Last night, there was an excellent diary on the fact that wealth disparities are now at Great Depression highs.
www.dailykos.com/...
Parallel to that is the fact that, despite Trumpian claims to the contrary, real middle-class incomes aren’t growing at all. I made a lengthy comment on that diary, but, admittedly, it probably needs its own diary, as a start to a much longer discussion on the impact of accelerating technological change (ATC) on economic patterns, jobs, income patterns, wealth disparities, politics, policies and the like. My key points are that:
--This stuff is happening, and needs to be better understood;
--Progressives are going to have to play an extremely important role in figuring out policy and political solutions, because the right just won’t.
To start out, I am going to give all of the Kos readers access to an “old” (by tech standards) book on the topic, which is now available free in pdf form.
edisciplinas.usp.br/…
It’s “The Second Machine Age,” which, while from 2014 predicted well many of the patterns that are happening now in terms of lack of growth in median incomes, vast increases in wealth and income of “superstars,” competition between humans and automated solutions, a clustering of wealth and power in a small handful of mega-companies, etc.
I’m going to describe what’s going on, imo, in a way that some of you aren’t going to like, but I believe that progressives are going to have to carry the fight based at least in part upon what I’m describing. It’s a topic I have spent parts of the last 5 years studying. Namely, that a key source of the current expansion of income disparities, wealth disparities, and potential for more of that in the future is a direct result of accelerating technological change (“ATC”)—the rapid and increasing impact of AI, automation/robotics, and other related forms of competition for human endeavors. A lot of this gets very tricky and messy:
--Senior executives at major tech-savvy organizations make increasing multiples of what their employees make, in part because superstar executives are best able to leverage the impact of technological innovation and the opportunities to buy off new tech endeavors.
--As noted, a small handful of tech companies are controlling more and more of the total economy—Apple, Amazon, Alphabet, Facebook, Microsoft, etc.
--Automated solutions are increasingly competing with human employees, and the competition will get worse over time. This makes some existing solutions to the income disparity problem harder to use, including sharp increases in minimum wages on activities that either now or over the near term can be fairly easily automated. Competition from Automated Electric Vehicles has uncertain timing, but it’s one example. Robotics and on-line retail are others. Some techies argue that new jobs will substitute in. I am confident that they are wrong. Otherwise strong books like The Fourth Age do a thoroughly unconvincing job of making the case that new jobs will fully supplant old jobs—and do an even worse job of dealing with income/wealth disparities. It does, however do a good job on the importance of leadership.
medium.com/...
--The magnitude of the competition will get sharply worse in some sectors over the next 2-15 years, holding down median incomes and putting upward pressure on income wealth/disparities. The transition to more of a GIG economy and more of a sharing economy is part and parcel of all of this—and don’t help deal with income/wealth disparities, mostly making them worse. .
--Over the longer term many technologists believe that these patterns will solve themselves as the cost of “making stuff” collapses. Many technologists don’t seem to care much, however, about the disruptive nature of the transitions, and the severe problems they are likely to create over the near to intermediate term. Some do.
Are there progressive solutions to all of this? I think so, but they won’t be easy, especially politically. I think we are going to need minimum basic incomes as an alternative to hgh minimum wages, for example. The right thinks that this is socialism. It isn’t. A lot of the best tech leaders are looking very closely at the need for a MBI. Lifelong learning is necessary, but not sufficient—but it’s very necessary. I also believe that a much more progressive tax code will become a necessary part of the solution—the executive who earns 1,000 times as much as his average employee really doesn’t need to keep most of that.
Dealing carefully and effectively with the interim period before new efficiencies begin to help maintain quality of life is something many technologists just don’t worry about much. And many politicians and policy makers find the threats for ATC too distasteful to talk about, politically. Hillary knew these issues were important, but she was too nervous about putting them in her policy agenda. Some of this is going to be a major mess for state and local governments, btw.
ATC is going to be very tough stuff across the political and policy spectrum. Progressives need to be a major part of the process of creating solutions. Right now, imo, too many people on both the left and right are whistling past the graveyard on the impact of ATC. The right can whistle all they want—they don’t care about being part of the solution. The left has to recognize how important all of this is, make it part of their agenda, and fight for solutions—while not moving toward so-called solutions that blow up economic competition, or send it overseas.
These are very challenging issues, but we need to start discussing them seriously. Personally, I don’t claim to have all the answers—but lots of questions and concerns. The problems may not be as imminent or all-encompassing as climate change, but they are very close, in my opinion. And the evidence that this is starting to get worse is getting pretty strong, as we see real wages stagnate in spite of tight unemployment. And Trumpian tax reform made the risks from all of this massively worse. And, of course, he is too stupid to even begin to think about all of this. The wealthy, I think, fall into three categories:
1)Those who ignore all of this or don’t understand it;
2)Those who know there’s a problem but want to delay the search for solutions and grab all they can in the meantime; and
--A relative handful who know how much of a mess this all can be if we don’t start to look for solutions.
My hope is that there is a critical mass in category three, but I’m not all that optimistic.
More to come, over time. This is a very tiny start to a massively complex set of challenges, that spill over into progressive politics, imo.