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Google's Eric Schmidt: 'let us celebrate capitalism'

Google's Eric Schmidt: 'let us celebrate capitalism'

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Speaking today at a panel at the SXSW conference, Google's executive chairman Eric Schmidt emphasized that Google is "very, very worried" about the class tensions that underlie recent protests in the Bay Area, where high-salaried tech employees have drastically driven up rents.

Gentrification has been going on for 40 years, but it's accelerated recently and we clearly need to do something to "ameliorate" the issue, he told Wired's Steven Levy.

In Schmidt's view, the tensions in the Bay Area are a manifestation of a global trend in which technology is displacing human labor without proportionately raising standards of living for most of the population. "Ninety-nine percent of people have seen no economic improvement over the last decade," he said, adding that "the data suggest that the problem gets worse" and will become the "number one issue in democracies around the world."

Schmidt was speaking alongside Google Ideas director Jared Cohen, with whom he co-wrote The New Digital Age: Reshaping the Future of People, Nations and Business. The two are attempting to think through the implications of the next billion people coming online — with a focus on macro-level issues like war, diplomacy, and privacy.

"$19 billion for 50 people? Good for them."

The solution to this displacement, according to Schmidt, is to foster conditions that encourage the creation of fast-growing startups that generate lots of jobs, or "gazelles." Those conditions include better education, looser immigration laws, and deregulation in strictly controlled areas like energy and telecommunications.

When Levy noted that fast-growing "gazelles" seem to lead to more inequality, at least in the case of the 50-employee WhatsApp, which was acquired by Facebook for a reported $19 billion, Schmidt brushed aside the apparent contradiction. "Let us celebrate capitalism," he said, opening his arms. "$19 billion for 50 people? Good for them."

Google has become a symbol of inequality in the Bay Area protests, where activists physically blocked the private buses that shuttle tech employees to work and visited the home of one of its engineers. On stage today, the chairman seemed sympathetic to their plight, but convinced that Google and its brethren are the solution as well as the problem.