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AI Is Accelerating The Fourth Turning’s Institutional Meltdown

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August 19, 2025
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AI Is Accelerating The Fourth Turning's Institutional Meltdown

Authored by Bryan Lutz via DollarCollapse.com,

News headlines are focused on AI innovations. Not so much on the input, but on the output.

The good, the bad, and the ridiculously ugly parts. It’s mostly entertainment. They want the spectacle—the robot that will fold their laundry, do the dishes, and guide them to their next best purchase on Amazon. The fascinations continue even into the doom and gloom—the possibility that AI will turn on us, dropping nuclear bombs into our underwear overnight.

But not many are paying attention to this…

AI is exposing errors and accelerating the breakdown of long-standing institutions, and it is also shaping whatever comes next.

It is a sign of the times.

AI is unfolding in the midst of what The Fourth Turning describes as a decisive period of crisis. Author Neil Howe and William Strauss write:

“The Fourth Turning is a Crisis, a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one.”

In this context, the values regime propelling AI’s growth is more than just technological ideals; they are survival traits in a system undergoing creative destruction. Each value driving AI reflects the pressures, competitions, and opportunities of a world reorganizing itself for the next era.

The values regime I am talking about is not simply the values of the technocratic elite. I am talking about values that must be embodied for the sake of survival through adaptability. AI can be used for better or for worse, domination or decentralized freedom, and right now, institutions and their leaders are racing to adapt to AI’s implications.

That implication is widespread forced dismantling of institutions. It happens during crises. It happens through technological advancement. And it happens simply as the underlying feature of capitalism. Systemic collapse is happening everywhere—especially to our institutions.

Strauss and Howe write, “Fourth Turnings function as periods of ‘creative destruction’ for social and political institutions.”

One important emphasis I want to make is that the institutional breakdown and renewal which occurs in a Fourth Turning is not the typical “progress” narrative we are used to, even though that’s what we hear in the news. We see the videos, the chatbots, and the ability of the Large Language Model (LLM) to retrieve, organize, and provide an output, but what we don’t recognize is the bigger context containing all this change. That context is the Fourth Turning.

In his newest book, The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End, Howe writes about the four cycles (turnings), which move from order to chaos over 80–100 years. He explains:

“…this must be emphasized—progress is not the purpose of the saeculum. If the saeculum has a purpose, it is rather to push a society that always anticipates something better into phases of creative self-adjustment where it must, from time to time, confront something worse….The saeculum contributes to long-term progress only to the extent that it keeps society alive and adaptive.

In this sense, its purpose resembles that of natural evolution: The saeculum may or may not make us better, but it does foster our survival. It may not give any generation what it wants. But, over time, it usually gives society what it needs so that more generations will follow.”

AI may not be what every person in society wants, but it may in the end become part of the solution. It has been a long time coming. Almost thirty years ago, authors James Dale Davidson and Lord William Rees-Mogg wrote about the implications of AI in The Sovereign Individual: Mastering the Transition to the Information Age:

“Faster than all but a few now imagine, microprocessing will subvert and destroy the nation-state, creating new forms of social organization in the process.”

Where AI innovation has been the focus of headlines, subversion and destruction are the painful parts in the process of re-organization. They do not make the headlines, but that is where the new overtakes and dismantles the old, new industries are created, and control is decentralized from centralized authority to more agile firms.

That being said, here are three foundational institutions in the process of breakdown and renewal in the Fourth Turning right now.

The Traditional Corporate Structure is Broken

Over the past 100 years, the corporate structure has been built through centralization, top-down hierarchies, clear divisions of labor, and formal policies and procedures. The best place to see how companies act internally is through their hiring processes.

In the past decade, the tech industry introduced new ways of working together—like lean entrepreneurship instead of top-down processes, and flat hierarchies for faster innovation and product development.

Then, to attract new talent, companies started implementing these ideas and sentiments into their culture: open office spaces without cubicles, free snacks, and drinks on Friday with the bosses around the foosball table.

