Bread and Circuits
Fractionally Legal 61 Looks at What is Really Distracting Us
I hope everyone is not too riveted by the Elon Musk v. OpenAI trial, which by all accounts has become a referendum on Musk’s altruism. Strikes me as an imperfect strategy, but no one asked my opinion. I’m sure there were other ways to frame the case. Musk wanted it done this way, which probably hobbled his lawyers considerably. It happens. Clients sometimes make decisions based on business logic rather than legal soundness, and lawyers have to work with what the client decides.
It’s a pity, because I find myself rooting for Elon on the underlying point: someone should be developing AI for the benefit of humanity and not purely for profit. The folks at OpenAI would say they’re thinking the same thing, but also: why us, specifically? Fair question, awkward lawsuit.
Either way, as I see it, it’s part of the circus. Or, as I’ll explain below, the circuits.
I spent a week in April in Sicily, tagging along on my girlfriend’s work trip. She was producing a brand campaign, the kind of work that involves getting beautiful people to do interesting things in extremely scenic places. In contrast, practicing law typically involves getting opinionated people to agree on extremely dull legalese in a generically-appointed conference room, so suffice to say, I was out of my element.
The talent on set were “Key Opinion Leaders” (KOLs, in industry parlance) and “Content Creators,” both of which are the more flattering, recently-rebranded names for what most of us still call influencers. My clients actually hire influencers from time to time, so I know a little about the law. The primary legal issue is disclosure: the FTC requires that any material connection between a creator and the brand being promoted (payment, free product, a sweetheart deal) be disclosed clearly and conspicuously, on every platform, in every post. Liability runs to the brand, not just the creator, which is actually clarifying, because most of the influencers are non-U.S. persons and therefore there are tricky jurisdictional issues.
For obvious reasons, I was not allowed anywhere near the influencers. So I busied myself learning a little Sicilian history, which is fascinating in its own right and, as it turns out, has some useful lessons for the present. Sicily existed in a quasi-feudal state until well into the twentieth century. The landowners, descendants of Norman nobles who arrived with the French from Normandy and later the Spanish, controlled most of the territory. The locals were tenant farmers. The Mafia, in its original form, were essentially the enforcement arm of that system: the gangs that kept the tenants in line. It is not difficult to understand, against that backdrop, why millions of Sicilians immigrated to America. They were trading a system defined by concentrated power, enforced by violence, and operated entirely without the consent of the governed, for one that, at least in theory, worked the other way around. Those immigrants brought with them a deep distrust of concentrated power and a corresponding attachment to the rule of law.
The historical irony is that Italian nationalism, though thoroughly fascist in character (fascism is, after all, an Italian word,) wanted to dismantle that old feudal model and build a modern state. Mussolini, in pursuit of that project, took on the Mafia. So when the Allies landed in Sicily in 1943, the Mafia was not only a willing collaborator, it was a battle-tested opponent of the regime the Allies were there to dismantle. Years of corruption and entanglement followed. The lesson Sicily drew from that experience is one it has not forgotten: be very skeptical of any outsider arriving with promises of liberation.
That history is relevant because when I was there, everyone in Sicily was gearing up for il venticinque aprile, Italy’s Liberation Day, the Festa della Liberazione. It commemorates the 1945 partisan insurrection that liberated Milan, Turin, and Genoa before Allied troops arrived. Over time, the holiday has evolved into an annual occasion to take stock of the politics of the present. This year, very cool-looking students were going around hanging posters bearing two phrases: No alla guerra. Contro il carovita. No war. Affordability. Blunt and accurate.
The Roman poet Juvenal called it panem et circenses: bread and circuses. The formula was simple: keep the population fed and entertained and they won’t notice what’s being done to them. The bread and the circus worked together, both provided by the same ruler, serving the same purpose.
Those students thought the war was the circus. How Roman of them. It isn’t. The circus today is AI: real, consequential, and extraordinarily good at consuming capital and attention. But here is where the ancient formula breaks down. Juvenal’s circus was provided alongside bread. This circus competes directly with the bread. Every hundred billion dollars flowing into AI infrastructure is a hundred billion dollars not building housing, not expanding healthcare capacity, not investing in the physical conditions of American life. The ruler is not providing both anymore. The circus is crowding out the bread.
And it goes further than that. This is not just a competition for capital. AI is the technology that promises to replace labor while absorbing the capital that could make labor more valuable. It doesn’t just entertain us. It devalues the work most people do while making the people who own it extraordinarily wealthy. The circus, in other words, is also eating the wages. That is a very old story with a new costume, and it is making the bread a lot harder to find.
No alla guerra and contro il carovita are not two separate demands: they are the same demand. But the enemy is not the military-industrial complex. It is a capital allocation problem dressed up as progress.
AI masks the underlying weakness in the economy. It is the illusion of growth, prosperity, and progress while everything else is getting harder. Affordability, which is really code for “everything costs more except what people pay me for my labor,” is directly linked to our collective fascination with AI. The same capital that could be building housing, infrastructure, and healthcare capacity is instead building agents that watch other agents. That is not a coincidence. It is a choice, made over and over again, by investors, politicians, and policymakers who have decided that digital infrastructure is worth subsidizing and physical infrastructure is not.
The contrast is stark. As I wrote after attending the Human[X] conference in April, the AI industry is awash in capital: investors are subsidizing your access to powerful tools, there is far more supply than demand, and if you are shopping for AI solutions, you have the leverage. We have collectively decided that building digital infrastructure is worth subsidizing heavily, even if most of it never produces a return. Housing operates on the exact opposite logic: severe shortage, straightforward supply-side fixes, demonstrated political inability to implement any of them. AI is abundant, subsidized, and celebrated. Housing is scarce, undersupplied, and politically neglected.
And the response to that neglect is, to put it plainly, astounding. There is an executive order to make the United States a global leader in AI. There is no executive order to make the United States a global leader in housing production, healthcare capacity, or any other physical thing that people actually need to live. Instead, the closest thing we have to a housing policy is a recent executive order barring institutional investors from buying single-family homes. It sounds populist. It is bad policy. Rents are high because supply is constrained: we are not building enough housing. Barring institutional buyers does nothing to add supply. In fact, it makes the problem worse by draining investment from residential real estate without replacing it with anything. And Trump can’t even get his story straight on the goal: he is on record saying he wants home prices to go up, not down. That is not a misstatement. That is the policy. A Congress that could be addressing zoning reform and construction financing is instead absorbed in voter suppression legislation. An administration that has shown no hesitation using invented powers to advance its agenda, go to war, impose tariffs, deploy the National Guard to American cities, dismantling federal agencies, somehow cannot find the political will to do the one thing that would actually help: build more housing.
The Sicilian students had it right, even if they had the wrong circus. Juvenal understood it two thousand years ago. The formula hasn’t changed. What has changed is the sophistication of the circus: AI is not just entertainment, it is a multi-hundred-billion-dollar bet that digital infrastructure matters more than physical infrastructure, being ratified by public policy every single day that Congress fails to act on housing and by every executive order that prioritizes AI dominance over human affordability.
The bread is not coming. Not from this administration, not from this Congress. And the circus, for all its spectacle, is not a substitute.
Keep thinking, keep building,
Jesse
Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.