When Americans peer ahead into the future, the most consequential question we ask is about jobs: in a world in which manufacturing jobs won’t support an affluent middle class and in which many professional jobs will be transformed by automation, how will most Americans make a living, and what will keep the middle class afloat?
A conventional, widely shared view informs the way that blue America looks at that future. This view holds that the death of industrial society means the death of the mass middle class. When millions of people can’t make a living “making stuff” in factories anymore, wages for the unskilled will fall. America will be increasingly polarized between a small group of high skilled creative professionals and a larger group scavenging a living by serving them: mowing their lawns, catering their parties and so on.
Those who think that the blue model needs to be preserved and extended into the future (including, I think, our current president and most of his top allies and advisors), tend to think that under those conditions we will both need and be able to afford an ever-more active redistributive state. The tycoons and the very successful minority will be so rich, thanks to their continuing gains from globalization and technological change, that they can pay progressively higher taxes to fund basic services and middle class jobs for enough of the rest of the country that something like a middle class society can be preserved. From this perspective, a government-funded health care system is more than a method of delivering health care: it is a way of providing protected, blue-model type jobs when the factories have mostly disappeared. In general, from this perspective you wouldn’t worry about the growth of public employment compared to jobs growth in the private sector; a highly productive private sector might employ fewer and fewer people to generate the wealth that would sustain the larger but much less productive public sector.
This view of the future sees a supercharged private economy pumping huge amounts into the system in a way that, unless corrected by sustained government action, polarizes incomes to an unacceptable degree. It sees a handful of very large and very successful businesses—an information-finance-entertainment complex, perhaps, including everything from movie studios to investment banks to software firms—generating vast profits. Top research scientists and a few other groups will also do well: the celebrity chefs, the famous writers and intellectuals who attract funding and publicity from the lords of the earth, and other clever, creative types. Wall Street, Hollywood and Silicon Valley will anchor the vibrant, creative side of the American economy, but the rest of the country and the very large majority of the citizenry will live much less productive lives.
The people who work in the cutting edge firms, directly or as contractors, will do extremely well and live fascinating lives. But the rest of the country will be cut off from wealth creation. For 4.0 liberals, the programmatic consequences are obvious: tax the productive private sector in order to fund a dignified life for those in education, health care and especially for the large majority of the population without the skills or the creativity that would qualify them to join the productive minority.
The problem with all those “tax the rich” schemes is you always run out of rich people long before you run out of the poor ones.
(As always with WRM, there is a lot more and you should go read it.)