The software company VMware has roughly the same market value as General Motors. VMware has 13,000 employees. GM employs almost a quarter of a million people. In addition to the current workforce, GM supports roughly half a million retired workers through its pensions and health insurance programs. VMware supports 0 retired employees.
Whether we mean to or not, we are deciding now on the shape of a post-jobs economy. What will American culture, politics, health care, and economics look like in an era when formal employment – a job – has ceased to be the most common way that Americans earn a living?
This is not just a question of how we treat the less fortunate, those who do not find jobs in shiny new tech startups. The post-jobs economy is not necessarily an unemployment economy. The shift away from formal employment does not mean stagnation or idleness.
More and more Americans are shedding formal employment in favor of more flexible work arrangements or starting their own businesses. Since 1990, small businesses and solo ventures have accounted for twice as many new jobs as large enterprises. Yes, many people are falling behind in the competition for knowledge-based jobs, but that is neither the only, nor necessarily the dominant theme of the knowledge economy.
The dynamics of the knowledge economy, much higher wages for professionals and rapidly declining inflation, are creating shorter, more flexible careers and more opportunity for entrepreneurship. For those who avoid falling into the dangerous chasms opened up by this economic realignment, the knowledge economy promises a freer, more prosperous world than we have ever known. The key to this future will be adapting our political arrangements to narrow those chasms and update the safety net beneath them.
Decisions we make now about health care, education, and the shape of the social safety net will not only affect the poor, they will determine how many Americans can afford the kind of risk-taking that accompanies entrepreneurship and innovation. For Republicans in particular, there is an opportunity hiding in this transition. If we can shed the notion that government=slavery, we could use a modified social safety net to unlock a massive economic expansion and a radical shift toward greater real personal independence than we have ever before experienced.
Imagine a country in which everyone can feed themselves, pay for a minimal place to live, and get access to health care. No matter how ill, damaged, or even indolent they may be, their children have an opportunity to earn an education and develop their talent if they so choose. Those who choose to work hard can live a lifestyle we can scarcely imagine. The wealth available to those who are particularly successful is spectacular.
Those who don’t work hard or succeed, for whatever reason, still survive reasonably well. Their children will not be precluded from opportunities to develop their talent by their parent’s failures.
Taxes on the successful fund an education infrastructure and a safety net that prevents the next generation from descending beyond help, but government is generally smaller and less intrusive than we have come to expect. A stronger safety net finances a wider room for failure, with less regulation and more individual accountability. Health care is paid for from taxation, but administered by private insurers and delivered by private providers.
The socialist model of deep state regulatory intrusion, public ownership of major capital, and mass unionization will be too restrictive to function. It is crumbling away globally under competitive pressure from more dynamic models. It will have to be replaced with a kind of universal profit-sharing plan.
Such an arrangement is not far from the way we live now, but it would require a government that sets standards rather than dictating outcomes. It would require higher taxes and a stronger safety net, but fewer government employees, more privatization, less support for unions and other interventions that distort market outcomes and dampen innovation. This model would free the innovation engines of global capitalism to crank out massive new wealth without risking the distortions, political and economic, which would come from an unmediated transition to lower net employment.
Without an updated safety net, the wealth concentration created by suddenly declining low-skilled employment would quickly breed economic stagnation. That stagnation would in time dim the prospects of everyone who had not successfully begun earning a living from capital, rather than wages.
That stagnation would narrow opportunities for investment, gradually converting capital owners into rentiers squeezing ever-diminishing returns from depreciating assets. In short, without efforts to support the most important resource in a knowledge economy – human innovation – the system would gradually eat itself, replacing an old overclass with a slightly nerdier new one before closing down. Without smarter efforts to expand opportunities, everyone will see narrowed horizons over time.
The Republican Party’s obsessive fear that someone might get government benefits they do not deserve is blinding us to a prime opportunity. More Americans are entrepreneurs than ever before. African-Americans are twice as likely as whites to start a new business. Republicans are inadvertently making this opportunity harder to seize by standing in the way of efforts to update the safety net.
Our changing economic landscape is creating an environment ripe for traditional Republican commercial values. If Republicans wake to this opportunity and find a way to shed the baggage of the Cold War, there is a potential for a long run of political success and economic dynamism. The makers/takers paradigm that defines the grumpy old Republican isn’t just arrogant, it is utterly false. If we recognize how the knowledge economy has wrecked that paradigm, new opportunities emerge for the party and the country.
It is important to remember that this economic transformation is a global phenomenon. The nation that experiences the greatest success in harnessing economic dynamism without creating a desperate underclass will dominate the next century. We have every reason to be the winners in this race. A bright future awaits if we have the courage and intelligence to seize it.
