Is there a solution? It’s complicated, but I offer three ideas for discussion:
Change the metrics
We can use capital with abandon now, because it’s abundant and cheap. But we can no longer waste education, subsidizing fields that offer few jobs. Optimizing return on capital will generate less growth than optimizing return on education.
Change the politics
Both parties are wrong on taxing and distributing the capital of the wealthiest 1%. The Republicans are wrong in thinking that the rich create jobs. In reality many of the richest Americans have been investing in efficiency innovations rather than to create jobs. And the Democrats are wrong, because growth won’t happen if they distribute the wealth of the wealthy to everyone else. Money will be spent buying sustaining innovations — replacing consumption with consumption, because there are few empowering products to buy.
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