January 18, 2017
The NYT had a strange editorial this morning on the World Economic Forum in Davos in which it posed the question:
“The question now is whether these gilded champions of globalization will choose to address inequality or proceed with the business of wining and dining as usual.”
It is difficult to understand why anyone would expect this group of people, who are there primarily because they are super rich, to be leaders in the fight against inequality. This is especially bizarre when we remember that many (most?) of the super rich got their wealth by rigging the rules so that they could profit at the expense of the rest of society.
The list of people in this category starts at the top. Bill Gates owes his enormous wealth to a near monopoly (less today than ten or twenty years ago) on the operating system in personal computers. This would not have been allowed back in the days when anti-trust laws were being enforced.
Other Davos characters owe their wealth to government granted patent and copyright monopolies which they lobby to make ever stronger and longer. Others owe their wealth to financial dealings that would not be possible without free government too big to fail insurance and the exemption of the financial sector from the sort of sales taxes paid by other sectors. (Yes, I am repeating the themes of my book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer [it’s free].)
It’s difficult to see why anyone would expect policy guidance on anything other than securing the wealth of the super wealthy from this sort of gathering. Would we expect major advancements on animal rights from a gathering of hunters?
In a measure of how out of touch this crew is with reality the NYT tells us:
“Also on the agenda is a preoccupation from last year that automation will soon put millions of people out of work.”
While it is of course possible that automation will lead to a sharp uptick in productivity growth, in fact most countries, including the United States have been struggling with very low productivity growth over the last decade. Most economists have been concerned that slow productivity growth would persist for the indefinite future. This is the basis for concern about government budget deficits (at least for folks who know economics) as well as the reason some folks worry about an aging population. This is also the reason the Federal Reserve Board raised interest rates: it was concerned about too many jobs, not too few.
Anyhow, there is nothing wrong with some shysters fleecing the super rich with silly stories about massive job loss due to automation, but that is not the sort of thing that serious people need concern themselves with.
Comments