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Sunday, February 14, 2016

The Problem with Jobs

Should I work for myself or for someone else?

Shall I take a job with an employer, or start my own endeavour. This is a simple decision with profound consequences in every work abled person's life. Contrary to popular belief, this has nothing to do with employment. It has everything to do with the principles by which you trade your time, skill and labor. It reflects your willingness to be employed in a job, or to take the risk and apply your resources for yourself, as self employed. Now, more than ever, people are empowered to exercise this choice. The means of production is shifting away from big capital corporations, and into the hands of everyday makers and producers.

The Concept of a Traditional Job

Jobs are born every day when private firms (driven by self employed entrepreneurs, or capital driven corporations) add workers to take care of business. No one gives you a job because you deserve one. No one gives you a job because you need one. Not because you are a good person, not because you are breathing, or are entitled. It is not a "human right". You get a job because someone needs some work done and is willing and able to pay you for it. You trade your time, skill and commitment for currency.

Employees typically cash a paycheque weekly, bi-weekly, or monthly. Entrepreneurs, and those that are self employed, don't cash a paycheques. Instead, they put up the capital for the enterprise, take responsibility for loans and other financing, pay the expenses (including payroll) and own the assets including revenue. They offer opportunities for people in need of jobs. They provide the means for your time, skills and commitment to create value.

If, over the course of months or years (or decades in the case of large-scale industrial projects such as oil drilling or computer chip manufacture), there is more revenue than expense, the employer enjoys profits, which enable them to live well and invest in another round of entrepreneurship or opportunity job creation.

Some of this profit is shared with shareholders (which can include employees). If there is less revenue than expenses, and if the losing trend is not reversed, the enterprise eventually fails, and the entrepreneur goes bankrupt and has to go begging the banks or other financiers for capital to try again, or becomes the employee of some other more successful entrepreneur. Jobs come from successful entrepreneurs and investors willing and able to risk a buck on you in order to have the potential to eventually make two bucks for themselves and for the next round of investment, which in turn has the potential to create a new job or raise for you, or enable you to become an entrepreneur yourself.

In order for all this to happen, there has to be freedom of contract (people must be able to choose the job, and employers must be able to choose employees), respect and protection of private property rights, light and reasonable taxes and regulations, and political stability with the expectation that those conditions will continue. If this contract is in some way off balance, it leads to: meaningless employment, faltering and unproductive businesses, labour unrest, capital withholding, and ultimate collapse in an economy. Simple, or is it?

History of Jobs

When early humans "went to work," they were initially hunter-gatherers. Their time was spent chasing game and finding animals and other objects they could transform into food, tools, and weapons. Over time for a variety of reasons, including changing climactic patterns and increased populations, people began to settle down. Tools were developed for planting and land cultivation, and societal structures formed that helped people to get along in larger settlements.

This is a good place for us to discuss the difference between "work" and "jobs." Many of us go to work, and that work is often a job. While humanity always worked (digging, planting, hunting, foraging, building), the concept of trading currency for time and labor, is something relatively new in our development.

Work is labor. A job is trading currency for time and labor.

Trading for labor is an ancient practice. Colonial America was a place of tradesmen and guilds. With the exception of a very few world-spanning enterprises like the East India Company, or Hudson Bay Company in Canada, there were few large employers. Most people either worked for themselves - self employed - or for local tradesmen and merchants. Alternatively, they were in the employment of the state (or military).

Before the Industrial Revolution of the late 18th century and 19th century most people worked as farmers. Only a small minority of people worked in industry. Back in colonial times and earlier, skills were passed down through apprenticeship. Guilds were created to control trade, share skills, and create barriers of entry to outsiders.

During the 19th century the factory system gradually replaced the system of people working in their own homes or in small workshops. In England the textile industry was the first to be transformed. The changes caused a great deal of suffering to poor people because the means of production was removed from the tradesperson and his tools, to that of the factory owner with the capital for machines. It largely destroyed the trades. The tasks within these corporations could be divided between the line worker (with a specific and specialized task) and management/administration. The one coopted with the tools of the trade to produce a product of value, while the other administered the means and the process.

Meanwhile in the late 20th century a change was coming over the economy, sometimes called de-industrialization. Traditional industries such as coal mining, textiles and shipbuilding declined rapidly. Service industries such as tourism, education, retail and finance grew rapidly and this sector became the main source of employment. The capital and labour for manufacturing moved to lower cost locations such as China and India, and the functions that remained were service or administrative in nature. People stopped making things. The majority of manufacturing jobs disappeared in favour of service jobs.

We are again on the cusp of another opportunity to more fully tap into our creative potential, driven by significant technological innovation that is democratizing the means of production and enabling connections between resources and markets. The arrival of the Maker Movement will emerge as the dominant source of livelihood as individuals find ways to build small businesses around their creative activity and large companies increasingly automate their operations.

Against Jobs

The biggest driver for self employment is to control your own destiny. Working a job gives someone else control over the majority of your life. Being self employed places the responsibility for your welfare into your own hands. Some people relish the opportunity, especially if they've already been a casualty of a meaningless job or a layoff.

