Investor. Curious about business models, behavioural economics, social psychology.
UK
Joined May 2019
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This analysis will be quantitatively on point. The thing people miss about IHT is it strikes a deep aspirational chord. After later life care many won’t have the assets they would hope to leave to their kids, but in their 40s-70s they absolutely aspire to. A tax everyone believes they will pay, but actually won’t, is a politically savvy tax to cut.
AI coming for overpaid white-collar finance jobs and the cuts are pretty wild.
There was limited/no welfare 1790-1840, so displaced labour had to accept wage bargaining as it was and productivity accrued to capital. These days we have too much welfare, so the feedback loop includes government outlays which will focus minds. This is why AI losers (incl. Youkay) are wanting to pace/regulate AI, you can’t easily tax US companies. A country who has determined to stop manufacturing anything, has no natural resources, is structurally uncompetitive in the physical world, has spent the last 4 decades pivoting to a white collar service led economy, ripe for deflation in the value of that GDP. What’s more, those services needn’t happen in the UK, accounting, law, marketing, consulting, advisory - can all be cross border, so you can’t artificially hold wages up, UK GDP will accrue elsewhere, robbed from under its own nose. Those at the top will behave rationally - you can already see it (Deloitte this week), so I do subscribe to the view that in a world where labour is displaced by AI, very clearly the share accruing to capital will be larger than labour. Welfare will dampen this dynamic, but unlike in 1840, capital is mobile, and as I said above, services don’t have to happen onshore. The UK will be faced with a choice, how structurally uncompetitive it wants to make itself vs how much inequality in can tolerate.
Sequent retweeted
There was limited/no welfare 1790-1840, so displaced labour had to accept wage bargaining as it was and productivity accrued to capital. These days we have too much welfare, so the feedback loop includes government outlays which will focus minds. This is why AI losers (incl. Youkay) are wanting to pace/regulate AI, you can’t easily tax US companies. A country who has determined to stop manufacturing anything, has no natural resources, is structurally uncompetitive in the physical world, has spent the last 4 decades pivoting to a white collar service led economy, ripe for deflation in the value of that GDP. What’s more, those services needn’t happen in the UK, accounting, law, marketing, consulting, advisory - can all be cross border, so you can’t artificially hold wages up, UK GDP will accrue elsewhere, robbed from under its own nose. Those at the top will behave rationally - you can already see it (Deloitte this week), so I do subscribe to the view that in a world where labour is displaced by AI, very clearly the share accruing to capital will be larger than labour. Welfare will dampen this dynamic, but unlike in 1840, capital is mobile, and as I said above, services don’t have to happen onshore. The UK will be faced with a choice, how structurally uncompetitive it wants to make itself vs how much inequality in can tolerate.
You can kill people with 'kindness', the government is crowding out the private sector, govt spending as % of GDP is +11ppts over the last 25 years to 46%, as high as the GFC when we had 9% unemployment, except this is not a crisis. This government is putting itself before the hands that feed it.
