Krugman's column today emphasizes that no matter how much "education" students receive (I mean the kind that trains folks for highly-skilled jobs, which is necessary, but not sufficient, for a real eduction), there always remains the spectre of outsourcing and out-moding that comes from globalization and technology advances.
So what can we do to make sure that these turn of events doesn't lead to mass poverty and mind-numbing inequality?
Certainly, redistributive tax policies and collective bargaining helps. Unfortunately, an effective response is one that must be globally coordinated. Else we will hear that famous "giant sucking sound" that is the race to the bottom.
The crux of the problem, though, lies with what drives our economy to make these technological advances. Competition among industry, of course, drives firms to acquire increasing returns of scale, greater efficiencies, and lower costs of production (including technological advances and lower wages). Where do the profits go?
To shareholders.
What can shareholders do? They can re-invest in capital markets. They can invest abroad. Generally, they go where the returns on their investments seem best. To companies that do the best at cutting costs and increasing efficiencies.
But who are the shareholders?
Certainly, many wall streeters and other members of the upper echelon of wealth.
But they are also many of the rest of us: anyone with a pension fund or 401(k). Who have a choice and a voice.
If the government doesn't do anything about the non-economic policy of the kind of free market capitalism that's bringing us to these turn of events, the shareholders can.
