We were watching CBS Sunday morning and one of the segments on the news show concerned income inequality and the pandemic. A good part of the segment described the differential impact of the pandemic on the economy of the wealthy versus other participants in the ecnomy based on the work of Thomas Piketty. My thinking on economic inequality has been strongly influenced by my reading of Piketty’s book Capital. The segment mentioned the release on Amazon of a documentary based on this book – Capital in the 21st century. I rented and watched this documentary this afternoon.
The book and documentary are part history, part economics, and part political analysis. Both are a remedy to simplistic notions such as the American Dream and any positive assumptions folks of advantage have regarding the superiority of unchecked capitalism. Claims such as Reagan’s trickle down economics simply ignore the data. For those who point to the high stock market shortly before and during the pandemic, the documentary explains just how few actually benefit and how unemployment and income inequality can be increasing even as the stock market rises. I now refer to the documentary because plowing through the book is a struggle even though the focus is on explaining more complicated economic constructs (e.g., capital) for those who do not study such theings.
The documentary in part addresses an issue I write about and understand at a deeper level – technology in society. Technology is in some way a boon to recent economic trends creating new wealth and new opportunities. The video considers the notion that new technologies are job creators rather than job eliminators. While often true, the key issue is whether there are meaningful options to which individuals replaced by technology can move. The creators of the documentary note that this may not be the case with digital technology. One factoid they note is that within the next decade the first or second occupation in nearly every state is likely to be replaced by technology. This occupation is professional driver of one sort or another. This is not like moving from horse power to steam power to gas and electricity. Technology is replacing occupations of every type and there comes a point at which there is simply not meaningful work for those displaced.
When factors such as the pandemic impact an economy you immediately see the value of capital and technology in increasing inequities. Those at the top in multiple vocations have low risk and great economic opportunities. Consider the benefits to Amazon and any media or communication industry under present circumstances. Those at the bottom face danger in providing necessary labor and cannot escape the danger because of the threat of no income. With so many out of work, their labor has not resulted in higher income because others will be willing to take low pay jobs. People are turning away from small businesses as unnecessary and concentrate their spending on big businesses that benefit from their scale in providing necessary goods and services.
We are in a time when passing on a better life to offspring will be less likely than has been the case for generations. Changes in taxation and business practices allowing tax havens will be necessary to preserve our way of life and limit the unrest that is now growing.