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“Inequality: What can be done? “ - interview with Sir Anthony Barnes Atkinson
Hank Pellissier   Jan 11, 2016   Ethical Technology  

Sir Anthony Barnes (“Tony”) Atkinson is a British economist who has worked on inequality and poverty issues for over four decades. He is a Fellow of the British Academy,  Fellow of the Econometric Society, Honorary Member of the American Economic Association and Foreign Honorary Member of the American Academy of Arts and Sciences. He was knighted in 2000. He academically mentored and has collaborated with Thomas Piketty (author of Capital in the Twenty-First Century) and his recent book Inequality: What can be done? was published in 2015.

A review in The Economist notes that Atkinson “does not mind speaking uncomfortable truths.”  IEET interviewed Atkinson via email last week, to obtain his opinions on economic justice.

Tony Atkinson

IEET: Do you regard Basic Income Guarantee as a solution to the problem of technological unemployment?

Tony Atkinson: Quite a lot of my book Inequality: What can be done? is about the relation between technological progress and the distribution of income.  I take issue with the majority of economists who say that increased inequality is due to technological change biased against unskilled workers (and against workers in general) and who conclude that it is out of our hands.  I disagree for two reasons.

The first reason is that the direction of technical change is the result of decisions that are taken by businessmen, investors and governments. A company may, for example, decide to invest in robotizing its warehouses and developing drones to deliver its goods. Those changes would reduce the demand for labour, and the company would no longer have to rely on a workforce that wants to be properly treated and paid.  But we could decide to invest in other forms of new technology. For example, we could invest in using robots to allow elderly people to stay in their own homes, which could increase the demand for care workers.

The second reason is that, if technological progress benefits capital in the form of a rising share of national income going to profits, then the distributional impact depends on who owns the capital. As Laura Tyson has said, the crucial question is – who owns the robots?  This brings me to the Basic Income. A second feature of my book is the stress on the changing nature of the labour market.  In the 21st century, there will be fewer “jobs” in the sense of being fulltime and long duration.  People will increasingly have portfolios of activities. This means that we need to re-think social transfers, and the Basic Income provides one route forward.  But this has to be financed.  As was proposed by my teacher, Nobel-Prize winner James Meade, if the state owns a share of capital, then this can be used to finance the Basic Income.

IEET: There are numerous ways to redistribute wealth - taxation, land reform, minimum wage, maximum wage. Which ways do you personally favor? 

Tony Atkinson: I would stress that it is not just a question of taxes and transfers. It is necessary to change the pre-tax distribution of income.  In addition to the measures you mention – minimum wages and ethical pay policies – consideration needs to be given to areas like anti-trust policy. After all, the original Sherman Act was proposed with this in mind. To quote Judge Learned Hand, Congress desired to “put an end to great aggregations of capital”.  And then there is full employment. The Federal Reserve has a mandate to maximize employment.

But taxes and government spending are also important. At the moment, taxes are presented too negatively, with no account being taken of the way in which they may support other societal goals.

IEET: What would you do to radically redistribute income? What reforms would you seek to enact?

Tony Atkinson: I believe…  that the taxation of the transfer of wealth should be reformed to take the form of a tax on the wealth received by a person over his or her lifetime. This would be a tax on inherited advantage and be an immediate contribution to reducing inequality of opportunity. Moreover, I propose that the tax revenue be used to fund a minimum inheritance for everyone on reaching the age of 18. Such egalitarianism would undoubtedly promote equality of opportunity – an objective to which Republicans sign up as well as Democrats.

Hank Pellissier serves as IEET Managing Director and is an IEET Affiliate Scholar.

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