That Awful Four(teen) Letter Word

Posted by Bob Lord

Paul Krugman's column in yesterday's Times, Sympathy for the Luddites, pokes at an uncomfortable truth. Those on both the right and left want to believe that education is the answer to both unemployment and inequality. 

It likely isn't. 

As Krugman points out, mechanization is eliminating jobs of the "highly-skilled" just as it has eliminated jobs of the unskilled. We can tell those who have lost their jobs to mechanization or globalization, some in their 50's or older, to train for a new job, but what if that job is mechanized out of existence as well?

Ultimately, we need to deal with the reality that income is moving from labor to capital, as Karl Marx predicted it would. Krugman confronts this head on:

Education, then, is no longer the answer to rising inequality, if it ever was (which I doubt).

So what is the answer? If the picture I’ve drawn is at all right, 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?

That awful four(teen) letter word: redistribution. Here's to the day when redistribution is not considered so awful.