Technology innovation's highest priority has always been to move money from the middle class to the ownership class. Why so many people assume altruistic outcomes is beyond me. Why so many people see any other outcome of OpenAI then increased income inequality is beyond me.
That's pretty demonstrably not true, historically. The explosion of the middle class of the 20th century was because technology still required a huge amount of labor, but it increased productivity to the point where that labor could live much more comfortably on their wages.
A changing means of production will likely shift the wealth from a previous ownership class to another. Whether that diffuses into the middle class is mostly a political problem. However the stronger a middle class is, (through access to capital) the faster technology production and adoption will become.
Or so is a school of thought of contemporary political economy (read Why Nations Fail by Daron Acemoglu. et. al. )
Example: the cotton gin did not make for a healthier middle class, since the political apparatus barred access to capital (and human rights and civic participation) for so much of the population.
This is nihilist thinking. There is no complete barring access to capital, even in the 19th century "middle class" loans were possible.
Today access to capital is as easy as it ever was (except maybe '06). The people who take risks are rewarded and there are countless stories of people moving out of middle class.
Productivity has been increasing even more rapidly, but the middle class is collapsing, so I'm skeptical that these two things are very strongly related
Most of the so called middle class are just well paid members of the working class.
Small business owners and others who get much of their income via ownership rather than wages/salaries are often indirectly but strongly dependent on the salaries of the working class to stay competitive.
So really most people are in the same boat when it comes to these things. It just manifests differently.
You are right that those who start off being well paid in the working-class tend to buy capital with the differential in pay, and thus move into the middle-class upon doing so. But, as such, still realize the gains on the capital side, so the decline on the wage side is not the whole picture for them.
I don't think necessarily, it just describes of the national productivity, how much of that produce is allocated toward labor rather than capital. (wealth generated through assets vs. wages)
The middle class owning more assets than working class sure is better off. But both derive most of their income through wages rather than assets.
That share of income from wages started its downward trajectory in 1971, when the US removed the gold standard and money-printing replaced hard money. The result was a man-manipulated interest rate fueled economy. Low interest rates benefit existing asset holders the most since they most definitively increase asset prices. Think about the simplest discounted cashflow, a perpetuity. When you change the discount rate r from 4% to 1%, the perpetuity value increases by 4x.
I've heard the gold theory a lot, but my current best theory is it wasn't until credit cards became ubiquitous that wages stagnated and the debt treadmill began. There was also a significant population increase in the latter half of the century, there - but forget looking at milk prices or gasoline prices - look at a ford mustang, or a motorhome - or even housing.
Once a certain segment of the population realized that real estate was "undervalued" relative to the potential for collecting rent on the undervalued property - yeah. rent goes up, wages don't at the same rate, more credit card debt. High debt means you're paying nearly all interest, so that ain't going down.
Oh and does anyone actually remember earning a decent amount of interest at a bank? man, those were the days. 12 month 7% CDs, lol.
There was a period of time when to get the highest ROI you had a factory built, you hired a bunch of people and had them make and sell washing machines, fridges and vacuums.
Since everybody now has a washing machine, fridge and vacuum, the profits fell and the manufacturing just barely sustains itself.
Since the founders / owners / shareholders extracted all excess profits, the companies became brittle in crises, causing them to buy each other until there is just about 1 per continent, possibly 1 in the whole world.
The only way to jack up prices until then, barred burying the whole planet under a pile of planned obsolescence electronics garbage, is to invent new ways to introduce scarcity. Like gating certain features behind a subscription fee.
And temporarily also to lay off as many people as possible, replacing them with automation.
Please elucidate how do you envision next win-win capitalism-based boom. Time savings to everyone have been driving the last one. The only area with a low-hanging time-saving fruit remaining is time on job. Which is exactly the time capitalism seeks to maximize for workers.
I don’t know why you are downvoted but the middle class was, and more broadly the merchant class were, literally created (and I mean that literally) by technology that invalidated the presumptions of the landowner class in several societies in the last few centuries. Some of these events were more violent than others.
In one sense I wonder if there ever was intention to make middle class rich... Increasing circulation allowed them to spend more money thus increase value of corporation same goes for pensions. Which then later were screwed out of the money stored there. Their value was to pump the stocks higher...
That's why the idea of the "middle class" was invented. You either live off the land/capital or you work for those people. You can't make the middle class rich enough that they don't have to work otherwise they'll realise they were working class all along.
Also class warfare. Can't have the working class and middle class team up and beat the rich... So have to give at least middle class some aspirations. I think elite is doing same thing with culture war now... Split them up and have them fight about something inconsequential instead of seeing true levels of inequality in wealth...
