For a while, it seemed as if history had ended. Not in the banal sense that nothing would happen any more. Events would continue, politicians would embarrass themselves, wars would break out, markets would wobble, technological wonders would appear and human beings would still find ways to queue badly. But the great ideological argument appeared to have been settled. Communism had failed. Liberal capitalism had won. The market had not merely proved more efficient; it had acquired a moral aura.
This last step matters. It is one thing to conclude that the Soviet Union was authoritarian, stagnant and doomed. It is quite another to conclude that capitalism, in the form developing in the West in the 1990s, was therefore morally vindicated. Yet that is largely what happened. The collapse of communism did not simply remove a geopolitical rival. It removed the restraint that had forced Western capitalism to behave itself.
During the Cold War, Western governments had strong reasons to ensure that capitalism remained attractive to ordinary people. The postwar settlement was not built solely because elites had suddenly discovered compassion in a forgotten drawer. Welfare states, strong trade unions, public housing, mass education, stable employment and rising living standards were also part of an ideological competition. Western capitalism had to offer the masses something better than insecurity and exploitation, because otherwise some of those masses might begin to look eastwards. In much of Europe, this was not a theoretical fear. Communist parties were strong in France and Italy. Trade unions could bring countries to a halt. Even moderate social democracy spoke in the language of class, solidarity and collective provision. Capitalism had to compete for legitimacy.
The Baby Boomers grew up inside this settlement. Many of them absorbed its radical possibilities. They marched against war, challenged authority, distrusted corporations, supported civil rights, embraced feminism, experimented with new ways of living and often imagined themselves as the generation that would transcend the narrowness of their parents’ world. In their youth, many leaned left, or at least liked to think they did. They had grown up in the shadow of fascism, under the pressure of the Cold War and amid the moral seriousness of decolonisation, Vietnam and civil rights. History, for them, was a vast ethical drama.
Then communism collapsed.
For many Boomers, especially in the West, this seemed to resolve the drama. The Soviet system had failed. The Berlin Wall had fallen. Eastern Europe had opened. China was moving into the world economy. The old anti-capitalist alternatives appeared exhausted, compromised or absurd. The lesson many drew was not simply that Stalinism had failed. It was that capitalism had won because capitalism was right. That was a very large leap, and perhaps one of the most consequential leaps of the late twentieth century.
It allowed a generation that had once seen itself as radical to reconcile itself to markets, privatisation, deregulation and financialisation. Not all at once, and not always with crude Thatcherite enthusiasm. Many retained socially liberal instincts. They still supported feminism, gay rights, anti-racism and environmental causes. But economically, much of the Western centre-left moved sharply into market-conforming territory. Blairism, Clintonism, Schröderism and their equivalents elsewhere did not present themselves as betrayals of the old left, but as its modernisation. The future belonged to globalisation, flexible labour markets, financial innovation and sensible people in expensive suits saying “reform” with priestly confidence.
For a time, it worked, or seemed to. Consumer goods became cheaper. Travel became easier. Inflation stayed low. The internet arrived. The old industrial conflicts faded. The 1990s and early 2000s were full of a particular elite optimism: the belief that market capitalism, liberal democracy and technological progress would reinforce one another indefinitely. The world was not perfect, but the direction of travel seemed obvious. The future was open, global, managerial and increasingly frictionless.
Then came 9/11. It is hard now, after the failures of the Iraq War, the long Afghan catastrophe and the exhausting spectacle of the War on Terror, to recover quite how deeply 9/11 shocked the Western political class. For many Boomers, it was not merely a terrorist attack. It felt like the violent return of History. The post-1989 world had seemed to promise convergence: countries would gradually join the global order, markets would spread prosperity, liberal norms would advance and old ideological conflicts would fade. Suddenly there was an enemy that seemed to speak in older, darker, more absolute terms.
That is why the reaction was so disproportionate. 9/11 could have been treated as a horrific act of terrorism requiring intelligence work, policing, targeted military action and sober international cooperation. Instead, it was interpreted through the inherited moral templates of the twentieth century. The Boomers had grown up with fascism as ultimate evil and communism as existential rival. When the towers fell, many reached instinctively for that scale of meaning. This was not crime. This was not even merely terrorism. This was a civilisational struggle. History had restarted, and they believed they knew how such struggles had to be fought.
The result was disastrous. Afghanistan became an endless war. Iraq became a moral and strategic calamity. The West exhausted itself politically, militarily and intellectually. The same generation that had learned from 1989 that capitalism was morally vindicated learned from 9/11 that liberal order had enemies that had to be smashed. It was a dangerously intoxicating combination: market triumphalism at home, militarised moral certainty abroad and an increasing unwillingness to question the economic model that had supposedly won the twentieth century.
Then came 2008. The financial crisis should have shattered the post-1989 consensus. Here, at last, was proof that the victorious system had become unstable, predatory and absurd. Banks had gambled recklessly. Financial institutions had wrapped risk in jargon, sold it as sophistication and built towers of leverage on foundations of vapour. If medieval theologians had been asked to examine collateralised debt obligations, they would have requested better Latin and then condemned the lot.
