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.
Are you preserving growth potential?
The highest growth potential should be in the fastest growth vector, and roughly the same potentials are there and everywhere else during/after a crash.
Or are you thinking of that vector as a plurality that can ruin the majority/everyone?
'Flattening the Curve' should work both ways, less to lose because of lower total potential.
I can see a case for trauma of crashes/outbreaks making entire generations reject growth for security with an overcompensated loss of potential there, but that's hard to quantify/graph.