Ed. note. The following is today’s Seth Godin, found over at his blog here. He refers to Clay Shirky, whose blog can found here. (He is also a must-read, although he doesn’t write much. Brag point: I know someone who recently had coffee with Clay, yah me!) I am repeating Seth’s post here cuz I know how hard it can be to jump all around the internets.
(He also guest wrote a post for me which has received blog acclaim called “Don’t Try To Get a Job.”
by Seth Godin
There are two recessions going on.
One is gradually ending. This is the cyclical recession, we have them all the time, they come and they go. Not fun, but not permanent.
The other one, I fear, is here forever. This is the recession of the industrial age, the receding wave of bounty that workers and businesses got as a result of rising productivity but imperfect market communication.
In short: if you’re local, we need to buy from you. If you work in town, we need to hire you. If you can do a craft, we can’t replace you with a machine.
No longer.
The lowest price for any good worth pricing is now available to anyone, anywhere. Which makes the market for boring stuff a lot more perfect than it used to be.
Since the ‘factory’ work we did is now being mechanized, outsourced or eliminated, it’s hard to pay extra for it. And since buyers have so many choices (and much more perfect information about pricing and availability) it’s hard to charge extra.
Thus, middle class jobs that existed because companies had no choice are now gone.
Protectionism isn’t going to fix this problem. Neither is stimulus of old factories or yelling in frustration and anger. No, the only useful response is to view this as an opportunity. To poorly paraphrase Clay Shirky, every revolution destroys the last thing before it turns a profit on a new thing.
The networked revolution is creating huge profits, significant opportunities and a lot of change. What it’s not doing is providing millions of brain-dead, corner office, follow-the-manual middle class jobs. And it’s not going to.
Fast, smart and flexible are embraced by the network. Linchpin behavior. People and companies we can’t live without (because if I can live without you, I’m sure going to try if the alternative is to save money).
The sad irony is that everything we do to prop up the last economy (more obedience, more compliance, cheaper yet average) gets in the way of profiting from this one.
6 users commented in " What He Just Said "
Agree with the problem statement, but not Seth’s “solution”.
Remember 8-10 years ago when the advice to displaced workers was “go back and get some high tech training”. Many did. Then they found out that the jobs they were training for are gone. Off shored by companies that could care less about their people (and the overall helath of the country economically). So then what?
Seth — here is the problem with your solution. Many people cannot take advantage of the “networked revolution”. They are not entrepenuers. They are not necessarily risk takers. They will work hard and give you a day’s effort for a day’s pay. “Fast, smart, and flexible” does not describe the average Joe. So where do these folks fit in your new economy? Extended unemployment?
Here’s an idea — Obama — close the loopholes that allow corporations to ship every middle class job overseas. Incent companies to hire on shore with tax incentives (it beats handing out money to the banks). Give folks a chance to make a living wage again. Tax revenues will rise. People will have money to spend again. And this economy will recover.
Back to the quarry.
Fred.
Seth’s forecast will likely hold for a little time, but long term I do not see it. More things are going to go backwards, recede.
1. Transportation costs are going to go up. James Kunstler and others foresee that peak oil is past and fuel costs are going up.
1b. Also, you will see barriers go up. Legal protectionism. Extra-legal blockades and refusals to permit transit without paying a toll. Such blockades are already seen in Bolivia and Ecuador. As things get bad here people will not permit moving imports unless a tariff is paid.
– The standard of living will definitely go down. So plan on that. Perhaps out of all that you will have better luck finding some sort of job, even if it is as a picotero manning one of those blockades.
There is more to the subject than I can think up in this short time at this terminal.
– Claudius
Yes, its globalized commerce with small infrastructors of internal economic demise (certain way business as usual happens) over the whole world (possible risks involved with capitolist economies/possible gains) the cycle of maintaining balance on the scales on the communication between civilized nations. China’s great wall fell what a shock to the average citizen it must have been at the time, now its just a world wonder. One must wonder how many people can be replaced by a more efficient reliable machine, on the other hand how many people are usefull when they aren’t needed like the way they used to be (I.E. jobs?), especially when they have to pay to be where they are and have no real means of providing/paying/earning?????