Perpetual Disruption

Having lived most of my life in the New York metro area, it was inevitable that I'd intersect with at least a few "finance bros" across the decades. One of my bosses back in my defense days - the man who taught me mission analysis - had a son who worked in the bond world in its big-money heyday in the late 1980s. He told me his son, who had to be my age (i.e. late 20s), was on a $200K salary and got a $250K bonus one year. Scale that up to $530K and $665K in today's dollars. Made my ~40K engineer's salary at the time seem rather piddling, and briefly made me question my career choice.

The big-bucks bond world collapsed some time after that, and with it many of those big-bucks jobs.

History reveals a similar arc for Wall Street broker and trader jobs, both disrupted by technology, and both tallying only a fraction of the numbers they used to.

A friend who works in the finance world would routinely caution his people not to get too used to high-flying salaries, or to commit themselves to lifestyles that required them going forward, because one disruption - one "better mousetrap" invented by a competitor - could knock them all back down to earth.

I saw his caution play out among other friends and acquaintances, as their big bucks jobs disappeared and they had to seek other professions as a result.

Heck, it happened to my gaggle in the 1990s, when Reagan's defense buildup ceased and a flood of young aerospace engineers moved into a range of non-engineering professions.

All this came to mind as I read about how Artificial Intelligence is killing jobs en masse in the tech sector, and drying up many of the perks for those that remain. This, after the massive complaints about having to return to the office after the pandemic, must have a lot of very entitled young people in utter bewilderment.

Not that long ago, longshoremen and stevedores went on strike to protest the automation that was eliminating many of their jobs.

Such is the way of progress. In economics, it is called "creative destruction," and we find examples of it ranging back to the beginnings of the Industrial Revolution.

A quarter millennium of creative destruction should serve as an anodyne to fears that the next disruption will lead to mass unemployment and a degradation in living standards. Such has never happened. There has not been a "leap forward" that has done so, despite dramatically reducing or even wiping out professions. Advances create new opportunities and new categories of jobs.

For most of human history, at least four out of every five people worked to feed themselves and everyone else. Today, only about one in eighty is directly involved in producing food. And, yet, we don't have mass unemployment. Pick any profession of yore that has been disrupted by innovation and you get the same answer. Gone or nearly gone are the buggy whip makers, typists, stenographers, lamplighters, video store workers, icemen, milkmen, paper boys, film processors, projectionists, town criers, cigarette girls, scribes, elevator operators, pinsetters, switchboard operators, typesetters, and countless other jobs/professions, big and small, skilled and unskilled.

Here lies the beauty of free markets: you and I don't have to figure out where the new jobs are going to be. Nor do our proxies in government. Human ingenuity, unfettered by government's smothering blanket, has always provided, and there is no reason to think that's going to change. Your (or my) failure of imagination is no justification for impeding progress.

In the past quarter century alone, jobs like app designer/developer, blogger, social media influencer, content creator, big data analyst, SEO specialist, data scientist, virtual assistant, web developer, and internet marketer have emerged. The gig economy is less than two decades old. Etsy, a marketplace for individuals' crafts, is only 20 years old. Many other fields have altered drastically across similar spans. Animation went from hand-painted cels to stop-motion to Star Wars-esque modeling to CGI. Technical skills jobs have proliferated, thanks to the Internet.

Some will be tempted to assign some sort of inherent merit or value to these jobs, and argue that they aren't as "worthy" as old-school manufacturing or manual labor, but our society is wealthier now - making our living standards better - than it was when everyone worked in factories, and the push to redirect America back toward more manufacturing is just nostalgic bias, if you ask me. The problems many point out and wish addressed almost invariably trace back to government distortions rather than a loss of a "golden age" of manufacturing.

But I digress.

My focus today is that the same sorts who have decried past disruptive innovations as doom for the working classes are stoking fears that Artificial Intelligence is going to create a large mass of unemployed and unemployable. That high-pay, high-flying, and sometimes high-prestige jobs are going to dry up and leave society with passels of idle tech and finance bros sponging off the welfare system. And, if I might project leftist thinking, displacing the dependent classes that "need" public support more than they do.

I'm a cynic when it comes to government, but I am an optimist when it comes to human ingenuity. I have ample history to support both viewpoints, and I do not fear the disruption that AI is bringing. I look forward to seeing what new innovations and inventions and careers emerge, and you should too.