… and where is it headed?
I am not an economist, and this blog is just a place for me to present my opinions about things, so you can take it for what it is worth, which is practically nothing…
But what’s really going on in the world? Why are jobs so scarce, debt so high and the outlook for the future so bleak?
Here’s my take.
The world periodically changes dramatically. In history books these are usually laid out in clear terms with nice clean timelines and events which heralded the transformative activities. You remember them. The steam engine, the cotton gin, the light bulb…
The last 20 years have brought the human race another transformative technology, and that technology is having a major impact on the world’s need for work and therefore the generation of jobs.
I’m not talking about the personal computer, although the personal computer is a part of what I’m talking about. I’m not talking about the internet, although that too is a part of the transformative technology I see changing the world. What I see happening is a fundamental difference in how the human race approaches solving problems. Information is not just growing at exponential rates, it’s application to solving problems is growing even faster. As a result systems are more productive, which is just a way of saying they need fewer people to get the same work done. People are healthier and live longer, which is just a way of saying that there are more of us and we are competing for fewer and fewer jobs. And there are no longer any significant boundaries to match up the least expensive supply with the most lucrative demand. So jobs that would once have been done in Detroit are now done in China, South Korea and India.
When I think about this at a 50,000 foot view, the vision I get is not one of economic problems due to hiccups in the supply chain, or disruptions to trade routes, etc… Our systems react to those things now in microseconds.
The real problem is that our existing economic engines are rapidly becoming irrelevant, and they will only become less relevant as new technologies replace existing ones.
In the end human beings are simply being outhustled and outproduced by information systems and machines. The inevitable end state will be a society where human beings do virtually nothing of economic importance. They won’t grow food, drive trucks, build houses, make cars or anything else that currently provides the bulk of human beings with meaningful activities which other human beings are willing to trade for.
Pretty soon you will see governments mandating the employment of human beings in jobs where they literally do nothing, but our economic models fall apart without humans “doing” the work. Humans will be assigned the “job” of overseeing the automated transport of goods, but they will be forbidden to actually do the task since the machines will do it more safely, more efficiently and more reliably. But because we haven’t yet conceived of an economic model that is not based on humans doing these things, our political class will have no other idea of what to do than to create make believe “jobs” so that the economic model can continue to lurch forward.
We are seeing the first limited impact of this sort of economic and social transformation. The jobs that have been “lost” are not coming back. They will temporarily be relocated to the least expensive humans who can and will do the work, and then will eventually push even those humans out of the way.
The only way out of this mess is to have some super-genius economist come up with a transformational economic model that no longer depends on human muscle and human data processing to distribute wealth.
And I don’t even know if anyone is working on it….