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Erik Brynjolfsson Talks Taxes at World Economic Forum

January 24, 2020


It was a brief lesson on the complex topic of economics and technology, and where they intersect. The setting was the World Economic Forum’s 2020 meeting in Davos, Switzerland, and the speaker was MIT IDE Director, Erik Brynjolfsson, in an interview with Bloomberg news.

Productivity is a puzzling paradox, he explained, because “while we have these amazing technologies, productivity growth has not increased, and in fact, it has slowed; it’s not taking off.” That means businesses are not yet pushing those technologies into new processes, new products, and new ways of doing business that will help average workers and citizens.

Brynjolfsson discussed the tech sector’s impact on the global economy, the link between productivity and taxes, and the strong benefits of a carbon tax.

Technology is moving faster than business or policymakers had thought, he said, but we can’t go backward. Even though many economists are still catching up to the profound technological changes taking place, they do agree that “we need smarter taxes, like carbon taxes.” These will “direct innovation and energy efforts into areas that make the planet better,” according to Brynjolfsson.

But that tax should be “coupled with a carbon dividend” that is paid back evenly. “It should be the polluting industries that have to bear the biggest price.”

Watch the full interview here.