The Future Economy

What will the economy of the future look like?

I get asked this a lot, and the truth is, for most people . . . not great.

Dario Amodei, the CEO of Anthropic, recently came out and said that entry-level white-collar work – the work formerly done by new college graduates – will be wiped out and that unemployment could surge to 20% in just a few years. Dario is proposing an AI tax, so he’s not trumpeting a case that helps him. About 44% of American jobs are categorized as either “Routine Manual” or “Routine Cognitive” by the Federal Reserve and could thus be theoretically automated away.

Over 2 million young people graduated from college last week. I’m not sure what today’s 22-year olds are going to do in five years, and college is somehow twice as expensive as when I graduated. I think to myself all of the time, “I’m glad I was born when I was.” I got to come of age before social media arrived and started depressing teenagers. And I had the chance to gain professional experience back when you could just show up and demonstrate your ability.

Could you just show up today? A lot of routine cognitive jobs are middle-class jobs that will disappear. Economists call this “job polarization” which is when you have jobs at the bottom and the top and not as many in-between. Some jobs are going to be inconvenient or not worth it to automate – like cleaning a hotel room – and are going to be with us a long time. But those aren’t going to be jobs that people are going to be pumped to do.

If you’ve been following me for a while, you know I’ve been convinced this would happen since 2018 when I wrote The War on Normal People. I was in Iowa talking about self-driving trucks back then. Now, the first robot trucks are hitting the highways. It’s been a busy 7 years.

I’m totally confident this is unfolding because I talk to friends who tell me what they’re working on. One founder I know told me he’s looking at replacing 2,000 customer service workers with AI. This isn’t some jerk, he’s a good guy and you’ve heard of his company. An entrepreneur said that he’d replaced his entire design department with AI. Having staff used to be a sign of corporate health and growth. Today it increasingly means that you’re not doing it right.

Coding used to be the most secure career path; now AI is writing code faster than any human could. One experienced coder with AI is now able to replace entire teams. I know of several people who were laid off from their tech companies recently. There are even stories of former coders becoming delivery drivers.

A study came out recently saying that 60% of Americans now can’t afford a minimal quality of life. AI is going to supercharge inequality and gut middle-tier jobs, making a bad problem even worse.

This isn’t to say that there won’t be areas of positive impact. There will be massive advances in biotech, energy, quantum computing and more. Diseases will be cured and drugs will be discovered. But the average American is unlikely to feel those benefits in their own lives; they’re going to wonder where their next rent check is coming from and what their kids are going to do.

If you accept that humans are going to lose to technology across the labor market, then you start thinking, “What are people going to do when they wake up in the morning?” Jobs and job-like arrangements are positive for people in terms of community, structure, purpose, fulfillment and development. The goal should be to build and retain as many arrangements like that as possible. The absence of that is already having negative effects across the country; think men staying at home without much to do.

The vision I’ve been driving, which I wrote about in The War on Normal People is a human-centered economy where we value people’s time and ability across a whole range of activities. One stepping stone in that direction is a system called Timebanking, which enables people to barter services based on what they can do. For example, if I tutor your child I could get a Time Dollar, that I then give to someone else to give me a ride. That person could then give it to someone else to help cook a meal. And on and on. Everyone has something they can offer. This was proposed in Edgar Cahn’s book, No More Throw Away People, and has been adopted by dozens of communities.

Last year I met with Stephen Dubner of Freakonomics who had recently read Cahn’s book. He and I decided to collaborate to try to catalyze a timebanking implementation. We identified an initial Executive Director, Jenny Kassan, who was already working to help entrepreneurs in Baltimore. I interview Jenny this week to talk about her work.

The economy is a man-made creation based on various rules and incentives. If we follow the current rules, millions of people will quickly become irrelevant as AI doubles in capacity every seven months. Despair will follow. Can we build an economy of the future that we are actually excited about for most people? The fate of Western civilization hinges on our ability to answer that question.

For my interview of Jenny Kassan, click here. For the Freakonomics episode on Timebanking, click here. To give to the work in Baltimore, click here. To see what Forward is doing to advance our politics to start addressing these issues, click here. Forward got a lot of new members last week due to some prominent people talking about the need for a new party.