The fastest growing companies are the ones in the tech/ecommerce industry. It has been described as the ‘app economy’. The app economy gives us great innovations – but it fuels economic inequality.
Ecommerce industries employ fewer people and they often eliminate existing jobs e.g self service checkouts at the supermarkets. But those at the forefront of these industries are rewarded with million or even billion dollar incomes. Thus concentrating wealth in fewer and fewer hands.
The top ten industries on the 2013 INC 5000 list of fastest growing companies in terms of income were tech industries. Almost all of them employed under 200 people.
New Zealand wants to promote the development of high tech industries. Prime Minister Key tells us this frequently. The Alliance Party does not disagree.
If we go down the high tech path, though, how can we avoid the concentration of wealth in the hands of an ever shrinking elite group? These companies are not doing anything wrong in the traditional sense. It’s just that they are the lucky ones. What they have hit on does not require many workers and is something we all want, so has a huge market. With a recipe like that they can’t help but make enormous sums of money.
If we go with the app economy, we need to agree from the outset that it has to work for everyone. We will need to seriously tax excessive wealth. We will need to seriously tax excessive income. We will need a universal basic income that encourages people to work less and share the jobs around. And we will need a tiny financial transaction tax to make sure the country gets something out of all the money disappearing off shore for online purchases we make from overseas companies.
The state will have to jump in and do it. For it is the state’s job to make sure income is distributed fairly, regardless of how or by whom that income is generated. This task cannot be delegated to a few mega-wealthy individuals, no matter how generous and well intentioned they are – that would be an affront to democracy and the common good.
Some of the increased revenue can be used to fund free education, start ups, and research. So even the hi tech entrepreneurs should not feel too hard done by that we make them pay their fair share of taxes if and when they become successful. After all the state helped them when they needed it most. And will be there to help them again if it all turns to custard!
But voters beware, a National led coalition government with ACT and the Conservatives as partners will not have the foresight or the mindset to implement these changes. If you are not one of the high earning elite and you want a fair share of the pie for yourself and for your children you will need to look elsewhere.