David Brin: My friend and fellow futurist/scifi fan John Mauldin weighs in on the rising use of the word inequality. He starts with what former Treasury Secretary Larry Summers was getting at in last week’s Financial Times op-ed: The share of income going to the top 1 percent of earners has increased sharply. A rising share of output is going to profits. Real wages are stagnant. Family incomes have not risen as fast as productivity. The cumulative effect of all these developments is that the US may well be on the way to becoming a Downton Abbey economy. Mauldin comments: That thinking assumes that if income inequality is rising, the top 1% is getting richer at the expense of the working class, because it assumes production still heavily exploits the relatively unskilled labor that most Americans can provide through hard work. It does not discriminate between value-added labor and value-added information and innovation. As I argued three weeks ago, the gains from the Information Age have been unevenly distributed throughout the economy. This is a structural problem in the sense that the productivity gains from the first two Industrial Revolutions are essentially thoroughly distributed through the economy. All workers saw their incomes increase along with increasing productivity for the 200 years of the Industrial Revolutions. Yes, entrepreneurs, innovators, and knowledge workers saw their incomes rise faster, but a rising tide of productivity lifted all boats. While populist politicians, mainstream economists, and envious market watchers would like to brand billionaire inventors like Tesla CEO and PayPal Founder Elon Musk, Facebook CEO Mark Zuckerberg, or eBay cofounder Pierre Omidyar as modern-day robber barons, they haven’t really robbed anyone. The emerging class of billionaires is creating value that did not exist before they arrived, and they’re doing it with relatively small teams of highly skilled knowledge workers. And they deserve every penny they earn. On the flip side, a growing majority of our labor force is responsible for a much smaller percentage of economic output. Their wages are stagnant because more people are competing for a shrinking number of jobs. He admits: Eighty-five people have as much money as do the poorest 3.5 billion. The top 1% have almost half the liquid wealth that has been accumulated in the world. There are 1,426 known billionaires, and gods know how many additional kleptocrats and people who have managed to maintain some semblance of privacy. Okay, heres my middle of the road response. I do not mind sharing the world with billionaires. I know several on a first name basis -- and that plus $4 can get me a small latte. As long as they got their wealth on an even playing field, by organizing teams of engineers to deliver wonderful goods and services, “good on them.” All of that applies to the tech moguls John gives as examples (above). Only… … only he cherry-picked the very very best examples of self-made billionaires who got it all the way I just described. Notice that John never mentioned the far greater numbers who leveraged inherited positions of dominance in an economic sector, or the Wall Street cheaters and those in the cartel-cabal of seated members of equities exchanges, or those who pay little or no royalties on resources extracted (with subsidies) from public lands, or those who slow down the economy by acting as Adam Smith described lords doing throughout history… passive rent-seeking. Which utterly demolishes the lie called supply side economics. Oh, theres one more thing about the list of examples of good billionaires that John supplied…. they are nearly all Democrats, who have joined Warren Buffett saying raise my taxes so that a society thats mostly flat and open can keep supplying the brilliant engineers who made… them… rich. https://youtube/watch?v=QPKKQnijnsM
Posted on: Tue, 04 Mar 2014 02:56:28 +0000
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