How Computers Are Creating a Second Economy Without Workers

BS alert. Another "machines are killing jobs/our future" rant. I'm pretty sure people said the same thing when Gutenberg developed the printing press. There's no "Second Economy".<p>And the whole thing "it's just computers talking to computers" is ridiculous. The phone started with actual operators in every village, and then moved to fully automated systems. It did not void the economy of jobs. All productivity gains bring new opportunities, new business ideas, and new means to make profits.<p>The biggest misunderstanding of this article is that the goal of business is not to "create jobs", it is to create wealth. Jobs are a means to create more wealth, because you need manpower and brains for many things that cannot be made by machines alone. That won't change for a while. Automation is simply removing a lot of these jobs that had very little value in the first place.

Increasing productivity is ultimately good. There are always more unmet human needs and wants that can absorb all that new productive capacity. So there's no reason to believe that underemployment is a permanent situation.<p>To the extent that anyone can master the new digital tools, there will be profitable work to employ them. There's no cap on the number of possible jobs. A sudden increase in the number of people with technical skill would cause entirely new industries to become possible.<p>So it all comes down to skills and education. The education system we have is nearly the exact opposite of what we need. I fear that it has permanently damaged large swaths of the population by conditioning them for rote factory labor (the purpose for which it was designed) in a world that doesn't need it anymore. The pain of this transition is going to lead to nasty political problems.<p>Most people <i>do</i> have the raw potential to do the kind of challenging work that pays handsomely in the digital world. They just get it beaten out of them at a young age.

I think we need to shift our mindset. Everyone gasps in horror when jobs get eliminated by tech - yes, that will mean that many won't have a paycheck for food tomorrow - I understand the sentiment. But eliminating a job where someone sits at a station and does the same mindless thing for 8 hours is a bad thing?? The bad thing is that society is failing to provide pathways to giving that person a more meaningful and fulfilling duty. That is what we should be gasping in horror at.<p>And no I'm not suggesting we should be trying to put an out of work cashier/factory worker/etc onto a track to be a programmer/engineer/etc. We have all sorts of problems. We have swaths of elderly folks who need the most basic care, parents who barely have time to raise their kids, a seeming lack of reward/appreciation for cultural diversity and arts... I could go on and on. There are lots of things that people doing mind numbing jobs could do instead that would probably be better for society and better for them. The unfortunate part is that our system fails to make the connection in many instances.

"<i>...As sobering as the Second Economy scenario is I believe the trend is reversible...</i>"<p>Ugh. Here I was thinking that the writer had at least a partial understanding of reality and then we get to that nonsense.<p>I'm not going get into this creative destruction, why-are-there-no-more-buggy-whip-manufacturers argument. It's been done to death, and if you don't understand it after hearing it a dozen times, there's not much I can do to help you with it.<p>But what interests me is the terms of the political discussion. Not politics -- that's mostly picking a team -- but the language that is being used to discuss employment and job creation.<p>Frankly I don't think politicians and economists have a clue to what they are doing when it comes to the technological and digital revolution. Not only are there less jobs, they are scattered all over the world. It's increasingly impossible to make some kind of political change, say putting in a highway, and have it directly bring in jobs of a certain industry. Jobs just aren't centralized like they used to be. There are a lot of industrial and technology parks across the U.S. that are going to remain mostly empty.<p>We see SV and the other startup hubs and think that all the action is there, but I remain convinced that those guys are just the tip of the iceberg. For every Instagram there are ten thousand tiny companies with a thousandth of their users. They don't appear on TV, they don't join the chamber of commerce, many of them don't even incorporate. They are invisible.<p>I don't see how we can have a discussion about jobs and such when all the terms and models we use don't match up to what's really happening. Watching the language of the debate evolve over the next decade or two should be very interesting.

That is a completely unfair rant.<p>This process creates jobs. Good jobs too -- the kind that you need to go to college for -- system administrators, programmers, database admins, etc, etc.<p>Sure it kills no-skills jobs, but that leaves those people free to get better jobs elsewhere (once they have upgraded their skills).<p>The only people with reason to complain are those unwilling, or in a few cases unable, to change.

Link to source article in the McKinsey Quarterly (free, but requires registration)<p><a href="https://www.mckinseyquarterly.com/The_second_economy_2853" rel="nofollow">https://www.mckinseyquarterly.com/The_second_economy_2853</a><p>Also, see this piece from Jaron Lanier for a much more tech-oriented and cerebral treatment of much of the same subject matter<p><a href="http://edge.org/conversation/the-local-global-flip" rel="nofollow">http://edge.org/conversation/the-local-global-flip</a>

<i>"One of its main byproducts is the replacement of low-productivity workers with computers."</i><p>This is the main fallacy of this article.<p>It's actually "high-productivity workers", who build technology, which replaces "low-productivity workers". For that to happen, more "high-productivity workers" are required. Do they realize how hard it is to find talent in tech these days? The economy is ever evolving and becoming more efficient. There is really nothing new here, this has been happening for decades and centuries. With some adjustments, this article could be published 100 years ago and probably 100 years into the future.<p>One problem is that it's hard for people, especially at a certain age to adapt their skill set. So while some sectors are struggling to find employees, others have too many. It's the friction that is created by economy's evolution. But we have to look beyond the cold numbers. This is a social problem. With 8% unemployment rate, an unemployed person is not 8% unemployed, he is 100% unemployed. That's a person like you and me, with family and dreams.<p>However, I believe that in the future this friction will actually become lower. With technology and internet becoming prevalent, high quality, relevant education will become accessible and affordable. In other words, when education finally becomes part of that "second economy" (and it will), things will get better, not worse.<p>When this happens, then ironically this "second economy" could actually solve the problem the article says it creates.

If Technology ever really kills jobs. We should be happy because we are getting pretty close to utopia where nobody has to work anymore.

To a first approximation all material progress comes from eliminating jobs. People were able to go to having indoor plumbing and cars because of a huge elimination of jobs in the agricultural sector brought on by the tractor. We have more material goods now because we need less factory workers to produce the subset of material goods we used to have. We have more Yoga instructors and teachers and health workers because they aren't needed to work in factories.<p>The thing is, there are always more things that could be done. People in 1900 didn't know that they would want social media or video games, but we're employing people making them. Losing one's job is traumatic and its good to have a social safety net to make it less unpleasant, but its also the engine of progress.

My firm policy is to program myself out of a job. I do it all the time, and you know what happens? Even more work lands in my lap. Funny that.

On the other hand, most developed countries have declining birthrates, so is there cause for alarm?

The question is what do we do with all these people that were doing "unskilled labor"?

Technology doesn't kill jobs.<p>Over last two hundred years, the number of people on Earth exploded off the chart. We went from 1 billion to 7 billion. If anything, overall improvement in technology always create more jobs than it destroyed them. Most dramatic example comes from going from 6 billion to 7 billion in just 10 years or so. We still don't have dramatic increase in unemployment that reflect this whopping 1 billion increase.<p>Technology always generated new problems people have to figure out that demands skills and human creativity. It creates jobs in areas that once weren't even thought of before.