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Eric Schmidt Decries Inequality, Declares "Let Us Celebrate Capitalism"

We don't get it either.

Does Google Executive Chairman Eric Schmidt contradict himself? Very well then, he contradicts himself. He is vast. He contains multitudes.

At the SXSW conference today, Schmidt was asked about the class tensions that seem to have engulfed the Bay Area recently, leading to protestors blocking shuttle buses that carry his company's workers. His response was nuanced and thoughtful—and contradictory.

He said that although gentrification had been a decades-long trend, that it had recently accelerated thanks to changes in the global economy playing out locally. He said that income inequality was approaching "the number one problem in democracies around the world" and called for its "amelioration."

His account of why it's taking place rang true. According to reports from the scene, he said, "in the automated world, incomes will go up for people who work with computers and work with robots, and they will go down for people who don’t embrace it. And that is a problem." He said that it would be better for society to work to take advantage of technological progress than to try to hold it back, calling for the organization of more fast-moving start-up "gazelles" through better education, looser immigration laws, and fewer regulations.

Sounds more or less fine, right? Well here's where things get a bit head-scratching.

When pushed to defend the consequences of that heated market for technology, including the eye-popping $19 billion dollars that Facebook recently paid for WhatsApp, a company with 50 employees, Schmidt seemed to change course. Spreading his arms wide, he said, "Let us celebrate capitalism. $19 billion for 50 people? Good for them." Schmidt seemed to be simultaneously decrying the economics of the high tech world while also glorifying them.

So let's review. Income inequality is bad for democracy. The problem in general is caused by increasing returns to a narrow, technically-skilled elite at the expense of a large majority. It needs to be fixed. But when you find a particular case of the increasing returns to that narrow, technically-skilled elite—hurray capitalism!

Don't ask us to explain that. It's Friday.


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