It’s been a crazy year and not surprisingly in the sudden shift in demand, and assets like Bitcoin reaching above £20,000, it’s not surprising that there’s going to be winners out of this. In 2020 56 billionaires were minted [link]. It has been established that the gap between rich and poor is increasing. There are now more billionaires than ever. However, we shouldn’t assume economics is zero sum, as wealth can be created. In the 1940s the gap between rich and poor was lower, but remember, back then, it was considered a luxury to have a fridge. The fact that other people are wealthy does not directly mean that you are going without. A lot of low information reactionaries dress their greed and envy up as morality.
There are some worrying trends however that cannot be ignored. Currently, the SMP 500 stock index is increasing. But, when you dive into the index, you will see a lot of stocks have taken a beating. The tech stocks have made such gains that it’s floating the whole index. My mutal index fund is returning just over 1% whilst my hand-picked tech stocks I brought on Etoro are giving returns of roughly 77%. Tech is itself causing more inequality.
You may think that banking is unique. It’s not. It’s the canary in the coalmine and now, other professions are following suit. Before, banking was not what people went into to make money. It was very mid-wage. The thing is financial transactions were some of the easiest things to automate with computing. Early computing systems focused on banks. You’ll come across some banking systems that were coded in Colbolt! When you automate on a massive scale, a lot of middle-class jobs get cut. However, the money you were paying all these middle-class jobs didn’t just disappear. It moved to the top for people who could code the algorithms and do the technical analysis. There were a few people with the skills available, and they could do things that required large numbers of middle-class jobs previously. People in bank branches now have no possibility to work their way up to the top of the central banking institutions.
Now with GPS, big data, and smartphones taxi driving is now taking this turn. Taxi drivers could work their way up to management and even run their own taxi ranks. Now, no matter how hard an Uber driver works, they will never make it to management. On the other side, Uber hires MBA graduates from world-class universities and they sign Rockstar software engineers for millions. Airbnb is also another warning. Combine that with smart contracts and decentralised ledgers that are made possible with cryptocurrencies, and we will see a massive culling of middle-class jobs in buying, selling, and renting houses. If you’re interested in this, Andrew Yang’s book “war on ordinary people” does a good job on covering this. He ran in the presidential race and is a backer of universal basic income to offset this massive inequality. Right-wing free-market supporters generally ignore this trend, but it cannot be denied.
However, leftists are not to let off the hook. They often paid these highly paid professionals as people who just lay around and take money for nothing. The fact is that there is a huge shortage of highly skilled people. If the banks could get away with paying these people less, they could. Many of these professionals are being pulled in all directions and are working around the clock. A good book that covers the data on how these highly skilled professionals are working more and more resulting in an increase of stress, mental breakdowns, and burnouts, is the “The Meritocracy Trap” written by the Yale professor Daniel Markovits. It also covers how high achieving people couple up and have kids, sending them to elite schools and coaching them and how the university system itself isn’t really mediocracy.
Thanks for reading to the end. I get a range of people to contact me over the posts I write. I’ve decided to build a discord server. It’s free, you can sign up completely anonymously. These posts will come in an ad hoc manner in the main channel of the server. Every day a news article that is ignored by the right and reported by the left and vice versa will be posted onto the server as well. Will also be doing polls on this server [link]