APRIL 2017
OGILVYRED
THINK SERIES
By Jess Kimball Leslie, Chief Futurist
The Future of Work:
On the economy millennials
will create from circumstances
they have inherited

NEVER BEFORE HAVE
AMERICAN COMPANIES
TRIED SO HARD TO EMPLOY
SO FEW PEOPLE.
- The Wall Street Journal
February 1, 2017

ANORMALLYCHILLBARACKOBAMA
ISSUESONEHELLOFAWAKEUPCALL
INTRODUCTION
4

ChameleonsEye/Shutterstock.com 5

“We’re going to have to redesign the social compact in
some fairly fundamental ways over the next 20 years.
At some point, when the problem is not just Uber but driverless Uber, when
radiologists are losing their jobs to AI, then we’re going to have to figure
out how do we maintain a cohesive society and a cohesive democracy in
which productivity and wealth generation are not automatically linked to how
many hours you put in, where the links between production and distribution
are broken, in some sense.
Because I can sit in my office, do a bunch of stuff, send it out over the Internet,
and suddenly I just made a couple of million bucks, and the person who’s
looking after my kid while I’m doing that has no leverage to get paid more
than ten bucks an hour.”
-Barack Obama to David Remnick, November 28, 2016, The New Yorker.
6

The Social Compact (noun) – The voluntary agreement among individuals by
which, according to any of various theories, as of Hobbes, Locke, or Rousseau,
organized society is brought into being and invested with the right to secure
mutual protection and welfare or to regulate the relations among its members.
Also known as the social contract.
Images (left to right): Thomas Hobbes, John Locke, Jean-Jacques Rousseau.
7

THINKABOUT BARACK OBAMA’S WORDS FOR A MOMENT.
8

Our 44th president—a man who has been accused on many occasions of
being way too even-keeled—has stated that we need to reinvent our entire
society. Then he added that we’ve only got 20 years in which to do it.
History fans might read Obama’s words and recall Dwight D. Eisenhower’s
final remarks upon leaving office—specifically Eisenhower’s warning
that the swelling postwar defense budget meant that the United States
risked becoming a “military-industrial complex.” Those proved to be
some sage words. It could be argued that a president leaving office is
perhaps our best informed citizen, and that his or her warnings merit
substantial consideration.
9

Obama is not unique in his beliefs. In recent
years, an onslaught of the world’s brightest
economists and academics—Columbia University’s
Joseph Stiglitz; Harvard University’s Thomas
Piketty; Stanford University’s Nicholas Bloom;
Oxford University’s Richard Susskind; MIT’s
Erik Brynjolfsson and Berkeley’s Emmanuel Saez
—have sounded the same alarm, vociferously
declaring that the economy has begun rapidly
changing, and we must alter the way society is
structured to match its demands and constraints.
Marx and Engels, ever the diligent futurists,
created a system for thinking about periods of
extreme change in human history back in the
1800s. Marx and Engels paid close attention to
times of “contradiction” in modern history, specific
times when the way things were socially done by
the groups of regular people were very different
from the way things were economically organized
by the powers-that-be. Whenever social behaviors
clash the economic models, said Marx and Engels,
revolution becomes an inevitability.
Let’s stop there to apply this very timely idea
to today…
10

MARX NAPSTER
Here’s a fun example of a Marxist “contradiction”
decimating a market: remember the 2000s? I was
in college at the time, and the way that we acquired
our music was by illegally downloading MP3 files
on Napster.
At the time, the way the music industry wanted us
to acquire music was to either download it from
iTunes, or to buy and store it on compact discs.
Hell no, we said to that! We’d rather wreck a $2,000
computer with a virus than pay $.99 for a song.
So it’s easy to see, in retrospect, that there was
a massive contradiction in the way that people
behaved vs. the way the music market was
organized. That same contradiction cleared the
path for revolution, thus iTunes gave way to
Spotify,andnowartistsyoulovecanmakebetween
$0.006 and $0.0084 in exchange for a play.
Music in the year 2000: How business was
organized vs. How people behaved
11

OBAMA, PIKETTY, MARX OR SEAN PARKER
If you don’t believe
Evan El-Amin/Shutterstock.com12

In addition to these academics, the world’s
most visionary CEOs have quietly prepared their
business models for a world in which our
economy is no longer structured around scarcity
of resources (for example, oil and natural gas),
but an unlimited abundance of them (for example,
the sun).
That’s a pretty huge change. Businesses built
around the scarcity of resources represent a crazy
percent of capitalism as we know it.
JEFFBEZOS
Then consider…
13

The choices made by the world’s top CEOs speak volumes: there is a reason
why Jeff Bezos has built his company’s new headquarters inside a working
biome; why Brian Chesky has equipped Airbnb to help millions of Americans
who can’t afford their (menacingly structured, subprime) mortgages with a
new way to derive income from that same, ultimately unaffordable asset;
why Elon Musk’s most treasured contribution to the world might be his
solar-powered tiles. (And those little tiles, at scale, could decimate not 1 but
2 of the world’s 3 most valuable industries.)
“It’s probably hard to overstate how big of an impact
artificial intelligence is going to have on society over the
next 20 years.”
-Jeff Bezos, Chief Executive Officer, Amazon
14

Those CEOs are not stopping, either: in December,
2016, CB Insights uncovered illustrations from an
Amazonpatentforan“airbornefulfillmentcenter.”
In other words, a patent for drones that can ferry
goods to and from convenient, flying, unmanned
warehouses. Imagine being at a ball game and
ordering all kinds of beverages and snacks from
an Amazon Airborne drone. That’s the type of use
case the patent cites in its filing.
These CEOs all know about the future reality to
which President Obama alluded—they see that
society is restructuring itself in some pretty
fundamental ways—and while other companies
are carrying on business as usual, those CEOs
are running around making their investments
and preparations. As was true when limitations
of mercantilism gave way to the expanse of
capitalism in the late 1700s, periods of great
economic tumult always yield great opportunity—
for those who can see what’s happening.
15

THECHANGE
THATISTOCOME
THE CHANGE THAT IS
ALREADY HERE,

In my last trend report, I posited that there is no longer
such a thing as a traditional “competitive set” in
business—that is, a notion that your company’s
competitors are merely the other companies producing
similar products. Instead, I believe your competition is
everyone. I also believe that your competition is always
Alphabet and Amazon, because these two guys like to
gobble up industries for sport.
Radu Bercan/Shutterstock.com18

Source: http://www.nytimes.com/2017/01/04/technology/techs-next-battle-the-frightful-five-
vs-lawmakers.html?smprod=nytcore-ipadsmid=nytcore-ipad-share
The New York Times agrees with this thesis. Writing
in January, 2017, Farhad Manjoo stated that
Microsoft, Apple, Amazon, Facebook and Google
have become the ‘Fearsome Five,’ with ‘no true
competition’ in sight. In Mr. Manjoo’s words: “The
Five are poised to jump beyond their corner of the
lagoon. Over the last few years they have begun to
set their sights on the biggest industries outside
tech — on autos, health care, retail, transportation,
entertainment and finance. With the Five, unlike
in previous eras of tech, it is not clear that there
are many potential disrupters among today’s
start-ups. The battles for dominance in cloud
services, artificial intelligence and data mining,
voice-activated assistants, self-driving cars, virtual
reality and most every other Next Big Thing are
being waged among the Five.”
19

OHBOY,T H E
HARD PARTI promise that this report gets more fun soon, but first we have to talk about how
truly bad things have gotten, in order to see how truly inevitable change is.

