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When only 1% are Employed

When I wrote Brave New War back in 2006, I made this aggressive projection on how rapid technological change would change warfare:

The threshold necessary for small groups to conduct global warfare has finally been breached, and we are only starting to feel its effects.  Over time, in as little as perhaps twenty years and as the leverage of technology increases, this threshold will finally reach its culmination — with the ability of one man to declare war on the world and win.

It seems that we are on track with my projection.  Recently, we saw individuals leveraging the power of computers and networks launch (open source) protests that toppled governments.   It didn’t end there.  Edward Snowden (love him or hate him) proved it is possible to wage a one-man information war against the biggest, most powerful national security establishment in the world.   The US government.  A country that spends more than all other countries in the world combined on national defense.

He was able to:

  • steal the crown jewels of the US security system by himself,
  • initiate an information war against the entire US national security bureaucracy while eluding capture, and
  • initiate economic disruptions that have done billions of dollars in damage to US corporations (from Boeing to RSA).

However, his successes don’t end there, he’s winning the war.

This support from the editors of the New York Times indicates that he’s already achieved most of what it takes to achieve a “moral victory” against the US government.

Of course, this type of revolutionary change due to technology isn’t isolated to the world of conflict, terrorism, and war.  It’s also going on in our economy.

Technological change is rapidly killing entire industries and job categories without replacing them.   Across the board, incremental productivity improvements are making it possible for employers to get by without hiring new people (even the head of the biggest employer in the World has plans to replace most of his workers with robots).  However, that won’t be where we see the greatest losses.   Those losses will occur in the industries that are completely gutted from the arrival of products and services that make them obsolete.   

As this trend strengthens, we may see results similar to what we saw with the agrarian economy.   If that occurs, the extreme endpoint of this decline may be a world where most of the commercial activity in goods and services we see today — from education to health care to manufacturing to transportation to retail to legal services — is accomplished by less than 1% of the people it used to require.  

That means only 1 of the hundred jobs being done currently will be left.  More strikingly, it’s very likely this won’t take the 200 years it took agriculture to go from 95% of the population to less than 1%.  It’s going to be much, much faster this time due to the speed at which improvements can be distributed (software/data).  Given this catalyst, we may find ourselves more than half of the way there within twenty years.

Another catalyst will be economic crisis.  With each successive crisis, there will an increased competition for the remaining economic scraps.  This competition will force companies to use technology more aggressively as a replacement for workers.  Economic crisis will also force bankrupt governments to radically reduce their expenditures.   This shortfall will drive a willingness to bend regulations to adopt alternatives that provide significant benefit for a fraction of the cost, despite vocal opposition from existing interests.

This process is both inevitable and irreversible. Our world is being upended. Get ready.

JR

Join the movement to restore America's prosperity

Discussion — 14 Responses

  • Michael J. Lotus February 4, 2014 on 5:58 pm

    Yes, this is so, scarily so.

    The question then is HOW do we “get ready,” maestro?

    How do we cross the chasm between the wicked fast disintegration of Industrial America (95% to 1% in … 20 years? Or so? Maybe quicker, even?) and the appearance of something, some new institutional arrangements, that will allow most people, not just the 1% who still have “jobs,” to benefit from the marvels of technology. There is no point in getting Future World, which should be and will be great, if most people starve to death by the roadside on the way to getting there!

    There are least two categories of response to this question: (1) Individuals and families getting ready, which is important but insufficient, and (2) political, legal, regulatory, institutional changes, that will facilitate the build-down of the old world and its replacement by the new, with the minimum possible pain.

    You have made some suggestions already, of course.

    Standing by for more … .

    Reply
  • Cavolonero February 4, 2014 on 6:19 pm

    SIMADs, short for ‘Single Individual, MAssively Destructive’.

    Reply
  • GoatGuy February 4, 2014 on 6:33 pm

    Techni-quibble: The US defense budget is only 38.4% of the world total, as of 2011. And we’re kind of cutting it back some, with mandates for hair-cuttings imposed by Congress some time back.

    I was watching the TV show … “Idiot Abroad” (or whatever its called) – not a particularly philosophically sophisticated piece of humorous fluff … but still having some interesting on-scene shots of various dumps around the world. (The protagonist, an ”ordinary Manx bloke” is sent on multiweek excursions to distant lands, to see if by the end of the whole series he will rise above his ordinary British mutton-chop myopia. Yet, the guys in charge are also making him the butt of the joke(s), by placing hiim in REALLY ordinary/banal situations. It is amusing.)

