George Rebane
[This piece is the last of a four part series on taxes, jobs, and income that includes, in order of posting, 'The Administration Discovers Shortage of Engineers', 'Higher Tax Rates = Lower Revenues', 'More Green Companies Heading for Greener Pastures', 'Employment and Income Inequality'. It was motivated by two articles, one that appeared in the June 2011 IEEE Spectrum and the other in the 23jun11 WSJ on the need, disposition, and importance of technology workers to our country’s economy and future – a future which is being compromised by progressive politics and policies in the name of the misguided notion of ‘social justice’.]
Predictably when the economy is in the dumps, the usual voices on the left unlimber their class warfare guns and launch another assault on capitalism as the evil that has caused all the world’s problems. Even a pseudo-free market has what are known as business cycles, always have and always will have. A market is a dynamic complex system that is hard to control, and more so when centralized control is attempted. Appropriately trained technologists know that distributed adaptive control is the best (and nature's) way to achieve semblances of stability – even Adam Smith taught us that back when we declared our independence from Britain. The collectivist is forever ignorant of this, and sees vindication in his distorted belief in every slowly failing socialist economy – but the dots are never connected when crunch time comes, and blood is in the streets as we see in Greece and the countries now enjoying Arab springtime.
To convince ignorant audiences, the easiest targets for the socialists are the high earners in a capitalist economy. Free market capitalism is a ruthless meritocracy that has constantly witnessed creative destruction – the new replacing the old as we distance ourselves from the cave. Conservatives and libertarians celebrate this process in proportions equal to the energies progressives expend in their attempt to stifle it. It is only in the ironic juxtapositions of their names that confuses the ideologically innocent – there is nothing progressive about the progressive. To the socialist, the railroad brakeman’s job is socially just and forever.
But in the real world of technological advance, those with the brains, vision, and courage to invent and build things and methods that deliver to humanity products cheaper, quicker, and more capable, to those belong inordinate rewards. And the more their products and services can be scaled, the more inordinate are such rewards which come from newly created wealth, and not, as claimed by the class warriors, from the pockets of the poor. But the result is there for all to see, the people who can and will are the high earners, and those who can’t or won’t will be at the other end.
Today this saga is playing out between the technically able workers and those who aren’t. Even in our Silicon Valley, in the throes of a long-term decline, there is an ongoing demand for engineers and scientists who have left the bigger/older technology companies as these continue to move their operations out of California. The region’s creative talent is snapped up by the new domestic giants like Google and Facebook, and also foreign high flyers such as Ericsson, SAP, Nokia, Alcatel-Lucent. Did I say ‘creative talent’?
In our land most people think of a rock star or a painter or a writer as being of the ‘creative types’. They haven’t a clue as to what real creativity is. They know nothing of the impact of an insight that enables whole new domains of electronic switching to come into being and change the lives of billions (yes, with a ‘b’) around the world. The creativity infused into an AI approach that will dig out your early cancer while your life can still be saved; a new way to connect and cool thousands of server blades to save enormous amounts of energy. And yes, the mobile app delivering a new paradigm that will command the attention of millions as they enter a new world of social networking. That’s what some of us call creativity. And we only seek to reward the people who can deliver it reliably.
In the American labor market these people have been in demand for at least the last fifty years. They are sought after by every company and entrepreneur that wants to profit from contributing to the world’s quality of life. These are the creative talents that our universities still pump out, talents for whom large corporate campuses are built to house them in comfort and convenience. They work hard and are coddled with on-premises shops, restaurants, fitness and rec halls, … . An example to how such creative talent is valued can be seen in the ‘chef war’ between Google and Facebook now in progress. Each company is trying to attract the other’s world class chefs preparing the finest foods for the geeks that deliver.
But the greater wonderment here is that so many of these creative techies have the itch to leave behind such grand corporate comforts and high wages. They scratch that itch by resigning and striking out on their own with an idea and, perhaps, a like minded, equally talented friend or two. They start their own ‘Kitchen table top Inc’, working what seem like 30-hour days for months, living off savings or a pittance in angel capital, in the hopes of catching their own golden ring. And their motivation is that in America that golden ring is still there for those who can. But socialism is working hard to replace that golden ring with one made out of more modest pot metal – after all, we must have social justice.
On the other end of the labor spectrum we have the commodity workers – people with highly replicable skills. The least of these can only maintain an above market compensation when they band together and threaten disruption or violence if their demands are not met. And these demands, as we see from today’s NLRB intervention with Boeing’s new plant in South Carolina, are not related only to the workplace, but can serve political objectives which know no bounds. That such replaceable workers receive lower wages and thus contribute to the country’s wide spectrum of compensation (wage inequality) is seen as a social injustice by the class warriors. The class warfare idea here is that mix-and-match manpower should receive additional wages that is made up from dunning those who successfully and extraordinarily contribute to the country’s wealth and well being.
And since such forced unionization states are already economic disasters in waiting, the socialist class is doing their best to level the playing field with the right-to-work states, and thereby make misery uniform across the land. This kind of solution has always been the solitary tool in the collectivist’s economic tool bag. Income must be limited, or better, ‘equalized’ regardless of the cost to society – it is only ‘fair’.
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