Not 20%, not 50%, 90%. It’s a very hard number
to really understand, so here’s a series of charts
that we can ponder as a collective.
90% of America is really,
really struggling right now.
Here’s a painful reality that many of us have
spent far, far too much time ignoring:
22

When it comes to the pace of annual pay increases, the top 1% wages grew 138%
since 1979, while wages for the bottom 90% grew 15%.
Cumulative change in real annual wages, by wage group, 1979-2013
Measuring employment becomes a moot point when 90% of Americans are earning
a stagnant wage.
Source: EPI analysis of data from Kopczuk, Saez, and Song (2010) and Social Security Administration wage
statistics. Reproduced from Figure F in Raising America’s Pay: Why It’s Our Central Economic Policy Challenge.
Cumulativegrowthinannualwagesince1979
200%
1980 1990 2000 2010
150
138%
Top 1%
Bottom 90%
15%
100
50
0
-50
23

Outsized U.S. Income Inequality Persists in 2014
The incomes of the top 1% and 0.1% of U.S. families dwarf the bottom 99%
Source: Emmanuel Saez and Thomas Pikkety’s analysis of IRS data. ©2015 Washington Center for
Equitable Growth. Chart source: http://www.epi.org/publication/charting-wage-stagnation/
Averageincomeineachgroup $6m
Bottom 90% Top 10% Top 5% Top 1% Top 0.1%
$4m
$33,068
$295,845 $448,489
$1,260,508
$6,087,113
$2m
$0
No surprise that stagnant wages produce wild net worth and savings deficits.
24

Long Robots, Short Human Beings
Manufacturing output grows because of technology, not wage work
Source: BofA Merrill Lynch Global Investment Strategy, IFR, Bloomberg.
Millions
1.75
1.50
1.25
1.00
0.75
0.50
0.25
0
’73 ’76 ’79 ’82 ’85 ’88 ’91 ’94 ’97 ’00 ’03 ’06 ’09 ’12 ’15
20
12
14
16
8
10
Global Industrial Robots
U.S. Manufacturing Jobs
25

Manufacturing: Total Employment and Production
Source: Federal Reserve Board of Governors, U.S. Bureau of Labor Statistics.
Manufacturing Employment
Manufacturing Production 2009=100
16,000 120
’47 ’52 ’57 ’62 ’67 ’72 ’77 ’82 ’87 ’92 ’97 ’02 ’07 ’12
14,000 100
12,000 80
10,000 60
8,000 40
6,000 20
4,000 0
26

Where do you work?
Estimates suggest a sharp increase in the percentage of the U.S. workforce that isn’t
employed directly by the company where they work.
Source: Lawrence Katz (Harvard University) and Alan Krueger (Princeton University).
The Wall Street Journal.
1995 2005 2015
16
2
4
6
8
10
12
14
0
Independent contractors
On-call workers
Temporary help agency workers
Contract-firm workers
with more than one client
Contract-firm workers
with one client
After successfully increasing
profits with technology, savvy
CEOs are milking more money
from employing less full-time
workers. The freelance economy
thrives because it’s highly
desirable because it’s as profitable
(for companies) as it is desirable
(for their most expensive workers).
Note: A janitor who is employed
by a contract firm and cleans
five unrelated offices a week is
counted as working for more
than one client. Data for 1995
and 2005 don’t include exact
comparisons for that group.
27

FOR 90% OF AMERICANS, A HARSH
REALITY IS ABOUT TO GET HARSHER
With those charts in mind, we can fairly say…
28

“The problem with the status quo
is that it isn’t static. It’s always
getting worse.”
-from a talk with Paul Mason at The Guardian Live, July 23, 2015
“Work hard, play hard” has been the overeager
motto of a generation in training for…
what?—drawing hearts in cappuccino
foam or plugging names and numbers into
databases. The gleaming tech no-future of
American capitalism was long ago packed
up and sold to China for a few more years of
borrowed junk. A university diploma is now
worthnomorethanashareinGeneralMotors.
We work and we borrow in order to work and
to borrow. Meanwhile, what we acquire isn’t
education; it’s debt.”
-Communiqué from an Absent Future, 2009
“We’re not only talking about three and a
half million truck drivers who may soon
lack careers. We’re talking about inventory
managers, economists, financial advisers,
real estate agents.”
-The Great AI Awakening, The New York Times, December 15, 2016
29

So we just looked at charts that show where we are today, now let’s talk
about where we’re going. The next chart is from an Oxford Martin study on
the future of employment.
A note on how to read the chart, because it’s a LOT—from left to right, we
see the likelihood of a computer taking a job away. The colors represent
pools of workers in different sectors of industry. The reason the sectors’
colors are “smeared out” horizontally over multiple probabilities is because
there’s a lot of deviation within a single sector. For example, certain kinds of
construction workers face a medium likelihood of being replaced by a robot,
and other kinds of construction workers face a very high likelihood.
The cumulative charts we’ve just looked at are, in various combinations and
permutations, often used to make the argument that capitalism has failed
our post-technology society. In capitalism’s place, the aforementioned
academics, CEOs and sitting president believe that we are now headed
toward a post-capitalist future.
30

Source: http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
Management, Business and Financial
Computer, Engineering and Science
Education, Legal, Community Service,
Arts and Media
Healthcare Practitioners and Technical
Service
Sales and Related
Office and Administrative Support
Farming, Fishing and Forestry
Construction and Extraction
Installation, Maintenance and Repair
Production
Transportation and Material Moving
Employment(millions)
Probability of Computerization
400
0 0.2 0.4 0.6 0.8 1
200
300
100
0
Low
33% Employment
Medium
19% Employment
High
47% Employment
31

W I T H
A N D
WIKIPEDIA
EXAMINING
POST-CAPITALISM
HOT DOGS

So what the hell does that mean—that
‘post-capitalism’ thing
Obama thinks we need to restructure the
U.S.A.’s “social compact,” aka society
Academics agree with him
CEOs agree with him
Federal Reserve, Census Bureau of
Labor Statistics data agrees with him
A REALLY FAST RECAP
01
02
03
04
34

Paul Mason, Erik Brynjolfsson, and Jeremy Rifkin believe that capitalism
has failed to keep pace with the demands of technology, and therefore
must be abandoned for a new model—a new social compact, if you will.
These thinkers believe that capitalism was pretty well set up to navigate
the past—to deal with a world where factory workers competed with other
factory workers to produce the best product at the best price.
Capitalism, however, doesn’t know how to cope with the one knowledge
worker working in the basement, the one who writes the code that makes all
those workers moot.
35

“The art of management has been defined as knowing
exactly what you want men to do, and then seeing that
they do it in the best and cheapest way.”
-Frederick W. Taylor
36

The “art of management,” as Frederick Taylor defined it, was built around the
notions of centralization and hierarchy. In Taylor’s world, workers showed
up from 9 to 5 on weekdays in order to be managed by a superior, who knew
everything about what they were doing. These workers needed each other in
order to be productive (the factory line can’t run with only 4 of its 20 people),
and they also needed the manager to puzzle through any inefficiencies.
The more efficient the group became with their time, the faster those goods
got produced, the more money management made.
Centralized factories—and companies—competed with each other to build
the very best thing.
Capitalism ‘got’ Ford vs.GM vs. Honda, for sure. What the aforementioned
thinkers argue that it doesn’t ‘get’ is the Uber.
37

WAGE
WORKERPeter Drucker
WAGE
WORKER
The
would soon be replaced by the
KNOWLEDGE WORKER
38

Before we delve deeper into the post-capitalist argument, it is now worth
mentioning that one of post-capitalism’s founding fathers was the
late, great Peter Drucker. He was the ultimate capitalist, the ultimate
sharp-shooting, steel-eyed, practical exec in one hell of a suit.
Peter Drucker was a legend who, in postwar America, all but invented
the consulting models that minted McKinsey and its competitors.
Peter Drucker was called “The Godfather of consulting” by no less than
The Harvard Business Review. He was the original CEO whisperer, the man
who helped boards and execs tweak their organizational practices and
structures to be just that little bit more profitable and efficient.
And then he saw the networked computer.
39