Now AI is democratizing this same process for individuals while companies attempt to adapt. The results are nothing short of a clown-world report. AI is doing nothing but amplifying the power of the masses to produce AI slop.

Imagine receiving 2,000 applicants for one job posting, with 1,800 of them having produced similar cover letters using the same AI tools.

Some people are excited about it.

But for the naive, it is their job to continue to promote the use of these tools without restraint. Meet David Fano, a self-described “naive career enthusiast.” He’s promoting AI recruitment to help people write, apply, and prepare for interviews.

But for the most part, the average person just wants microwave-style, one-click ZipRecruiter applications—quick money with no consideration of the value they might be giving to their clients. Here’s one company owner who received 2,000 applications for one position, most of them with the same cover letter.

Ironically, one way corporations are adapting to the breakdown of their centralized, top-down recruiting is by adding another layer of AI filtering—using more AI. After they receive their horde of applications, they push applicants through a factory-style AI video recruiter. See how weird this feels, below.

I don’t know if anyone who is already providing talent and knows their value would ever submit themselves to these processes. Maybe an ambitious student right out of college with no qualifications—but I would expect ambitious students might already be hired through co-op education and on-campus workplace processes. Maybe, but maybe the universities are blind enough to use these processes to connect students with employers.

The future of talent acquisition and recruitment is already here. Starting with recruitment and talent acquisition, the typical corporate structure is breaking down.

Here’s how Mark Zuckerberg is applying the Fourth Turning’s new value regime to personally recruit the best AI talent. When top-down methods to develop his latest AI project over-promised and under-delivered, he did this…

Bloomberg reports:

Zuckerberg Is Personally Recruiting New ‘Superintelligence’ AI Team at Meta

“Zuckerberg has spoken openly about making artificial intelligence a priority for his company. In the last two months, he’s gone into ‘founder mode,’ according to people familiar with his work, who described an increasingly hands-on management style.

The CEO’s desire to micromanage the recruitment effort is driven in part by frustration over the quality of and response to Llama 4, the latest version of Meta’s large language model to power chatbots and other services.

The latest release in April proved a disappointment to Zuckerberg, who had repeatedly told Meta insiders he wanted the best AI offering—both in terms of total usage and performance—by the end of the year. His demands piled pressure on AI-focused staff working nights and weekends to achieve those goals, according to people familiar with the matter…

…Those missteps pushed Zuckerberg to get more involved and led to his interest in building out the new team, according to people familiar with the matter. He started a WhatsApp group chat among senior leaders called ‘Recruiting Party’ to discuss potential targets for hiring. Members of the chat group have been engaged in discussions at all hours of the day to identify talent.

Zuckerberg has been compiling his own list of recruits and likes to handle the initial outreach and stay in regular contact throughout the hiring process…

…Over lunches and dinners at his California homes in the past month, Zuckerberg pitched AI researchers, infrastructure engineers, and other entrepreneurs on joining Meta’s team, according to people familiar with the plans.”

The future of talent acquisition is individualized and decentralized, where distributed intelligence guides decision-making and development. So, Zuckerberg formed decentralized communities of talent where he asks questions and gathers intelligence he would not have otherwise had access to. Within the chat, relationships are built beyond the work. Networks are formed, and people meet at in-person events—sometimes held by Zuckerberg, sometimes not.

So, as Davidson and Rees-Mogg predict in The Sovereign Individual, corporations are becoming talent communities, or networks.

Future corporations may look something like the model Zuckerberg is building—closer to a founder-oriented start-up model, decentralized in every section with leaders building their own communities internally and externally.

On the other hand, his actions may only be what’s required in times of change—adapting to achieve project goals in a Fourth Turning.

But the corporate breakdown is only one piece of the whole meltdown. Higher education, once the pipeline feeding corporations, is cracking just as fast—and AI is widening the fractures.

Universities and Colleges Have Lost Relevance

The old higher-education model is broken. Employers and prospective students want credentials. It’s sad, but skills are no longer what students are buying from universities and colleges. They’re buying a paper and a record to put on a résumé. Our institutions know this, so they’ve been exploiting it to the max. They pump students through their factory model, demanding things like essays, reports, and other projects—which AI can easily produce with a few prompts.

