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My model is that as median labour power decreases capital and superstars should capture a larger percentage of future productivity increases. And automation sho
by ZhuanXia 7y ago
My model is that as median labour power decreases capital and superstars should capture a larger percentage of future productivity increases. And automation should provide huge productivity increases. This seems compatible with index funds being a good bet.
Perhaps I am wrong, but could you provide details as to why?
- marktangotango 7y agoCan you talk about how superstars would capture future productivity increases, in practice?
- koolba 7y agoIt’s no different then the proverbially 10x programmer landing a consulting gig for literally 10x the compensation of a nobody.
- deleted 7y ago[deleted]
- nostrademons 7y agoThe model is incomplete in the details (as most models are). The actual effect is that capital in the companies that are taking advantage of the new globoticized future does great. FANG does great. Upwork does great. AirBnB and Stripe do great, once they go public. Labor and capital of old-line companies do terribly. This type of economic transformation doesn't just result in layoffs, it results in whole companies going out of business. Their value-networks are adopted to the cost structure of the old world; as that cost structure changes, they have no reason to exist as a firm. When you buy an index fund, you're buying both of these types of companies. You should probably do okay, because the public market is actually pricing a lot of this phenomena in already: multiples on old-line companies are severely depressed while FANG shares are soaring, and the capitalization-weighting of the index is taking this into account. But you're leaving money on the table: many of the biggest winners will be new fast-growing startups that aren't public yet.