Through some miracle of clairvoyant intellect,
this same man, at 80 years old, took a long look
at the (pre-internet browser!) digital network
and predicted that it would shatter capitalism
altogether. Writing in 1992-1993, Peter Drucker
said that the wage worker would soon be
replaced by the knowledge worker, and that the
trouble with these new knowledge workers would
prove impossible for CEOs to manage or value.
These workers wouldn’t need to all show up at
the factory at 9am. These knowledge workers
would be decentralized. The best of them would
be unmanageable. In a lengthy 1992 interview with
The Harvard Business Review, Drucker explained
that the best of these women and men would be
their most profitable and productive when left
to do whatever they wanted, and that the best
CEOs of the future would quickly learn to accept
this reality.
Unlike wage workers, knowledge workers
wouldn’t need to be managed*
. “So how would
company hierarchies work?”, HBR asked Drucker,
representing the question in all of its readers’
heads. Well, Mr. Drucker replied, They wouldn’t.
The company hierarchy is dead. Mr. Drucker wrote
a whole book about this whole theory, ultimately
positing, that certain knowledge workers’ hours
might become so valuable, they’d be worth 10,000
wage workers’ hours.
40

Inthepost-capitalism,knowledgeworkereconomy,
this would mean that a company could post the
exact same profits on that 1 person while firing
some or all of the other 9,999 people.
Once those 9,999 people*
were left without a
way of supporting themselves, their lack of
economic relevance would mark the decimating
blow to capitalism’s status as society’s main
organizing principle.
After all, capitalism can’t “organize society”
if it leaves 90%+ of society out.
*For those of you arguing that there are other potential outcomes for those 9,999 workers, look up Paul Krugman’s seminal 1997 “hot
dog” theory; it’s extremely Googleable. Krugman’s answer, in short, is Well, yes, there are sort of other outcomes for those other workers,
but ultimately no, not at sustainable scale.
Wage Economy Knowledge Economy
Paid by the hour Paid by the value of
their contribution
Work regular hours Work whenever they
want to
Work in one location Work wherever they want
to/need to
Hierarchical (Bosses/
subordinates/peers)
Networked (It’s more
complicated than that)
41

SO WOULD
THIS BE
UTOPIA?
UH, NO.42

It is worth noting here that post-capitalism is not
Marxism or socialism: there are still companies in
a post-capitalist world, and they still make hearty
profits, they just employ far far far less people and
tend to give a lot more away for free (or for “close
to free”) than current companies do. More on that
in a while.
And one of post-capitalism’s main beliefs is that
society ultimately will also have to—as Obama
said—create a social welfare system for the 90%
or so of people who are left out of work, rendered
irrelevant by machinery.
43

1723 - 1790
WAIT! THERE’S
ONE MORE
POST-CAPITALIST.
ADAM SMITH
44

Now for some macroeconomics comedy—the original post-capitalist
might have been the father of capitalism himself: Adam Smith.
Most of us only read excerpts from the first few chapters of The Wealth of
Nations in school—the ones that cover the concepts like “The Invisible Hand.”
When we read about Smith’s ideas in news articles it’s probably most often
as a sort of Republican, anti-regulation argument, an implication Smith’s
capitalism never wanted for government monitoring and involvement
because its “Invisible Hand” would see to it that business was fair, that
the best businesses would win and the others would fail. There’s just
one small problem with our vague notion of Smith as the ultimate anti-
regulatory capitalist…
45

GOD IS IN THE DETAILS
ADAM SMITH’S
“INVISIBLE HAND”
Google Search Results: 10MM+
Actual Mentions in The Wealth of Nations: 1
Smith never talks about
“The Invisible Hand” as being
some giant justification for
unregulated capitalism, for
governments stepping aside
to ‘let businesses do what
businesses do.’ Smith mentions
the concept once, in a chapter
on regulating imported goods.
46

Smith mentioned the word ‘regulation,’ however
123 times in The Wealth of Nations. Smith was a
big, big fan of heavy government regulation. He
went as far as to say that in any capitalist system
without government regulation, man “generally
becomes as stupid and ignorant as it is possible
for a human creature to become.”
Smith was not the limited government capitalist
that some might like us to think he was. In fact,
he was a Scottish Enlightenment thinker who
harbored deep concerns about where machines
and capitalism would ultimately lead society.
Adam Smith, like Marx, foresaw that ever-increasing
efficiencies would either render regular workers
to a state of unhappiness, a state of uselessness,
or both.
In 2015 Katrine Marçal wrote an outstanding book
called Who Cooked Adam Smith’s Dinner? In the
text, Marçal delightfully points out that Smith was
also something of a giant adult baby, as he lived at
home with his mother for most of his life. Marçal’s
goal was to poke holes in his theories of capitalism
as being a representation of anything exhaustive—
capitalism, in the way Smith outlined it, leaves a lot
of important workers out of its model.
47

Marçal’s thesis is that capitalism, as a idealogical
system, is flawed. And likely now fatally so.
Case in point, whilst Smith penned his various
theories on how the economy works, his mother
was making his food and washing his clothes. In
hiswritings,Smithconvenientlyvaluedhismother’s
contribution to the global economy at zero. Her
work was ghost work, or what economists call
‘shadow work.’ Marçal argues that, by Smith’s
definition, most of the world’s work is ghost
work, and entirely left out of economic measures.
(So Capitalism = A model that leaves out most
work.) This ghost work is also much of society’s
most important work, such as child-rearing, caring
for the elderly and sick, housecleaning, chores.
While we were able to get away without discussing
“ghost work” or as I like to say, “most work,” for a
handful of decades, Marçal argues that the creep
has been too great. Capitalism as a system no
longer behooves our reality.
48

49

SWEETLORD,W H AT D O
I D O A B O U T
ALL THIS?Let’s examine the future through two lenses — First, let’s look at the death of the company, as we
previously understood it to exist. And then we’ll start examining how new careers are changing form
to meet the demands of a different economy.

COMPANIES
NEW
THE

“In the next 10 years, 40% of the
Fortune 500 companies will be
-2014 study from the John M. Olin School
of Business at Washington University.
GONE
54

Is Dollar Shave Club:
A COMPANY?
A SUCCESSFUL STARTUP?
They sold every product at a loss
A NEW PRODUCT?
The production was entirely outsourced
to Dorco, a South Korean company (the
same product can be bought directly
from Dorco)
A POWERFUL BRAND?
Do brands have to be profitable
to be successful?
IT’S A BIRD, IT’S A PLANE,
IT’S A… COMPANY!?
Here’s a fun business guessing game:
What is Dollar Shave Club?
A
B
C
55

The internet has made it possible for venture-funded, $100MM-in-revenue
retailers to pop up virtually overnight. Kleiner Perkins’ Mary Meeker warned
about this new phenomena this summer.
Let’s look at Mary’s report: traditional retail had a wretched 2016, and they’re
about to have a far worse 2017. Why? Their businesses have become
bloated, leaving them as easy for tech to undermine as the entertainment
industry was in 2001. Here’s the trend, as beautifully analyzed by the
prophetic Ms. Meeker:
In the forthcoming chart, Ms. Meeker explains that it is now possible for
an upstart company to quickly develop a quality product (say, a mattress,
a la Casper), delete as many legacy costs as you can (like retail space,
distribution inefficients, etc), hyper-target your advertisements using the
Facebook ad exchange, and build a $100MM brand in a year or five.
56