    One of the dumps is Cairo. Don’t get me wrong: of course Cairo has some amazing spots to visit. But the take-away is the depth of the banality to which an overcrowded, ostensibly capitalist society degenerates. NO ONE seems to make much of anything, meaning, to clean, keep in good order, acquire and produce product. When walking down a eatery-vendor’s lane, our protagonist was literally peppered by gaunt, somewhat crazed weasels, each who had memorized the entire menu of their patron’s restaurant, and could cite the whole thing in 60 seconds or less. In a language they really didn’t understand. I played back the segment several times – every one of them had memorized the same standard list, which included food items, and the inevitable “Engrish creep” of wanton mistranslations. But dutifully handed down, like the holy incantation of Isaiah.

    Point is – poverty – all gaunt, all weasels, all competing for a lucky catch. Making… nothing. When protagonist actually (bad idea) stopped to talk to the first 2 or 3, they couldn’t answer anything. But they were competing. I fear the same thing with our increasingly idled workforce. The number of phoney-baloney jobs out there has topped out. The number of sales people have gone up remarkably. The attempt to differentiate MY custom-labeled generic Chinese crap from YOUR custom-labeled Chinese crap and somehow sell it (“its pink! it sparkles! see the tiger stripes and rhinestones?”) is diminishing the factual value of what our workforce COULD be doing to substantiate the remarkable income enjoyed by the average upwardly mobile bloke’n’lass bedmates.

    YES – I’m intentionally sounding dyspepsic. I’m concerned not so much (though it is important) what the 0.001% can do to the nation, to the person, to the system, per this article’s focus … but rather what the workforce will be able to derive as value from what it produces, if it produces near-nothing.

    GoatGuy

    Reply
  • Bruno Behrend February 4, 2014 on 7:00 pm

    While I admit this is total conjecture, I believe there is a strong probability (maybe over 35% ) that Snowden was a CIA op designed to do any number of things.

    When I look at WikiLeaks, and its impact, it too benefited government more than hurt it.

    Reply
  • Bob Morris February 4, 2014 on 8:44 pm

    Snowden is a Super-empowered Individual, seems to me. Gen. Clapper saying he wants the copies returned is a clear indication that Clapper doesn’t even understand what digital media is. We are governed by chimpanzees.

    When most everyone doesn’t have jobs (and presumably little or no income) the traditional solution is that social structures and governments get overturned.

    Reply
  • James Bowery February 4, 2014 on 11:17 pm

    The contribution of wealth centralization to the drop in employment is not merely additive with technological change, it is multiplicative (synergistic).

    You know things are bad when even the New York Times has to admit there is a real problem with collapsing demand causing a shift of businesses away from servicing the middle class to servicing the wealthy (which they unfortunately conflate with high income). If the NYT is being forced to talk about reality, the elites are starting to take notice. Given how insular they are that means things are much further along toward collapse than many pessimists imagine.

    Reply
  • Cliff February 4, 2014 on 11:19 pm

    If only 1% are working, if even that much, it seems to me there are only one of two things to do with the remainder:

    1) Tax the 1% to create a fund to support the 99%, as John seems to have indicated, assuming I do not misunderstand.

    2) Genocide the 99%, that is, use the marvelous security infrastructure being built all around us these days for this purpose, as we write and exchange opinions, to mass kill them. Starve them (Stalin, Irish potato famine, Mao and many others are precedents), gas them systematically with latest mass extermination tech (Holocaust), shoot them en masse (Hitler, Stalin, Mao, the US Army vis-a-vis the Indians in the 19th century, Haiti against all whites in 1804). The list goes on and on: see the very sobering wiki entry for “Genocides in History” http://en.wikipedia.org/wiki/Genocides_in_history.

    Does anybody really believe the rich are going to want to pay welfare out to the 99%, in light of massive historical precedent mentioned in #2 above? I mean, not just because the rich are so greedy, which they are (see this link, though written from a different context, which shows the deep venality of the rich are, who obviously in this instance *hate* to pay fair wages even to highly skilled software and tech people: Silicon Valley billionaires believe in the free market, as long as they benefit
    http://www.theguardian.com/commentisfree/2014/feb/03/google-apple-silicon-valley-free-market-joke. They will be even more resistant to pay off the unskilled – this, I think, is a safe given.)

    But if they delete 90%-99% of the population, with the rest as slaves and robots doing work, would the world not be a sort of paradise for the 1%? They can have much more land for beautiful parks and land to enjoy and do what they want, and be able to stabilize environmental imbalance when most people, whose needs of all kinds have to be catered to but in so doing causes the imbalance, will be gone. So perhaps John’s solutions will require him to address this question, especially as represented in the 2nd scenario – what’s in it for the 1% to not genocide the 99%?

