“Modern technology has become a total phenomenon for civilization, the defining force of a new social order in which efficiency is no longer an option but a necessity imposed on all human activity.” — Jacques Ellul
Consider the daily tasks performed by the owner of a small, local restaurant — opening up, cleaning equipment, wiping down tables, setting tables, cooking, doing dishes, doing payroll, taking inventory, paying employees, handling marketing, etc. Many of these could be handled by a specialized worker — an employee — for a small cost, giving the sole proprietor the opportunity to focus on his strength — let’s say, his cooking. In economics, this idea is known as “opportunity cost” — the opportunity forgone by opting for one activity over another.
Economists tend to analyze choice through the lens of opportunity cost, rather than financial cost. If, for instance, the sole proprietor of a restaurant decides to handle every aspect of the business himself, he may save money in the short run, but he will also lose the opportunity to focus on his cooking, because he will be inundated with all the other duties required of a small business owner. Second, since he knows little about these other duties, his business will suffer. As it does, the extra time he spends trying to salvage it will be even more time he cannot spend cooking, and the quality of his food will continue to fall. Assuming zero intervention, this cycle will repeat itself until his business is no longer sustainable. A successful restaurant, in contrast, is organized hierarchically such that tasks are distributed to people specialized to handle them. The owner is one of these, but he does not wield absolute power — nor do presidents, or CEOs. Few organizations, in fact, whether they be corporations or governments, have ever run effectively for long periods of time under the leadership of one person. The inevitable failure of the sole proprietor’s business, contrasted with the success enjoyed by many of the largest corporations and countries in the modern world, illustrates the importance of two fundamental microeconomic principles: opportunity cost and labor specialization.
Specialization is fundamental to the success of every major organization that has ever existed. It gives individuals roles and duties so that they may know their jobs, and ensures that individuals within organizations can focus on their specific strengths — hence why most companies have separate departments for marketing, sales, HR, engineering, etc. Specializing allows us to add tangible value, and through that, achieve a sense of purpose, in a way that spreading ourselves across many different roles does not.
As we improve in our roles, we accrue more responsibility, until we are proficient enough that we offer more value elsewhere — training or management, perhaps. Given this structure, the best leaders are the ones who foster independence, and in turn, new leaders, rather than dependence, and sheep. Corporations that specialize effectively allow individuals to cultivate their skills and then migrate to other specialized positions with more responsibility. These corporations see specialization as dynamic, rather than static. This contributes to their success.
But as humans, we are not like corporations, or countries; in fact, we aren’t like anything at all. We are highly irrational, and to call us “profit-maximizing” would be demeaning. We don’t think in terms of opportunity cost and specialization — more often, we just make decisions, unsure of why exactly we’re making them, but making them all the same. Classical economists have long argued that we behave in our own self-interest, but their theories rested on the premise that we understood what was best for us at any given moment, when in fact, most of the time, we have no idea. Even when do, often we go against what we know to be right. Economics has pointed out that value is subjective, and every decision we make is technically in our own self-interest because, whether objectively more valuable or not, the choice we made is the choice we made. Where the discipline falls short, however, is in determining why we make the decisions we do. Instead, it simply points out that the decisions we make must be utility-maximizing, otherwise we wouldn’t make them.
Classical economics, then, offers a blurred lens through which to examine why a sole proprietor might attempt to take on every duty his business requires of him; its insight into the matter would be that in doing so, the sole proprietor is “maximizing his (subjective) utility”. In doing so, he may not be maximizing profit, and the quality of his food and timeliness of his service may suffer, but to him, his business is operating the way that he sees fit. This seems counterintuitive, given how financially-focused our society is. However, as we come to understand ourselves better, it is becoming clear just how preposterous it is to believe that the factors that shape policy within the most prosperous countries and corporations can also reliably predict human behavior. Put another way, humans are not corporations.
From the standpoint of classical economics, it is hard to justify any individual’s decision to operate in a manner so as not to maximize profit. The ambitious sole proprietor could increase profits substantially by investing in employees to take over work that is keeping him from cooking as well as he can. A stay-at-home parent could save time by hiring a nanny or a maid to take over the household tasks that help define their day. The modern era has given us the miraculous ability to increase the efficiency in our lives by a hundredfold, yet in many cases, we refuse. Why? Successful corporations are successful precisely because they do this; precisely because they focus on specialization and opportunity cost. So why don’t people?
