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Bright Future
Inequality May be Rising, But Technology Can Help

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.

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  • thrasymachus02

    Automation increases inequality because it’s easier to automate mid-level tasks than low-level tasks. No company has secretaries any more, but they have the same number of janitors.

    Education can be automated, depending on how you define education. People have always been able to self-educate, much more since printing, and on-line courses can provide the group and teacher experience. But Anglophones substantially define education as a socialization experience of being exposed to others chosen for the elite and elite professors, especially outside the classroom. This will still require an expensive four years in New England to get financially valuable certification as a qualified member or the elite, rather than just knowledge or skill which is preferably obtained from an H1-B worker.

  • Boritz

    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.-NYT

    Well let’s not be too quick and cavalier to abandon Marxism. The centerpiece of any good perspective should include capital bashing.

  • Anthony

    Trends in Income Inequality and its Impact on Economic Growth:

  • Corlyss

    But technology is one of the biggest drivers of inequality.

  • LarryD

    The Progressive dominated cities in the Progressive dominated States have the worst inequality. Do you think this is mere coincidence? I expect any inequality reducing technology to be hobbled, if not banned outright, by Progressives.

  • FriendlyGoat

    Technology can help raise the standard of living for many people—–perhaps nearly all people. We call this “progress” and no one is against it. Technology, taken as a whole however, DOES NOT reduce inequality. Free-roaming capital does not either.

    A simple example of the inequality problem is the widening gap between what people collect on an after-tax basis to hide the Coca Cola formula, own the Coca Cola brand, lead the Coca-Cola company, advertise the Coca Cola image, and trade the stock or options of Coca Cola—— vs. —–what people earn for mixing the Coca Cola, putting it in containers, trucking it to the stores/restaurants, stocking it on shelves or serving it to a diner.

    Although people “like” Coca Cola, it is not even remotely “new” and certainly is NOT some critical innovation that required low taxes on the wealthy (as always claimed by conservatives) to attract investment some risky venture that will save lives and advance society. It’s a sugary beverage which has basically helped a lot of people get fatter.

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