My latest art of gig newsletter got me thinking about a general point of relevance beyond the gig economy. Inequality is a misframing og the real problem: bad fat distribution. https://twitter.com/artofgig/status/1248066039763484673…
The current economy is optimized for extracting all surpluses and storing it in a particular concentrated form: high liquidity financial instruments that allow fat surpluses to migrate rapidly and frictionlessly to the current fastest growth vector.
The fact that the concentration coincides with a small population of private wealth holders is almost irrelevant. Any such high mobility concentration would hace the same effect: everything else has to be super lean and tightly synchronized. Great for growth but not resilience.
While wealth inequality may be a moral problem under some views, that’s not the main reason extreme wealth concentration is a practical problem. It’s a problem because it causes fragility. Thinking in terms of fat distribution rather than wealth helps.
To make it clear, such a distribution would be a problem even in a society that explicitly designed for eugenics and associated authoritarian values. Bad fat distribution is a problem for any system of values. Kinda like a potbelly is a marker of risk for anyone.
“Good” fat distribution would store fat in a much broader variety of instruments and engineer friction and illiquidity so it cannot gravitate to fastest growth locus too easily. You’re not trading off growth for security: you’re securing the growth itself.
There now seems to be a consensus among economists that dichotomy between opening up the economy sooner and mitigating for longer is a false one. You mitigate longer to actually rescue the economy rather than just put it through a false dawn. This argument works long term too.
A better fat distribution is the longer term macroeconomic analog to social distancing. It prevents economic contagion from spreading as fast, thereby preserving growth potential.
Except wealth concentration only pseudo-extreme <-- socialism among the rich, which leads to many people with $1-2b. Those billionaires feel poor, lean, and optimize against inflation.
It's only at about $20b that anyone starts doing much of anything.
Why eat the rich? No fat.