The rise of the Entrepreneurial Economy, http://people.few.eur.nl/thurik/Research/Teaching/The%20Rise%20of%20the%20Entrepreneurial%20Economy%20and%20the%20Future%20of%20Dynamic%20Capitalism%20-%20Thurik%20et%20al.%20%282013%29.pdf
Chris Ladd is a Texan living in the Chicago area. He has been involved in grassroots Republican politics for most of his life. He was a Republican precinct committeeman in suburban Chicago until he resigned from the party and his position after the 2016 Republican Convention. He can be reached at gopliferchicago at gmail dot com.
GOPLifer 
[…] Preparing for a Post-Jobs Economy, November 2013 […]
[…] These folks may not represent a majority of American workers, at least not yet, but they are a dominant and growing plurality. More Americans than ever before are graduating from high school. More Americans than ever before are completing college. Our new, more dynamic career arc is coming to define our economy in ways that challenge old understandings of success or failure. Those same forces are changing the meaning of a job. […]
[…] Labor force participation peaked in the ’90’s and has been in decline ever since, but the aggregate numbers hide a long secular trend. We should be re-evaluating the emphasis we place on that metric, as the meaning and significance of employment, both culturally and economically, has been changing for a very long time. […]
[…] economic transformation that has ended the middle class as we knew it, upset old notions of the purpose and rewards of employment, severely undermined the value of labor, and concentrated power, wealth and opportunity in fewer […]
[…] some of the boldest early innovators in Internet technology. Now they are on the leading edge of a post-employment economy, demonstrating what life may be like for millions of middle-earning professionals from realtors to […]
Nice place you have here. Many political affiliations are about ‘feelings’ as when the economy suffers a setback it just ‘feels’ right that government should do like us and cut back and tighten its belt. It’s the same hard thing to ignore ‘feelings’ when it becomes apparent that collective action and using the principles of risk pools can actual lead to more personal ‘freedom’ economically. It doesn’t ‘feel’ right to just give those people money, said Cain.
Nice blog Chris! I like your “good reads” section, hopefully they are Kindle-available. 🙂
Good to see everyone, cheers
Hey, the band is back together. Good to see everybody again.
Feels right don’t it!
You betcha.
OT, but congrats to one of my favorite Republicans Richard Luger. A well deserved honor.
http://www.indystar.com/story/news/politics/2013/11/20/lugar-receives-presidential-medal-of-freedom/3650567/
“Those who don’t work hard or succeed, for whatever reason, still survive reasonably well.”
———————————————————————–
What fresh hell is this? Chris, you underestimate human nature’s inclination toward laziness. Yesterday, I asked my husband’s opinion on a topic brought up on your last blog about Boeing moving operations to South Carolina. He has had experience with unions and he thought that even if there was an initial shortage of skilled workers, the move would be a positive one for the company. Unions spend a good deal of their resources (with what’s left after lining the pockets of their leaders) negotiating for benefits that make the workforce less efficient and more costly. Unions potentiate mediocrity in workers since they push to base pay on seniority rather than quality of work, thus, disincentivizing workers. A poor worker will earn as much as a person who does an excellent job – so why put in the effort?
Your new economy would give great swaths of people little motivation to do anything more than just skate by. Why work hard when one can spend all one’s time in a virtual world or addicted to alcohol or drugs? Don’t get me wrong, the majority of people would still want to find a job they find fulfilling and challenging but there would be less opportunity and far less incentive.
Survival – food, shelter, and taking care of one’s young has always been a great motivator. Even dogs have the need to work. My dogs recently took an obedience classes, and the trainer said the biggest mistake most pet owners make is merely feeding dogs without having them do any work for food or treats. Yet, isn’t the proposal here to treat people like pets – plopping down kibble in front of them and expecting little more than to have them eat?
Lest, I am called a heartless conservative, I realize that some people are either mentally or physically unable to hold down a job. Society should definitely make sure they are taken care of. With all others, there should be a safety net, but it would be dangerous psychologically to promote an economy where unemployment is a life-style choice. That kind of economy would definitely help some succeed spectacularly but would cause many more to crash and burn.
Ask yourself this question: Am I willing to make the entire country, including myself, poorer in order to put more pressure on a few lazy people?
Personally, I don’t care if some people or even lots and lots of people decide to “skate by” if it means that the rest of the economy can surge ahead without them. This is the wrong thing to be concerned about and it is not just costing the GOP, it is costing the country.
