they no longer trust how progress has been handled. To his credit, Chamath acknowledged this directly on the All-In podcast, recognizing that public skepticism toward AI is rational, rooted in lived economic pressure, and fueled by the sense that elites celebrate progress while ordinary people absorb the disruption.
That diagnosis matters. But recognition after the fact is not the same as responsibility by design. History shows that when responsibility arrives late, politics compensates with force rather than structure.
Scale Without Responsibility Leads to Clawbacks
The current fight over wealth taxes is what late responsibility looks like in practice. Sanders argues that extreme concentration of wealth demands government action after the fact. Chamath counters that granting open-ended authority to tax “wealth” is a one-way ratchet that eventually stops targeting billionaires and starts targeting the middle class.
Both arguments focus on the end of the movie. I am focused on the beginning.
When systems are designed so that upside concentrates early, politics turns to blunt tools later. These measures may feel satisfying in the moment, but they expand government power and signal that legitimacy has already failed. A healthy system does not depend on punishment after the fact to hold together.
Yes: We need a wealth tax on billionaires. pic.twitter.com/2OUwSos5De
— Bernie Sanders (@BernieSanders) December 30, 2025
A couple of important thoughts and clarifications:
— Chamath Palihapitiya (@chamath) December 31, 2025
Where is Bernie right?
He is right that a handful of the Tech Billionaire class are completely and totally loathsome. Monopolists who’ve flouted privacy, dampened free speech, enabled debanking and sewed societal chaos with… https://t.co/rRGu33k0jd
He is right that a handful of the Tech Billionaire class are completely and totally loathsome. Monopolists who’ve flouted privacy, dampened free speech, enabled debanking and sewed [sic] societal chaos with their money while they haven’t given back in any meaningful way relative to their wealth. But not everyone is like this. Most have become successful by working hard and making useful things that many people need and has generally added to societal progress.
Where is Bernie wrong?
This bill is not a Billionaire Tax. In fact, the state AG removed that language from the title as it will appear on the ballot. Why? Because it is a bill that constitutionally allows the government to asses a tax on all private property. While it starts with a “billionaire” it allows the legislature to continue to implement it and move down the ranks and apply it as it sees fit.
While targeting Billionaires are an easy ways to get a bill like this passed, mathematically, they are a small pool. Make no mistake, the real honey pot of money is in the middle class and this bill can be applied to them too.
There are many ways to get Billionaires to pay more - so I would encourage Bernie and everyone else to find more targeted ways to do it. Taxing margin loans is the simplest and most effective form of example. Closing the carried interest loophole is another.
But the current proposal is a one-way ratchet on the constitution that empowers California politicians to eventually seize property from everyone in California.
Buyer beware.
That same design failure explains how innovation gives rise to unaccountable behemoths. The real question is not whether scale should exist, but how growth avoids turning size into untouchable power.
The answer is not to prevent scale.
Scale is often the result of useful ideas working, and innovation requires room to grow. Behemoths are not created by innovation alone, but when scale hardens into dominance, network effects go unchecked, and success becomes insulated from accountability. The problem is not that companies get big. The problem is when size becomes a license to extract without responsibility.
A healthy system keeps power contestable as firms grow and keeps the public connected to the upside as success compounds. When responsibility is designed in early, innovation thrives and legitimacy holds. When it is ignored, politics eventually forces a reckoning late, and everyone pays the price.
Individual Contribution, Not Equal Outcomes
You cannot create a world where nobody is different, nor should you want to.
This argument is not about equality of outcomes. It is about fairness of participation and predictability of opportunity. People do not resent others for succeeding. They resent systems where success detaches from contribution, where wealth compounds without responsibility, and where ordinary effort stops translating into stability.
A functioning society allows difference and rewards excellence, but it does not tolerate permanent exclusion. We don't need a world where everyone ends up the same. We need a world where success does not detach so completely that everyone else is told to wait indefinitely.
AI doesn't create value on its own. It creates value by drawing on millions of individual actions and assets. The worker whose job is automated. The small business owner whose data trains a model. The homeowner whose community hosts infrastructure. The consumer whose usage improves performance.
These are not abstract collectives. They are individuals exercising labor, property, and choice. Recognizing who is upstream is not collectivism; it is respecting individual contribution. And when value is captured by default at the ownership layer without recognition, it is not free market capitalism. It is silent expropriation.
Once you start from that premise, a different path becomes clear.
Read More: Watch: Mamdani's Chilling Inaugural Remarks Are a Harbinger of Trouble to Come
A Practical Way Forward
We need progress to pay people early instead of telling them to wait it out. That doesn’t require bans or government micromanagement. It requires designing systems that respect individual contribution before delayed upside turns into political backlash.
If AI is powerful enough to reshape the economy, then its benefits should be visible early, automatic in structure, and grounded in individual contribution.
When productivity increases, individuals whose work is displaced or augmented should share in the gain. When data is used, individuals and businesses should be treated as contributors rather than free inputs. When infrastructure is built, host communities should see direct benefits rather than just disruption.
This is not socialism. It is system design that respects property, contract, and choice. Individuals cannot be expected to build the future if the systems they operate in extract value first and promise rewards later.
Critics on the left will argue that this does not go far enough and that bans and/or taxes are necessary. But bans export innovation, and after-the-fact taxation is an admission that the system was designed wrong. Critics on the right will argue that markets will sort this out on their own. We have tried that repeatedly, and delayed fixes produce resentment, backlash, and government overreach.
Designing systems to share upside early avoids both failures. It protects innovation without worshiping elites, defends markets without pretending they self-correct magically, and centers the individual without denying how modern systems extract value.
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