Wednesday, January 18, 2017

"How the middle class beat the world’s billionaires"


This kind of globalism is, in many ways, the economically optimal outcome: the thing which produces the most upside for the most people. Consider two ways of spending an extra $1 billion a year. Under the Global Plan, you take 200,000 people earning $5,000 a year, and double their income to $10,000 a year. Under the American Plan, you take 100,000 people earning $50,000 a year, and increase their income by 20% to $60,000 a year. Given that choice, everybody in Davos would choose the Global Plan: it does the greatest good for the greatest number.

And globalism is exactly what Davos chose, with devastating consequences. Because the middle classes in countries like the US and the UK have always been richer than the middle classes in countries like China, India, and Brazil, it’s been extremely easy for Davos Man to pat himself on the back for improving the lot of the latter while making vague sympathetic noises in the direction of the former.

The problem is that you can’t eat vague sympathetic noises, and the middle classes in the US and UK have the ability to elect the leaders of the free world. If you ignore them, you can blow up the entire global project.