Karl Smith writes something that I think should make nearly all of us nervous:
At its heart the issue is that Industrialization Really Was Different, and there is no reason to think it will come again.
The reality of this new world is that you cannot simply work hard and make a good living. Nor, should you expect that if you save for your future you can support yourself.
As for now, it is still in the interest of innovators to tap public equity markets and doing so means that they come under some – but not absolute – pressure to pay a dividend.
However, I have a hard time believing this will not come to an end. The money available in private pools will be sufficiently large that innovators can strike side deals that let them walk away with almost all the profits.
Savers will get nothing.
All of our institutions are geared towards a very, very different world than the one that Dr. Smith describes. Many of those institutions have preferential access to power and will fight like the dickens to preserve their prerogatives. Fasten your seatbelts, we’re in for a bumpy ride.