That concern is part of the reason we feel it’s necessary to maintain a massive bureaucracy to administer the welfare state. If we stopped worrying about the “undeserving” getting some meaningless scrap, we could slash the cost of the whole system, make it work much better for everyone, and free up productive citizens (who, let me suggest, there are more of than you think) to achieve far more than they are accomplishing now.
Lifer, It is not a matter of being mean and putting pressure on a few lazy people; it is a matter of making more people lazy. It is like a teacher saying that all students will pass her class and receive at least a B. Sure, some of the students will excel and get As, but a good portion of the class will do nothing and learn nothing.
OV, it sounds as if you are a follower of the neoconservative “I got mine, and to hell with you getting any left overs”. Decent paying jobs are few, and those struggling making minimum wages need help. NO child in America should go hungry. I’d much prefer my tax $$ go to feeding America rather than helping those that make big bucks in the oil industry. Funny how some of the women whose husbands work for the oil companies seem to feel entitled
OV,
I’m not sure I want to slow the whole class down out of concern that someone might choose not to do the work. I really don’t care. If there are millions of Americans out there who would be happy living on a basic income, what good are we doing by crippling our future to take that away from them? Whatever contributions they are making now we can probably live quite well (better?) without.
Let me write a check to support them if it means all of us can have a sensible health care system and we can all have broader opportunities to succeed. I find the concern about laziness a little baffling.
It’s me – OV. I’ll probably be changing my avatar to the pantera photo soon but for now have a mugshot of my Aussie up until I find the jaguar pic.
ROR: I see the personal attacks have started. So, I’m “entitled” and spoiled and want children to go hungry? Really? That’s ludicrous.
I have never hidden that I have extended family members who have received government assistance. I am grateful and appreciate that a safety net exists. People who find themselves out of work sometimes need a little help getting back on their feet. However, allowing able-bodied people to collect welfare indefinitely is a bad, bad idea.
My husband and I have helped relatives out financially. One set of in-laws, in particular, used to request help often. I remember sending them money we were going to use for a family vacation only to learn they had used the money to go on vacation themselves while we stayed home. I would never want my nieces and nephews to go hungry but there was a point where we knew the best thing to do was to let my brother and sister-in-law work things out by themselves and know that we would not be helping out financially except in a dire situation. They ended up doing fine without our help. Sometimes “necessity is the mother of invention.”
I believe that we, as a country, should do our utmost to end poverty and promote job growth, but guaranteeing income to people who choose not to work is not feasible long term. Do we have enough wealth make it possible? You seem to think so, but I have grave doubts.
***Do we have enough wealth make it possible? You seem to think so, but I have grave doubts.***
The math strongly suggests that we do and we could drastically shrink government along the way. But to address your other concern, compassion is really beside the point.
A basic income isn’t so much about helping the poor as eliminating the whole concept of poverty and – along with it – eliminating the notion that government should care a great deal about individual decisions. That’s why the concept originated with guys like Hayek and Friedman, not with thinkers on the left. It’s a sort of political jiu jitsu that would suck all the air out of the big government project.
Everyone gets their basic needs met in a fairly straightforward way, without special constituencies or any other preferences. Basically it says “We accept the New Deal, now’s here’s how to do it right.”
For those used to working, unemployment is even more work than being employed and sometimes one has to learn anew how to interface with total strangers in a much changed job market. For some reclusive types, that ends up being pretty much out of the question, and they would prefer some kind of personal innovation instead of the rigors of ‘nuevo resume y presentacion’. See? (si?) Are you going to learn a new language just to compete for that new job? Or is it time to sharpen up the skates? Hey, that’s a job!
OV is absolutely correct. Statistics show that more and more people are getting ‘in the wagon’ and less and less are ‘pulling the wagon’. I also believe those that are satisfied with mediocrity probably have low self esteem. This acceptance of letting a growing segment of our society fail is preposterous. I say keep the safety net intact but with an expiration date.
There is a real reason the old adage of: Idle hands cause mischief.
OV
If a person is willing to be satisfied with the meager amounts provided by the social safety net then I am going to guess they were not the most highly motivated people to begin with. Why handicap people that want to work and create wealth?
OV wrote, “you underestimate human nature’s inclination toward laziness.”
As you pay your lawn guy a mere pittance to mow your grass in searing heat and humidity in the summer.
Or how about these “lazy” poor people:
http://www.nytimes.com/2013/11/24/nyregion/the-end-of-willets-point.html?ref=nyregion
No, I underestimate your inclination towards hate of others not like you and your total lack of general compassion.
YOU are NOT what made or continues to make this nation great. I feel you are more of a drag on this country than any ” throng of undeserving loafers” could possibly effect.
Chris – It says my first comment is awaiting moderation. Will you still have to approve posts in this format? Does that change if I log in with one of the social media sites?