    Reply
  • WildBillB February 5, 2014 on 8:57 pm

    totally agree with the direction it is heading. Tech is cheap, underexploited, and outpaces the fleshware that created it.

    one suggestion on an option – become less dependent on the system. excessive want for more drove us into Urban areas, abandoning the simpler life (arguably more abundant life) in favor of ‘the system.’ abandoning ‘the system’ and getting back to the land AND simpler consumption breaks our dependence, and makes us PRODUCERS again.

    we can see the National and Corporate moves into the PRODUCER space – big $ and countries securing farm land and resources for the short and long term. we should look to do the same… WITHOUT debt.

    taking on debt breaks our chance at freedom.

    Reply
  • Kirk Parker February 7, 2014 on 2:06 am

    GoatGuy,

    Hold on a moment: you’re calling Egyptian society over the last how-many decades “capitalist”? Go (re)read Hernando DeSoto and then see if you still want to make that claim.

    John,

    Snowden presents himself as a solo actor, but how can we know?

    Reply
  • Michael P February 7, 2014 on 2:11 pm

    I have been feeling for some years that the economy as we know it will collapse. And like you say…fast.
    I am not worried about it. I am looking forward to brand new paradigms.
    I think that we will see some revolt and warfare (possibly even civil war), but that it won’t be that bad.
    I intend to get the hell out of the city real soon. Out to a rural area, far away from the crowded east coast.
    And watch it all go down.

    Reply
    • Ringdocus Michael P February 9, 2014 on 7:28 pm

      My wife, children & I moved from San Diego to rural aCalifornia in 1980 for reasons you & others have identified.

      Unfortunately, the recent arrivals (gen’ly in the 2000’s) bring the urban attitudes with them thereby altering in a negative manner – the simple life, etc.

      Reply
  • PeteW February 8, 2014 on 3:59 pm

    Another very interesting thought provoking piece John. Thank you.

    I agree the affects on many industries will be dramatically accelerated. I can certainly see it in IT now…the mainframe computing world that underpins virtually all major financial industries ( i.e. MVS/VM now ZOS & ZVM) has totally transformed since the late 80’s and imminent changes are going to match or exceed this level of change again in a very short time. It has had virtualisation imbedded for 40+ years at hardware and software level and now software defined operating systems are the next logical step. This has been driven by an aging workforce but in the process technology an innovation have caught up. It won’t matter so much now that no one is learning ZOS/VM technology anymore as the software will know what to do, and that software will be fronted by another layer of more familiar software designed by youngsters. Good luck to them. It will be an interesting life!
    Technology has already had it’s effect, it just depends what you define as technology. If you start from the Industrial Revolution and come forward in time you can see the accelerated upward curve of change, especially in mechanisation and automation as it’s become more sophisticated. People displaced by this often gravitate toward that very technology and look for even more creative ways to exploit it as a means to make an income, so it’s effects are spread even wider and faster. A recent good example would be the hoards of App and game designers for mobile phones / tablets. There has been a massive resultant decline in laptop and desktop sales. Unimaginable 5 years ago. It was the same for the cotton and fabric mills of the 1700’s which killed off most cottage industry weavers. Some of these people probably ended up working in the mills, but some probably helped design the looms because they understood what was required to make them work. Others saw that there were opportunities in design in other areas and went on to help create entirely new design industries.
    The common thread through this whole period has been cheaply exploitable energy, first coal, later oil. This is changing…the large scale physical industrial businesses will probably struggle to survive the inevitable cost increases for energy. This will spark a lot of smaller scale localised production using 3D printing for example, because it can be powered by much smaller energy sources like solar power, but also can work at a smaller scale and is more flexible to local market requirements.
    One of the biggest problems to deal with will be Gov’t and traditional ‘big business’ colluding to prevent people from using their full creative power because it’s seen as a threat, or not understood. The phonographic and film industry is a classic example. They will eventually become irrelevant, but what will govern things beyond that is unknown. If I was an artist I’d be incentivising by releasing free material and some that has to be bought. The more that is bought the more the points the individual collects and the cheaper subsequent purchases become, or they can take up a share of future income which could be used for purchasing at a reduced rate, or traded. Referrals of friends who then also buy can also be a rewarded incentive. This reveals the real value of the product and is less prone to machinations of the market and advertising.

    Looking forward to more on this John. I think this is the area that will be very defining. It depends very much on how technology evolves with computing. It is currently to bound to silicon technology and too reliant on other rare earth materials to be sustainable. The quantum level and organic level computing that seems to be not too far off will be a prerequisite I think to real revolution. This will make nano-technology much more realistic for example. Anyway…we shall see..

    Reply