I’ve spent my career focused on digital acceleration and building the future of business. But lately, I’ve been haunted by a foundational question: what if the very system we’re building on is cracking?
A lot of ink gets spilled about Millennials and Gen Z—their politics, their work ethic, their "naivete." But what if their widespread discontent isn't a failure of character, but a rational response to a broken economic script?
TL:DR: The Generational Contract is Void
Younger generations aren't flocking to socialism because they're "naive"; they're doing it because the current system has failed them. Peter Thiel identifies a pincer movement: skyrocketing student debt (the "entry fee") and untouchable real estate prices (the "barrier to wealth").
This is compounded by a geographic trap: the only cheap housing is in "ghost towns" with no jobs. Why? Because in a service economy, your house isn't just a home—it's your primary "tool of production." To access high-value jobs in tech or finance, you must live in a few hyper-expensive "superstar cities."
This creates a permanent renter class with no stake in the system. The establishment ignores this at its own peril.
The 70% Problem: Why "Capitalism" Failed the New Generation
Peter Thiel recently highlighted a stunning statistic: 70% of Millennials in the US say they support socialism.
The knee-jerk reaction from many leaders is to dismiss this as youthful idealism, entitlement, or a lack of understanding. Thiel’s analysis is far more chilling: it’s not ideology, it's economic necessity.
Think about the "generational compact" we offered them. It was a simple, post-war script:
- Work hard in school.
- Go to college (and take on "good" debt).
- Get a good job.
- Buy a house and build equity.
- Accumulate capital and enjoy the benefits of the system.
Now, look at the reality of that script in 2025. "Good debt" for college has become an astronomical, life-altering burden. And the primary tool for wealth creation—real estate—is no longer just expensive; it’s a fantasy.
When a generation is systematically locked out of accumulating capital, why would we expect them to defend the system? As Thiel puts it, "If you proletarianize young people, you shouldn’t be surprised they eventually become communists."
They have no stake in the game. The contract has been breached.
The Fallacy of "Just Move": Why a Free House in the Countryside is Worthless
The common retort is, "If you can't afford the city, just move!" We all hear the stories—you can get a free house in rural Japan or a massive property in a struggling industrial town for the price of a closet in New York or Hong Kong.
This argument willfully ignores the most fundamental truth of our modern economy.
A house is no longer just a place to live. For most of us in the service economy, a house is a tool of production.
In the 20th century, a farmer needed fertile land. A factory worker needed a machine. In the 21st century, a software engineer, a financial analyst, a marketer, or a graphic designer needs one thing above all: proximity.
You must be near the ecosystem. You must be near the high-value clients, the corporate headquarters, the venture capital, and the government centers.
A beautiful, cheap house in Hokkaido is worthless as a production tool because the economic opportunities aren't there. You can't get a job at a global bank or a major tech firm from a remote village. The market is honest: that free house is priced at zero because its economic value is zero (or even negative).
This is why people endure horrific living conditions—tiny, subdivided flats in Hong Kong or multi-tenant shares in London—just to be present. They aren't paying for shelter; they are paying for access. They are paying rent on their "tool of production."
The Great Siphon: How "Superstar Cities" Are Draining the World
This brings us to the core problem: globalization and the tech revolution didn't flatten the world. They centralized it.
Wealth and opportunity have become incredibly concentrated in a few "superstar cities": Silicon Valley, New York, London, Tokyo, Taipei, Singapore. These hubs act like giant economic siphons, pulling in all the talent, capital, and growth from the surrounding regions.
As these cities boom, they create a vicious feedback loop:
- High-value industries (tech, finance) cluster, creating high-paying jobs.
- Talented people must move there to compete for those jobs.
- This massive influx drives housing and rent prices to impossible levels.
- The only people who truly "win" are those who already own the "production tools"—the landlords and property owners.
Meanwhile, the old industrial cities—the Detroits or the Kytakyushus—are hollowed out. They become ghost towns. Young people born there have no choice but to leave and become rent-paying "production units" in the nearest superstar city.
This is the zero-sum game Thiel describes. The economy has stopped growing in a distributed way and is now just a massive transfer of wealth from young renters to established, city-based asset owners.
This is why the political world feels so volatile. When the economy becomes a zero-sum war, politics becomes a zero-sum war.
My Take as a CEO
As a tech leader, I see this as the single greatest systemic risk we face. We are building our digital future on a foundation of generational resentment. We're telling the brightest minds to get advanced degrees, only to trap them in a system where they can never build a financial foundation for themselves.
We can't solve this by telling them they're "entitled." We have to recognize that the script is broken.
Thiel’s final warning to the establishment is one we should all heed: If your only answer is to call the new generation's ideas "radical" and "absurd" without offering any solution to the debt and housing crisis, you are proving their point.
And you will continue to lose.
