Bred as House Pets

Walter Russell Mead argues that standard white collar jobs are going to be hit with more competition in coming years.

Increasingly, it looks to me as if large chunks of the upper middle class are about to get whacked. ... Lawyers, accountants, business managers and executives, university professors and administrators, architects, designers, upper level civil servants, NGO managers: this means you.What’s happening is that computers and software are reaching the point where they can effectively displace more and more routine skilled labor — just as for the last forty years we’ve seen automation reducing the need for routine human labor in factories.

This undermines Democrat hopes for redistribution, he believes, because the upper class is going to be having its own problems. Wealth will not automatically flow to the professions as before. And the answer is not more "helping bureaucracies", but to make life easier for start-ups.

This also means college kids need to think differently:

These kids have been raised to point toward bureaucratic, institutional success. Go to school, stand in line, keep your nose clean, get the grade, get into the next good school, and repeat until you get a job offer. At that point, get on the escalator of success — as an associate in a law firm, for example — and if you do your job well, you will have a reasonably smooth ride to the top.

But the standard hierarchies of the twentieth century are fading:

Graduating into a world that looks less and less like the world they’ve been led to expect, these young adults are going to have to figure out new ways to get ahead. They are going to have to become entrepreneurs.

Success will mean more willingness to take risks:

A state that wants to be on the cutting edge of the future should be thinking less about setting up enterprise incubators and more about how to restructure its educational system so the next generation graduates debt free. Debts drive students toward salaries and security; that is exactly the opposite of what our incentives should do.

The career paths they’ve been trained for are narrowing and they are going to have to launch out in directions they and their teachers didn’t expect. They were bred and groomed to live as house pets; they are going to have to learn to thrive in the wild.

I really enjoy reading Mead. But I don't think we can remake the economy just in terms of providing personal services for each other, as he seems to think. Of course there will be some exciting new products and services. But they may not employ a US labor force of 140 million at the same wages as before.

The fundamental point I keep making on this blog is the nature of needs changes as you go up the hierarchy of needs. Needs become more non-rival and less excludable. They become more to do with happiness, self-realization, personal connection and personal growth.

And that means they are less easily packaged and exchanged in the market. The market is a wonderful thing, but it has borders of usefulness.

Instead, the challenge is going to be largely ethical, as I keep discovering on this blog. I find myself reading relatively more moral philosophy than labor economics in thinking about how the economy is changing. We need to actually think about "the good life" again.

We still need incentives for people to flourish and lead productive lives. But if we can provide basic goods and services with such efficiency we don't need a mass industrial labor force, then we need to think about what people do instead. We need to think about purpose and virtue and flourishing.

The borders of the market and exchange economy are not the mirror image of the borders of the state, though. The twentieth century welfare state does not work any more, either.

The irony is we increasingly have overwhelming material abundance, at least in the developed world. But it is producing economic problems. It is not a Marxist-style accumulation crisis so much as a phase shift, like the move from agriculture to an industrial economy. We just have to recognize that is what's happening.

 (edit: fixed missing word, 5/4)