Many internet retailers/Brands @ $100MM
in Annual Sales* in 5 Years…
Took Nike 14 years, Lululemon 9 years and
Under Armour 8 years
Viral Marketing/Sharing Mechanisms
(Facebook/Instagram/Snapchat/Twitter…)
+ On-demand purchasing options via
mobile/web + Access to Growth Capital
+ Millennial Appeal = Enabling Rapid
Growth for new products/brands/retailers)
Sales growth for select internet retailers*, USA
First 5 years since inception
Source: Federal Reserve Board of Governors, U.S. Bureau of Labor Statistics.
$100
$80
$60
$40
$20
$0
0 1 2 3 4 5
Years since inception
AnnualSales($MM)
Average
57

THE CONVENIENCE ‘STITCHED’
INTO THESE BUSINESSES IS
OFTEN DELIGHTFUL
Look at Stitch Fix. Why would anyone go to Macy’s when
there’s that thing!? Clothes picked out just for me, by a
real stylist, based on my needs, and sent to my home?
Oh and wait, you mean Stitch Fix is just going to get
betterandbetterandbetter,thankstomachinelearning?
And Rent the Runway is going to make ‘buying’ many
typesofclothes(likethingsforpartiesandevents)totally
moot, because renting is smarter, easier and cheaper?
(Short the big bloated retail stocks, now, people!)
Source: Internet Trends 2016 – Code Conference, Mary Meeker,
June 1, 2016, www.kpcb.com/InternetTrends
58

59

POST-CAPITALIST
COMPETING IN
THE NON-RIVAL,
AGE
60

As mentioned earlier, a capitalist economy
was built around the concept of scarcity,
but post-capitalist companies must be built
around abundance. This is because goods in a
capitalist economy were rival, meaning that they
were made from materials that were limited in
supply (either labor or resource) and thus had
a certain cost of reproduction. Now many of
the most valuable goods of post-capitalism are
non-rival—meaning that they have
zero cost of reproduction.
61

Here’s a simple example, which I’ll rehash
from Paul Mason’s excellent book
– if I drink your beer, you have to go buy
another one. You can’t just click a button and
reproduce your beer, because it’s gone. That’s
an example of a traditional capitalist good.
POST-CAPITALISM:
A GUIDE TO OUR FUTURE
Trong Nguyen/Shutterstock.com62

Extend the beer example out to the
economy, and competition occurs
through the creation other, rival beer
companies making other kinds of beer,
with the market determining the winners
and the losers. The winner is thus
determined by that “Invisible Hand” thing
economists have so loved talking about
for so long.
63

Information-based goods can be copied—for
example, both of us could use my Kendrick
Lamar MP3 at the same time if you stole it
from me, unlike with my beer.
Hal Varian and Carl Shapiro first wrote about
this idea in their crazy excellent 1998
book Information Rules. Tech companies
“build” with zeros and ones, which are a type
of ideas that can be instantly copied for
free, aka a non-rival good. Their rules are
inherently, entirely different than a rival good’s
governing rules.
DON’T WORK THIS
WAY AT ALL,
BECAUSE THEY’RE
BUILT WITH
INFORMATION AND
INFORMATION IS
NON-RIVAL
Post-capitalism’s priciest goods, however…
64

Take Uber’s $70B valuation.
What’s so valuable there? Largely its code.
Google’s search engine
and ad exchange?
A pile of code.
Facebook’s social networks
and ad exchange?
Code.
Three streams of code, each producing billions and
billions every quarter, and technically anyone could
copy them. The network should hold intrinsic value,
but many of these networks can be replicated very
quickly, as Curb proved to Uber.
65

Aside from the obvious need to protect IP at
all costs, these business models create other
new challenges.
Uber has made the specific point of being
responsible for as little in the physical world as it
possibly can—Uber’s drivers are left to assume the
financial responsibility for their car leases.
Sure it’s nice to be nimble as Uber is—it’s the
business version of receiving all the benefits of
marriage without having to actually care about
another person—but that unlimited supply of zeros
and ones can mean it’s extremely hard to create
an entrenched advantage.
66

Let’s look at Uber vs. the new taxi-hailing service
Curb. Built by Verifone, Curb is an Uber copycat
that thanks to non-rival goods, was able to “copy
paste” a bunch of Uber’s most important ideas
(tethering cars to a map via GPS, etc).
When Uber—long known for being cavalier—
responded insensitively to President Trump’s
Muslim ban, young people took to Twitter and
implored each other to #deleteUber. The campaign
went so viral, Uber’s often-ignored competitor Lyft
became one of the 10 most downloaded apps.
200,000 Uber accounts were deleted.
One day Curb didn’t exist, and then one day it did.
One day Lyft was an unpopular step sibling to its
private stock superstar older brother Uber, and
the next day (literally, the very next day) Lyft was
one of the hottest companies in the country.
That’s post-capitalism in action, and the immense
complexities of competing in a world of networks
and non-rival goods.
67

Innovation has always been “combinatorial” in nature, aka reliant on several
things being invented and popularized at once. We wouldn’t have mass
media without the telephone, radio and electricity. The term “combinatorial
innovation” refers to a different kind of convergence—one where the “puzzle
piece”—like nature of technologies mean that companies can open up their
code to each other and almost instantly create something new.
Combinatorial also refers to the abundance of technologies and systems
that many companies can instantly build upon. So it’s not just innovation
because Uber can team up with restaurants and create Uber Eats, it’s the
existence of GPS, peer economies, big data cloud servers, etc etc etc.
COMBINATORIAL INNOVATION: THE
INNOVATION MODEL OF POST-CAPITALIST,
NON-RIVAL GOODS-BASED COMPANIES
68

Here’s a chart that’s frequently used to show how combinatorial innovation works:
Source: Frank Diana
Internet
Logistics internet
Energy internet
Maker Economy
Autonomous Vehicles
Sharing Economy
Connected Healthcare
New Generation Automation
Smart Cities
Next Generation Education
Smart Homes
Connected Car
Social
Mobile
Cloud
Big Data - Analytics
3D Printing
Renewable Energy
Internet of Things
Cognitive Systems
Robotics
Technology Progression
Foundation
Unknown
Disruptive Scenarios
New Economic Paradigm
Smart Grid
Accelerators
69

COMBINATION INNOVATION
LET’S PUT
IN HISTORICAL
PERSPECTIVE
FOR A MOMENT
70

The economists Richard Lipsey and Kenneth Carlaw created a set of
constraints around what defines a very important technology, which they
call a “General Purpose Technology.”
By its definition, a General Purpose Technology, or GPT, is:
A single, recognizable generic technology
Initially has much scope for improvement but
comes to be widely used across the economy
Has many different uses
Creates many spillover effects
A GPT can be a product, a process or an organizational system.
01
02
03
04
71

Let’s look at the qualifying General Purpose Technologies that man created before the computer:
GPT Spillover Effects Date Classification
Domestication of plants Neolithic Agricultural Revolution 9000-8000 BC Process
Domestication of animals Neolithic Agricultural Revolution, Working Animals 8500-7500 BC Process
Smelting of Ore Early metal tools 8000-7000 BC Process
Wheel Mechanization, Potter’s wheel 4000-3000 BC Product
Writing Trade, Record keeping 3400-3200 BC Process
Bronze Tools Weapons 2800 BC Product
Iron Tools Weapons 1200 BC Product
Water wheel Inanimate power, Mechanical systems Early Middle Ages Product
Three-Masted Sailing Ship Discovery of the New World, Maritime Trade, Colonialism 15th Century Product
Printing Knowledge economy, Science education, Financial credit 16th Century Process
Factory systems Industrial Revolution, Interchangeable arts Late 18th Century Organization
Steam Engine Industrial Revolution, Machine Tools Late 18th Century Product
Railways Suburbs, Commuting, Flexible location of factories Mid 19th Century Product
Iron Steamship Global agricultural trade, International tourism, Dreadnought Battleship Mid 19th Century Product
Internal Combustion Engine Automobile, Airplane, Oil Industry, Mobile warfare Late 19th Century Product
Electricity Centralized power generation, Factory electrification, Telegraphic communication Late 19th Century Product
Automobile Suburbs, Commuting, Shopping Centers, Long-distance domestic tourism 20th Century Product
Airplane International tourism, International sport leagues, Mobile warfare 20th Century Product
Mass Production Consumerism, Growth of U.S. economy 20th Century Organization
72

