The scapegoats are everywhere. Immigrants are stealing jobs. Tourists are driving up housing costs. China is undermining our economy. The government is failing us. Pick your villain – there’s no shortage of targets for our collective rage.
But while we’re busy pointing fingers at each other, two massive forces are quietly dismantling the economic foundations that made democratic prosperity possible. And because addressing them would require confronting the very structure of our economic system, politicians find it much easier to blame foreigners, minorities, and each other.
The real culprits? Corporate rent-seeking and artificial intelligence. Together, they’re creating an economic vise that’s crushing working people while making effective governance nearly impossible.
When Extraction Replaces Creation
Rent-seeking – the practice of extracting wealth without creating value – has metastasized throughout our economy like a cancer. Your landlord raises rent not because they’ve improved the property, but because they can. Your health insurer denies coverage not to improve care, but to boost profits. Tech platforms extract data and attention while producing little of tangible value. Financial firms trade derivatives that exist only to generate fees.
This isn’t capitalism creating wealth – it’s capitalism eating itself. When housing becomes a speculative asset rather than shelter, when healthcare becomes a profit center rather than a service, when basic needs become vehicles for extraction, the whole system starts consuming its own foundation.
The result is predictable: costs rise faster than wages, debt explodes, and working people get squeezed harder each year. But instead of addressing rent extraction, politicians offer tax cuts that help landlords more than renters, or subsidies that end up in corporate pockets. The fundamental dynamic – value extraction without creation – remains untouched.
Meanwhile, young people watch their prospects evaporate. They can’t afford houses because housing has been financialized. They can’t afford healthcare because it’s designed to extract maximum profit. They can’t find stable work because gig platforms have destroyed employment security. Their response? Increasingly, they’re opting out of the system entirely – delaying marriage, avoiding homeownership, questioning whether democracy can deliver for them at all.
The AI Acceleration
While rent-seeking drains the economy from within, artificial intelligence threatens to eliminate the jobs that remain. We’re not talking about the distant future – AI is already automating customer service, data analysis, content creation, and financial services. Goldman Sachs estimates 300 million jobs globally could be displaced.
This creates a catastrophic contradiction at the heart of capitalism: the system depends on workers being consumers, but technology is eliminating workers faster than new jobs are created. Even when AI creates new roles, they’re often lower-paid or require skills that displaced workers don’t have.
Politicians promise to “bring back manufacturing” or “create good-paying jobs,” but they’re essentially promising to hold back the tide of technological progress. It’s like campaigning against the industrial revolution while it’s already happening.
The cruel irony is that AI could solve many of our problems – it could reduce healthcare costs, improve education, and free humans from drudgery. But in an economy organized around rent extraction, AI just becomes another tool for the wealthy to extract more value while providing less in return.
Why Democracy Is Failing
Here’s why this matters for governance: both rent-seeking and AI displacement operate at a scale and speed that democratic institutions can’t match.
Rent-seeking is embedded in the structure of property law, financial regulation, and corporate governance. Changing it requires taking on every powerful interest group simultaneously – real estate, finance, healthcare, tech platforms. No elected official has the mandate or the power to restructure the entire economy, especially when campaign funding comes from the very forces they’d need to confront.
AI displacement is even worse because it’s largely happening outside government control. Private companies are automating jobs based on profit incentives, not social considerations. By the time politicians notice the disruption, millions of jobs have already vanished. And the solutions – universal basic income, massive retraining programs, shorter work weeks – require the kind of long-term thinking and institutional cooperation that our polarized system can’t deliver.
So instead of addressing these systemic forces, politicians default to scapegoating. It’s much easier to blame immigrants for job losses than to admit that AI is eliminating entire categories of work. It’s simpler to blame tourists for housing costs than to confront the fact that housing has been turned into a financial commodity. It’s more politically viable to blame China for economic problems than to acknowledge that our own corporations are extracting wealth without creating value.
The Scapegoat Trap
This creates a vicious cycle. Real problems demand systemic solutions, but systemic solutions require confronting powerful interests and admitting uncomfortable truths about how our economy actually works. Politicians can’t deliver on these challenges, so they redirect anger toward available targets.
The result is political theater that gets more extreme over time. Each election cycle, the promises get bigger and the villains more demonized, but the underlying economic pressures continue to build. Young people become more disillusioned. Working families get squeezed harder. Social trust erodes as people lose faith in democratic institutions.
Meanwhile, the forces actually driving the crisis – rent extraction and technological displacement – operate largely unimpeded. Corporate concentration increases. AI automation accelerates. The wealth gap widens. The problems that created the political instability in the first place get worse, not better.
Beyond the Blame Game
Breaking this cycle requires acknowledging some uncomfortable truths. The economic system that created middle-class prosperity in the 20th century is being undermined by forces that operate faster and more powerfully than democratic governance can respond to.
We can’t vote our way out of technological unemployment. We can’t elect leaders who will magically stop rent-seeking without confronting the property relations that enable it. We can’t restore 1950s economic conditions with 2020s technology and 21st-century global integration.
This doesn’t mean democracy is doomed, but it does mean we need new approaches that match the scale of the challenge. That might mean public ownership of essential services that have been turned into rent-extraction vehicles. It might mean treating AI development as a public utility rather than a private profit center. It might mean fundamentally restructuring how we organize work and distribute resources in an age of technological abundance.
But first, we need to stop falling for the scapegoat trap. Every minute we spend arguing about immigrants or tourists or foreign trade is a minute we’re not spending on the forces that are actually reshaping our economy. Every election cycle we waste on promises that can’t be kept within existing constraints is another cycle where the real problems get worse.
The choice is becoming stark: we can either develop new institutions capable of managing rent-seeking and technological disruption, or we can continue the increasingly desperate search for someone to blame as the system continues to unravel.
The scapegoats aren’t the problem. The system that needs scapegoats to function is.
