Wolfstreet and Druck
Today, I read this article, from Wolf Richer’s blog. I think that Druck had previously said how grateful we should be for all these high-tech companies providing valuable services to us below cost (or, maybe in the case of Amazon, barely above cost). Well, yes, these are very convenient. At least for those who are banked, and have a computer, an internet connection and a smartphone. It’s nice of the providers of capital to pay for this. But, hold on: we are the providers. We all are, de facto, providers and consumers of capital.
Martin Wolf in the FT pointed out recently that all this debt, all this foregone consumption, is gone forever. Nobody is going enjoy it in the future. Not current savers. Not their descendents (Wolf channels Marriner Eccles).
I have always believed that the way to address extreme inequality in society is via a tax on capital transfers, before and after death. I’m arguing above that this won’t be needed, but it would speed things up. It would also drive the rich to consume more, which is a good thing. I think it was Gibbon who said something along the lines of “the consumption of luxury is a voluntary tax paid by the rich for the benefit of the poor.”