Letter to the Financial Times - January 18th 2016
Sir
The hollowing of margins (Sainsbury's Home Retail bid, FT 17 January), and the end of the growth funding scheme (Zoellick/Rogoff, FT 18 January), might be a harbinger of bigger needed adjustments.
The only way that the giant grocery retailers in the UK might survive the onslaught of our heavy discounters is through ruthless cost cutting. So how soon will we see robotic grocery pickers and stackers? And driverless taxis - which it will be trivial to build for retrofit - using the algorithms of Google, Mobileye or Delphi and off-the-shelf hardware?
But where will that surplus, which formerly went to employees, accumulate. In a hollowed out world, where needs are met by the few, it will not trickle to the least skilled humans, or to the less resource rich regions.
And the model, of perhaps the last 160 years where redistribution flowed from growth financing, has probably reached it's logical conclusion in absurd asset bubbles.
In this context redistribution - through explicit wealth, and consumption, taxes - will grow in urgency. Likely when we face calamity. And the time will come when we are surely driven to devise allocation systems beyond just "rewards for productivity, and for frugality".
Mark Reader
Cambridge
Twitter: @READER_MA
