Dissolving the middle class into the lower class

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AI is making capitalism alarmingly effective. Forget just the jobs it replaces; the real power is how it targets our earned income. AI constantly uses our data to figure out exactly what we’ll pay, allowing it to subtly increase prices based on our specific habits and needs. This new level of data-driven market efficiency is happening right under our noses, making us less aware of how well AI knows us and how much it impacts our spending.

Companies with built-in pricing power like subscription services or on-demand platforms such as Uber, Lyft, or Instacart are now leveraging this data-driven advantage. They can feed consumer data to AI, which then calculates the maximum price each person is willing and able to pay, ensuring the highest possible charge for a product or service. The same item or ride can have wildly different prices for different customers based entirely on their habits, their needs, and an evolving set of personal data that remains invisible to the buyer. This impacts prices in the whole sector it operates in meaning every transportation service and every grocery store and restaurant will have to competitively adjust pricing up instead of down because algorithms are trained to maximize profits on each individual not for the company in general.

This AI-driven personalized pricing is directly tied to the financial reality of public companies pressured for continuous growth. Traditional technology helped companies calculate margins and profits, but AI takes this to an extreme. Under the constant demand from investors to show greater returns than the previous four months, these companies utilize AI's optimization capabilities. This allows them to systematically increase the price of the same product or service, often without any change or added value by varying charges for individual customers based on their calculated willingness to pay, thereby ensuring a continuous, data-fueled trajectory of revenue growth.

These invasive pricing strategies are made possible by the very devices we use: our phones and computers act as the ultimate surveillance technology. They gather every aspect of our lives from our interests, personalities, movements and spending habits which is then stored as data and refined into a precise digital identity. This invisible processing of our personal data results in an altered reality where visually identical products and service are priced separately for each individual, with the consumer having no way of knowing the true cost. This is altering the financial reality of the middle class based on invisible, obfuscated data processing.

The New York Times pointed out that price tags are our necessary defense, enforcing one price for everybody and driving genuine market competition. Manual, in-person shopping lacks the technical insights to adjust prices on the fly, forcing companies to maintain a standardized price. However, today, consumers are digitally siloed within their personal ecosystems. Through our phones we give companies full access to our habits. This data is filtered through AI and then leveraged against us, allowing companies to customize products and pricing models to determine the absolute highest amount each person is willing and able to afford.

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A massive wealth transfer is quietly underway. It benefits those who control, implement, and utilize this technology to generate enormous profits, while the consumer, using the same technology for convenience, understands its mechanics less and less. AI is taking the established rules of capitalism based on advertising and brand loyalty and perfecting them to a new, profit-maximizing degree. This transfer is largely unseen, driven by the incremental inflation of prices on literally everything you buy from necessities like food and toothpaste, to major expenses like housing and transportation, and every subscription service in between.

The information gathered by firms and the tools they use create a profound asymmetry against the public's understanding of the effect on their lives. Political leaders such as Donald Trump are reluctant to curb these practices, and even tacitly allow them because corporations are maximizing profits within a capitalist system that benefits the economy, American businesses and elite class. As technology advances, corporations deploy it in increasingly complex ways. This profit is drawn directly from the working and middle classes, who are compelled to buy necessities, and whose fully documented habits and needs are used by algorithms to determine what we can afford. We live in a world where our survival needs and lifestyles are now fully transparent to algorithms controlled by corporations that dictate individualized pricing across all goods and services.

We must accept that little can be done outside of actively limiting our digital participation and revert to offline, personal devices that aren't constantly feeding data servers. Salvation lies in the manual structures: the fixed price tags, inventory systems, and local, physical stores that cannot adjust prices on the fly. This limits the data-driven manipulation of competitive pricing. Communities in suburbs and rural areas, where these technologies have less daily impact on transactions, may become the last bastions where the remnants of the middle class can survive the relentless, data-driven extraction.

Shifting over from individual consumer technology to large-scale, international economic policy, Canada also has a spending problem. Canada is spending way too much on investments that don't produce a return in Canada. The country's economic woes are intensified by a misallocation of capital that sees both government funds and private corporate profits leaving Canada for more robust investment climates abroad. This capital flight increases inflation and drives up costs for the working middle class. Meanwhile companies in Canada exporting can make more money because the cost of goods is rising, so the companies and the owners make more money, and instead of reinvesting in their business/the canadian economy and hiring more Canadian workers with their investment expansions of operations , they go and do it in the US, they buy us stocks or invest in american companies operations where trump is pro-business and deregulating to allow more business and manufacturing to occur. Carney knows this and is very investment savvy, he is taking taxpayer money, canadian government money, and giving government funding to Canadian firms for building housing, energy, manufacturing etc. that ends up getting invested in American factories, plants and related businesses because their policies and outlook for growth are much higher than in canada because of what trumpos doing with onshoring manufacturing and making America an industrial and manufacturing country that produces goods to sell everywhere else.

While Canada's economy benefits from increasing exports, rising prices, and a stronger currency, factors that normally suggest prosperity, the key failure is the cash flow issue. The profits generated are not being reinvested to produce returns in Canada, causing the country to grow poorer despite successful business activity. This system creates a perverse incentive that benefits business owners and the wealthy elite, who see their capital grow elsewhere. Meanwhile, this capital flight contributes to inflation and unaffordability, which disproportionately harms the working class who must pay higher prices for goods and necessities with their fixed wage

This economic situation combined with AI is doubling pressures that cause prices to go up and contribute to the dissolution of the middle class. The squeeze on regular people is a compounding effect. Inflation, driven by government spending and monetary policies, already pushes prices up nationwide. When you add the improving AI technology which surveils consumer habits and learns exactly what individuals can afford, you double the wealth transfer effect. This creates a system where an ever-increasing amount of capital is shifted from the working and middle classes directly to the upper class, rapidly widening the wealth gap so subtly and reality altering that we don’t even realize what’s happening.