MIT economist Paul Krugman has an alternative...

...vision of how information technology will invert the expected order. He writes: "The time may come when most tax lawyers are replaced by expert systems software, but human beings are still needed--and well paid--for such truly difficult occupations as gardening, house cleaning, and the thousands of other services that will receive an ever-growing share of our expenditure as mere consumer goods become steadily cheaper." Actually we don't need to wait for the future. Recently I had to hire two different freelancers. One sat in her office moving symbols around. She transcribes tape-recorded interviews and charges $25 per hour. The other is a guy who works out of his home repairing greasy kitchen appliances. He charges $50 per hour, and as far as I could tell had more business of the two. Krugman's argument is that these "manual crafts" (as they are bound to be labeled when so high-priced) will level the salary discrepancies that now exist between high tech and low tech occupations.

My argument is that great gardeners will be high-priced not only because they are scarce and exceptions, but also because they, like everyone else, will be using technology to eliminate as much of the tedious repetitive work as possible, leaving them time to do what humans are so good at: working with the irregular and unexpected.

At the dawn of the industrial age it would have been difficult to imagine how such quintessential agrarian jobs as farming, husbandry, and forestry could become so industrialized. But that is what happened. Not just agrarian work, but just about every imaginable occupation of that period--especially menial labor--was intensely affected by industrialization. The trend was steady: The entire economy eventually became subjected to the machine.

The full-scale trend toward the network economy is equally hard to imagine, but its progression is steady. It follows a predictable pattern. The first jobs to be absorbed by the network economy are new jobs that could only exist in the new world: code hackers, cool hunters, webmasters, and Wall Street quants. Next to succumb are occupations with old goals that can be accomplished faster or better with new tools: real estate brokers, scientists, insurance actuaries, wholesalers, and anyone else who sits at a desk. Finally, the network economy engulfs all the unlikely rest--the butchers, bakers, and candlestick makers--until the entire economy is suffused by networked knowledge.
The three great currents of the network economy: vast globalization, steady dematerialization into knowledge, and deep, ubiquitous networking--these three tides are washing over all shores. Their encroachment is steady, and self-reinforcing. Their combined effect can be rendered simply: The net wins.



Archives - This site operates under a Creative Commons License.

This is a blog version of a book of mine first published in 1998. I am re-issuing it (two posts per week) unaltered on its 10th anniversary. Comments welcomed. More details here.
-- KK