I question how much of the economy today is actually productive, and how much of it is actually indeed concentrating wealth into different areas. If a startup generates a lot of hype, IPO's to some incredible valuation, and then fails without making a product, it's conceivable that some people will make a lot of money for effectively no reason. Where's the production? It would be similar to having a gofundme and then taking donations. People give you money and there is no tangible production. Money moving from many places (investment on IPO in example A or donations on gofundme in example B) to fewer or one place seems like concentration rather than production to me. This isn't really true with Amazon as a company, but a lot of Bezo's net worth is tied up in Amazon's valuation. Bezo was probably a bad example to start with. Do you think concentration doesn't happen, ever?
I'd say yes wealth concentration happens, but it generally doesn't
mean what people think it means. Certainly there are cases where people are swindled out of money for no real goods or services in exchange. That's a drag on the economy, and the hope is that the market finds it and weeds it out. Multi-level marketing schemes (rather than IPOs) would be an excellent example.
I'm not debating the merits or causes of automation. It's completely understandable to automate from a business perspective. But isn't it conceivable to see a future where there are no jobs left for humans? Automation will likely reduce the costs of things across the board, but will there ever be a truly free lunch? If not, than how are people going to pay for things without the means to earn money?
I don't think it's possible in the short run for automation to eliminate all jobs. The more our standard of living rises, the more we consume, but also the more we focus on leisure. And leisure is one area where human creativity really dominates. Machine learning can pick up on patterns, but the more people are fed patterns in entertainment the more they start to value things which break from the mold. I think that machine learning could produce pop music one day, for example, but I think that a wide supply of AI generated pop music would result in a backlash toward music which broke from that mold. Part of art is uniqueness.
In the short run, machines flipping burgers may cause the workforce to restructure (leaving some people unemployed briefly), but it also raises standard of living by reducing costs. The more machines do, the lower costs get until ultimately, when they do everything, there is no cost for anything. Machines could design, build, and send other machines to harvest resources from an asteroid to be sent back to earth for the purpose of creating products that humans want, and that process could ultimately have zero cost. Because a self-sufficient system of machines, which repair each other, design each other, create their fuel, and ultimately harvest their own resources from wherever those resources are found, can build it.
Right, I get that being a CEO is hard and demanding. But a lot of jobs are hard and demanding. Is it harder or more demanding than being a brain surgeon? 50 times more demanding? I doubt it. But they can make upwards of 50x more money. CEO's make so much money
because they can more than any other reason. And that's fine. But the super-rich have a habit of walling off vast wealth in perpetuity, which effectively removes a LOT of production from the economy. Whether it's offshore accounts for various reasons, gold stashed somewhere, real estate that is held through multiple generations or other methods. It would be much better if they did their consumer duty and just bought tons of Yachts and ****
. This is essentially the crux of the problem with AOC's 70% tax on wealth....it would probably exacerbate how much money is removed from the system...
Ok, from the perspective of taking money out of the economy, I'll just leave you with this. If you create $1 out of thin air, and then share it with no one, who have you hurt?
From the perspective of how much money they make, I'll give you an example. You're an attorney who is revisiting licensing fees that your company is paying to other companies. During your review you find that you're licensing a product that you no longer sell, and are paying a licensing fee for nothing. You call up the licensing company and inform them of this, and they point out that your product on the market is covered by the license. You claim that it isn't. After some debate, it becomes apparent that the other company was wrong, and that the licensing fees are not needed for the products on the market. You reach an agreement. Your company stops paying $10M annually for licensing fees. You have now generated $10M for your company. In this case, you didn't generate it out of thin air, you redistributed it (which is often the case for lawyers), but from the perspective of your company, you generated $10M annually for the rest of your tenure at the company. This took you 3 weeks of negotiation.
Let's pretend that your salary at the company is $500k annually. In the course of doing your job for 3 weeks, you've saved the company your salary times 20 every year from now on.
That is why you get paid a lot of money. Not because you work hard, not because you're a better person, or smarter, or have a stronger work ethic, but because your job is
easily worth that much to the company.
