Post Scarcity

At this point Covid has shut down most of Los Angeles. Restaurants are closed. Stores are closed. Companies have had layoffs. It feels like every week a new record is being hit in terms of unemployment claims. Despite people not having jobs, we still have enough houses to house everyone, food to feed everyone and produce enough products to sell everyone. Given this all, it feels like it’s a good time to talk about post-scarcity economics.

Hertz Example

A few years ago I was in a Hertz Rent-A-Car. There were some people lined up to talk to the folks at the counter, and there were automated Hertz terminals. The terminals had no line, so I went, used one and left. Did the people really need to be behind the desk? If one of the people behind the desk just didn’t come into work a few more people would probably have gone to the terminal, and the only impact to the world would have been that guy didn’t get paid. The same number of cars would have been rented. The same number of TVs would be created. The same number of Teslas would get produced. The same number of cabbages would be grown. If you’re serious and look at your workplace, you can probably identify people you could do without (Don’t feel bad about this, it may not be a reflection on the person’s competence). How many times have you been working at a company, there was a layoff of a bunch of employees you “couldn’t live without” and despite those people being gone not much changed? At a recent job I left, I was offered a substantial raise to stay when I gave them my notice. I declined, left and was not replaced. The company continued without a blip.

Imagine for a second all the folks at every company in the world who could be released were simultaneiously let go. The amount of “stuff” produced wouldn’t drop. So why couldn’t we just let those people choose to not work if they didn’t want to?

Can increasing efficiency turn into less labor?

Historically as efficiency has increased throughout our economy, we’ve always repurposed the labor saved for added productivity. When the power loom was invented, there was a need for less people making fabric. It’s not like those people were subsequently allowed to do nothing, by the next generation of labor all the newly freed up labor was otherwise engaged doing new things. This has been true throughout our history. In the early 1900s this made sense. It now takes less people to assemble a car? Great! Now we can use those people to ____. We owe much of our current world to this process. We couldn’t have an airplane before the power loom not only because the technology didn’t exist. Also, a large portion of the workforce was tied up making textiles, and not available for building airplane wings. (Gross oversimplification clearly.) Availabilty of labor for work was traditionally a major constraint is economic growth.

De-coupling growth from labor need

For the last century we’ve obsessed over economic growth. People today certainly have more things and options than people in 1900. Cars, iPhones, TVs, European vacations. These things all either didn’t exist or were only accessible to the very rich. Today most Americans can afford to have a car, everyone has TVs and a cell phone and many can afford to take a European vacation. In the 1990s something new happened. The IT revolution. Computers started to make people dramatically moreefficient. Communication was faster. Even a basic spreadsheet enabled a single person to do things that were unimaginable before. The Hertz worker mentioned earlier is redundant because of information technology.

The major change is that people being replaced in this era of technological advance are not production workers. When textile workers were replaced by power looms it was very clear that “work” had been replaced by a technology. With managerial organizations keeping track of supply chains, it’s much harder to tell

Create a world where jobs aren’t necesary

So why are we all still working? Because jobs are “necesary”. If you don’t have a job, you can’t afford to pay rent, you can’t afford to eat dinner, you can’t live a dignified life.

Published 23 Jul 2020

On building software, living a healthy life and the world around us.
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