11: How Did the Robot End Up With My Job?

Thomas L. Friedman, The New York Times, October 2, 2011

I've done a lot of television book interviews lately, and I continue to be struck at what a difference there is in the technology in just a few years' time.

Here is a typical evening at a major cable TV network: arrive at Washington studio and be asked to sign in by a contract security guard. Be met by either a young employee who appears to still be in college or an older person who seems to have hung on with tenure. Have your nose powdered by that person. Have your microphone attached by that person. Be positioned in the studio chair by that person, and then look directly into a robotic camera being manipulated by someone in a control room in New York and speak to whoever the host is wherever he or she is. That's it: one employee, a robot and you.

Think of how many jobs – makeup artist, receptionist, camera person, producer-director – have been collapsed into one. I raise this point because there is no doubt that the main reason for our 9.1 percent unemployment rate is the steep drop in aggregate demand in the Great Recession. But it is not the only reason. "The Great Recession" is also coinciding with – and driving – "The Great Inflection."

In the last decade, we have gone from a connected world (thanks to the end of the cold war, globalization and the Internet) to a hyperconnected world (thanks to those same forces expanding even faster). And it matters. The connected world was a challenge to blue-collar workers in the industrialized West. They had to compete with a bigger pool of cheap labor. The hyperconnected world is now a challenge to white-collar workers. They have to compete with a bigger pool of cheap geniuses – some of whom are people and some are now robots, microchips and software-guided machines.

I wrote about the connected world in 2004, arguing that the world had gotten "flat." When I made that argument, though, Facebook barely existed – and Twitter, cloud computing, iPhones, LinkedIn, iPads, the "applications" industry and Skype had either not been invented or were in their infancy. Now they are exploding, taking us from connected to hyperconnected. It is a huge inflection point masked by the Great Recession.

It is also both a huge challenge and opportunity. It has never been harder to find a job and never been easier – for those prepared for this world – to invent a job or find a customer. Anyone with the spark of an idea can start a company overnight, using a credit card, while accessing brains, brawn and customers anywhere. It is why Pascal Lamy, chief of the World Trade Organization, argues that terms like "made in America" or "made in China" are phasing out. The proper term, says Lamy, is "made in the world." More products are designed everywhere, made everywhere and sold everywhere.

What is out and what is in anymore?

The term "outsourcing" is also out of date. There is no more "out" anymore. Firms can and will seek the best leaders and talent to achieve their goals anywhere in the world. Dov Seidman, is the CEO of LRN, a firm that helps businesses develop principled corporate cultures, and the author of How: Why How We Do Anything Means Everything. He describes the mind-set of many CEO's he works with: "I run a global company with a global mission and one set of shared values in pursuit of global objectives. My employees are all over the world – more than half outside the US – and more than half of my revenues and my plans for growth are out there, too. So you tell me: What is out and what is in anymore?"

Matt Barrie, is the founder of, which today lists 2.8 million freelancers offering every service you can imagine. "The whole world is connecting up now at an incredibly rapid pace," says Barrie, and many of these people are coming to to offer their talents. Barrie says he describes this rising global army of freelancers the way he describes his own team: "They all have PhD's. They are poor, hungry and driven: PHD."

Barrie offered me a few examples on his site right now: Someone is looking for a designer to design "a fully functioning dune buggy." Forty people are now bidding on the job at an average price of $268. Someone is looking for an architect to design "a car-washing cafe." Thirty-seven people are bidding on that job at an average price of $168. Someone is looking to produce "six formulations of chewing gum" suitable for the Australian market. Two people are bidding at an average price of $375. When Barrie needed a five-word speech to accept a Webby Award, he offered $1,000 for the best idea. He got 2,730 entries and accepted "The Tech Boom Is Back." Someone looking for "a rap song to help Chinese students learn English" has three bids averaging $157.

Indeed, there is no "in" or "out" anymore. In the hyperconnected world, there is only "good" "better" and "best," and managers and entrepreneurs everywhere now have greater access than ever to the better and best people, robots and software everywhere. Obviously, this makes it more vital than ever that we have schools elevating and inspiring more of our young people into that better and best category, because even good might not cut it anymore and average is definitely over.

§ § § § § § § § § § § § § § § § § § § § § § § § § § § § § §

Editor: And yet it foretold that Japan's human capital not only allowed it to rebuild the country, but to do so along vastly more profitable – lines from a textile exporter that had to import the very fiber for its industries, it became, step by step, a great engineering nation, that made the most of its talented human capital.

For a few decades, as we have repeatedly explained elsewhere, Theodore Schultz and his great discovery were celebrated, and then completely forgotten. However, the great lesson he taught the world lives on in ever more crucial form.

Unless society stands guard over that human capital, it will merely become the dice of our speculative banks' future gambling. There were clear safeguards developed after WW II against this happening. One was the Glass-Steagall Act brought in under Roosevelt that forbade banks to acquire interests in non-banking financial institutions. For were they to do that, they would use the capital reserves for such firms – business to finance speculative banking – exactly what happened in the great bank busts in recent years.

Another were the statutory reserves that required the banks to deposit with the central bank money on which they earned no interest. This served as a damper for their gambles. And of course, in Canada, we have a nationally-owned central bank which allowed the government [to borrow from it] – and could still allow this – without the government paying more than a handling charge. Provisions are still on the books of the Bank of Canada to allow such advantages to be passed onto the provinces, and against the guarantee of the Federal government and to the municipalities, which would require the guarantee of either federal or provincial government.

There is also a series of important scholars, notably Douglass C. North, who have made the point that when a new economic class takes over, it must change political control as well. Otherwise, the old economic ruling class will sabotage the new economic regime. In the French Revolution, they cut off their heads, which we are not proposing.

But we must not allow representatives of the old order to run the proposed new one. For they will most surely sabotage. That is what Obama is doing.


-- from COMER, October 2011


Frederic Soddy – 'virtual wealth' – 'Wealth, Virtual Wealth and Debt', 1926:

"Debts are subject to the laws of mathematics rather than physics. Unlike wealth, which is subject to the laws of thermodynamics, debts do not rot with old age and are not consumed in the process of living. On the contrary, they grow at so much per cent per annum, by the well-known mathematical laws of simple and compound interest ... It is this underlying confusion between wealth and debt which has made such a tragedy of the scientific era."