Okay, so that’s a lot of recognizable stuff. Notice, however,
the vast gaps of time in between each innovation—wherein
society has centuries, and sometimes millennia, to adjust
to the new stuff altering their existences.
Oh look, there’s the three-masted sailing ship.
That’s pretty cool! Those people’s grandkids
invented the next thing on that list: the printing
press. As we know, it was a big deal. Martin Luther
forever altered Europe in 1517 with a (printed)
list of theses questioning the church’s power. In
the late 1700s, when the invention of the steam
engine and the factory system collided, the
change was so societally tumultuous that, among
myriad consequences, the Luddites protested the
Industrial Revolution for years.
That’s why the “combinatorial” word is so potent
in combinatorial innovation: if 1-2 technologies
“hitting” at the same time spurred an Industrial
Revolution, then what can 10 simultaneous new
technologies do?
That’s basically the question society is about to
answer over the course of the next 10+ years.
Here we get at many economists’ arguments for
Trump-ism; the election was largely decided by a
few Midwest “Rust Belt” states, places wherein
the key issue was the economy. Trump’s promise
of an economic time machine—and his past-
tense sloganeering of “Great Again”—was actually
addressing the most pressing societal issue of
the day: jobs. His team just seems to lack the
understandingObama’shad—thatdependablejobs,
real middle class jobs, protected by unions, tenure
and benefits—aren’t ever coming back again.
73

Many of us had access GPS and digitized street maps
well before Waze existed, by way of Mapquest or
perhaps a Garmin device in our car. These products
could effectively tell us where we wanted to go. What
makes Waze special is that it layered together many
non-rival goods to make a delicious sandwich that can
tell us where we want to go as efficiently as possible, in
that exact moment.
As Paul Mason argues in his book Postcapitalism:
A Guide To Our Future, there’s no Waze without
DARPA. There’s no Waze without Google, even before
Google bought the thing. The products had to
combine. Adam Smith never imagined such situations.
(Marx, to some extent, did, in a text called Fragment
on Machines).
Waze was only made possible through the existence
of other semi-open source, semi-free things.
ALL THE WAYS WAZE
IS COMBINING
TECHNOLOGY
TO MAKE A NEW
SUPER-TECHNOLOGY
TAKE WAZE
74

TRADITIONAL GPS
Anetworkof24geosynchronousGPSsatellites
built and maintained by the U.S. government
DIGITAL STREET MAPS
A global API created by Alphabet
LOCATION COORDINATES FOR CARS
Broadcast by the Waze app—this is a little
of the special sauce that they added
A SOCIAL NETWORK
For users to chat about traffic
conditions through a series of alerts
WITH
75

DID HISTORY REWRITE ITSELF?
ON MARXISM, THE PROLETARIAT,
AND THE QUIET COMPROMISES
OF THE BOURGEOISIE
In Yuval Noah Harari’s outstanding new book
HOMO DEUS, he reflects on the rampant similarities
of today to Marx’s time—the few holding all the
wealth and power, the many attempting, often in
vain, to alter that reality.
At one point in his 1993 book, Peter Drucker
argues that Marxism was “wrong” because
Marx’s predictions of revolution never happened
at the scale he imagined. Or as Harari writes in
2016, we never bore witness to Marx’s prediction
of “an increasingly violent conflict between the
proletariat and the capitalists, ending with the
inevitable victory of the former and the collapse of
the capitalist system.”
Harari goes on to make the fascinating argument
that because Marx wrote Das Kapital and people
actually read it, he prevented the very future
he predicted!
76

In Harari’s words (and I strongly recommend reading the entire book):
“Marx forgot the capitalists know how to read. At first only a handful of
disciples took Marx seriously and read his writings. But as these socialist
firebrands gained adherents and power, the capitalists became alarmed.
They too perused Das Kapital, adopting many of the tools and insights
of Marxist analysis. In the twentieth century everybody from street urchins
to presidents embraced a Marxist approach to economics and history.
Even diehard capitalists who vehemently resisted the Marxist prognosis
still made use of the Marxist diagnosis. […] As people adopted the Marxist
diagnosis, they changed their behavior accordingly. Capitalists in countries
such as Britain and France strove to better the lot of the workers, strengthen
their national consciousness and integrate them into the political system.
Consequently, when workers began voting in elections and the Labour
gained power in one country after another, the capitalists could sleep
soundly in their beds. As a result, Marx’s predictions came to naught.
This is the paradox of historical knowledge.”
77

Ah, the power of reading
78

Speaking of reading (or the present cultural lack
thereof), let’s turn to my favorite economist-
slash-humorist, Joe Bageant. Mr. Bageant wrote
2007’s mind-altering book Deer Hunting With Jesus:
Dispatches From America’s Class War.
The book audaciously predicted that America
was becoming so unequal, soon the labor class
would find a way to rise up and revolt against the
country’s ruling class. Mr. Bageant, a journalist,
was raised in rural Virginia. (You can think of
his writing as a less personal, more researched
predecessor to the 2016 bestseller Hillbilly Elegy).
After George W. was elected for his first term, Joe
began writing about how his New York City friends
didn’t know or care about his Virginia friends—
Joe’s original American community and family.
Joe’s writing very thoughtfully worries about his
Virginian friends’ declining relevance in the global
economy—and their lack of understanding of this
situation. “Malcolm X had it straight when he said
the first step in revolution is massive education of
the people,” Joe wrote.
In his final blog post (entitled “America: Why are
r peeps so dum?”), written in 2010, Joe Bageant
wrote that “Societies declining into obsolescence
understandably resist looking forward, and hang
onto their past mythologies.” I often wonder
what Joe would have written if he’d lived to see
the golden 757 touring America, and the crowds
of people proudly sporting their made-in-China
American greatness hats. With typical Bageant
sprite, he carried on: “Meanwhile, here we are,
American riders on the short bus, barreling into
the Grand Canyon. With typical American gunpoint
optimism, we’ve convinced ourselves we’re in
an airplane.”
I write this section not to provide answers, but context.
79

WAITPEOPLE ENJOY WORKING FOR FREE?
80

(The Majority of) Movies: Made by unionized workers, for agreed wages
(The Majority of) YouTubes: Made by regular people in their down time
Does anyone pay you to update Facebook in the afternoon, adding to
its value and intelligence? How about YouTube? Twitter? Instagram?
Wikipedia? 250 million new photos are uploaded each day to Facebook.
43,000 hours of new YouTube videos are added each day. Then there’s the
starred reviews on Amazon, Tripadvisor and Yelp. You see what I’m getting at:
little bits of unpaid labor are cumulatively adding up to something powerful.
6 OF THE INTERNET’S 10 MOST VISITED
SITES ARE CREATED ENTIRELY FROM
USER GENERATED CONTENT, OR, IN OTHER
WORDS, UNPAID LABOR.
81