A real reckoning might have followed. The crash could have led to a serious rethinking of financial capitalism, housing markets, debt, inequality and the relationship between democracy and capital. It could have punctured the idea that markets were self-correcting moral machines. It could have forced Western societies to ask whether they had mistaken asset inflation for prosperity, liquidity for civilisation and financial complexity for wisdom.
But by 2008, the people in charge were psychologically and politically incapable of treating the crisis as an indictment of the system. If capitalism had won the great ideological struggle, then the crisis could not mean capitalism had become fundamentally corrupt. It had to be a technical malfunction. The plumbing had failed. The pipes had to be repaired. Confidence had to be restored. The system had to be stabilised.
That word, “stabilised”, is the key. The response to the financial crisis was not renewal but preservation. Banks were rescued. Interest rates were slashed. Quantitative easing began. Central banks bought assets, suppressed yields and pushed money through the financial system. Again, one should not pretend the alternative would have been painless. A full financial collapse could have been politically and socially terrifying. But the chosen solution had consequences. It protected institutions. It preserved asset values. It inflated houses, shares and bonds. It rewarded those who already owned things and punished those trying to acquire them.
QE postponed the reckoning. Instead of allowing asset prices to reset, it helped freeze the existing order in place. Housing did not become broadly affordable again. The financial system was not fundamentally transformed. Productivity remained weak. Wages stagnated in many places. Public services were squeezed. Younger people were told that the economy had recovered while the basic milestones of adulthood receded before them: secure work, a home, children, savings and the quiet dignity of not living as an unpaid intern with a master’s degree and a reusable coffee cup.
The generational consequences were enormous. The Baby Boomers had bought homes when housing was far cheaper relative to incomes. Many had benefited from free or cheap higher education, strong wage growth and secure pensions. Then, in later life, the post-2008 settlement inflated the value of the assets they had already acquired. A generation that had prospered under a mixed, socially constrained capitalism ended up defending a far harsher financialised capitalism that would have made its own youth much more difficult.
This is the part that makes the story so bitter. The Boomers did not simply become conservative because they grew old. They became conservative because the system they had come to see as morally validated also happened to validate their own life stories. Their houses rose in value. Their pensions depended on markets. Their sense of prudence became entangled with asset protection. Capitalism was not merely an ideology. It was the thing that proved they had made good choices.
Politicians of younger generations learned the lesson. Gen X leaders such as Obama and Cameron did not really overthrow Boomer politics. They governed within it. The voters who turned out, the homeowners who had to be reassured, the pensioners whose confidence mattered, the markets that had to be calmed and the banks that could not be allowed to fail all pointed in the same direction. Do not transform. Stabilise. Do not risk collapse. Preserve the settlement.
So the consequences of the financial crisis were delayed. They were shifted forward into the future, hidden beneath low rates, inflated assets, austerity, precarious work and generational resentment. The system did not solve its contradictions. It refinanced them.
Then came the pandemic, which briefly revealed how much states could still do when they decided the emergency was real. Governments spent vast sums, paid wages, restricted movement, supported firms and intervened directly in ordinary life. Policies that had been dismissed as impossible suddenly became possible. But once again, the emergency mostly ended in restoration. Asset markets recovered. House prices remained high. Public debt rose. Public services remained strained. The old order survived, more brittle but still standing.
And now comes AI. This is why the timing feels so dangerous. A society facing a major technological transformation would ideally enter it with low inequality, affordable housing, resilient public services, high trust, strong education systems and enough security for people to retrain, experiment and adapt. Instead, we are entering the AI revolution with inflated asset prices, exhausted welfare states, ageing electorates, fragile public finances, expensive cities and younger generations already delayed, indebted and precarious.
AI threatens to reopen every ideological question that the post-1989 world thought it had buried.
What happens if human labour is no longer the central source of economic value? What happens if machines can perform not only repetitive manual tasks, but also translation, coding, design, administration, research, legal drafting, teaching support, accountancy, customer service, journalism and the thousand small acts of educated cognition that sustain the modern middle class? What happens if the entry-level jobs disappear first, leaving young people unable to acquire the experience that once justified later expertise?
The standard answer for decades has been education. If your factory job disappears, retrain. If your clerical job disappears, upskill. If your industry collapses, become more flexible. This answer was always morally thinner than its users admitted, but at least it had some plausibility when education moved people into safer cognitive work. AI weakens that promise. If cognitive work itself becomes automatable, the ladder does not lead upward. It leads into the machine room.
The question is not whether every job will vanish. That is too crude. The real question is what happens to bargaining power when employers need fewer humans, fewer juniors, fewer trainees and fewer expensive specialists. A labour market does not need to collapse entirely to become brutal. It only needs to make workers replaceable enough that their wages, security and dignity decline.
At that point, the old ideological map begins to melt. Almost every serious answer to AI-driven job loss sounds at least a little communist-y. Not communist in the Soviet sense. Not secret police, party congresses and tractor statistics. But communist-y in the deeper sense: concerned with who owns productive capacity, who receives the surplus and whether survival should depend on selling labour in a world that needs less labour.
