@SteveRoth People do face a choice.

With new income, "should I spend this money on newly produced goods and services, or purchase an existing long-lived goods, or purchase a financial asset?"

With existing financial wealth, at any given time, "should I retain this wealth in the form of a financial portfolio asset, or shift into existing long-lived goods, or mobilize it into commissioning real goods and service?"

@SteveRoth If these don't seem like choices, it's because under conditions of the kind of stability we've enjoyed, the answers are very predictable. As income increases, the share devoted to financial assets increases, asymptoting at 1. As wealth increases, the likelihood financial assets are mobilized as anything else decreases, asymptoting towards zero.

@SteveRoth Under conditions of reduced financial stability, these choices might become much more urgent, though. When financial assets come to seem questionable, for example, I think wealth might shift from financial assets towards real estate (both bidding up existing assets and commissioning new ones), with profound real economic effects. Existing wealth holders might revise their choice.

@SteveRoth We see this certainly in almost every developing economy, where domestic financial assets have never seemed safe and so real estate is the primary "store of value" for the rich. China in the news is suffering from that story right now. The question is whether places with histories of more stable financial assets can become at risk of shifting towards that equilibrium.

@SteveRoth holding preferences, the range of goods, and prices constant, egalitarian redistribution yields lots more spending on CO2 generating goods and services, compared to spending power just plowed into portfolio assets. 1/

@SteveRoth obviously, though, global warming (the fact itself) plus regulatory responses to it will shift prices dramatically. we'll see new scarcities as places become uninhabitable or uninhabitable w/o HVAC transmogrified into robust life support systems. we'll see resource prices rise. we'll see alternative energy sources become cheap, or else a regulatory crackdown on fossil fuels, or else a positive reinforcement cycle as we burn more carbon in response to climate change, worsening it. 2/

@SteveRoth but my conjecture in the piece is that complementary to shifts in prices, or more accurately, supply curves, related to resource scarcity, preferences will shift very dramatically in a world with the kind of well-thought out and sane VR/AR that Apple may be pioneering. the opportunity cost of NOT participating carbon-intensive consumption will fall very dramatically when you can be effectively everywhere while staying physically in your own neighborhood. 3/

@SteveRoth the piece isn't about the effects of redistribution *per se*, but an implication is that we can afford, in an environmental sense, more redistribution of wealth at present levels and colorably "stable prices" (because increased purchasing power and resources scarcity get offset by less-resource intensive patterns of consumption) than we might ave otherwise, ceteris paribus. 4/

@SteveRoth of course, without the speculative technology, we could use tools like a refunded carbon tax to promote less-resource intensive patterns of consumption as well. i don't think we should encourage inequality because ceteris paribus it's less carbon intensive than a more equal income or wealth pattern, any more than the fact inequality is disinflationary should recommend it to us in general. /fin

@LouisIngenthron "economically worth" is never a fact in the world. value is a human construct, turtles all the way down. it depends upon your, um, values.

mainstream economic does not even pretend people are paid what they are "worth". just as water is worth more than diamonds under any use metric, but also much cheaper, a person can be valuable for scarcity. it doesn't matter how many jobs the robots you maintain automate, if lots of other people can maintain them. 1/

@LouisIngenthron people who are "responsible for maintaining hundreds of thousands of jobs (i.e. chairpeople of huge companies)" like to claim they have extremely scarce and valuable talents that merit extraordinary pay. but at two different levels, we should be skeptical. 2/

@LouisIngenthron first, firms and boards are clearly unable to distinguish between talented chief executives and poor ones. the ones who run firms into the ground are eagerly recruited and make huge salaries before they do. *ex post*, we might identify "talent" from the successes. but it's impossible to distinguish between talent and luck in the *ex post* distribution. 3/

@LouisIngenthron the question then becomes what is the minimum level of compensation required to get as-good-as-we-can-tell people to take these jobs? obviously, it is much, much lower than actual CEO comp, or would be if there weren't the high comparables they springboard from. if the top social comp in existence were 20x the minimum, would sufficiently talented people really just opt out? we have some evidence from the midcentury experience the answer is no. 4/

@LouisIngenthron at a deeper level, it's a mistake to imagine that maintaining 100,000 jobs in big firms is socially necessary to those 100,000 people. the question of full employment is conceptually and empirically distinct from the scale of the largest firms. right now we are near full-employment, but very few of our contemporary bigs employ at the scale of midcentury industrial firms. 5/

@LouisIngenthron we could have a full-employment economy made up only of small and medium-sized firms. there are questions of technical economies of scale, there may be things that huge is necessary for. but it's not employment. being a "job creator" for hundreds of thousands is arguably lots less desirable than having lots of job creators for hundreds. /fin

@LouisIngenthron (all of that said, the actual policy recommendation I typically support is yours! 100x from minimum to maximum. not because i believe that is somehow "right", but because a 100x collar would be a *huge* improvement to the *status quo* without being as disruptive of present arrangements of insisting on a much tighter compression of incomes. whatever ethical case you might make for a tighter compression, getting to 100x would be huge, and we'd know more after getting there.)