Sure I see that. What I don't see is how automation will make this variation larger for skilled workers like programmers.
The concentration in market share that the Internet allows also allows for a corresponding concentration in programmer salaries/talent.
Fighting off monopolistic tendencies and the disproportionate influence of monopolists and oligopolists – both economic and political – is already one of the greatest challenges of capitalism.
Automation makes this problem worse because our political institutions are corrupt and incapable of fixing the rise of monopolies, not because automation is bad in itself. And unlike brand recognition, lobbying, and other barriers that monopolists put up to keep their moat safe, automation is generally available to everyone, so it doesn't make sense to penalize it.
Inequality is a product of market regulations, not automation. Put a 90% tax on income over $1M, make 20 hour work week / 12 weeks vacation the new standard, introduce a land value tax, make it impossible to hide wealth offshore, and find a good way to distribute all the extra revenue so that people don't starve but still have just enough incentive to work (in a world that needs much less work because of automation). That'll go a long way towards fixing excessive inequality in a heavily automated world. Half of this can be done to great positive effect even today.
I don't know, maybe that's "a whole new system" that the author theorized that we need. But really it's just turning a bunch of knobs on the existing system. We haven't tried even that much, and everyone's already spelling doom.
Inequality arises naturally out of many different processes. You can think of the economy right now as being Pareto optimal or efficient; any reallocation of capital will necessarily make one person worse off than another. It is an example of the power law distribution.
> Put a 90% tax on income over $1M, make 20 hour work week / 12 weeks vacation the new standard, introduce a land value tax, make it impossible to hide wealth offshore, and find a good way to distribute all the extra revenue so that people don't starve but still have just enough incentive to work (in a world that needs much less work because of automation). That'll go a long way towards fixing excessive inequality in a heavily automated world. Half of this can be done to great positive effect even today.
That sounds to me like the way to hell paved with good intentions. If you increase the tax rate to 90% over $1M, those individuals will simply move their assets elsewhere. What's stopping them from investing in real estate in Japan (where you can still get good deals, because the dollar is still relatively strong, even though it soon won't be)? Wealth redistribution sounds nice in theory, where you can feel good about yourself because hey, you're saving the world right? Except you're making things worse. All those wealthy individuals you want to heavily tax will stop hiring here, and suddenly you have a population of very angry people that cannot work anymore. The illusion of a living wage is better than no wage at all.
The conclusion of the article, to me, is that the concept of a central bank and a State is obsolete. The future is rich city states with zero regulation, Pareto optimally efficient economies, surrounded by wastelands of those left behind. This is what the Singularity entails.
That's true but I'm not sure how that's relevant. The economy is Pareto efficient because it's literally impossible to make a significant change without making someone worse off, not because the current state is somehow good. This doesn't mean we can't make tradeoffs that will be better than the status quo (just not Pareto-better).
> It is an example of the power law distribution
People can tolerate such distributions as long as the vast majority who gets the short end of the stick has it pretty well off. That is the current situation. With automation we will see a higher concentration of wealth in the hands of fewer people. Whether it's natural or not is inconsequential if this puts most people into misery. They will not stand for it, and the society will collapse, but that will not happen because no one wants that, not even the rich, so the government will find some way to redistribute the tax revenue to make sure everyone can live comfortably enough that they don't need to riot. There's really no way around this redistribution if automation will indeed end up a serious problem.
> If you increase the tax rate to 90% over $1M, those individuals will simply move their assets elsewhere. What's stopping them from investing in real estate in Japan (where you can still get good deals, because the dollar is still relatively strong, even though it soon won't be)?
I am talking about a world where automation has eaten most jobs but the economy keeps producing a similarly high GDP (because all the same jobs are being done, just more efficiently), except the wealth is much more concentrated than today and needs to be distributed to a higher degree than today so that people don't starve. My back of the napkin suggestions are for that world.
In that world, other countries face the exact same problem because automation is not bound by country borders, and their governments will face the same pressures. The situation in different countries will not be perfectly equal of course, but neither are countries equal today (by tax rates or wages or environmental regulations), and we're able to manage that with visas, customs, tariffs and other barriers on international trade.
Even today the ultra rich and big corporations avoid taxes by parking money abroad. It's already a problem, it needs fixing regardless of automation and the taxation changes it will likely bring.
There is nothing special about how we happen to be doing things right now. All the tax rates, work hours, work culture, trade barriers or lack thereof – all that and more will change on a dime if we actually have a reason to change that. And with automation we very well might. Even 40 years ago the US had 70% marginal tax rates in the top bracket, and it's not like they were facing mass unemployment or any other crisis.
By this logic all wealth would have already moved some place with the lowest taxation. Something like Russia. It didn't happen yet though.