Central Perk: Seth's Blog : The computer, the network and the economy

joi, 7 iulie 2016

Seth's Blog : The computer, the network and the economy

The computer, the network and the economy

Where did all the good jobs go?

They didn't head to other countries or even down the street.

The good jobs I'm talking about are the ones that our parents were used to. Steady, consistent factory work. The sort of middle class job you could build a life around. Jobs where you do what you're told, an honest day's work, and get rewarded for it.

Those jobs. Where did they go?

The computer ate them.

For a hundred years, industrialists have had a clearly stated goal: standardized workers building standardized parts.

The assembly line was king, and the cruel logic of commodity economics pushed industrialists to improve productivity. They did this by improving the assembly line and, when they could, by paying workers less.

We invented public school to give the industrialists enough compliant workers. More supply meant that they could pay people less. More supply meant that the terms of the deal were in their hands.

But as the economy grew, the demand for workers for these jobs grew as well. It fueled a housing boom, a retail boom, a mass marketing boom.

The computer (and the network it enabled) turbocharged this race toward cheaper and faster.

The computer patiently measures and reports.

And the network creates value in connection.

The connection economy values the bridges between the nodes as much as the nodes themselves. Uber is worth more than the independent cars it connects.

So, the computer:

First, if you (the owner of the means of production, the boss, the industrialist) can find a supplier who can make a part for less, you will, and you did.

Second, once you can parcel work among your employees, you can measure them ever more closely and figure out how to maximize what you get (and minimize what you pay).

Third, computers make patient, consistent, cheap workers. When you can train a CNC machine or a spreadsheet to do a job better than a person can, odds are you will.

It's difficult to overstate how powerful this three-part shift is.

125 years ago, the Singer sewing machine was one of the most complicated consumer products ever constructed. Every part in every machine was hand fitted to work. Replacement parts had to be hand tweaked to fit. Without craftsmen, there was no chance such a machine would exist.

Today, it's possible to build just about anything merely by specifying existing parts, sending them to an assembly shop and accepting delivery. If any provider along the supply chain wants to charge extra for their commodity contribution, the creator can switch suppliers.

Today, the typical worker serves the computer. Only a few have computers that work for them.

Sure, there are still pockets of work that are essentially unmeasured or unique enough that they're difficult to replace. This is where the remaining 'good jobs' exist.

For the rest, though, the first brick in the wall is clear: Either you serve the computer or it serves you. Either you are working on spec to create a commodity, or you are using new tools to create disruptions and to establish yourself as the linchpin, the one we can't easily live without.

It happened to machine tool operators and to radiologists as well. It happened to travel agents, to lawyers, to the local shopkeeper as well.

And the network? What about the connection economy?

Some have voted to cut themselves off from the network. In some ways, this isolationism is understandable. In the race to the bottom, a key job of our government is to build rails, to set limits, to ensure that standards are met. On top of that, we must work to ensure citizens are trained for what they can do next. When that doesn't happen, it's easy to blame the network, because it acts like a leaky pipe, not satisfying the people who have signed up to use it.

But the connection economy creates value. Not for everyone, not all the time, but it gets adopted because it works. Pareto optimality can't be repealed--people and organizations working together are more productive than those working alone.

Our short-term challenge isn't to get the good jobs back. That's truly unlikely. No, the challenge is to embrace a different form of education and training for a different world. And we must build and maintain a safety net as we go through this transition. People didn't ask for this revolution to happen.

[A surprising book on this topic, worth a read.]

It's not a matter of paying for it. In the winner-take-most world of the connection economy, there's plenty of wealth being amassed, and there's no reason to believe that society benefits from dramatic inequality. Creating pathways out of this inequality is what governments do when they're doing their job.

During the last forty years, as the computer and the network destroyed the system that our schools were built for, we (from the top down, and also, most definitely, from the bottom up) did almost nothing to change the schools we built.

Parents and the institutions they fund closed their eyes and only paid attention to SAT scores and famous colleges.

When a pre-employed person says, "I don't know how to code and I'm not interested in selling," we need to pause for a moment and think about what we built school for. When he continues, "I don't really have anything interesting to say, and I'm not committed to making a particular change in the world, but I'm pretty good at following instructions," we're on the edge of a seismic shift in our culture. And not a positive one.

No, the good jobs aren't coming back. But yes, there's a whole host of a new kind of good job, one that feels fundamentally different from the old days. It doesn't look like a job used to look, but it's the chance of lifetime if we can shift gears fast enough.

You don't have to like this shift, but ignoring it, yelling about it, cutting ourselves off from it is a recipe for a downward spiral. It's an opportunity if we let it be one.