At the dawn of a great transformation

Audio report: written by reporters, read by AI

Kim Byung-yeon

The author is a chaired professor of economics at Seoul National University. 

In the early 19th century, Britain stood at a crossroads of progress and division, dominance and collapse. Adam Smith’s “The Wealth of Nations” (1776) helped legitimize capitalism, which until then had often been viewed with suspicion and fear. Around the same time, the steam engine revolution transformed society. Regardless of social status or education, those with technical skills and capital could now become wealthy.

But the changes also produced severe social conflict. Workers displaced by mechanization launched the Luddite movement, destroying factory machinery and attacking employers. While the rich built temple-like mansions with their enormous fortunes, children and pregnant women worked more than 12 hours a day in coal mines. Britain was also engaged in fierce geopolitical rivalry, fighting Napoleon’s France for a decade. Had Britain lost the Battle of Waterloo, the British Empire might have collapsed, and the course of world history could have changed.

Another era of upheaval has now arrived.

The 19th century witnessed the Industrial Revolution, the spread of capitalism and democracy and intense competition for global supremacy. Any one of these developments alone could have transformed the world. The fact that they unfolded simultaneously reveals the scale of the disruption.

Today, similar forces are converging once again. The possibility of a massive industrial revolution driven by AI, the weakening of democracy and capitalism and the intensifying rivalry between the United States and China are becoming closely intertwined. Global historical transformations emerge under such conditions. Enormous opportunities coexist with grave risks, and volatility and uncertainty shake societies around the globe. The fate of both individuals and nations may depend on how successfully they endure and use this transition to their advantage. The question is whether we are prepared.

The AI revolution may bring broader and faster creative destruction than the steam engine revolution ever did. Humanity has long coexisted with animals that are stronger than humans, but never with beings that are more intelligent. That reality is now changing. A widening divide could emerge between a small number of wealthy people profiting from creative industries and a large population engaged in physical or emotional labor that intelligent robots cannot easily replace.

The destruction of jobs is also likely to proceed far more quickly. Physical machinery takes time to spread, but digital technologies move almost instantly across networks. During what could be decades of transition before a new employment ecosystem stabilizes, mass unemployment, polarization and resulting social and political conflict may prove unavoidable. If ethical standards for AI are not established in time, direct conflict between humans and AI could even emerge.

The U.S.-China rivalry is also likely to persist for decades, amplifying the instability created by technological transformation. Both countries possess vast territories and populations, giving them exceptional resilience and abundant resources. They differ fundamentally from earlier powers such as Britain, which depended heavily on colonies, or what was once the Soviet Union, which relied on satellite states in its rivalry with the United States.

Both countries also face serious internal vulnerabilities. China’s greatest risk lies in a potential collision between economic development and political rigidity. After the Industrial Revolution, France, Germany and Russia failed to resolve similar contradictions and descended into crisis. Their economies expanded through capitalism and industrialization, but unlike Britain, their outdated political systems struggled to absorb rising social tensions. France and Germany projected their frustrations outward through war, whereas Russia experienced a socialist revolution.

China now faces a similar question: What can its government offer citizens who increasingly demand political rights? In the past, economic growth and rising incomes sustained public support, but this formula is weakening. Worse still, the technology-led growth strategy that Beijing now promotes may reduce jobs rather than create them.

The United States also faces mounting weakness. Democracy, the foundation of its stability and prosperity, is being shaken by polarization. If already severe inequality deepens further under the AI revolution, can U.S. democracy endure the strain?

What about Korea? Ultimately, democracy remains both the safeguard and the solution. But conservatives have weakened the rule of law while the liberal ruling party has undermined checks and balances. Can such politics guide the nation through an age of upheaval? Korea now stands at a fateful crossroads.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.