Matt Yglesias: observation

Transcript context

…Do you think that a belief in significant increasing returns to scale means that massive income inequality is simply inevitable? That even with high rates of taxation, the rates of growth of the increasing returns at some point just overcome that, and the wealthy people are just extremely wealthy and possibly politically very powerful, and you live in a Silicon Valley kind of world whether you like it or not? I don’t know exactly where the lines curve on that. I’m impressed, as I think a lot of people who are not hardcore anti-inequality folks, that Sweden has a high number of billionaires per capita despite a lot of social democratic policies. The reason for that, fundamentally, is that they’re a successful company that were founded by Swedish people, and that that’s good, right? If you’re on the other side of it, and you’re trying to make the case for Sweden — you’re trying to say universal healthcare is good, it’s great that they have all these trains in Stockholm, you’d say, “Look, this is a successful country.” It’s high GDP per capita. They’ve got Ikea. They’ve got Spotify. But that’s also why they have some of that very high-end inequality. Can you balance that out in some Gini coefficient way? Maybe yes, maybe no. But I think even if you did, you wouldn’t eliminate all of the political inequality that worries people. This thing in California, where they’re trying to regulate Uber and Lyft more strictly, and so now the companies are saying, “Well, we’re going to shut down there.” And left-wing people are now mad at them. But if you run a significant business enterprise, you’re going to be a powerful person in society, whatever your personal income is because it matters what these big businesses do. I don’t think that there’s ever been a country that doesn’t have that feature. As long as you have big successful businesses, the people who run them are going to be more politically powerful than — I don’t know — the man on the street, and that’s just life. But it seems there is a difference between, say, Denmark and Sweden. Especially if you take away Maersk, Denmark doesn’t have that many global companies. It’s very socially democratic. Stockholm has a huge and pretty successful startup scene. They’re probably going to grow more billionaires or at least multi-multimillionaires in the pretty near future. Would you, in this regard, rather be Sweden or rather be Denmark? I would rather be Sweden.…

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