September 19, 2015

WE ALL KNOW WHERE WE'RE HEADED:

A Proposal for the Age of Automation--Turn Workers Into Investors (JERRY KAPLAN  SEP 16, 2015, Pacific Standard)

While there are many causes, one of the least appreciated is the privatization of long-term infrastructure investment. When the government invests, the benefits should properly flow to society in general. When private parties foot the bill, the return, rightfully, should flow mainly to the investors. For example, the U.S. government has invested more than $300 billion (in today's dollars) in the interstate highway system--possibly the best public investment in U.S. history, with broadly distributed benefits. By contrast, most of the cost of broadband access has been borne by private parties, over $1 trillion to date.

So it's not surprising to see a generation of hyper-wealthy Internet moguls protecting their turf: The 1998 federal Internet Tax Freedom Act prohibits taxation on Internet use.

There's a good argument that this is as it should be, a "new normal"--but that's little comfort to those left behind. Let's face it, workers aren't responsible for their own increased productivity. As a general matter, they aren't working faster, harder, or more than they did 50 years ago, and people aren't smarter (though they may be better trained mainly as a result of public investment in education). In fact, the average full-time employee is working fewer hours than ever before. What's made the bulk of the difference in productivity is technological advances, infrastructure improvements, more efficient organization, and better information put to more effective use. People are still people, but today's cars are way more efficient than your grandfather's Oldsmobile, not to mention that computers outperform his hand-cranked adding machine by factors measured in billions. Why does it follow that drivers or bookkeepers should be paid more? They weren't responsible for either of these improvements. [...]

The good news is that the U.S. GDP has doubled fairly reliably about every 40 years, and there's no reason to expect it to falter. This means that by about 2055, we will have created new assets roughly equal in value to all of today's assets. If we can find ways to distribute even part of this new wealth more widely as it is created without interfering with its formation, there's plenty of room for everyone to get on the economic escalator without raiding the piggybanks of today's affluent. By analogy, this is as if the acreage available for homesteading doubled every four decades--we could give away nearly two percent "new" land each year without taking any away from anyone. This is great news. It means that, carefully managed, there's at least a shot at making wealth a sustainable, renewable resource.

As the coming wave of automation washes over our economy, we're about to discover that Karl Marx was right: In the struggle of labor against capital, capital has the upper hand. Instead of fighting the inevitable, we need to go with the flow, and stop thinking that labor is the only virtuous path to personal comfort. Perhaps the road to a more equitable future is to raise a generation of capitalists, not workers. When we wanted more food, we gave away land to individuals willing to work it, not to increase the holdings of those who already had farms. When we want more money, perhaps we should make capital available to individuals willing to put it to work, not to backstop increased leverage for today's financiers. Micro investors just might deliver macro benefits.


The First Way : maximizing the efficiency of the economy + the Second Way : distributing wealth more efficiently = the Third Way : funding the social welfare state via personal ownership of equities

The main reason that W's reputation will continue to grow is that he will be seen to have laid the economic, moral and philosophical foundations of the Ownership Society.


Posted by at September 19, 2015 8:10 AM
  

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