Yet abundance will not abolish scarcity. It will merely change where scarcity lives. If AI and robotics push the marginal cost of many informational and manufactured goods towards zero, apps, books, translations, routine legal documents, software and much of what we now call “content” may become extraordinarily cheap. But land will not become cheap simply because a model can write a sonnet. The fields that grow food, the sites on which houses stand, the mines that provide raw materials, the water systems, the energy infrastructure, the attractive cities, the pleasant coastlines and the hills on which wind turbines are placed will still be finite. So will status, beauty, quiet, proximity and time. A world of abundant machine labour may therefore make ownership of land and natural rents more important, not less.
This is where the Marxist-sounding questions may lead, oddly enough, towards Henry George as much as Karl Marx. If labour ceases to be the main source of value, then taxing labour becomes increasingly perverse. If the great fortunes of the AI age derive from ownership of models, platforms, compute, energy, land, data and natural or socially created rents, then the obvious question is how those rents should be captured for the public. A land value tax, broader resource-rent taxation or some form of social dividend begins to look less like nineteenth-century eccentricity and more like the missing bridge between automation and shared prosperity. Perhaps the post-capitalist future, if it comes, will not arrive through the abolition of markets, but through the socialisation of rents.
Universal basic income, universal basic services, social wealth funds, sovereign AI dividends, public ownership of compute, shorter working weeks, guaranteed housing, stronger taxation of capital, land value taxation, resource-rent taxation, data dividends and collective ownership models all circle the same old question: if machines produce abundance while land, energy and infrastructure remain scarce, who gets the rents?
The old capitalist answer was that workers sell labour, earn wages and buy goods. But that answer only works if labour remains sufficiently necessary. If AI allows capital to produce more with fewer workers, then wages may no longer distribute purchasing power adequately. A system can be highly productive and socially disastrous at the same time. There is no contradiction there. History is full of efficient misery.
The old communist answer was that the means of production should be collectively owned. That answer failed catastrophically in the Soviet version because power concentrated, information bottlenecks multiplied, coercion replaced consent and political freedom was crushed. But the question behind it did not disappear merely because the USSR collapsed. It waited. It lingered underneath the shopping centres, the cheap flights, the rising house prices and the pleasant fiction that history had ended.
Now it is back. Indeed, it may turn out that capitalism needed communism more than it realised. Not as a model, but as a rival. The existence of an alternative forced Western capitalism to justify itself. It had to produce broad prosperity. It had to offer workers security. It had to make democratic citizenship feel materially meaningful. Once the rival disappeared, capitalism became complacent. It no longer had to compete for the loyalty of the masses. It confused victory with virtue.
The AI revolution may now force the argument open again. If productive power becomes concentrated in companies that own models, data, chips, infrastructure and platforms, then we are not heading towards a free market utopia. We are heading towards a new form of technological feudalism: platform lords, asset owners, subscription serfs and a vast population instructed to retrain indefinitely for jobs that no longer quite exist.
The alternative is to accept that automation changes the moral basis of the economy. If machines can produce more of what humans need, then humans should not have to justify their existence by pretending to be economically indispensable. But that does not mean money disappears, or that markets vanish, or that scarcity evaporates in a mist of benevolent circuitry. It means the tax base and the moral argument must move. Instead of taxing human labour as if it were still the central engine of wealth, societies may need to capture the rents from land, energy, natural resources, infrastructure, data and machine capital, and recycle them into basic security for everyone. The abundance created by AI should broaden freedom, not merely increase the valuation of a handful of firms. The point of technological progress should be fewer people trapped in drudgery, not more people trapped in insecurity while machines make the rich richer with admirable efficiency.
That, in the end, is why the phrase “the end of history” now sounds so hollow. History did not end in 1989. It paused while the winners gave speeches. It resumed in 2001 with terror and war. It demanded payment in 2008, but the bill was rolled over through QE and asset inflation. It returned again in the pandemic, exposing the fragility of states and societies. And now, with AI, it is reopening the deepest questions of all: work, ownership, distribution, dignity and power.
The reckoning was only postponed. The twentieth century asked whether capitalism or communism would organise industrial society. The twenty-first may ask something stranger: what comes after a labour-based economy when machines can perform much of the labour, but land, energy and infrastructure remain scarce? If we answer that question badly, we may end up with a world in which technology creates abundance but politics preserves scarcity. If we answer it well, the AI revolution could do what earlier automation only promised: free human beings from unnecessary toil and make civilisation less dependent on fear.
Perhaps the post-capitalist future will only become humane if we follow Henry George as much as Karl Marx. Not because land value taxation is a magic spell, although it would be pleasant if public finance occasionally contained one, but because it starts from the right question. People should own what they genuinely create. But the value created by nature, location, infrastructure, collective knowledge and social development belongs, at least in part, to everyone. In an AI economy, that distinction may become impossible to avoid.
That is the real resumption of history. Not the return of the Soviet Union, not the revival of old slogans and not some nostalgic rerun of twentieth-century class politics. It is the return of the questions capitalism thought it had defeated.
Who owns the future? Who gets the surplus? What is a human life for when it is no longer organised around work?
History has resumed. This time, it has brought machines and feudal overlords.