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Derrick RancourtLast week’s announcement that Amazon, Berkshire Hathaway and JPMorgan Chase are forming a new healthcare company to cover their employees is an interesting case study in creating haves and have nots.

It’s an intriguing concept because of how fractured the United States healthcare system is.

No doubt other companies will join suit and pool their resources to buy loyalty from employees. It will be interesting to see how far this new trend goes in the U.S. For example, will enterprises such as McDonald’s that oversee franchises that pay minimum wages to their employees join the trend?

Since the 1970s, employee pay hasn’t kept up with the cost of living. Yet many argue that because of the spread and bounty of the Internet, quality of life in North America has actually improved. Information technology and globalization have mostly driven down the cost of goods, including food.

At the same time, it has routed out North America’s manufacturing sector while creating titans, the one percent who more and more rule the world. I fear that with technical advancements such as robotics and artificial intelligence (AI), these titans will become even stronger.

While some of the titans have decided to toss some of their plebs a bone by providing healthcare, history shows that titans tossing bones to plebeians isn’t enough.

In their book Why Nations Fail, Daron Acemoglu and James A. Robinson suggest that extractive economies fail, whereas inclusive economies thrive. Extractive economies are those where a ruling elite subjugates people while extracting wealth in the form of resources. In inclusive economies, the ruling elite provide free agency and limited taxation to their people, creating incentives to become entrepreneurial and facilitate change through creative destruction. According to Acemoglu and Robinson, this is the reason that countries such as England and the U.S., and more recently Japan and Korea, have succeeded.

Based on this logic, titans need to leave enough room for the occasional pleb to innovate. Through innovation, plebs will have the opportunity to transcend future anticipated employment hardships, while creating bounty for the rest of us.

However, by supporting U.S. legislation overturning net neutrality, titans are making a mistake, moving us back to an extractive economy. The Internet is a wellspring of innovation and it’s where much of our current bounty originates. However, when titans can throttle the Internet to suppress upstart companies (i.e. the source of competition and creative destruction), then a significant portion of new innovation and bounty are at risk of not occurring or being delayed.

Acemoglu and Robinson show us that a society’s advancement is superior when idea generation is put in the hands of the many rather than the few. This means that titans should allow startups to put their ideas forward to compete in the marketplace. Plebs should be given the opportunity to become titans, be it through competition or acquisition.

As for the rampant unemployment that’s expected with the creative destruction coming from robotics and AI, some argue that governments will soon have to give displaced plebs the option of a living wage. This will mean that the titans and their employees, including those receiving their fancy new healthcare, may have to pay more taxes to sustain the ‘takers.’

If governments must provide a living wage to those displaced by AI and robotics, it should be tied to expectations such as entrepreneurship. A living wage can be used to drive innovation.

People with plenty of free time (since they’re not working) can start dreaming of ways to become titans – provided the titans leave enough room for the plebs to innovate.

Derrick Rancourt is a professor in the University of Calgary’s Cumming School of Medicine, where he chairs the Graduate Science Education’s Professional Development Taskforce, and a Director on the board of the Alberta Council of Technologies Society.

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