Against Efficiency

This inequality is a direct reflection of the growing dominance of corporations themselves. In the second quarter of 2026, corporate profits reached 18% of national income, their highest level since World War II. At the same time, labor’s share of national income sank to its lowest level since the 1950s, on a path to reach post-WWII lows soon. The dollars that workers are no longer earning are going directly into corporate profits, and from there, into the pockets of investors. The gap between the ultra-rich and everyone else is real, but a more politically meaningful divide in our two-tier economy is between those who own a significant amount of financial assets and those who don’t. If you own a lot of stocks, the rise in corporate dominance benefits you; if you live off labor income, it hurts you. It is becoming more and more true that if you aren’t an investor, you are guaranteed to fall behind.

Free marketeers like to point out that the majority of American households own stocks. But the median value of those holdings is well under $100,000, meaning that the stock market is far less important to their well-being than their paycheck from work is. Nearly three-quarters of financial assets are held by the richest 10% of Americans, and half of those assets are held by the top 1%. This is why the story of the 1% versus the 99% never really panned out. In reality, it is the richest 0.1% guiding the ship — but they have the tacit support of a hundred times their own number, the 10% of Americans for whom the rising fortunes of financial assets (and, therefore, the decimation of labor power) are everything.

Adding to the quandary, the stock market’s fortunes are now inextricable from the success of the artificial intelligence (AI) buildout, which the Wall Street Journal calls ​“the biggest economic bet in U.S. history.” Even if we broaden stock ownership or create a sovereign wealth fund that pays out to all Americans, we will not restore the balance of power between capital and labor. Instead, we will only succeed in raising the number of Americans whose finances are a bet on the success of the most labor-hostile technology ever invented.

This is the trap we find ourselves in: Economic inequality is tied to stock ownership. Rising stocks depend on increasing the dominance of corporations over workers, and on a future dominated by automation, which itself will likely destroy millions of jobs and concentrate wealth in fewer hands. There is no exit from this maze that does not involve throwing away the rule book and climbing over the walls.

The discomfort with where our economy is going is not just mathematical. It is also aesthetic. Is this the world we want to live in? One of maximization of profits, minimization of friction, the lack of need for independent human thought, the outsourcing of all problems to the machine? A world in which total wealth grows in direct proportion to how successful we are at automating ourselves into irrelevance? Corporate profits, corporate power and AI all flourish in a world of maximal efficiency. What dies in such a world? Individual working people. Democracy. And all of the quirks that make humanity, for all of our flaws, charming.

Democracy is inefficient. By necessity. Involving everyone, talking to everyone, listening to everyone, giving everyone a voice and a choice — these things are a slog, far harder than concentrating power into a few hands and making everyone else follow. For the same reasons, labor unions are much less efficient than corporations. Unions are democratic, while companies are not. Totalitarian regimes are notoriously both efficient (from the perspective of those in charge) and brutal. Democracies are messy.

Machines are efficient. Humanity is not. Humans meander, go off on tangents, stop to smell the roses instead of charging toward their next goal with blinkered determination. We — you, me, your kids, your family, working people, human beings with all of a human’s varied interests and distractions — will never beat corporations, machines and algorithms in a contest of efficiency. We must recognize that we are destined to lose and play another game instead.

Human inefficiency is a positive value. Not in the land of pure economics, and not in terms of stock market wealth and corporate perfection, but as a matter of living on the real, tangible planet that we occupy. We want to have art. We want to take naps. We want to sing and wander around and get lost and daydream. We do not want to slowly see all of these inefficiencies purged from our lives in the name of serving corporate interests more effectively. If we want to protect our ability to be human, it is vital that we value inefficiency as a positive good.

This means that the institutions that exist to protect the power of humans — unions, for example — must not allow themselves to be subordinated to the values of financial markets. Unions may clamor for worker power, but if all of their pension money is invested in stocks, their financial fortunes depend on worker power declining. The financial incentives of companies on the stock market are aligned with AI hyperscalers whose business model is to replace union workers with robots. This is inescapable. Unions must think about redirecting their pension wealth into direct investments in things like affordable housing and cooperatively owned businesses, which can produce profits without falling prey to the trap of the stock market’s incentives.

I admire corporations’ shocking effectiveness at ingesting the chaotic world of humanity and spitting out a well-organized puree of efficiency. We can learn from their methods. The most important thing we can learn is that their activities should be hemmed in quite strictly, so they don’t spill out and start making our entire world bland and uninteresting.

Wealth creation is an important part of human flourishing. But modern America has focused itself to an unhealthy degree on the well-being of financial assets, to the detriment of human well-being. Economics is an alluring field because of its ability to quantify progress. That quantification, though, has the perverse effect of penalizing things that we all actually like: aimless exploration, passion, love, creativity with no particular purpose. The things that make life worth living. Inefficiency. Put it on a pedestal and worship it. There are profits to be had in destroying it. If it’s successfully eradicated, we might as well just leave the world to the machines.