Comment by brc | Hacker News Reader

Comment by brc | Hacker News Reader

I much prefer early pg to current-day pg writing. Hopefully handing over the reigns will bring back some clarity of thought.

This is a good article which highlights several things I agree with:

>The prospect of technological leverage will of course raise the specter of unemployment. I'm surprised people still worry about this. After centuries of supposedly job-killing innovations, the number of jobs is within ten percent of the number of people who want them. This can't be a coincidence. There must be some kind of balancing mechanism.

precisely. The whole 'technology gone done taken our jerbs' thing seems to be popping up again lately - anyone taking this line needs to justify why this time it's different.

>One upshot of which is that the companies of the future may be surprisingly small. I sometimes daydream about how big you could grow a company (in revenues) without ever having more than ten people. What would happen if you outsourced everything except product development? If you tried this experiment, I think you'd be surprised at how far you could get.

WhatsApp

>'technology gone done taken our jerbs'

followed by:

>I sometimes daydream about how big you could grow a company (in revenues) without ever having more than ten people.

Do you not see the contradiction there?

Why is there a contradiction? Sounds more like a formula for a lot of small to medium sized businesses being started. If there were no Big-COs that provide thousands of jobs, people wouldn't roll over and decide not to work. On the contrary, it's likely more people would form their own business out of necessity.

Now, would this be better for the US economy in general? Maybe. Maybe not. When I was in college I spent a stint as a Political Science major (focusing in IR). When learning about Asia I remember a lot of discussion about Taiwan's economy being successful in part because of their strong small to medium sized businesses.

Taiwan's government seems to be a fan of this idea as well: http://www.taiwantoday.tw/ct.asp?xItem=127151&CtNode=429

Not necessarily. 100 companies each with 10 people may net more money per company than 1 company with 1000 people.

No, definitely not.

A company with big revenues and a small staff means a very productive company - someone delivering lots of value for very little work.

Whenever you have a productivity multiplier working away, jobs are being created. The jobs might not necessarily be for the company, but the productivity benefits show up somewhere.

It's easy to employ people - just pay lots of people to do low productivity or negative productivity jobs. But to make a better society with better jobs, you need productivity to go up. This requires people to lose their current (less productive) jobs, but the forces created when this happens always create more jobs somewhere.

Case in point....before Henry Ford automates his production line, cars are built by hand slowly. It is a low productivity industry. He automates, and builds many more cars, for much higher revenue per person, than before. The price of the car drops as a result. More people can now afford cars, which means lots more people can use this new tool to do their job more productively. Eventually all this increase in productivity increases employment. There are specific cases of unemployment (coachbuilders, manure collectors) but there is a rise in general employment.

Taking your example a step further (and subsequently bringing it into a more modern context), what happens to those jobs when Google (or someone) builds a mass production driver-less car? Sure, a few thousand engineers will be employed, but that's barely going to put a dent in the millions of taxi/truck/delivery drivers that now find themselves out of work.

This is a matter of opinion, as none of us can predict the future, but I believe that one of the purposes and goals of technology is to replace and reduce the drudgery of human labor. If I was a VC, I would be investing in almost any labor-replacing tech startup that came across my desk because the market for the tech has already been validated (companies paying for the labor) and you are bringing a more efficient solution to that market. You believe that this process somehow results in more jobs. I believe, baring massive changes in the education and social infrastructures, that this process inevitably leads to fewer jobs.

>what happens to those jobs when Google (or someone) builds a mass production driver-less car?

Lots of people will no longer be employed in low-productivity jobs of driving vehicles. That is exactly what will happen.

>as none of us can predict the future

Correct. And Henry ford didn't foresee Pizza delivery.

>You believe that this process somehow results in more jobs

The process creates higher productivity. Higher productivity leads to higher living standards and more jobs in aggregate, though not for the affected workers.

> I believe, baring massive changes in the education and social infrastructures, that this process inevitably leads to fewer jobs.

For this to be true, you must explain why this time it is different.

It's not the fact that a few thousand engineers replace millions of drivers. It's the fact that the increased productivity drives down the cost of things. The increased productivity also releases human capital and actual capital to pursue new things and create new jobs. This leads to new jobs in entirely new industries. It's comment to lament and say 'what are these new industries going to be?'. But as already stated - nobody can see the future. We don't know, but we must accept that it will happen, simply by looking at all of human history. The fashionable argument currently is that you need to reform education to make this possible, but other large-scale changes in technology have happened when people usually didn't finish high school. When a person needs to learn new skills, they generally find a way of doing so.

>The increased productivity also releases human capital and actual capital to pursue new things and create new jobs. This leads to new jobs in entirely new industries.

Correct, but it doesn't necessarily result in an equal number of or more jobs than before.

>but we must accept that it will happen, simply by looking at all of human history.

This is where I think we disagree the most. I don't think history sets a good precedent for predicting the future, especially in this current environment. At no point in history have we had robots and AI. We still don't have that now, and there are no guarantees that we will fully achieve AI, but in many areas we are making humans obsolete and I expect this trend to continue. Using your eariler analogy, what happened to the horses after Ford introduced mass produced cars? They were turned to glue. In many ways, this is the issue we are currently facing.

I do agree that highly skilled and entrepreneurial folks will create new industries which could dramatically alter the economic landscape, but I am still not convinced that this is going to result in full employment. These new industries will still be taking advantage of the highly automated and efficient technologies that other industries use and lower-skilled and less educated people are going to find it increasingly difficult to find work.

In addition to what others have said you can subcontract significant amounts of work (e.g. using SAAS systems rather than in house) supporting other companies. Of course managing significant contract will become much of the work for the ten employed people.

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