So, students no longer accumulate, internalize, or apply the knowledge they’re supposed to be paying for. Using AI, the accumulation and internalization phases are skipped entirely. Without the acquisition of skills, there is no meaning to education.

Needless to say, post-secondary institutions are losing relevance due to AI. In fact, the use of AI is so pervasive, and the rate of change is so rapid, that the same students using AI to complete their assignments are the same students who feel they’re inadequately prepared for work. This is how AI is accelerating the breakdown and irrelevance of these older institutions.

CampusTechnology reports:

Survey: 86% of Students Already Use AI in Their Studies

“In a recent survey from the Digital Education Council, a global alliance of universities and industry representatives focused on education innovation, the majority of students (86%) said they use artificial intelligence in their studies. And they are using it regularly: Twenty-four percent reported using AI daily; 54% daily or weekly; and 54% on at least a weekly basis.

For its 2024 Global AI Student Survey, the Digital Education Council gathered 3,839 responses from bachelor’s, master’s, and doctorate students across 16 countries. The students represented multiple fields of study.

On average, surveyed students use 2.1 AI tools for their courses. ChatGPT remains the most common tool used, cited by 66% of respondents, followed by Grammarly and Microsoft Copilot (each 25%). The most common use cases:

  • Search for information (69%);
  • Check grammar (42%);
  • Summarize documents (33%);
  • Paraphrase a document (28%); and
  • Create a first draft (24%).

…Fifty-eight percent of students reported feeling that they do not have sufficient AI knowledge and skills, and 48% felt inadequately prepared for an AI-enabled workforce.”

You can see how the use of AI drops off during the summer months. If the use of AI helped students acquire new skills, and then they used those new skills in summer co-op placements or in their summer jobs, the use of AI would not drop so dramatically. Since AI is accelerating the Fourth Turning’s institutional meltdown, and students experience “real life” by entering the workforce, applying for corporate roles, and discovering that those AI skills have little to do with their actual contribution and their ability to scale their income, a kind of “work shock” occurs.

As the centralized, top-down model for corporations broke down over the last decade, corporations changed their talent strategies. Many people became generalists. Others deep-dived into specific skill sets to find their place in the world. Old corporations have failed to adapt quickly enough because old post-secondary institutions running on old models of skill acquisition have failed to transfer what could be into the workplace. Disillusionment ensues for employer and employee…

As a result, workers are responding by adopting new values needed to adapt in the Fourth Turning. Over the past decade, workers have taken on the same values Zuckerberg is choosing for new talent acquisition. Work has become more individualized and decentralized, where distributed intelligence looks like people joining and building communities where they can find work.

Here’s what that has looked like over the past decade and into the depths of this Fourth Turning.

Forbes reported in May 2024:

What To Know About The Freelance Workforce As It Grows And Changes

“The face of the freelance workforce keeps evolving to reflect the career choices of different generations. An estimated 64 million Americans—or 38% of the U.S. workforce—did freelance work last year, up by 4 million people from 2022, according to a 2023 study from the Upwork Research Institute. Those freelance workers contributed nearly $1.3 trillion in annual earnings to the U.S. economy.

The growth in the freelance workforce is nothing new. Over the past decade, an average of 1 million more people each year have done freelance work, according to the results of a new Gen Z survey from the Upwork Research Institute.

It also found that more than half (52%) of all Gen Z professionals surveyed did freelance work, compared to 44% of Millennials, 30% of Gen X, and 26% of Boomers. Gen Z represents the fastest-growing generation of workers, which is increasingly rejecting conventional 9-to-5 jobs and embracing freelancing as a career choice.”

Future universities and colleges are already taking on the same values. For example, online learning for kids ages five to eighteen is already popular, even among schools. Teachers in the public school system buy online education for their students so they can learn to read, do math, and understand science. Khan Academy is one of the biggest free online platforms for this. My kids both use Prodigy to learn reading and math skills.

