The impact of artificial intelligence, the growing concentration of wealth in the hands of a few and the inequalities that penalize young generations: these were some of the themes at the center of the speech by David Card, Nobel Prize winner for Economics 2021.
During the conferences held on Saturday 24 October at International Festival of Economics of Turin, the Canadian economist outlined a severe diagnosis on the state of the global economy, warning against the easy enthusiasm linked to new technologies and denouncing the distortions of a tax system that weighs almost exclusively on earned income.
The growth of assets and the delay of taxation
One of the themes at the center of Card’s speech is the analysis of inequality, which does not derive from a simple difference between salaries, but from the wealth accumulation of a few. If wage inequality has remained substantially stable since the 1990s, the general increase in wealth at a global level can only be explained by corporate profits and capital returns that have grown at dizzying rates, left behind by proportionate taxation. The phenomenon is driven by technological giants and large American digital platforms, such as Meta, Amazon and Alphabet, which monopolize global markets and extract value from them.
US platforms and European delay
Europe continues to produce top-level talent thanks to a quality public education system, but suffers from a chronic shortage of supply and industrial infrastructure capable of competing on the field where the real game is played. The Old Continent thus finds itself in the role of pure consumer of US technologies, incapable of retaining the value generated and making its own brains profitable within indigenous players.
Assets, universal income and budget sustainability
After the analysis, the Canadian Nobel tries to draw conclusions to indicate possible solutions. Universal income is considered a true welfare utopia, financially unsustainable for the public coffers of any country: guaranteeing an allowance, even a modest one, to a large segment of the population would lead to state budgets collapsing.
However, the fiscal issue remains open. A levy on large wealth and capital dividends that are currently not adequately taxed would represent the key resource for financing the great transitions of our time:
- investments for the environment and for the energy transition;
- strengthening public education.
Today the fiscal pressure weighs punitively on employees and young people, forced to pay a third of their salary to support the pension system and social spending for the elderly population.
The role of Artificial Intelligence
Card also debunked the triumphalist narrative about generative Artificial Intelligence. This is not a zero-sum or no-loss technology, because linguistic models are already undermining the demand for professions that previously seemed unassailable.
An example of this is the software sector: after a decade of exponential growth in hiring between 2010 and 2023, the demand for traditional programmers and IT engineers is at a standstill. The integration of AI into industrial processes is pushing tech giants to hire fewer entry-level staff and reduce career progression for intermediate workers. In this way, in the coming years there is a risk of penalizing new graduates and increasing the precariousness of those who are a few years away from retirement.
