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Actually I think the hyper growth of the top 1% is attributed to development of Automation and globalization. Here is a brief explanation of how each move money
by omot 9y ago
Actually I think the hyper growth of the top 1% is attributed to development of Automation and globalization. Here is a brief explanation of how each move money to the top.
Technology - Here is a simple thought experiment. You have 10 cashiers each are paid $100 a day. The total expense for these workers are $1000. The store in total makes $10000 a day. The owner nets $9000 a day. New technology comes out that replaces workers, you now only need one machine that costs $100 to maintain a day. The store owner nets $9900. Now just imagine this kind of replacement happening at every level of society.
Globalization - With technology comes better ways to communicate with foreign countries with cheap labor. Take the same experiment but instead of replacing workers that cost $100 a day with machines, we replace them with foreign workers or undocumented immigrants which cost $1 a day. Your total expense is now $10 a day. The store owner now nets $9990 a day. This also happens at every level of society.
This is the cost of efficiency and technology.
- yoz-y 9y agoBen Thompson was talking about this on his podcast. His idea was that over time capital earns more money than labor - due to automation, as you say. If the end game is 100% automatised then basically 100% of income will be produced by machines/robots/algorithms owned by a tiny proportion of human population.
- zanny 9y agoThe problem is we might already be too late to stop it, especially since it would require global cooperation to stop. Amassed capital right now can already bribe and control governments due to its scale, and isolated attempts to curb the power of the lauded elite will only either make them use their money to depose the current regime or have them leave the country. Unless we can get international agreement to stop this runaway concentration of wealth scenario from happening - which is extremely unlikely, since the country hosting the rich benefits from their presence in the short term despite the long term detriment - humanity seems destined for that dystopian eventuality.
- ddxxdd 9y agoThe counter to that argument is that if the owners of robots make 100% of the income while customers make 0%, then the owners of the robots will have a very small market to sell their goods and services. If you are capable of making 10 billion fidget spinners, you're going to lower your prices until as many people can afford fidget spinners as possible.
- yoz-y 9y agoIndeed. But what are the solutions. One proposal is "raise taxes on capital by a lot, and then provide basic income". Another option would be "nationalize all production and distribute the profits". There is the luddite option of course but I do not believe that the progress can be stopped. And I do not think that there are nearly enough "new" jobs created in services, entertainment and arts.
- ddxxdd 9y agoMy point was actually that there is no way automation could possibly leave more people worse off, since it brings more goods into circulation.