Nick Hanauer: If income inequality continues to rise, it will be Ferguson everywhere
After college, Nick Hanauer became really interested in chaos theory and the subsystems that control complex economic ecosystems.
"I read books, I'm a science geek," the Seattle venture capitalist and serial entrepreneur said Thursday.
That was the just the beginning of his changing views on economic theory, during which he realized everything he had learned in college economics was wrong.
Now Hanauer, who is undoubtedly and unapologetically in the wealthiest 1 percent of society, is calling for society to stop acting like rich people create jobs.
The basis behind his "middle-out" economics that he presented at the Seattle Interactive Conference Thursday is that prosperity doesn't "trickle-down" from a wealthy top, rather it comes from a thriving middle class.
Hanauer's passionate and controversial theory was the subject of a disputed TED Talk and many articles written by Hanauer and Eric Beinhocker, the executive director of the Institute for New Economic Thinking at University of Oxford.
Hanauer was at the forefront of the $15 minimum wage issue in Seattle. But he insists it's not about what people deserve. Rather, it's about the collective upside that happens when the middle class has more money and opportunity.
"Moral issues aside, rising inequality excludes so many people as innovators and customers," he said. "It diminishes innovation and demand."
So he doesn't think rich businesspeople should pay lower taxes, or pay low wages, or even claim they are the ones creating jobs.
How popular does that make him with his peers?
"I'm not shunned," he said in an interview after his speech. Though, the idea wasn't too popular at first.
But it's getting harder to deny society has an income inequality problem, he said.
"You'd have to go to Texas to find an intelligent affluent who doesn't believe that economic inequality wasn't an issue today," he said.
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