In poor countries, work has generational qualities. The latter is the explanation for the grinding poverty. Adam Smith understood this well. Where there’s no change, or no dynamism, there’s also very little investment. Investors want a return, and stasis is anti-return.
All of this has relevance to the AI story. Supposedly ChatGPT and other advances will erase all manner of jobs, including white collar jobs. One can only hope.
The simple truth is that job creation is a function of job destruction. There are quite simply no new jobs without investment, investment capital is a consequence of wealth creation, and wealth creation is – yes – the happy result of producing exponentially more with fewer hands. Jobs emerge from the destruction of past forms of work. Really, what is “technology” but an advance that augments human effort, enables greatly reduced human input, or that which erases human input altogether?
Please keep all of the above in mind with rapid advances in thinking technology top of mind. In a recent piece the excellent Andy Kessler wrote very favorably about what’s ahead with AI technology, but added on at the end that despite the undeniable good that’s coming, "we need education, training and temporary safety nets to help workers make the transition." I’ll bet Kessler could be convinced otherwise.
Kessler knows better than anyone that jobs spring from investment. That’s the underlying basis of his own point that new jobs emerge from the vanishing of past forms of work. If technological advances render production less expensive, capital is freed up only to find its way to new endeavors. If jobs are being destroyed, they’re by definition being created. Job destruction and job creation in a very real sense mirror each other.
From there, we first pivot back to Adam Smith. If “stationary” economies repel capital in search of returns, and they do, then it’s only reasonable to conclude that rapidly evolving economies are a magnet for investment. We certainly know what’s true in theory to be true in reality: While Baltimore, Detroit and Flint bleed capital (including the most important kind of all – human), Austin, New York and Palo Alto attract it in enormous amounts. Progress attracts human capital, and human capital attracts the financial capital that leads to abundant work opportunity.
What’s important is that talented human capital is rarely interested in the work of the past. It’s not precisely because the work of the past doesn’t pay as well. For obvious reasons. That’s yet another reason that opportunity is endless where technology is most abundant. Technology augments human genius, which means the work of humans is rendered much more valuable by technology.
The obvious problem is that while technology invariably re-invents and greatly improves the future, that future is most certainly unknowable. Really, who was demanding Amazon before Jeff Bezos created it, or Uber, or thinking technology that is giving recent “search monopoly” Google a run for its money? That’s why there’s no way for government to get involved with offerings of “education” and “training.” What would government educate or train for? Anyone who knows in advance what jobs and thriving industries will emerge from ChatGPT would be a billionaire or likely a trillionaire in short order. These people don’t exist in government.
Cliched as it sounds, government is superfluous with regard to what’s ahead. The education and training will be wholly irrelevant, while safety nets will be wholly unnecessary. Since new and better forms of work are the brilliant, capital-attracting result of huge technological leaps, it cannot be stressed enough that AI itself is the ultimate safety net.
