June 20 2013
Vicki E. Alger
Nobel Prize winning economist Paul Krugman, Obama Treasury Secretary contender, author, and New York Times columnist, is feeling blue about the prospects for the middle class amidst so many pesky technological advances. Inequalities will rise as job prospects fall, and Krugman does not believe that more education will save the day (on that point, I actually agree with Krugman—at least in the sense that more education is not necessarily better education).
The reason is that even before the rise of technology all the education in the world did not eliminate that troublesome 1 percent of Americans who consistently earned more than the rest us—and herein lies the problem with Krugman’s world view: the 1 percent will always be with us—even if we embraced an all-expansive government to care for our every need. Krugman disagrees:
So what is the answer? … the only way we could have anything resembling a middle-class society—a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules—would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income. I can already hear conservatives shouting about the evils of 'redistribution.' But what, exactly, would they propose instead?
How about liberty? At a certain point those who generate the wealth used to support this egalitarian utopia would simply stop working. Why bother if what you earn based on your hard work and creativity gets confiscated and handed over to someone else—who presumably doesn’t work as long or as hard. And I don't recall Krugman offering to dole out proceeds from his New York Times or other paychecks to his readers.
On a more sinister note, thinkers from Plato to Tocqueville to the Federalist have noted the evils of attempting to give people the same opinions, passions, interests, not to mention incomes or abilities. If you don’t believe me just ask someone who’s fled a Communist regime.
While Krugman obsesses about the 1 percent, let’s consider what technology has done for the rest of us. Computers, the Internet, cell phones, social media, and other technologies have broken down all sorts of barriers, including geographical, socio-economic, and even the barriers of varying abilities. Interesting that Krugman focuses on current technological advances but ignores the now commonplace ones from the previous century.
Most people couldn’t explain how cars, kitchen stoves, electric lights, or washing machines work—but somehow we manage to drive, turn on the lights and the stove, and do a load of laundry. Few people had these “luxuries” at first, but within a few decades they’re virtually universal. The democratization of technological advances is a glorious thing that happens on its own without a government program or mandate (perhaps it's the politicians who should worry about job displacement).
The same principle applies to current-day technologies. A recent report by McKinsey and Company details the 12 most promising emerging technologies, from mobile Internet and robotics to renewable energy and genomics. Imagine cheaper, more environmentally friendly fuels. Think of the expanded opportunities people will have to blend work and home life thanks to Internet and other communications advances that make traveling to an office obsolete. With better automation, fewer people will have to work in dangerous conditions.
Importantly, just as during the last century displaced buggy-whip makers, chimney sweeps, oil lamp manufacturers, and laundresses adapted and found other jobs, so too will members of today’s workforce.
Both the 1 percent and the 99 percent of us can look forward to enjoying emerging technologies—as long as we reject Krugman’s suggestion to make government a ubiquitous part of our everyday lives under the guise of being a “safety net.”