Friday 18 May 2012

TED: Inequality too Hot?

Here's a TED talk by American entrepreneur and venture capitalist Nick Hanauer about income inequality (h/t Occasional Links and Commentary) and why it matters from a strictly pragmatic (as opposed to ethical or moral) point of view.

Personally, I find the talk pretty good: it's clear, direct, brief, overall accurate and easily applicable to other countries, like Australia.

As importantly, it shows that "fairness", "social justice" and other such arguments (which conservatives deride as "touchy-feely") are by no means the only arguments against inequality.

Additionally, Hanauer's wealth and business background lends him the credibility that rightly or wrongly (less rightly, more wrongly, in my opinion) others discussing similar ideas are denied. You know, something along the lines of "if you're so smart, how come you ain't rich". Well, here's a rich and smart guy saying the same thing the poor said, and you didn't believe.

From my perspective, the points Hanauer makes are: demand drives economic growth, employers hire additional staff only when the existing staff is incapable to service new business, inequality hurts demand and taxation policy can reduce inequality somewhat and allow to offer public goods, indirectly fostering demand. Neither ground-breaking, nor mistaken, although undoubtedly a contentious subject to conservatives... and some Marxists (whether you believe it or not!)

Anyway, the video's above, and here are the transcript and slides. You be the judge.


Incidentally, Hanauer's talk created a bit of a stir in the US. In a nutshell, after recording, TED website decided not to publish it, allegedly on the grounds that the talk was "explicitly partisan", "included a number of arguments that were unconvincing", and "the audience at TED who heard it live (...) gave it, on average, mediocre ratings", as explained by TED's curator Chris Anderson.

Hanauer and others have argued that the talk is "un-incendiary", "familiar to anyone who's ever taken Econ101, or regularly watched business news", and suggest it was not published out of self-censorship. (See here, here and here)

Like I said, I believe the talk is good, if not "earth-shattering" (for one, there are other good reasons why inequality is dangerous and I intend to write about this soon) and as Anderson did not explain which arguments were deemed "unconvincing" and why, I have to conclude that, to me, his explanation sounds like bullshit.

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