In the late 90s, there was a big political struggle over globalization. The pro-globalists (the economic establishment and the Clinton administration) argued that it would (A) grow the economy (based on comparative advantage), (B) enrich the developing world, and (C) push them towards liberal democracy, as a consequence of having a richer middle class. The anti-globalists (mainly left-wing opposition) argued that it would (D) destroy the working class in the first world, (E) shift the balance of power enormously in the favor of corporations, (F) destroy the developing world too.
The pro-globalization side won the fight completely: the WTO was established, China was brought into the global trade system, etc.
Twenty years on, it is clear that both sides were partially right. The pro-global side was right about A and B, and wrong about C. The anti-global side was right about D and E, and wrong about F.
Strangely, the anti-global side disappeared entirely from the public discussion; in fact, that entire period of history seems to have been memory-holed with incredible rapidity. Even as D (the destruction of the working class in the developed world) was brought into the 2016 presidential campaign as one of the main issues (by Sanders and, surprisingly, by Trump), nobody seemed to recall the anti-globalization protests of the 90s. None of the activists from back then came out of the woodwork to say "we were right!"; no journalists went to look for them.
This should give pause to those who put trust in the media, even (especially?) the self-proclaimed progressive ones, like Vox.
Breitbart marks Globalists in their article headlines with literal globes. Also a pure coincidence that all of those are Jewish of course.
Trump ran on abolishing NAFTA and TTIP.
How is this not a mainstream position now?
Can you elaborate on what you mean when you say
"This should give pause to those who put trust in the media, even (especially?) the self-proclaimed progressive ones, like Vox"
Why does the media's lack of memory, and lack of pursuit of the anti-globalists, mean we should not have trust that what they report now is accurate? (Genuine question not trying to make a point with my question).
Perhaps in older times when there were railways to build, factories and assembly lines to setup, power grids and communication networks to build, there was more room for investment in the sense of spending money now to gain rewards later.
Now that businesses have little trouble raising capital, we may be getting closer to the point where new technology/ideas are scarcer than capital. In that climate, money may be more useful to society in the hands of government or regular people than the beneficiaries of investments like entrepreneurs.
Concretely, when $1B is better used to build housing or improve healthcare, than invested into 10 "Uber for X" startups, it makes sense to tax more and let the government use the money for just that.
There is no hoarded money. It's all invested. Where do you think Gates' money is, for example?
These aren't investments and they aren't going to generate a monetary return for Gates. Under traditional economic dogma, no one should ever do this. Its not an investment, its donation.
Money set out purely for generating return can be hoarded when theres no good use for it. Money lying in an investment fund or an investors bank account is useless while not invested and can continue to be useless when invested in a company that fails or does nothing to help society.
That's correct, but it isn't hoarded, either. It's spent.
> Under traditional economic dogma, no one should ever do this. Its not an investment, its donation.
There's no such dogma.
> Money lying in an investment fund or an investors bank account is useless while not invested
It's always invested. Investment accounts/funds do not hoard cash in Scrooge McDuck cash vaults, either. It's all invested.
> and can continue to be useless when invested in a company that fails or does nothing to help society.
Wealthy people tend to be good at investing, which is why they're wealthy in the first place. Besides, money spent on a failed investment was still spent, and others were the recipients of that money.
I'm tired of seeing the same trope of "the free market solves all problems" when there are clear counterexamples. Its clear as day to me that $1B spent on malaria is better than $1B spent on the next advertising startup. The ad company may have been a great investment and many employees would be recipients of the money like you say. Doesn't change the fact that there are better uses for the money - uses not served by the incentive structure of free markets.
Also, you're arguing that you know better how to spend money than others. Probably about 90% of people feel that way about it, too, and they all have different ideas than you.
As for the central planning argument that a single planner cannot effectively organize all of society, I agree. But central planners (such as government) already do have some influence in the structure of the economic system, which behaviors are rewarded vs. not.
Don't you think there might be other ways of setting up the world that incentivize behaviors differently? Whatever way has worked so far might not be the best going forward when the problems we are solving at society scale change.
That´s it. Once there is too much super-rich capitalism stops working, as decisions are not an average of million of small transactions, but it is a centralized economy decided by a few.
Also, the rich spend more money in luxury items that have no return value. A garage with 10 Ferraries doesn´t produces almost anything, it is wasteful. For the same cost you get 200 cars that allow workers to get to their jobs, go shoppping, etc. The same goes for an "iceber manssion" on London vs an apartment building.
And that wealth also creates corruption. So much money on so few hands creates an unchecked source of power. Why do you want to serve the public, that has no extra money to spend on you, when you can serve the elite that has more resources that they need and can share them with you?
So why are CEO salaries still going up? Is there not increased competition for C-level positions in companies from globalization? If not, why not?
But that means there are fewer C-level positions/capita today. So:
* supply of C-level candidates has gone up (more MBA graduates, larger supply of candidates from overseas)
* demand for C-level candidates has gone down (fewer, larger corporations, so fewer C-level jobs overall)
And yet C-level compensation is going up. Doesn't this contradict all the supply/demand theories I keep hearing about lower/middle class employees?
Guess what, there are some VP's that have 5 more layers of VP, Senior VP's... before C suite.
You want to incentive people to work hard at their jobs to get promoted to the next level so you need to constantly pay them more. When you have 10 layers in your company and people at the bottom are making 6 figures (for software engineers, easily the case), the top level employees are going to make a lot of money.
The increase in the labor supply has mostly affected the low end of the spectrum. You don't usually go from subsistence farming directly to the board room. This will change but it takes a long time to percolate up.
Large corporations are usually conservative with their C level executives. Even if someone else could do a 10x better job you are not going to replace an executive if they are outperforming the market. The threshold for being removed is fairly high.
If you started your own company and own a controlling stake it is highly unlikely that you will be removed, even if you are terrible at your job.
The scale of some of the biggest companies is profoundly larger than in the past forty years. For example McDonalds has 375,000 employees worldwide. Their CEO makes around 15.5 million a year. If you were to distribute his salary to each worker in the company (assuming each works 40 hours a week) you could afford to give a 2 cent raise per hour to each employee.
Because it is irrelevant. If you have 100 workers, they produce and consume as 100. If you get 100 million, they produce as 100 million, but also consume as 1000 million.
> It makes sense from an economic standpoint that the price of labor would not rise when the supply is increased
The price of labor would not fall if the demand increases also. That´s why it´s a non problem to have more people, until you hit the ceiling of Earth resources.
The problem is the distribution of the wealth created, and that´s explained in the article.
Also "hoarding" implies intent and capability. From all I can see, what's happening is the natural consequences of lifting billions of people out of poverty.
Ah yes, billionaire CEOs and investors have lifted millions out of poverty and so the market has rewarded them with steadily increasing incomes. But wait! I thought the market only cared about profits!? Why would it reward them for lifting millions out of poverty?? Is it possible that the modern American political system has been bent to the exclusive benefit of the rich at the expense of everyone else? Nah.
Because a worker and consumer with high productivity and high standard of living is more valuable to everyone involved (creates more value, buys more stuff) than a subsistence farmer? [0]
Really the only people totally losing out here are environmentalists, as the newly minted middle class overwhelmingly buys cars and air conditioning.