Working a job is dangerously comfortable. When you work for someone else, life is just comfortable enough to keep you from asking the really important questions. Most jobs eliminate incentives to stand out or challenge convention. Pushing a new or alternative idea is considering threatening behaviour, and people are labelled for not being a "team player". The safe thing to do, is to do just enough. Corporations easily suffers from groupthink. Groupthink is a psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints, by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences. Sound familiar?

While you feel like your soul is being crushed every day at work by the next whiff and whim of a manager, at least you get a paycheque and some security, right? How much of that paycheque is spent on vices and entertainment just to make yourself feel better or to cover up the fundamental lack of fulfillment? How secure are you really if you can be laid off at short notice?

Fear is what keeps most people from doing extraordinary things in life. Most people choose to stay in jobs they hate because they’re scared of the alternative. They’re afraid they don’t have what it takes, that they’ll fail miserably and become a homeless embarrassments. This keeps them loyal to companies, who has no intention to return the favour. Instead, they rather put their welfare in the hands of others. The truth is, if you get past the fear and laziness, there’s no reason you can’t accomplish anything you want. Jobs keep you just comfortable enough so you never have a strong enough reason to confront those fears and start living your life’s purpose.

Working for yourself is one of the most challenging and rewarding things you will ever do. You discover things you never knew about yourself. And it’s no different when you become a business owner. You’ll never know what kind of leader you’ll be, what kind of boss you’ll be, and even what kind of morals you really have, until you’re in the thick of it. And once you are? You learn a lot about yourself and other people.

You’ll learn a lot more about life than most people. This learning is exciting. It is what we are born to do. No matter how successful you become, every single day will present a new challenge. You’ll have no choice but to figure things out. In order to do that, you’ve got to learn stuff important stuff, like how to relate to people, and how to make things happen for yourself.

Your hard work can result in wealth instead of a big, fat pink slip. When you’re working for yourself, you’re building an actual asset. Knowledge is the main asset that no one can take away from you. So is the revenue stream and momentum of the business. One that you might even be able to sell someday. When you’re working for someone else, you’re dedicating years and years and years and years (and years) of your life making someone else rich. Granted, you get paid for it, but it is not an achievement.

You’ll feel alive when you feel in control of your life and your future. There’s something to be said about the thrill of the hustle, and the love of the game. And nothing feels better than success and the the appreciation from someone else when you've added value their life.

When you are working for yourself and you’re planning to have a family, you can actually see them. You have flexibility with your work schedule, and your time is something that no amount of money could ever, ever make up for.

In Summary

We should keep in mind that the percentage of the population in the labor force peaked in the US of A, back in the year 2000, and has been falling since. The amount of those employed within the total population is at a record 38-year low of 62.6%. Meanwhile, despite slowing, GDP is still growing, so all the work is still obviously getting done somehow. 

Erik Brynjolfsson from the MIT Sloan School of Management thinks this is because not only are jobs outsourced to countries and people that can do it cheaper, but a whole lot of jobs are being taken over by technology or robots. In fact, he makes the point that we are already confronted with being a robot, or a maker/engineer that deploys and controls technology/robots. Many jobs people do can already be done better by technology. Robots are faster, cheaper, and more accurate. If you are doing a job today that can be automated, you should get ready for retirement or a new career. The robots have arrived. 

On the other side of the spectrum, makers and producers are not threatened by the arrival of new technology or robots. They rather revel in the opportunity it provides to make more, newer, better and cheaper. because they are makers, any tool that helps to make better, is embraced eagerly. We are now for the first time able to truly “race with the machine,” harnessing the power of the machine to unleash and amplify our creative energies. More broadly, we are finally making learning a true lifetime journey, finding new sources of meaning, and developing new ways to connect more richly in physical space, so that we all benefit and prosper from the new opportunities that are now available.

What does this mean? Over the past decade and a half, we’ve witnessed tremendous disruption across the economy at a speed that previously seemed impossible. It all revolved around bits. Digital was the edge, the frontier, we connected rapidly and globally through social media, and new business and institutional models evolved to fit the digital world. Now, the edge has become the core. The world is digitized. What we learned with software, web services, and apps about innovation, iteration and collaboration is being applied back to the physical – bits to atoms.

Physical “making” is the new frontier. But this time, the atoms are supported by bits, enabled and enhanced by technology that allows individuals everywhere to connect to the same resources and use the same tools.

I am adding one more possible role to the future of humanity. The role of the entertainer. There luckily remains a human quality that the world of robots have not (yet) been able to touch. Yes, a robot can make a leather bag perfectly. A craftsperson makes a custom leather bag imperfectly, but authentically, with a character that is both flawed but true and real. The same goes for the perfect notes produced by a computer, but it is the pianist that succeeds in communicating emotion and movement in her play. For myself, I can only hope to miss the day when robots become more human than people.

In the mean time, let's continue to make something. Research has shown that people who moved into optimal jobs or are self employed shows significant improvement in mental health compared to those who remain unemployed. Those people who are in poor-quality jobs shows a significant worsening in their mental health compared to those who remain unemployed.

That's right, having no job at all can be better than having a bullshit one.

If low-skill jobs are more likely to be worse on mental health than medium and high-skill jobs, then for decades we've been increasingly working in newly created jobs that are depressingly worse for us than not working in any job. Give those to the robots. Let it go.

Let's go and make something instead.

Hendrik van Wyk

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