We routinely avoid increasing efficiency in our daily lives is in no small part because at the individual level, efficiency, by its nature, threatens purpose. Purpose doesn’t matter to corporations, which, by nature of operating within competitive markets, must prioritize profits, or else die. But purpose matters to people. The ambitious sole proprietor, should he hire workers to handle all the tasks he used to, may end up with more time to cook, and larger profits, but neither guarantees happiness — just wealth. Oftentimes, too, people do find purpose in the seemingly mundane, like household chores, the needlessly difficult, like business duties that could be outsourced, or even the evidently backbreaking, like mining, or factory work. To observe someone performing a duty that could have long since been outsourced isn’t to be observing insanity, or irrationality — it is to be witnessing a manifestation of both our society’s desire for purpose, and subconscious fear that if we give it up, nothing would exist to replace it. The duties that the sole proprietor outsources may be things that he didn’t love doing, but operating his business to maximize profit doesn’t mean operating it to maximize utility. Humans are far more complex than that. Corporations, necessarily, are not.
In a recent article, I’ve Seen The Future. It Looks Like Appalachia, writer Travis Lowe speaks candidly about what happened in McDowell County, West Virginia, where he grew up, when globalization and technological advancements made it clear that the driving force of a once booming economy was coming to an end. Though some saw the “writing on the wall,” as Lowe puts it, in many cases, individuals affected by the great migration of manufacturing jobs out of the Midwest chose were forced to leave. To his credit, Lowe shows how the tide is, in places, beginning to turn, but his point is ominous — our progressive society views the devastation that occurred in Appalachia as a relic of a bygone era; of a town that couldn’t keep up, and suffered the consequences. In fact, the very groups labeling it as such are the ones that as of now are at the highest risk of undergoing the exact same thing.
It is abundantly clear, given research from firms (PwC) and universities (Oxford), that soon, current sources of purpose may not be. My own experiences, too, echo their findings. I work in an outbound sales role making cold calls to local businesses. My job relies heavily on data, but at the end of the day, given the type of clients we work with and the relationship-based nature of selling ads to local businesses, my company still requires salespeople to do the job effectively. It is not hard to imagine, however, that soon, the product we sell will be effective enough to sell itself, much like other advertising platforms with more robust self-serve offerings. Once that happens, my company may pare back its sales team, and shift others into account management roles, through which we can provide new value by offering solutions to problems faced by companies and individuals on the self-serve platform. Looking even further down the line, however, it is not hard to imagine a world in which basic queries about any aspect of the advertising program can be handled by a significantly sophisticated AI. Once this happens, it will be little consolation to those no longer earning a salary that a decade ago, some big consumer analytics firm with three unmemorable consonants for a name labeled their positions as “at high risk for automation”; on the contrary, it will be patronizing, and cruel.
As of now, we have the choice between efficiency and purpose. But as automation finds its way beyond everyday tasks, and begins to offer corporations cheaper alternatives to human labor, efficiency will not be an alternative to purpose, rather it will begin — and it has already begun — to replace it. In this future, new jobs will emerge, but the skills required for them may be least prevalent among those most likely to need them. These skills, according to researcher David J. Deming, and others, are social and cognitive, and are both hard to find, and hard to automate.
“Our findings thus imply that as technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerization — i.e., tasks requiring creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills.” — Carl Frey and Michael Osborne, “The Future of Employment: How Susceptible Are Jobs to Computerisation?”
How easy is it, exactly, for formerly low-skilled laborers to acquire “creative and social skills”? Are these skills being taught in schools, or in communities? Is “teaching” creativity possible? The best society may be able to do is train individuals for a fast-paced world in which the ability to adapt is more important than having specialized knowledge, but this excludes most of the current labor force, and is far from guaranteed to work, even for those exposed to it.
In the meantime, what will become abundantly clear is that corporations don’t employ humans because they feel some divine obligation to do so — they employ humans because currently, doing so is profitable. Should a better alternative to the work we do reveal itself, the “moral” corporations; the ones that stick with more expensive, human labor, will be left behind.
Now, imagine a world in which finally, every mundane task is eliminated, or taken care of by some AI that runs off a server buried seventeen stories deep somewhere in the Rockies, or, almost poetically, in Appalachia. In that world, what will humanity’s purpose become? Lowe argues that humans will find meaning elsewhere. As he puts it:
“In the best of my community, I see neighbors looking out for neighbors. I see people finding dignity not just in their job but in being a good friend, growing a garden, or making art in their back yard. I see cooperation like I never thought was possible. I see government employees working together across borders of cities, counties and even states. I see local lawyers offering to volunteer their time to any entrepreneurs with ideas for patents. I see local colleges with a renewed interest in adding value to the communities they serve.” — Travis Lowe, “I’ve Seen The Future. It Looks Like Appalachia.”
To say that we will find meaning through cooperation and community-mindedness is novel; whether that is a solution to the structural problems faced by Appalachia is unclear. What is even less clear is whether that same “solution” is applicable in places like New York City, or Chicago. If it isn’t, the effects of mass unemployment could be even worse in those areas, in which millions of people are concentrated within miles of each other, and new high-rises appear daily on the horizon. And to say that jobs hold any less weight as arbiters of purpose, or indicators of status in cities like New York or Chicago is to never have set foot in either place — conversations with strangers rarely start with anything other than “What do you do?”
I appreciate Lowe’s optimism, but I’m not confident that it’s entirely justified. I’m not sure he is, either, and his point isn’t that it is, necessarily — just that addressing the AI “jobs apocalypse” will require reforming the economy so that it offers not just new sources of income, but new sources of meaning and purpose, and that Appalachia is ahead of the curve in identifying what those sources may be. UBI is a necessary first step — admittedly, there are likely millions of people with entrepreneurial capacities that are stifled by a lack of a basic income to cover their basic needs, and millions more living in objective poverty — but it is far from the last one.
If there’s one well-documented effect of automation, it’s that it has actually driven up wages for small groups within many industries — usually those in possession of higher amounts of human capital — while putting the majority within those industries out of work. Many industries are observing similar trends — the consolidation of necessary human labor within fewer, better-educated, more capable individuals (and salary increases for those individuals), and the outsourcing of everything else to machines, or AI. This consolidation has contributed to the well-documented decline of the middle class in the United States.
Robust, purposeful middle classes are hallmarks of successful societies because they create a sense of community among a majority. They do this by organically spreading purpose among that majority — purpose, that unrecognizably scarce resource that it is becoming increasingly clear will become progressively less accessible to progressively more humans as the economy continues to grow, while humans’ role within that growth continues to wane. In a world in which so many of us measure our value by the work we do, and the wages we earn, the disintegration of the middle class is significant because it will not only concentrate wealth among elites, but purpose, as well. To understand what that means is to have ever been asked, “What do you do?” and not have had an answer.
Should we choose to look, manifestations of the omission of our own purpose in modern society are not hard to find. I would posit, as many have, that purposelessness, whether consciously realized or subconsciously predicted, led in no small part to Trump’s election, as well as the opioid epidemic currently ravaging much of the United States. It is admittedly difficult to definitively say that one caused the other; I would, however, ask readers to set aside the data, think back to moments in your life where you have felt pangs of purposelessness, and consider honestly whether in those moments, you may have found yourself prone to the pull of a candidate, or figure, like Trump, who promoted himself first as a prophet who understood the “problem”, and second, as the problem’s one and only “solution”. I would ask you to consider honestly whether in those moments, you may have found yourself susceptible to the call of a substance, however potent, meant to dull the pain of perceived purposelessness. In The Attention Merchants, Tim Wu aptly points out the following —
“As consumerism grew, it also became possible to sell products solving problems that were hardly recognized as such, let alone matters of life and death. Demand was engineered by showing not so much that the product would solve the problem but that the problem existed at all. Bringing subconscious anxieties to the fore was the inspired brilliance behind the great campaigns for mouthwash and toothpaste, two products largely unknown before the 1920s.” — Tim Wu, The Attention Merchants
— the “problem”, of course, being that America had lost its way — that it was no longer “great”; the “product”, or “solution” being Trump himself; the “problem”, of course, being a perceived lack of purpose, existential pain, or worry, or simply boredom; the “product”, or “solution” being a substance, or several substances with ranging potency, and the potential to kill.
Assuming we were perfectly rational individuals, and that we lived in a perfect, efficient world, we would always and everywhere opt for efficiency over routines, and choose to forfeit mundane tasks for more productive endeavors as soon as the opportunities to do so presented themselves. We’d feel no apprehension at the idea of giving up our bi-weekly trip to the grocery store, or our half hour spent walking home simply for the sake of saying we did something active, because we’d know that we would immediately and without issue be able to find something better to do with our time, something that would fulfill us in every way that it is possible to be fulfilled, and offer us a sense of purpose not rooted in banality, but rather in rigorous, challenging, and necessary work. But we do not operate this way because, through the sheer experience of having lived our lives, we understand, consciously or not, just how much friction there is between giving up one source of purpose and coming upon another. So too do we understand, also through the sheer experience of having lived our lives, just how awful it is to exist without purpose.
If our global economy is to fulfill the promise of increased welfare for humanity, it must effectively answer the question of how exactly to enable individuals to find purpose in a world that seems hell-bent on eliminating it. This will not be simple — purpose is neither easily discovered, nor easily given up, and our global economy is woefully unprepared to address a truth that those still living in places like McDowell County have known for a while, that is, purpose is as important for a stable, functioning society as income. It is paramount, then, that future economy treats the decisions to objectively avoid profit-maximization made by the ambitious sole proprietor, or the single parent, or the 22-year-old living in Chicago, working a job “at high risk for automation” not as “irrational”, but rather as symptoms of the failures of past economies to realize that in order to function effectively, they must give as much attention to the question of how to their provide citizens with purpose as to the question of how to provide them with income.