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I'd like Prof. Gordon to break down the skyrocketing 1% incomes by profession. Wasn't most of it due to high tech? His chart shows the disparity dramatically

I'd like Prof. Gordon to break down the skyrocketing 1% incomes by profession. Wasn't most of it due to high tech? His chart shows the disparity dramatically widening starting in the mid-80s, which is precisely when the microcomputer revolution was accelerating. The 1990s saw a booming stock market and the minting of thousands of new millionaires and dozens of billionaires as well. These stock-rich technology entrepreneurs should be seen not as an exploitative class to be feared and countered, but rather as a sign of successful capitalism at its finest, brilliant new ideas that have changed the world and vastly expanded the major Western economies with new modalities for doing our work, communicating, and nearly everything else.

xenadu02 10y ago
Not really. Globalism allowed management to get rich without having to share much or any of the pie with anyone else by outsourcing and shipping manufacturing to low-cost no-regulation jurisdictions. Massively lower taxes reduced the redistribution effect, accelerating the accumulation of capital to the top. A global capitalist economy can't survive 90% crushed labor, 9% upper-middle, and 1% who own almost everything. Those conditions eventually lead to revolution. Or rather it would be more accurate to say those conditions have historically led to unrest, collapse, and/or revolution. Why would future generations feel any loyalty to their nation or this system if they're barely making ends meet while they watch billionaires cut their own taxes to make themselves richer and shift more of the burden of maintaining society on the poor and shrinking middle class? None of this is good for the startup ecosystem. Fewer consumers with money to spend means less customers and less advertising targets. That's the problem with capital accumulating at the top: without customers there are fewer and fewer legitimate investments that have any yield so capital is forced to make increasingly reckless investments or do the equivalent of stuffing the money under a mattress. None of that is putting capital to useful work.
- nine_k 10y ago
  Globalization did bring visible growth of wealth to the bottom-of-the-ladder guys like factory workers. Only it did so in places like China, Vietnam, and other manufacture outsourcing destinations.
- blisterpeanuts 10y ago
  But I'm talking about software and high tech hardware that only migrated to Asian factories late in the cycle.
  - anigbrowl 10y ago
    Yeah but it's not like that's been the only growth sector in the economy, now is it?
adwhit 10y ago
One of the points Piketty makes in his book is that the rich generally aren't the heroic creative geniuses of Ayn Rand's imagination. Most wealth is inherited. Wealth grows faster than the economy at large. The rich get richer. They spend their money lobbying for lower tax rates, and they get them. They lobby for privatization, and they get them. They lobby for monopolies and patents and bailouts, and they get them. Interesting to note that half the population are no richer than they were almost 50 years ago.
- Avshalom 10y ago
  'course Ayn Rand's imagination is mostly horribly vindictive genocidal assholes...
- ryandrake 10y ago
  Going from $0 to $1M? Nearly impossible. Going from $1M to $2M? Nearly inevitable.
- blisterpeanuts 10y ago
  Gates, Jobs, Ellison, Zuck et al didn't inherit their wealth.
  - anigbrowl 10y ago
    One of the points Piketty makes in his book is that the rich generally aren't the heroic creative geniuses of Ayn Rand's imagination. 1. There are always going to be outliers, but most people are going to be closer to the middle of a normal distribution. 2. The examples you mention were all excellent entrepreneurs, but they were also a bit lucky with timing and social position; Jobs' adoptive parents were blue-collar workers but none of these future industrialists grew up in poverty. If we could reduce the latter a bit we might have even more of the former.
  - Namrog84 10y ago
    They also didn't start at the absolute bottom. Most of them had an above average hand to start with.

xenadu02 10y ago

Not really. Globalism allowed management to get rich without having to share much or any of the pie with anyone else by outsourcing and shipping manufacturing to low-cost no-regulation jurisdictions. Massively lower taxes reduced the redistribution effect, accelerating the accumulation of capital to the top. A global capitalist economy can't survive 90% crushed labor, 9% upper-middle, and 1% who own almost everything. Those conditions eventually lead to revolution. Or rather it would be more accurate to say those conditions have historically led to unrest, collapse, and/or revolution. Why would future generations feel any loyalty to their nation or this system if they're barely making ends meet while they watch billionaires cut their own taxes to make themselves richer and shift more of the burden of maintaining society on the poor and shrinking middle class? None of this is good for the startup ecosystem. Fewer consumers with money to spend means less customers and less advertising targets. That's the problem with capital accumulating at the top: without customers there are fewer and fewer legitimate investments that have any yield so capital is forced to make increasingly reckless investments or do the equivalent of stuffing the money under a mattress. None of that is putting capital to useful work.

nine_k 10y ago
Globalization did bring visible growth of wealth to the bottom-of-the-ladder guys like factory workers. Only it did so in places like China, Vietnam, and other manufacture outsourcing destinations.
blisterpeanuts 10y ago
But I'm talking about software and high tech hardware that only migrated to Asian factories late in the cycle.
- anigbrowl 10y ago
  Yeah but it's not like that's been the only growth sector in the economy, now is it?

adwhit 10y ago

One of the points Piketty makes in his book is that the rich generally aren't the heroic creative geniuses of Ayn Rand's imagination. Most wealth is inherited. Wealth grows faster than the economy at large. The rich get richer. They spend their money lobbying for lower tax rates, and they get them. They lobby for privatization, and they get them. They lobby for monopolies and patents and bailouts, and they get them. Interesting to note that half the population are no richer than they were almost 50 years ago.

Avshalom 10y ago
'course Ayn Rand's imagination is mostly horribly vindictive genocidal assholes...
ryandrake 10y ago
Going from $0 to $1M? Nearly impossible. Going from $1M to $2M? Nearly inevitable.
blisterpeanuts 10y ago
Gates, Jobs, Ellison, Zuck et al didn't inherit their wealth.
- anigbrowl 10y ago
  One of the points Piketty makes in his book is that the rich generally aren't the heroic creative geniuses of Ayn Rand's imagination. 1. There are always going to be outliers, but most people are going to be closer to the middle of a normal distribution. 2. The examples you mention were all excellent entrepreneurs, but they were also a bit lucky with timing and social position; Jobs' adoptive parents were blue-collar workers but none of these future industrialists grew up in poverty. If we could reduce the latter a bit we might have even more of the former.
- Namrog84 10y ago
  They also didn't start at the absolute bottom. Most of them had an above average hand to start with.