This is a super confusing notion for capitalism, because
capitalism doesn’t have a reason as for why someone
would want to complete unpaid labor. More complex is
the fact that these unpaid, unmeasured labor pools can
eat away at the revenue streams from the traditional,
paid labor pools.
Research done by the authors of The Second
Machine Age (the source of the above perspective
on unpaid labor markets) estimates that “a correct
accounting for computer-related intangible assets
would add over $2 trillion to the official estimates
of the capital assets in the United States economy.”
All those YouTubes providing entertainment in the
place of movies, Wikis usurping encyclopedias,
craigslist ads circumnavigating the newspaper ads.
That’s $2 trillion released from the labor market
over to the non-labor market—thus those tasks
becomingthesametypeofshadowworkthatSmith
didn’t account for his own mother completing—
thanks to computer networks. Things people do
for free. The work that people are willing to do for
free is capable of eating entire industries.
Here’s an example of what I mean—think about
the movie that a couple doesn’t go see in the
theater because they spent their Saturday evening
watching funny YouTubes, instead. Let’s say many
of those YouTubes were made by people who were
never paid to post them—they merely captured
funny, interesting stuff that happened for the sake
of sharing it with the world.
82

83

Think about how Kodak must feel about those
aforementioned Facebook photos—or the fact that
3.5 billion photos were taken last year.
(That’s a full 10% of the 3.5 trillion photos taken since 1838).
Money is still made off of photos—lord knows the
kids at Instagram have the bank accounts to prove
that one—there’s just less of it to go around. This is
the reality of companies of the future.
urbanbuzz/Shutterstock.com84

85

LESSPEOPLE,
SAMEPROFITS
86

This is a Foxconn Foxbot. Foxconn employs over a million Chinese workers,
but 60,000 of those employees were just terminated and replaced with
robots. Foxconn wants to build the world’s smartphones as a fully automated
factory. No human employees working the assembly line. That’s its goal for
the future. (Hey Trump: this future’s inevitable.)
87

FOXCONN
IS NOT SOME
CRAZY OUTLIER
88

Image courtesy of Rethink Robotics, Inc. 89

This is Baxter, the humanoid robot
that made a memorable cameo in
the book The Second Machine Age
“To train Baxter, you grab it by the wrist and guide
the arm through the motions you want it to carry
out. As you do this, the arm seems weightless, its
motors are working so that you don’t have to. The
robot also maintains safety; the two arms can’t
collide (the motors resist you if you try and make
this happen) and they automatically slow down if
Baxter senses a person within their range.
Baxter has a few obvious advantages over human
workers. It can work all day every day without
needing sleep, lunch, or coffee breaks. It also won’t
demand healthcare from its employer or add to the
payroll tax burden. And it can do two completely
unrelated things at once.”
Image courtesy of Rethink Robotics, Inc.90

In 1964, the nation’s most valuable company,
ATT, was worth $267 billion in today’s dollars
and employed 758,611 people. Alphabet is worth
$370 billion but has only about 60,000 employees.
Facebook is worth two hundred and seventy billion
dollars and employs just thirteen thousand people*
.
It’s not just that companies will be able to profit
with less on staff, the companies able to harness
the best talent will be able to compete in more and
more categories. I sometimes joke that the…
Fortune 500 is becoming the Fortune 5.
The trouble with cheaper and cheaper technology
is that employs less people. Ford cites the example
of one of their factories—a facility in Gaffney, South
Carolina that produces 2.5 million pounds of cotton
yarn a week. It has fewer than a hundred and fifty
workers. The New York Times ran a story about
the Gaffney factory with the headline “U.S. textile
plants return, with floors largely empty of people.”
91

“The most important thing happening in Silicon Valley right
now is not disruption. Rather, it’s institution-building —
and the consolidation of power — on a scale and at a pace
that are both probably unprecedented in human history.”
-“The Great AI Awakening,” The New York Times, December 15, 2016
92

According to The Economist,
“The share of GDP generated by
America’s 100 biggest companies
rose from about 33% in 1994 to
46% in 2013. The five largest banks
account for 45% of banking assets,
up from 25% in 2000.”
93

Nataliya Hora/Shutterstock.com94

A casual segue to a chat about AI
“Should robots pay taxes? It may sound strange, but a number of prominent
people have been asking this question lately. As fears about the impact of
automation grow, calls for a “robot tax” are gaining momentum. Earlier this
month, the European parliament considered one for the EU. Benoît Hamon,
the French Socialist party presidential candidate who is often described
as his country’s Bernie Sanders, has put a robot tax in his platform. Even
Bill Gates recently endorsed the idea.
The proposals vary, but they share a common premise. As machines and
algorithms get smarter, they’ll replace a widening share of the workforce.
A robot tax could raise revenue to retrain those displaced workers, or supply
them with a basic income.”
-Ben Tarnoff, The Guardian, “Robots won’t just take our jobs – they’ll make the rich even richer,” March 2, 2017
95

OKAY, SO,
THIS WHOLE AI THING
A 2016 Forrester report writes that robots, or AI, will eliminate 6% of all
U.S. jobs by 2021.
AI of course is not some single technology, some futuristic meta-app. Rather
AI is a collection of technologies that are applied to specific tasks.
Of course, we don’t know exactly how this “AI” future will play out, just like
how in 2007 we didn’t know exactly what apps the iPhone would ultimately
yield. There are three predominant theories of what will end up happening
when it comes to AI: it usurps us, it enhances us, it rules us. There’s plenty of
room for a future that combines 1 and 2.
96

(Think back to the section on General Purpose
Technologies, and how all previous generations
of civilization either had 0, 1, or sometimes 2
brand-new technologies to contend with—verses the
number of new technologies that we have today,
and we will have tomorrow…)
Equally good are these 4 charts:
When will AI really happen?
In 2015, the blogger Tim Urban saw his posts on
“The AI Revolution” go extremely viral (to the point
that Elon Musk then asked Mr. Urban to blog about
Tesla’s work. Talk about good compliments!)
Mr. Urban’s blog, called “Wait But Why?” is well-
knownforitsextremelyresearchedexplanationsof
really hard to comprehend things. Here’s the chart
that became most well-known from his report on
the current state of AI, and its likely future:
Source: http://waitbutwhy.com/2015/01/artificial-intelligence-revolution-1
97

Artificial Narrow Intelligence
This is what we have now. Intelligence that’s super
good at one thing, like instructing a car on how to
get to a place.
Artificial General Intelligence
That’s intelligence that’s as smart as a human
being. It can do anything we can do. ***Important
note: AGI is exponentially more complex than ANI.
Lastly… Artificial Superintelligence
Artificial Intelligence is often broken
out into important sub-categories,
and they’re worth understanding.
Here are the most commonly referenced
sub-categories of the AI universe:
98

Here I’ll quote Tim’s blog post: “Oxford philosopher and leading AI thinker Nick
Bostrom defines superintelligence as ‘an intellect that is much smarter than
the best human brains in practically every field, including scientific creativity,
general wisdom and social skills.’ Artificial Superintelligence ranges from a
computer that’s just a little smarter than a human to one that’s trillions of
times smarter—across the board. ASI is the reason the topic of AI is such
a spicy meatball and why the words ‘immortality’ and ‘extinction’ will both
appear in these posts multiple times.”
This one changes the entire planet in ways we cannot imagine. As in that’s
part of the literal definition: it’s computing power that’s so smart, we cannot
as human beings imagine how it will draw conclusions and what conclusions
it will draw. Additionally, its intelligence is recursive, meaning that it will
progress in giant, unimaginable leaps. Fun times!
99

This is one of the best big questions to ask about artificial intelligence. (One note:
there is still a whole world of economic upheaval that can happen within the Artificial
Narrow Intelligence stage in which we now live… For example, those millions of
Americans who make money by driving things places can still be replaced within an
ANI world).
Again, I’ll pass the question entirely off to Tim Urban (and I recommend reading the
entirety of his posts on the subject of AI if you’re intrigued by his delightful style of
information presentation).
SO WHEN WILL WE GET
FROM ANI TO AGI?
100