Thanks for pointing that out. Just fixed it. After a few weeks I’ll change the configuration so that moderation is required for first-time posters. For now it will be open.
I still got the awaiting moderation message.
Hello, Chris. This looks like a good blog, though I’ll have to remember to add it to my usual web ramblings.
However, isn’t it still subject to “spoofing” by typing an arbitrary name into the reply field?
Yes, Owl. Right now this format is very open. Over time I’ll turn on moderation for first-time users and require some kind of login for posting. There are likely to be other tweaks and we see how this works.
Guten Tag, Herr Eule von Bellaire. Wie gehts? I promise I won’t try to be you. I couldn’t pull it off, anyways. 🙂
I like the format and hopefully we can avoid the mayhem that certain troll posters would create with mass comment deletions.
I had an interesting conversation with a friend this weekend who worked for years in corporate America and was a principal in one start-up. She quit her corporate job a year or so ago to focus on other entrepreneurial opportunities and in the meantime is doing consulting work. Her #1 concern was health insurance: she had a cardiac issue a few years ago that should be fixed but none of the dozen or more insurance companies she contacted would write her an individual policy. She is fortunate to live in a state that created its own functional exchange and she has a policy that starts Jan. 1, conveniently close to the end of her COBRA coverage.
My brother lost his job in the recession and is now self-employed as a general contractor. This is also issue #1 for him; alas, he does not live in a state with its own exchange, but perhaps the federal one will eventually function well enough to help his family.
How many people would strike out on their own if finding health insurance for them and their families were not a barrier?
If I could only get Republicans to recognize that scenario! An effective safety net could be a the keystone that makes “The Ownership Society” an actual, functioning reality.
Nevermind, for a moment, the poor. We need a sane, effective safety net so that young people and professionals can make the leap from earning wages to earning a living from capital. This is not about socialism, it’s about making capitalism a broader phenomenon.
These are a few links I have concerning this question on entrepreneurship and Obamacare. The Houston Article cites researchers from the Urban Institute and Georgetown University’s Health Policy Institute that estimates that Obamacare could help spur 1.5 million Americans to become self-employed entrepreneurs next year.
If this is socialism then I am all for it.
http://www.inc.com/peter-gasca/how-affordable-healthcare-will-spur-entrepreneurship.html
http://www.houstonchronicle.com/business/columnists/sixel/article/Another-effect-of-the-Affordable-Care-Act-More-4981915.php
http://www.upi.com/Health_News/2013/06/01/Healthcare-reform-may-spur-new-generation-of-entrepreneurs/UPI-10271370062915/
Exactly. Democratic socialism (which is exactly what this is) is all about ensuring human freedom and protecting human rights by providing a clear, substantial, and appropriate “floor” to citizens’ existence. It does not eliminate capitalism; rather, it enables and enhances it.
The uninspired or uneducated won’t be driven to criminality out of desperation; the brilliant can succeed; the moderately talented can fine or make their own middling way, either by working for others or freelancing with services or crafts (“the Etsy economy”?).
And the prospects from innovations like nanotech make such an eventual society all the more likely.
Hear, hear!
I still do not see the GOTP buying into the new economy. Many members are still stuck in the just work hard learn a trade and you can live the middle-class dream. That dynamic has been dead for 20 years and it is not coming back. Entrepreneurship is going to flourish in this nation with access to health insurance available to those willing to risk new opportunities but not at the risk of their family’s health.
But not everyone can be a entrepreneur and will work for someone always. We cannot forget about them. Small effective government can also help establish national manufacturing objectives and provide access to capital and research to develop these industries. Green energy is a viable option as is technology based industries.
But can that happen today in our current environment. I believe not and it will not happen till the extremists have their grip on the reins of Republican Party removed.
I might be wrong, but I’m pretty sure that it’s not Nov. 20th yet, nor past 2 in the morning – but who’s time is it?
I think I fixed that. It will now either show Central Time, or Central Asian Time, depending on whether I got the +/- correct.
“Fascinating”, as Spock would say, and it is the first time that I have seen what I have always called, ‘The Star Trek Economy’ explained by someone well versed in political communications.
I will not live long enough to see the idea come to pass, but I rejoice that at least the doors are opening and thoughtful people will indeed bring those new and vibrant social mechanisms to light and grant new freedoms to our citizens.
“I’ll be back!”
I forgot to mention that the world is already flirting with Bitcoins, although mining them is beyond the capacity of most of the citizenry. So the experiments with alternate forms of currency have begun in earnest, and the stock market has taken notice – albeit in a somewhat cursory manner…