March 10, 2017
Sir, when you don’t know what to do, you might spend sometime putting a drawer in order, or sharpening some pencils. That’s the impression I get from Martin Wolf’s “British business is starting to look more Italian” March 10.
There are too many new challenges building up fast and on steroids, and those numbers Wolf so insistently feeds his readers with, might also risk chaining us to no longer valid economic realities or models.
How are we to best manage (and measure) the effect of all those salaries paid to humans that are disappearing because of robots and automation?
How are we to get the decent and worthy unemployments, which a structural lack of jobs indicates we will need more and more?
If we go for something like a Universal Basic Income, do we have the tools needed to measure their adequate levels? A correct dose UBI dose could be magical, but an excessive one, extremely poisonous.
What would happen to Britain and Italy, if their robots do not measure up in capacity to for instance Germany’s?
With risk weighted capital requirements for banks our most important risk takers are told not to take risks, while, without a blinking of an eye, we allow our young to take on debt to study what we all suspect will not generate them any repayment capacity.
Regulators allow a low 20% risk weight for what is so dangerous to banks as what’s rated AAA, while imposing a 150% risk weight on the so innocuous below BB-… and tenured economist or finance professors do not even question that.
Where are the societal debates on all these issues? For instance were there any mention of robots in the recent Brexit and US president election processes?
Martin Wolf, at least for a while forget numbers which importance might have been superseded by events. We need all men (good and bad) on deck.
PS. Of course, just in case “all men” includes all women too.