The following post was prompted by the Salon article linked below.
Obviously, as a Progressive, I abhor income Inequality. The main problem, however, with this argument as it relates to its structural deficiencies, as opposed to the moral implications, is that it relies on the assumption that more players able to play in the game is automatically good for economics in a structural sense. And, as Mr. Rosenberg suggests, this is so because it not only creates more innovation, it also fosters more competition which also spurs innovation.
All of this is quite true but what it fails to consider is that Capitalism is a good deal more complicated now that it has been mutated across two quite different conceptual mind sets; and by this I mean mind sets in the nature of those described by Marshal McLuhan: linear and objectified typographic thinking, and the more all inclusive sensory mind space of electrified experience retrieval.
First and foremost in fully accounting for this greater complexity is that fact that Capitalism has always been in a love-hate relationship with competition. It certainly adores the facade of competition, but the actual reality always makes profit margins thin. If that weren't bad enough, however, what we get now with increased competition is electrified amplification. More can be done for less; especially as it relates to inputs of human skill. In this is created the dichotomy of ever greater quantities of output that must be consumed by fewer people per unit volume who will have a job affording them the ability to purchase in the first place. And don't even think about getting me started on what the hyper marketing required to sell as much as is possible to the remaining workers does to humanity as a whole.
Hang on, though, because it gets worse. Ever increasing innovation and competition also have the unavoidable consequence of making old enterprise paradigms obsolete which, as a further result, require those few still working to retool in various ways. With electric amplification this cycle winds up faster and faster with little consideration of not only who pays for the retooling, but, perhaps a great deal more importantly, what this does to the human condition as it relates to our connection to tools and the ability to create expressively.
When you get right down to it, Capitalism on electricity just doesn't make any sense at all. It makes human skill as a commodity absurd, hyper consumption absurd, and Democracy absurd because not only are information and money are the same thing, but also because thwarting socially unacceptable concentrations of counters is extremely difficult to maintain long term.
The fact of the matter is that Capitalism is obsolete. It is an operating system never intended for electrified environments. We need to start over in coming up with a new system. I'd like to think I've made some strides there. I would encourage all of you to check it out at either Oldsofty.com or Jeff Vale on Google+.