tensorgami

The structural history of the Western institution since 1940 is, at its core, a history of transaction costs. As the economist Ronald Coase articulated in his seminal work on the nature of the firm, organizations exist to internalize the friction of the market, to coordinate labor and information when the cost of doing so across open networks is prohibitive. For nearly a century, the solution to this coordination problem was the hypertrophy of the “Managerial Class,” a vast stratum of cognitive laborers occupying the band. These individuals, administrators, compliance officers, and academic bureaucrats, function not as creators of value, but as biological middleware. They are the “Human API,” designed to route information between silos, format data for executive consumption, and enforce process compliance. However, the emergence of enterprise-grade Agentic AI marks the terminal phase of this interregnum. We are witnessing the collapse of the “Coasean floor,” a structural shift that renders the primary utility of the credentialed manager, information routing, economically null. The ensuing cultural hysteria, manifested as “woke” ideological enforcement, is best understood not as a moral awakening, but as the collective psychic defense of a class facing its own obsolescence.

The distinction between Generative AI (which synthesizes content) and Agentic AI (which executes workflows) is critical to understanding this displacement. When a computational agent can autonomously audit a ledger, reconcile a global supply chain, and navigate regulatory frameworks without latency or ego, the “email job” is revealed as an inefficiency that existed solely due to technological limitations. As the cost of coordination approaches the asymptotic limit of zero (), the economic justification for the “Coordinator Class” evaporates. The result is the rapid bifurcation of the economy into a “barbell” distribution: a hyper-productive elite of Architects, high-agency synthesizers and owners of compute, and a grounded class of Physicals, whose interaction with the material world remains resistant to automation due to Moravec’s Paradox. The hollow middle, once the secure domain of the credentialed bourgeoisie, faces immediate liquidation.

This economic reality is mirrored by a profound devaluation of the academic credential, the primary production facility for the managerial elite. The expansion of the doctoral pipeline has subjected the academy to Price’s Law, which dictates that of the productivity in a domain is generated by the square root of the number of participants (). As exploded, the density of genius collapsed. The Ph.D., once a proxy for the outlier capable of paradigm-shifting insight, has devolved into a certificate of conscientiousness. This shift privileges “Normal Science” (in the Kuhnian sense) over revolutionary discovery, filling institutions with researchers who optimize for metrics rather than truth. In rigorous fields like geometric analysis, this dilution is visible and fatal. The ability to solve the Ricci flow equation, , requires a raw processing power that cannot be simulated by diligence alone. When the “midwit” enters these domains, they are confronted with the brutality of objective verification: the theorem is either true, or it is not.

It is specifically this confrontation with “The Real,” the unforgiving binary of competence, that drives the current ideological derangement. Unable to compete on the vertical axis of General Intelligence (), the obsolete intermediary migrates to the horizontal axis of Moral Intelligence. This is the mechanism of “status laundering.” By adopting and enforcing complex, unfalsifiable ideological frameworks, such as critical theories regarding gender or equity, the managerial class creates a new game in which they possess the advantage. In this constructed reality, rigor is reframed as exclusion, and objective merit is deconstructed as a social fiction. This allows the administrator to invert the hierarchy: the mathematician who solves the problem is suspect, while the bureaucrat who polices the language of the solution is virtuous. Ideology, in this context, is not a pursuit of justice but a form of rent-seeking, a desperate attempt to artificially reintroduce friction into a system that is trying to eliminate it.

The visceral, existential rage often observed when these “luxury beliefs” are challenged, the hysteria regarding “safety” and “harm,” is diagnostically significant. It signals a phenomenon known to psychologists as “Identity Fusion,” where the individual’s self-concept becomes inextricably merged with the group dogma. For the Architect, an idea is an external object to be inspected; for the Intermediary, the ideology is a prosthetic personality. To critique the bureaucracy is to threaten the host’s biological survival. The “moral moat” they dig around their institutions is a defensive fortification designed to protect a depreciating asset class from the liquidity of the market. They are attempting to outlaw the competence gap because they can no longer cross it.

Ultimately, the West is undergoing a painful correction. The Agentic shift is a deflationary force that will strip away the administrative surplus funding these ideological projects. The “culture war” is, in reality, the death throes of a clerical caste realizing it has been priced out of existence. As the surplus evaporates, we will likely see a restoration of “hard” reality, a world where value is determined by the ability to architect systems or manipulate matter, and where the “human middleware,” having served its historical purpose, quietly exits the stage.

References

Burnham, James. 1941. The Managerial Revolution: What is Happening in the World. New York: John Day Company.

Coase, Ronald H. 1937. “The Nature of the Firm.” Economica 4, no. 16: 386–405.

Kuhn, Thomas S. 1962. The Structure of Scientific Revolutions. Chicago: University of Chicago Press.

Park, Michael, Erin Leahey, and Russell J. Funk. 2023. “Papers and Patents are Becoming Less Disruptive over Time.” Nature 613: 138–144.

Price, Derek J. de Solla. 1963. Little Science, Big Science. New York: Columbia University Press.

Swann, William B., Jr., et al. 2009. “Identity Fusion: The Interplay of Personal and Social Identities in Extreme Group Behavior.” Journal of Personality and Social Psychology 96, no. 5: 995–1011.