Adults are also adapting to learn skills and acquire knowledge outside of the classroom. Online learning platforms like Udemy, Coursera, edX, Skillshare, and OpenClassroom are among the most popular. AI can also be used to acquire and apply knowledge more efficiently than in schools. Many AI platforms, like Manus AI, will produce a 50–100 page document in a little under 15 minutes on any topic of your choice. You can then turn to other AI platforms like Perplexity, Claude, or ChatGPT to answer your questions.

According to Charles Hugh Smith, in his book Get a Job, Build a Real Career and Defy a Bewildering Economy, two of the most important skills to learn in the time of institutional meltdown are the ability to read a balance sheet and project management. Those are hard leadership skills needed in times of change, like what we are experiencing in this Fourth Turning.

Corporations (or parts of them) may look something like the model Zuckerberg is building—closer to a founder-oriented start-up model, decentralized in every section with leaders building their own communities internally and externally.

On the other hand, his actions may only be what’s required in times of change—adapting to achieve project goals in a Fourth Turning.

And if corporations and universities are buckling under AI, governments—already fragile—stand no chance of escaping the same reckoning. Their inefficiencies can’t hide when algorithms drag them into the light.

Corrupt, Inefficient, and Ineffective Government Institutions Have No Place to Hide

Too many people see the label Department of Government Efficiency “DOGE,” and think Elon Musk. He may have been the one who launched the office, but he’s not the culprit responsible for the cost-cutting data. The same programming language used to run your favorite AI platforms is being used to expose government corruption, inefficiency, and ineffectiveness.

That small group of “young, talented programmers?” Once they have access to government systems and databases, they use their programming skills to create programs that “search and destroy” today’s biggest moral hazard—big government.

For example, after the corruption and alleged money laundering were exposed at USAID, the DOGE set its sights on Social Security. Probably America’s biggest unspoken and legitimized Ponzi scheme was showing holes. Big gaps.

So much so that their “reckless cuts” sent the archaic institution into chaos. The response at the Social Security Administration was the same response to every problem government creates for itself—“not enough staff.”

MSNBC reports:

How DOGE’s reckless cuts created chaos at the Social Security Administration

“The Trump administration’s colossal cuts to the Social Security Administration in the name of ‘efficiency’ are sowing chaos and dysfunction throughout the agency. Even attempts to fix these new problems are akin to rearranging deck chairs on a sinking ship because they fail to address the core problem: staff shortages.

The Washington Post reports the SSA is ‘temporarily reassigning about 1,000 customer service representatives from field offices to work on the swamped toll-free phone line, increasing the number of agents by 25 percent.’ And when the Post reports the phone line is ‘swamped,’ what that means in practice is that people are complaining about dropped calls and previously reported wait times of up to five hours.”

Only several weeks later, the DOGE used AI programming to expose twenty million people over the age of 100 still receiving Social Security benefits. Yet, according to the Census Bureau, “only 86,000 people living in the US at the time were actually centenarians.”

Only several weeks later, the DOGE used AI programming to expose twenty million people over the age of 100 still receiving Social Security benefits. Yet, according to the Census Bureau, “only 86,000 people living in the US at the time were actually centenarians.”

NY Post reports:

Elon Musk ‘uncovers’ 20M in Social Security database over age 100 — here’s why they’re listed and don’t get benefits

“Tesla and X CEO-turned-special government employee Elon Musk claimed to have uncovered ‘the biggest fraud in history’ when he stumbled across more than 20 million people listed in the Social Security database as over 100 years old.

‘According to the Social Security database, these are the numbers of people in each age bucket with the death field set to FALSE!’ Musk posted on X late Sunday, showing a chart of ages ranging from zero to 369 years old…

…The same inspector general’s office found in a March 2015 audit that 6.5 million people with Social Security numbers but no death information were over 112 years old—despite just 35 people on the planet having reached that ripe old age.

