Shift_from_Capital_to_Labor

Technological Advancements: o The rise of technology and automation increased productivity but also displaced certain types of labor, particularly in manufacturing.

o Capital investments in technology led to higher returns for investors and owners of capital.

Financialization of the Economy: o An increased focus on financial markets and instruments allowed capital owners to generate significant wealth through investments, often outpacing wage growth.

1. The Era of Capital Dominance (1980s Onward): • Political Changes: Bessent notes that the shift favoring capital began around 1980, coinciding with the election of leaders like Margaret Thatcher in the UK and Ronald Reagan in the US. These leaders implemented policies that favored deregulation, privatization, and a free-market economy.

2. Impact on Labor: • Stagnant Wages: Despite increases in productivity, wage growth for average workers remained relatively stagnant, leading to a growing income inequality gap.

• Decline of Labor Unions: Union membership declined, reducing the collective bargaining power of workers to negotiate better wages and benefits.

• Offshoring and Outsourcing:

Globalization and Trade Agreements: o NAFTA (North American Free Trade Agreement): Implemented in 1994, NAFTA reduced trade barriers between the US, Canada, and Mexico, encouraging businesses to relocate production to lower-cost regions.

o WTO (World Trade Organization): Established in 1995, the WTO facilitated global trade by reducing tariffs and t