From Wait But Why:
In 2013, Vincent C. Müller and Nick Bostrom
conducted a survey that asked hundreds
of AI experts at a series of conferences the
following question: “For the purposes of this
question, assume that human scientific activity
continues without major negative disruption.
By what year would you see a (10%/50%/90%)
probability for such Human Level Machine
Intelligence to exist?” It asked them to name an
optimistic year (one in which they believe there’s
a 10% chance we’ll have AGI), a realistic guess
(a year they believe there’s a 50% chance of AGI—
i.e. after that year they think it’s more likely than
not that we’ll have AGI), and a safe guess (the
earliest year by which they can say with 90%
certainty we’ll have AGI). Gathered together as
one data set, here were the results:
Median optimistic year (10% likelihood): 2022
Median realistic year (50% likelihood): 2040
Median pessimistic year (90% likelihood): 2075
So the median participant thinks it’s more likely
than not that we’ll have AGI 25 years from now.
The 90% median answer of 2075 means that
if you’re a teenager right now, the median
respondent, along with over half of the group of
AI experts, is almost certain AGI will happen within
your lifetime.
101

The Facebook Ad Exchange removes much of
the mystery and guesswork in understanding how
a company’s marketing investments pay off (or
don’t pay off). Gone are the days of the mystery
of the purchase path, and the “Awareness = Reach
x Frequency” calculations used when companies
guessed at how “aware” a public was of their ad
campaign by looking at the number of times
it played/potential audiences that saw it. Now
we can know exactly what interactions Jim and
Jane have had with the Samsung 4K TV they’re
thinking about picking up before the Super Bowl.
Facebook’s exchange can also know their income,
savings, entire browser history, friends, and reams
of other deeply identifying data.
1 WAY COMPANIES
WILL SAVE
BUT THERE ARE
OTHER WAYS, TOO
ROBOTS
102

In an attempt to understand the full power behind
the Facebook behemoth, which is systematically
eating its way deep into the $1T advertising
industry (that’s about 1% of the GDP), ProPublica
built a Chrome extension that it encouraged people
all over the world to download. The extension had
a way of figuring out everything that Facebook had
a way of figuring out about you. When analyzed
collectively, this data become quite revealing.
“[Facebook] are not being honest,” said Jeffrey
Chester, executive director of the Center for
Digital Democracy. “Facebook is bundling a dozen
different data companies to target an individual
customer, and an individual should have access to
that bundle as well.”
-“Breaking The Black Box,” ProPublica, October 28, 2016
From the list of what Facebook understands about me
(and all spookily accurate).
103

THE INCREASE OF FREELANCERS
ACROSS MANY PROFESSIONS
As we talked about earlier, perhaps the defining
trait of shifting from capitalism to post-capitalism
is that we decentralize. This decentralization is, of
course, thanks to technology.
Decentralization means they don’t have to come to
the factory anymore to have management oversee
their work; they can work just fine (and in many
professions, much faster) from home.
Decentralization also means the end of Frederick
Taylor-style management policies and company
structures. Networked professionals are far less
hierarchical. There’s no VP-SVP-EVP needed chain
of command among freelancers.
In the companies of the near-future, executives
will simply hire out the best freelance teams for
whatever needs they have that year. They’ll scale
up or scale down depending on the tasks at hand.
104

$1,000,000
950,000
900,000
850,000
800,000
750,000
700,000
2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15
1,200
thousands
1,100
1,000
900
800
700
600
2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15
10%
9
8
7
6
5
2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15
Average revenue per employee,
in 2016 dollars
Estimated number of outsourced
workers in manufacturing
Source: SP Global Market Intelligence and the Wall Street Journal (revenue per employee); Matthew Dey (Bureau of Labor Statistics), Susan Houseman
(W.E. Upjohn Institute for Employment Research) and Anne Polivka (Bureau of Labor Statistics) (manufacturing workers and direct-hire employees).
Efficiency Boosters
Average revenue per employee at the largest U.S. companies
has climbed 22% since 2003. The jump could reflect the
growing use of contractors and temporary workers, who aren’t
counted as employees. Outsourcing is having a major impact in
manufacturing and might have inflated official measurements
of labor productivity from 2009 to 2015.
Outsourced workers as percentage
of direct-hire employees
Note: Revenue figures are adjusted for inflation and include
about 430 companies that were in the SP 500 from 2000
to 2016. Direct-hire employees usually have full-time jobs
with benefits.
105

THE INCREASE OF AUTOMATION
ACROSS MANY TASKS
Robots aren’t immediately coming for all of our jobs, but they are coming for
our most mundane tasks. Who enjoys filing their taxes every year? Almost
no one. Accounting is also repetitive, rule-driven work, making it one of the
first candidates to be gobbled up by software. Your CFO will employ fewer
and fewer people as these tools become more sophisticated.
106

Comparison of wages and automation potential for
U.S. jobs
Ability to automate, % of time spent on acitivities1
that can be
automated by adapting currently demonstrated technology.
Note: The analysis used “detailed work activities,” as defined by
O’NET, a program sponsored by the U.S. Department of Labor,
Employment and Training Administration. Using a linear model,
we find the correlation between wages and automatability in the
U.S. economy to be significant (p-value 0.01), but with a high
degree of variability (r2
= 0.19).
Source: O’NET 2014 database: McKinsey analysis, McKinsey Company.
r2
= 0.19
20 40 60 80 100 120
100
20
40
60
80
0
Hourly wage, $ per hour
107

IMPROVED NETWORK
INTELLIGENCE
Our social networks haven’t really changed in
more than a decade, and they’re beginning to
look a little long in the tooth.
Last year my publisher and I were trying to find the
best illustrator to design my book jacket. Because
the book’s a bit specific (it’s about technology, yes,
but also hopefully funny and entertaining, as well)
so there wasn’t an established “go-to” designer
in mind. How would I find the best designer for
me? LinkedIn was useless, as was Behance (too
much to sift through with both services). I reverted
to the oldest way possible—I went to a bookstore
and wrote down the names of jackets I liked that I
thought had something in common with my book.
LinkedIn is already working on tools that help
organizations find exactly the right freelancers
for their business challenges. These tools will no
doubt improve in under 5 years.
108

Alf Ribeiro/Shutterstock.com 109

BEHOLD
THE
TEMPORARY
ORGANIZATION
“Corporations once built to last like
pyramids are now more like tents.”
-Peter Drucker to the Harvard Business Review, 1992
110

One way to deal with all of this change is to think of your
company—or parts of your company—less like a pyramid or a
skyscraper, and more like a tent.
Look at Facebook and Google/Alphabet, how many projects do
they routinely shut down, entire branches of their company that
they cut off on a moment’s notice.
Just as quickly things can go up, like Uber entering the catering
business virtually overnight with Uber Eats.
What opportunities could you scale quickly with technology, with
the intention of then shutting them down?
DW labs Incorporated/Shutterstock.com 111

THE NEXT BIG
TRENDS –
SIMPLIFICATION
AND
AGGREGATION
-From Scott Belsky,
The Interface Layer: Where
Design Commoditizes Tech
112

“Fast forward; It’s the year 2020 (or sooner!) … I woke up this morning and
grabbed the nearest screen. I selected my transportation for the day, refills of
groceries I am running low on, what sandwich I want for lunch, a time window
for my apartment to be cleaned, a dry-cleaning pick-up, and a reservation for
dinner. I also selected a gift for my sister’s birthday, from a suggested list curated
for me. After a productive 5 minutes, I got up and had breakfast.
You may assume I used Uber, and then Fresh Direct or Amazon Fresh, and
then Seamless, and other specialty apps and services striving to iron out the
logistics from my life. Maybe I did, but I’m not sure. Why? Because I took all
these actions through a beautiful (or invisible?) and customized interface
that aggregates such services and blends them all together into a more
integrated and frictionless experience.
The era ahead is all about simplification and aggregation. Atomization went
too far, and now the pendulum is swinging back in the direction of one-stop
solutions for integrated services.”
113

