Over at the NYT’s Upshot, Tyler Cowen argues that technological innovation could reduce inequality. Cowen explores several reasons why this could happen: innovations from other countries could improve life here, successful Wall Street businesses practices could become less profitable as more companies adopt them. But here’s an especially key excerpt:
For example, while computers have improved our lives in many ways, they haven’t yet done much to make health care and education cheaper. Over the next few decades, however, that may well change: We can easily imagine medical diagnosis by online artificial intelligence, greater use of online competitive procurement for health care services, more transparency in pricing and thus more competition, and much cheaper online education for many students, to cite just a few possibilities. In such a world, many wage gains would come from new and cheaper services, rather than from being able to cut a better deal with the boss at work […]Movements toward greater inequality often set countervailing forces in motion, even if those forces take a long time to come to fruition. From this perspective, rather than seeking to beat down capital, our attention should be directed to leaving open the future possibilities for innovation, change and dynamism.
Read the whole thing for a convincing case for some degree of economic optimism. As Cowen notes, these are just speculations, and don’t eliminate the necessity of acting now to improve the economic lot of the American population. But many of the changes Cowen predicts are highly plausible and could very well come to pass if we create the space for them to do so. There are many ways technology could make health care cheaper that already exist, with more on their way. MOOCs, telework, and other innovations can help lower the cost of living even while in some case improving quality of life.