The Future is Ours to Lose

And in exchange for free internet searches, discounts on books and other merchandise, posting pictures of family and friends, and playing games, we’re giving it away. Giving away our means to earn a living. Giving away our privacy and most personal information. Giving away copyright protection, our health care data, our time. Making large companies and internet entrepreneurs wealthy. Waving goodbye to economic opportunities that could, in the mind of non-economist but future thinker Jaron Lanier in a creepily fascinating book called Who Owns the Future. From the book jacket, a clear explanation of a complicated book:

Lanier asserts that the rise of digital networks led our economy into recession and decimated the middle class…In this ambitious and deeply humane book, Lanier charts the path toward a new information economy that will stabilize the middle class and allow it to grow. It is time for ordinary people to be rewarded for what they do and share on the web.”

futureukuscomboCertainly, creative professionals have seen new opportunities, but many jobs have disappeared, crumbled, or become so easy for amateurs to do, there is little perceived need for professional work. Two examples: illustration and another is photography. What about people who drive for a living? Lanier: “A great portion of the global middle classes works behind a wheel. Many have entered middle-class life as a taxi driver or truck driver. It’s hard to imagine a world without commercial drivers. A traditional entry ramp into economic sustenance for fresh arrivals to big cities like New York would be gone. Wave after wave of middle class immigrants drove New York taxis. And I’m trying to imagine the meeting when someone tries to explain to the Teamsters that nothing like their services will ever be needed again.” You see this in the battles between the everyone-can-be-a-cabbie service Uber and the people who actually make their living by moving people.  Soon, cars will move without drivers. Lanier: “Both cabbies and truckers have managed to build up levees…they’ll be able to delay the change…there might be a compromise in which a Teamster or cabbie sits there passively, along for the ride, perhaps to man a failsafe button…the world of work behind the wheel will drain away in a generation.”

Lanier: “What about liberal arts professors at a state college. Some academic will hang on, but the prospects are grim if education is seduced by the Siren song… The future of “free” will beckon. Get educated for free now! But don’t plan on a job as an educator.”

Lanier’s Siren server combines a Siren’s song with a server that collects information, provides appealing benefits, and causes tremendous destruction as it is managed by a wealthy few. The Siren server is portrayed as a monster stomping the life out of everything in its path. Health care? Empathetic robots empowered by Big Blue’s encyclopedic database of knowledge, the processing speed of a digital chess champion, and unbelievably precise motor skills. The list goes on.

So what’s to be done? It’s tough for anyone to survive in the modern world with a “just say no to the Siren servers!” philosophy. So much relies upon credit cards, EZ-Pass, Android, and, yes, Netflix (now my most-used television “channel”). What’s more, there’s the “Pervasive Creepy Conundrums: online security, privacy, and identity.”

Lanier builds his case for divergence with a disheartening disclaimer: he cannot explain the idea simply. In fact, he can, and somehow, his editor did not delete most of chapters 16-20 because they take too long to set up a very good, very simple idea: two-way links. He appropriately credits an early home computing visionary, Ted Nelson, whose name may be familiar because he was the guy who originated HyperCard, which Ars Technica describes in a wonderful article entitled “25 years of HyperCard—the missing link to the Web.”

hypercard_tutorial_posterLet’s continue down that path: “The foundational idea of humanist computing is that provenance is valuable. Information is people in disguise, and people ought to be paid for value they contribute that can be sent or stored on a digital network.” I agree. For more about why and how I agree, see my recent articles about Google Books.

Simply: “If two-way linking had been in place, a homeowner would have known who had leveraged the mortgage, and a musician would have known who had copied his music.”

Lanier is right: That changes everything!

It’s a complicated fix, a change in the architecture of so many things digital, but it’s worth the shift. Here’s a straightforward example of why: “When you buy a physical book, you can resell it at will…” It is yours to own, sell, repurpose. “You can get the author to sign it, to make it more meaningful to you, and to increase its value.” With an eBook, you have only purchased “tenuous” rights within “someone else’s company store.” And so, “Your decision space is reduced.” It’s just not a fair deal. What’s more, this kind of thinking leads to the kinds of big company, big brother control that makes nobody comfortable (and few people wealth).

Lanier’s theory about “commercial symmetry” places everyone—companies and individuals, governments and other institutions—on a level playing field. Rules apply in both directions. People’s rights are not reduced. There is fair play. I am not required to subsidize ESPN on my cable bill; I don’t watch, and probably will never watch, most of the cable channels that I am required to fund each month. We’re trying to do something like this with health care—patient rights and all of that—but the health care system is not likely to share information about its economics. Students are graded by teachers, but (most of the time), teachers are not graded by students or (much of the time) by their employers or the larger body of taxpayers who fund their salaries, benefits and pensions.

Still, there is that looming question: is the value that we provide to, say, EZ-Pass or Netflix, transferable to real income for individuals who must earn a living. If Netflix discounted its services in exchange the data that we provide, would that result in more or less employment overall? Less, I suspect—but I’m operating within a present-day reality, and if we’ve learned anything from the future’s past, paradigm shifts change all of the rules.

