K-12 Tax & Spending Climate: Technology and wealth inequality
Thanks to technology, people can create more wealth now than ever before, and in twenty years they’ll be able to create more wealth than they can today. Even though this leads to more total wealth, it skews it toward fewer people. This disparity has probably been growing since the beginning of technology, in the broadest sense of the word.
Technology makes wealth inequality worse by giving people leverage and compounding differences in ability and amount of work. It also often replaces human jobs with machines. A long time ago, differences in ability and work ethic had a linear effect on wealth; now it’s exponential. [1] Technology leads to increasing wealth inequality for lots of other reasons, too–for example, it makes it much easier to reach large audiences all at once, and a great product can be sold immediately worldwide instead of in just one area.
Without intervention, technology will probably lead to an untenable disparity–so we probably need some amount of intervention. Technology also increases the total wealth in a way that mostly benefits everyone, but at some point the disparity just feels so unfair it doesn’t matter.
Wealth inequality today in the United States is extreme and growing, and we talk about it a lot when someone throws a brick through the window of a Google bus. Lots of smart people have already written about this, but here are two images to quickly show what the skew looks like:
