Wednesday, December 16, 2009

Transient Craft Guilds and the Future of Work

Poor Barack Obama. He had to spend his December prodding banks into being rational financial agents instead of agents of chaos; pushing Democrats into supporting a gutted-out health care reform plan pissed upon by the evil Lieberman toad; conjuring up prospects for new jobs in an economy destined to remain jobless; and browbeating nations in "Cop-enhagen" to care about whether human society exists in another 100 years or so. How did this scenario end up looking so unlike the 1933-era FDR?

For one thing, the ability of government to apply leverage to a self-organized economy run amok has declined significantly since the 1930s. Since the boom began in the 1980s, we have sped through the post-industrial, post-post-industrial, and post-post-post-industrial economies, to the point where entire infrastructures of jobs and artisan crafts are created and destroyed in a matter of months. Once upon a time (say, the 1970s), neo-Malthusians assumed that automation would leave a majority of the world's population unemployed. The reality is somewhat different - new abstractions of "work" keep a significant number of people employed, even (or particularly) in the developing world, but as automation takes over larger and larger sectors of the economy, we chase a froth on the goods-and-services tsunami to invent new means of placing intellectual stamps on a machine that adaptively grows and morphs and changes faster than we can document that change. And no FDR or Obama-FDR-wannabe can place brakes or a framework on that change.

A couple years ago, the Defense Intelligence Agency was shopping around a PowerPoint underscoring the fact that two-thirds of the jobs that college graduates will enter in five years will not have been invented when they entered college. In other words, college must teach core skills in very broad areas, without leaning to specifics, as the job descriptions will utterly change in four or five years. It's certainly been true in my field of journalism! Any J-school professor talking about the traditional print profession is about as useful as Latin Scholasticism in a business school.

What's even more astonishing is how the 21st century equivalent of the medieval craft guild creates and destroys itself, with all the accompanying infrastructure, in a matter of years or even months. An example from the recent past is chip design. Until the mid-1980s, semiconductor chips were middling collections of logic gates that were assembled by following simple rules of electronic theory and Boolean logic. But as their complexity grew to the size of a Manhattan street map, suddenly chip design required a mix of electronic-engineering and architectural-design talents that had never been demanded in previous generations of computer design. The specialists in this field had their own guild, the IEEE (Institute of Electrical and Electronics Engineers). An entire sub-industry developed of software companies dedicated to making the design of chips easier - the Electronic Design Automation or EDA software industry. And since chips followed Moore's Law in complexity growth, everyone assumed that chip design was a job with a guaranteed future.

Well, guess what? Semiconductor manufacturing moved from the US and Europe to China and Southeast Asia. Chips got to be so big and complex, their design involved the stringing together of predefined modules. The EDA software industry grew long in the tooth. And companies discovered that groups of designers working at chip plants in Asia could apply rules of innovation much more cheaply than well-paid postgrad experts in North America. In only 20 years, a craft guild has arisen, matured, and dissolved before our eyes.

Now, Web 2.0 and social-network development has led to new full-time job descriptions such as "Search Engine Optimization." For you uninitiated, SEO now entails a full-time job of searching for interesting algorithms by which your web content is prioritized in Google and other search engines. A craft guild is being assembled from the bottom up by practitioners of advanced web content and social-networking tools. Need I suggest that this entire craft guild will be obsolete in a decade, as search engines, operating systems, computing clouds and ad-hoc networks become adaptive and self-assembling, while displaying the rudiments of hive intelligence?

I'm optimistic enough to think that this still won't mean the end of jobs. The need to make our economic systems sustainable in an environmental sense will assure a new generation of craft guilds growing from green tech/cleantech. But the accelerated pace with which new job descriptions are created and destroyed shows how difficult it is for governments to observe, regulate, and prevent meltdowns in the strange world of 21st-century capitalism. In particular, the abstracted nature of financial instruments makes the financial sector "disappear through the skylight" -- and we're worried about executive pay bonuses!