In both audits, the inspectors general concluded that ‘almost none’ were actually cashing Social Security checks—despite the glaring accounting errors identifying people born in 1886 and 1893 as still living, in two extreme cases.

Roughly 18.4 million uncovered in the 2023 audit had not received benefits or reported income for 50 years, meaning they were likely dead.

‘We believe it likely SSA did not receive or record most of the 18.9 million individuals’ death information primarily because the individuals died decades ago—before the use of electronic death reporting,’ the report states.

Around 44,000 were actually receiving benefits, with 13 of those older than 112…

…The audits, however, did reveal that around 531 million unique Social Security numbers are in circulation—and that ‘thousands’ may be in use to commit identity fraud…

…Nowrasteh and other observers believe that Musk was pulling from a Social Security list known as ‘Numident,’ which includes every number handed out since the benefits program started in 1936.

‘Some people have more than one number, occasionally because they’re committing fraud, but more usually because they’ve had fraud committed against them and they were issued a new clean number,’ a former SSA employee told journalist Jesse Singal.

‘Also you have people who received a Social Security number and then left the US, like temporary immigrant workers,’ the employee added. ‘But there’s a long-term recognized problem with SSA’s databases not marking as dead people who have died.’

Payments to dead beneficiaries have also occurred in other federal agencies.”

The exposure of inefficiency and fraud is only the beginning. What AI does best is shine a light into dark corners. And in government, there are plenty of shadows.

Institutions that once relied on complexity and bureaucracy as cover are now finding themselves stripped bare. It doesn’t take congressional hearings or whistleblowers anymore—just a small team of programmers with access to data. The algorithms do the rest.

And this is exactly what a Fourth Turning does. It pulls down the curtain. It forces institutions that have long been propped up by trust, inertia, or fear to face reality. For governments, there is no longer any place to hide.

What comes after? That is still uncertain. But one thing is clear: the old model of bloated, opaque, centralized government cannot survive an age where AI makes waste and corruption instantly visible. Either governments adapt—leaner, more transparent, more accountable—or they collapse under the weight of their own dysfunction.

Strauss and Howe would call this “the crucible.” The destruction of old forms is what creates space for the new. And right now, AI is accelerating the fire.

The collapse of government institutions completes the picture. Corporations, universities, and governments—each one buckling under AI—aren’t failing in isolation. Together, they mark a systemic unraveling, the kind of creative destruction Strauss and Howe warned defines a Fourth Turning.

More Destruction and Adaptation Ahead

Taken together, the story is the same across every institution. Corporations are struggling to hold on to centralized hiring and talent models. Universities are hemorrhaging relevance as credentials lose meaning. Governments are being exposed as bloated, inefficient, and corrupt.

Each one of these collapses is not an isolated failure.

They are symptoms of a much bigger cycle. The Fourth Turning is not just about disruption—it’s about creative destruction that clears the ground for whatever comes next.

And AI is the accelerant.

It is amplifying every weakness, magnifying every inefficiency, and tearing through every structure that cannot adapt. The old order was built for a slower, more controllable world. But this world—the one we are already living in—moves at machine speed. Institutions built on bureaucracy, hierarchy, and trust in centralized authority simply can’t keep up.

That doesn’t mean everything ends in ashes. It means the fire burns away what no longer works. Out of that comes the chance to rebuild—leaner, more transparent, more decentralized institutions.

AI is not the savior or the villain. It is the tool that reveals what we are made of. And as the Fourth Turning intensifies, survival belongs not to the biggest, but to the most adaptable.

In the years ahead, the destruction of these legacy institutions won’t be a clean break but a grinding process of exposure, collapse, and forced adaptation. Bureaucracies will resist until the last possible moment, corporations will double down on broken models before conceding, and universities will cling to credentials long after their value has evaporated. But as the Fourth Turning intensifies, the institutions that survive will be those that abandon their old hierarchies and embrace decentralization, transparency, and adaptability. The rest will be left behind—hollow shells that couldn’t keep pace with a world being reorganized at machine speed.

The future won’t wait for them—and neither will AI.

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