Lanier probably doesn’t have the answers, but he writes in a way that makes you think, and he ignites meaningful conversations like this one. Smart guy, interesting book.

Lanier

Success! Good Health! Longevity! Fabulous Children!

You can do it! You’ll need a college degree and you’ll need to move to a place where 21st century America’s promise shines. Seattle, the SF Bay Area, New York City,

Boston, and the ring around Washington, DC.–those are the places where innovation is held in high esteem and is most likely to be funded so that new companies can be born, grow, and change the economic picture for employees, shareholders, and those smart enough to live nearby.

These are the places where venture capitalists fund big opportunities, and if a company seems promising, a VC will often require a move to, say, Silicon Valley, or not to fund the company at all. The “thickness” of the job opportunities in the Silicon Valley (and a very small number of other places), and the thickness of people with the necessary skills to suit those needs, not only attracts the best (and highest paid) people to these centers, where their high incomes tend to generate more jobs for the local economy (usually with salaries that are higher than even unskilled high school dropouts will find at home). If you’re an attorney, you’ll make as much as 30-40% more if you work in these areas than in an old rust belt city. The same is true for cab drivers and hair stylists.

Much has been made of Google’s employee perks; they won’t play in Hartford or Indianapolis, but neither of those places, nor most other American cities, see the kinds of financial results and spillover effects in the community enjoyed by the area around San Francisco. This is becoming the area that drives the American 21st century. And it’s very difficult for other cities to get into the game.

Author and UC Berkeley Professor Enrico Moretti has just published a book that presents a compelling picture of the much-changed US economy. The title of the book, The New Geography of Jobs, undersells the concept. Yes, if you can, you should move to any of these places, where you will make more money than you will at home–regardless of whether you are a high school dropout or a Ph.D. You will probably live longer, remain healthier, provide a better path for your children, live in a nicer home, have smarter friends, smoke less, drive a nicer car, you name it… the American dream lives large in San Diego, but in Detroit or Flint, Michigan, it’s gone and it’s not likely to return any time soon.

Average male lifespan in Fairfax, VA is 81 years. In nearby Baltimore, it’s just 66.

That’s a fifteen year difference. This statistic tracks with education attained, poverty level, divorce rates, voter turnout (and its cousin, political clout), lots more.

Want to remain employed? Graduate from college.

Nationwide unemployment rates: about 6-10% for high school only, 10-14% for incomplete high school, 3-4% for college graduates.

College degrees matter…far more than you might think. In Boston, with 47% of its population holding college degrees, for example, the average college graduate earns $75k and the average high school graduate earns $62,000. By comparison, Vineland NJ–just outside Philadelphia in South Jersey, has just 13% college graduates, and a college graduate earns an average of $58,000, with high school graduates at $38,000. Yes, it costs less to live in Vineland, but over a lifetime, people who live in Vineland are leaving hundreds of thousands of dollars on the table, perhaps as much as a half million dollars over a lifetime.

Real cost of college, including sacrificed employment: $102,000. At age fifty, average college graduate earns $80,000, but average high school graduate earns $30,000.

If a 17-year old goes to college, he or she will earn more than a million dollars lifetime. If not, it’s less than a half million.

What’s more, 97% of college educated moms are married at delivery, compared with 72% of high school-only grads. Just 2% of college-educated moms smoked during pregnancy compared with 17% with a high school education and 34% of drop-out moms. Fewer premature babies, fewer babies with subsequent health issues. Almost half of college graduates move out of their birth states by age 30. By comparison: 27 percent of high school dropouts and 17 percent of high school dropouts. The market for college graduates is more national; the market for non-grads is more local.

Caught in the middle? The best thing you can do is hang out with people who are pushing their way up the productivity curve. That is, MOVE! Leave the town where things aren’t happening, and take a job, almost any job with growth potential, in a place with high potential.

While the arguments about fencing lower-income immigrants out persist, most people earning graduate degrees today are immigrants. And a high percentage of people who start significant new businesses, funded by venture capital, are first generation Americans.

Today, an immigrant is significantly more likely to have an advanced degree than a student born in the US.

Foreign born workers account for 15% of the US labor force, but  half of US doctorate degrees are earned by immigrants. Immigrants are 30% more likely to start a business. Since 1990, they have accounted for 1in 4 venture backed companies. When they start a new business, they generate high-value jobs, which brings more money into the community (not any community, only the ones with a thick high-skill / high value workforce and a thick range of desirable jobs), and the people who fill these jobs generate more jobs in the retail and services sector, jobs that pay more in the high value areas than they do at home.

A century ago, investment money went to Detroit for its car industry, and to the midwest for productive factories. That era is ending. Innovation in the health sciences, technology, software, internet, mobile, and other fields is the driver of American productivity–but not everywhere. Clusters attract the best and the brightest from metros without the necessary thickness, leaving lesser places with fewer people who can make big things happen.

There is so much more here (sorry for the long blog post, but this is a very powerful book). We need to generate more college graduates, especially more men, and especially more people with STEM expertise (science, technology, engineering, math). We need to do a far better job in educating and creating opportunity (including opportunity for mobility) among those with fewer advantages. We’ve got a lot of work to do. First step: read the book!

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