It is hard to suppress schadenfreude as legislators offer proposals to tax the endowments of our elite universities. Their administrators and professors are overwhelmingly Democratic—indeed left-liberal Democrats. They regularly support candidates who want to raise taxes on for-profit corporations and individuals.
Even more piquantly, most of the taxes proposed would target only wealthy universities. Of course, soaking the rich is de rigueur for the left-liberal. And the most serious proposals are coming from blue states, like Connecticut, that are desperately seeking new sources of revenue as business and individuals flee the state’s already onerous taxation and its job killing regulations.
Nevertheless, these are bad ideas.
Perhaps the biggest technology story of the year is also the most general—the recognition that machine intelligence is poised to displace more people in the labor market more rapidly than ever before. Among many other treatments, two economists wrote a well reviewed book, the Second Machine Age, on the subject, the financial commentator Nouriel Roubini took note of the trend, and the New York Times recently wrote a long piece trumpeting the development. I wrote about machine intelligence’s imminent invasion of the legal space. But this news is all around us. Google and others are developing self-driving cars. Self-service kiosks are replacing cashiers.
The cause of this development is the most important phenomenon of our age—the relentless exponential increase in computer power. Until a certain level of power is reached, computers cannot compete with humans. But once they get into a domain they can improve rapidly until they oust human competitors.