Several bloggers, most notably David Sirota, recently have talked about applying the phrase "moral hazard" from the financial world to the capitalist economy at large. If the notion that all decisions on business development, job creation, and macroeconomies can be made with moral considerations foremost, I'm all for it. But we must embed the awareness of the moral hazard from the bottom up. The economy, and the nature of work, is changing too fast for government or even non-profit NGOs to keep up. It's up to all of us to try and tame the tiger as we ride it, directing its future morphing in productive directions, or it will surely swallow us all.


Greeley's Ghost said...

A lovely rant, and it's too bad I wasn't there to share a beer with you at the creation.
Change is a bitch, no doubt. It's always darkest before dawn, etc. But there is little way to build moral boundaries for the future.
The moral hazard concept is spot on. Most people are rational and rational people by and large don't make irrational decisions, unless, for example, the Congress is complicit in believing that low-cost housing (Clinton era) would pave the way to social equality.And the only way to do that is look the other way on 60 years of post-Depression risk assessment philosophy.
Too big to fail? The only reason you can't let them all fail (at least the banks) is that there would be no capital to grease the economy's skids. (If you believe Bernanke's analysis of the reasons the Depression was so deep and prolonged).
But Detroit? That's a political bailout, plain and simple. No one bails out a semiconductor company (which arguably delivers more value to the world than GM) when it screws up.
It may sound Ayn Randian, but we shouldn't be in the business of rewarding stupidity or reckless risk, but we have.
On labor, while I tend to eat a lot of my own dog food on the changing nature of labor, it won't happen nearly as fast as we think. It's human nature.
And it's good to note that every "jobless recovery" I've ever been a part of seems a return to 2-3% employment levels within a few years.
Painful? Yes. Apocalyptic? No.
Now, if Obama would only stop demonizing the banks for a few hours, maybe they'd start lending again. We have nothing to fear except...

Loring Wirbel said...

Egad, Mildred, is Brian showing signs of becoming Ayn Rand? Should we put him out his misery?

Seriously, it was interesting to see that Obama's smackdown of the banks garnered the most bipartisan popularity of any act of his administration - Graham, Hatch, and other Repubs were falling over themselves to say that Obama for once was doing the right thing. I don't think this was just a kneejerk pitchfork-and-torch action, but an intuitive recognition by people of all parties that financial executives have reached such a level of abstraction, they couldn't practice "moral hazard" rules if they wanted to. You can say they're just serving shareholders, but NY Times' front-page article on Goldman Sachs on Dec. 16 points to what I mean. Those wanting to manipulate ethereal financial instruments are just looking for higher rates of return, and don't even realize how they are gutting the economy. Like I said in the post, regulation won't work. But maybe we could simply ban the entire financial industry, and go back to a barter economy. Might be fun to try, and it fits with the craft-guild thingie.

Ruth said...

Strangely (is it?) I found this post exciting, not depressing. It's beautifully conceived, and I just had to laugh at the dinosaur! I don't know, it just made me feel very hopeful that we the people will do what we need to do (sort of like blogging that takes on its own life, or the Internet itself, the longest running machine that can't be tamed).

Through your pace I kept hearing the word biomimicry in the back of my head and I couldn't stop thinking about Janine Benyus. Whether or not we learn and design from Nature as her design concept teaches, what we design jobs-wise and economy-wise as things keep changing will be out of the survival of the fittest model, no matter what, this quickly evolving morphing state of things.

So, while scientists use biomimicry to make "new" adhesives, etc., how can we learn from Nature to design "new" economies (that are also humane)?

You get me thinking, old dawg.

Loring Wirbel said...

And you, Ruth - I never thought about applying biomimicry ideas here. What a fun synergy and synchronicity! But every time I hear "survival of the fittest" just below mention of Ayn Rand, I hasten to remind people that there are both selfish and altruistic genes. Rand never believed in the latter, and they've been proven.

otin said...

I linked you in a post that I did. I know that I have not commented here in ages, but you are still on my reader. I have gotten away from political stuff and pretty much write fiction stories now. I hope that you have been doing okay!