Collectivism is fundamental to both the “New Economy” and the real estate
industry. Immeasurable benefits,
such as reduction in global poverty by over 2 billion people over the past 40 years
are credited largely to rise in global trade and urbanization. Economies of scale made this possible. Knowledge
has become far more accessible, and costs of bringing an idea to market have
been greatly reduced, thanks to harnessing of the internet. Our lives have been forever changed.
Staggering fortunes have been made by harnessing these forces
and delivering solutions to the marketplace; and yet
rather than unlocking barriers to equal opportunity-there is growing evidence
and considerable consternation over rising income inequality, corporate and
private tax evasion and the pace of technological and demographic change
upending society as we know it. Hence the rise in protectionist rhetoric, but
this is entirely the wrong tool to address these issues in today’s world.
According to MIT’s School of Political Science, discord in
the political world is not only increasing, statistically it is increasing
exponentially. As real estate
professionals this should be great cause for concern – at the local, regional,
national and international levels. Say
you are a builder – you rely on local and regional publicly funded infrastructure,
available skilled labor and stable building codes and tax regimes. Say you are an owner – what if your tenants
suddenly find their businesses unable to function due to supply chain
disruption, costs skyrocketing due to border crossing issues, tariffs and/or extradition of meaningful swaths of the workforce (this is how the housing
situation became so dire in Spain during the last recession). Say you are an international investor - $70
billion of foreign direct investment went into the US alone last year – risks are
not insignificant of these assets being impacted in an environment of
escalating counterproductive policy proposals.
Our economic health and social future depends on political
leaders coming together to find ways to spread costs burdens equitably and ensure
benefits of technology are unfurled ethically.
The January 30, 2016 Economist
article – Going after Google suggests a common sense approach to dealing with
tax avoidance that speaks to the direction in which comprehensive solutions lie in an
increasingly global economy. Every country taxes its corporations and
residents on their worldwide income which is then redistributed back pro-rata to
the source countries, accounting for both workers and consumers in the
redistribution formula. Ideas like this highlight that cooperation, not protectionism provides better solutions, both morally and economically.
I profoundly agree with Peter Diamandis, author of Abundance is our Future. The question is how do we get there. Technology is key to solving
most of the causes of distress and suffering in our world - that will be the
topic of future blogs. But technology cannot deliver its promised
benefits, and neither can we hope to build and invest in healthy communities without
functional and constructive public policy.
