He starts out by observing that corporate profits are high while wages are low, which he hints at being caused by underpaying workers. He doesn’t come right out and say it because he knows it isn’t true, that mostly it’s caused by downturn in corporate investment and offshoring of jobs, but it gives him a chance to start using the term “robber barons.”
He then gets to talk about the wage gap between those with and without college educations, which he admits isn’t relevant because it had begun to stagnate before the “financial crisis.” One has to wonder, then, why he brought it up, especially since he does not use it in any further argument.
He then introduces the theme of his op-ed, that being that “profits have been rising at the expense of workers in general,” and goes on to say that “as best as I can tell,” which means he doesn’t really know and is purely guessing, that “there are two plausible explanations.” Plausible to him, anyway. We’ll see if they’re plausible to anyone else.
The first reason he offers is “technology has taken a turn that places labor at a disadvantage,” and the other is “the effects of a sharp increase in monopoly power.” These combine, he says, to place “robots on one side, robber barons on the other.” No hint at where the workers stand in that picture, so presumably the robots are attacking the workers from one direction while robots are attacking from the other. That's pretty complex, though, so I suspect that's not what he meant to say, and that he sort of got lost in his metaphor.
I’m not sure how the “sharp increase in monopoly power” plays into that. We all know how monopolies force consumer prices upward, but I’ve never heard how they drive wages down or what they have to do with robots. A near neighbor worked for San Diego Gas and Electric, which was at the time a monopoly. She retired at age 55 and paid cash for a $450,000 house. It does not look to me like her wage was suppressed very much.
He goes on to discuss the history of innovation at some length, citing several authorities from the 19th century no less, and argues that innovation can harm workers and has done so for centuries. He never mentions the Luddites, but he sounds like one of them.
He then makes his pitch, because it is on op-ed not just an editorial and therefor it has to call for some specific action.
…there is a big, lavishly financed push to reduce corporate tax rates; is this really what we want to be doing at a time when profits are surging at workers’ expense? Or what about the push to reduce or eliminate inheritance taxes; if we’re moving back to a world in which financial capital, not skill or education, determines income, do we really want to make it even easier to inherit wealth?
I happen to agree that corporate taxes should not be reduced, but this is gibberish. Wages are down because robots are replacing workers and therefor we need not to lower taxes on corporations and personal inheritances. The corporate tax argument at least has a slim thread of connection, but personal inheritance?
Krugman has an almost unique ability to state a valid point and then make myriad utterly absurd and nonsensical arguments in support of it.
“This is,” he says, “a discussion that has barely begun.” Seriously? Where has he been? This argument has been raging for more than a year. I know that his little ivory tower at Princeton is isolated, but it can’t possibly be that remote. Has he not been paying attention, or is he just that oblivious?
“But we need,” he says, “to get started before the robots and the robber barons turn our society into something unrecognizable.” News flash, Paul, the politicians and pundits have already done that.