Doctor CamNC4Me wrote:I might've misinterpreted what you meant by disincentivzing companies and individuals from holding onto their wealth. Let me try this again.
honorentheos wrote:As I noted above to Cam, I personally think government intervention is necessary for capital to move in the economy at levels that create the benefits we've been talking about.
What would you have the government do to get capital moving? I'm not sure what that even means.
It's more intuitive than something I've seen demonstrated in models. So, I guess it's a bias of mine. But that's my sense of why overall we're seeing wealth accrue disproportionately to the most wealthy few even as the effect of both automation and cheaper immigrant labor have positive effects on real wages in the US.
You can't really have it both ways here. One, you're saying automation and immigrant labor has positive effects on wages in the US, while at the same exact time saying automation and immigrant labor result in companies and individuals accruing disproportionate amounts of wealth. You're contradicting yourself.
I think we're talking past one another because what we've seen in the last three decades is indicative of there being a problem with how wealth is accruing that needs looked at but this isn't directly the same thing as Markk complains of where the immigrant worker being paid $11/hour is occupying a space in the market he seems to feel should be occupied by people like him but making $20/hour. Let's use a washing machine to illustrate the concept which hopefully shows what is meant here. If a person spent 10 hours a week doing laundry before and the invention of the automatic washing machine cut this time down to 1 hour, the productivity of that person goes up in that the person is able to do other things while the machine produces clean 9 hours worth of clean laundry. And, hypothetically, the person is able to spend those 9 hours doing something that they can be even more efficient at because it takes more skill to do that they uniquely have compared to most other people. In the case of automation replacing skilled labor, it works the same way provided that person is able to take their skills and interests to perform a different and productive end. And this is what has happened historically. Innovation and technology for most of the 20th century freed people from menial work that anyone could perform so they could become more specialized where their skills and interests benefited them and increased productivity as well. But we're seeing real results shifting over the last few decades since the Reagan tax cuts where the benefits are accruing to fewer and wealthier people.
Earlier you said:
My real argument is that there needs to be disincentives for hording wealth to maintain the benefits of automation and immigrant labor. There's a certain irony in the complaint by blue collar conservatives against immigrant labor in my perspective because of this.
You've stated that automation and immigrant labor result in wealth inequity and you state, in the same sentence, we need to discourage the wealth that results from that. I'm asking you what you would have the government do to move hordes of wealth out of companies' and individuals' clutches into the economy so, I guess, we can have more automation and immigrant labor? I'm trying to wrap my mind around your thought process here.
I don't think we need to "discourage wealth" so much as ensure that it circulates in the broader economy rather than narrowly within financial sectors and the like. I do think that tax rates need to be part of the solution to move horded wealth back into the real economy so that the benefits of increased efficiency get distributed more broadly. I'm not a free market capitalist. I'm for government regulation to ensure the costs of production (economic, environmental, social, etc.) aren't passed off onto communities and the public while the profits are accrued and horded by the corporate entities who will do exactly that with no regard for much else than the bottom line if allowed to be so myopic. I think the most democratic way of using those taxes should be sought to benefit society the most, including investment in infrastructure and innovation industries, scientific research and exploration of new frontiers in space, medicine, and elsewhere. Schools, libraries, public spaces and lands would all be greater beneficiaries of this in my view because they offer the means for people to create the new means of production needed. I'm also inclined to see some form of minimum basic income or other broad safety net program implemented to mitigate the inevitable reality that cheap labor that can be performed by machines is going to prevent some people from being realistically more productive because they can finally take on learning to make the App they have been rolling around in their minds...