CONCLUSIONS,
THE NEW COMPANIES
WHAT DOES THIS MEAN FOR ME?
Let’s talk about potential business
models for the near future. Think about
your company: what does it produce
that you currently limit through “artificial
scarcity,” and how soon can you loosen
those limits? Think about things
‘wanting to be free,’ and think about how
you can free them. Here are a few very
successful adaptive examples:
114

Overall, think about your industry: how could
it simplify or aggregate? Financial services is a
classic industry that requires people to self-
aggregate, gathering many products from
diverse companies and trying to make them
work together…
THE NEW YORK TIMES
The New York Times allows every person to
read 10 free articles per month. They charge
for those who want to read more, who
thus support the ‘free’ portion of the NYT’s
contribution.
AMAZON
Amazon leaves all its texts searchable, so
that, say, a student looking for a very specific
line in a book can use their search tool to find
exactly that page, and read it without buying
the book (I can’t explain how amazing this
feature is when you really start using it to your
advantage…).
HULU AND YOUTUBE
Hulu and YouTube are free with commercials,
they charge more to partially/entirely avoid
those commercials.
LYFT
Attempting to make their rides ‘more free,’
Lyft has created Line, which can reduce the
cost of a car ride to something far closer to a
public transit fare.
115

CAREERS
NEW
THE

Kanye West
THE REAL OWNER
IF THE BOSS GETS
A SALARY?
WHO’S
118

There are many ways to think about
what a “job” is to a society, but one
of the more interesting descriptions
is that a job is simply a way of
distributing wealth throughout
a society. The distribution is
supposed to be somewhat even.
And for a brief while, it sort of was.
But as the section on companies
has proven, this is no longer the
case. The job, as we know it, is on
its last legs.
119

SO WHAT
WILL PEOPLE
DO?120

For today’s young people, it is time to give up thinking of jobs
or career paths as we once did and think in terms of taking on
assignments one after the other. [It’s about] taking individual
responsibility and not depending on any particular company…
The stepladder is gone, and there’s not even the implied structure
of an industry’s rope ladder. It’s more like vines, and you bring your
own machete.
-Peter Drucker to the Harvard Business Review, 1992
121

For the past forty years, those are
probably the most uttered words inside
any high school guidance counselor’s
office. Have a rational plan, the advice
goes, (like becoming an accountant) in
case your irrational plan (like becoming
a movie star) doesn’t work out. It’s good
advice. However, that kind of guidance
is no longer applicable.
Today’s kids won’t have careers in
the singular sense. Instead they’ll
have something that looks more like
a professional ecosystem, a series of
things that they do for varying reasons.
I can imagine my 10 year old son Beckett’s
career looking something like this:
HAVE
BACK ON
TO FALL
SOMETHING
“
”
122

days a month he volunteers inside the
vertical farms in his apartment building. His
CSA share is directly proportional to the hours
he puts in. Beckett works enough to provide
for himself and his longtime girlfriend.
days a month he tutors math students to the
sweet tune of $100/hour. Beckett’s always
been great with math, and his patience makes
him a favorite with the kids. This is his most
dependable income.
days a month he works on his first
commission as an architect. This is a big
deal. Beckett spent almost a decade
acquiring the skills and the reputation to get
this commission. He’s taking a big fee cut in
order to develop his portfolio, though.
5
10
2
123

days a week Beckett publishes articles on
design. He doesn’t make any real money
from publishing, either, but it’s what built
his reputation as a thinker in the
architectural world (and what earned him
that first commission).
day a week Beckett hosts architectural tours
of NYC to tourists and shows how math can
be seen in the architecture of the everyday
world. He runs these tours through Airbnb,
where he is a 5 star super-host, so his tours
fill up. These tours combine almost all of
Beckett’s hard and soft skills—his public
reputation, his math and architectural know-
how, his storytelling ability, and his gentle way
with people.
1
4
124

Beckett works in 4 of the different ways we’re about
to talk about—
he’s a service worker
(people skills, the farming, tutoring
and the touring),
a knowledge worker
(writing, architecture, math), and
a super-worker in one category
(he’s highly paid for his math skills, and truly
one of the best tutors in the area).
Beckett’s life also benefits from a ton of
robo-worker help
None of the farmers in his vertical garden
have to really understand soil pH, because
they use a system of robots to monitor it
and alter it with very little human interaction.
Robots also pick the cherry tomatoes from
the plants when they’re at peak harvest (also
determined by machines).
01
02
03
04
125

MINI-CAREER,
MICRO-ENTREPRENEUR
A TREND USHERED IN BY OUR NEW
ECONOMISTS, THE KARDASHIANS
AND THE
The rise of the
126

Underemployment is one of the cornerstone issues of our current
economic system: According to a recent Accenture study, 51% of
2014-2015 graduates are underemployed—holding jobs that don’t require
the college degrees, while nearly half of U.S. workers consider themselves
underemployed, according to a survey of more than 960,000 people by
PayScale. The only true remedy to underemployment will be a system of
Universal Basic Income (to read more, skip to the conclusion), but in the
meanwhile, there are certain aspects of a more temporary, ephemeral model
of work that could prove valuable to the retail workers and entrepreneurs of
the future—forms of mini-careers and temporary-companies that could be
quite lucrative.
Kylie Jenner could perhaps be considered the next generation of the mini-
entrepreneur, as she’s found a way to use the scale and serendipity of
Snapchat to fuel occasional forays into the cosmetics and fashion micro-
businesses that defy all rules of traditional retail.
127

WHY IS KYLIE SO ATYPICAL?
One day her businesses are here, one day
they’re gone. She feels no commitment to
any particular timeline or longevity. It’s just
opportunities as she finds them
She produces limited runs of her goods,
which, aside from being a good marketing
tactic, insulates her from the financial risk
of overstocking
She forgoes longterm store leases for
pop-up leases
She spends nothing on traditional marketing
She all but encourages the secondhand
economy that pops up around her goods—
some kids stand in line to buy them only to
resell them at a profit
Apps like Goat take advantage of these resell
communities, creating youth-friendly, hyper-specific
versions for certain kinds of goods (Goat is the tool
of choice for sneakerheads).
01
03
04
05
02
128

Kylie Jenner, in the words of The New York Times:
“Ms. Jenner is part of a growing cohort
of both individuals and brands who have
embraced the sales strategy known as the
“drop.” It works like this: A seller controls the
release of exclusive new items outside the
traditional fashion cycle, cleverly marketing
the impending arrival of the product to build
demand. Pioneered almost two decades ago
by the American skatewear brand Supreme,
which took its cues from the Japanese
streetwear scene, the trend has gained
particular momentum in recent years thanks
to its adoption by some in the booming
limited-edition sneaker industry: Kanye
West’s Yeezy line with Adidas, for example,
and Nike’s Air Jordans. It is also at the heart
of the limited edition designer collaborations
championed by retailers like HM and
Target. Even Snapchat itself tried to jump on
the bandwagon last month when it began
exclusive sales of its new Spectacles glasses
via randomly placed bright yellow vending
machines, giving no indication of where
they would crop up next. The overwhelming
majority of drop customers, whatever the
product, are younger than 30.”
Source: New York Times December 14, 2016
Kylie Jenner Supreme Year of the Drop
129

Not all of us have a last name like
Kardashian or Jenner, but there are
many more mini-careers that could
fill our bank accounts.
SOME MINI-CAREERS
We might have
TEACHERS SELLING LESSON PLANS
Teachers are already creating their own mini-
careers in selling their best lesson plans and
worksheets. Other teachers can download these
sheets/plans for very small costs (around .99-
$4.99, depending on the ratings/popularity).
130

As The New York Times reported, “When Laura
Randazzo heard about TeachersPayTeachers.
com, a virtual marketplace where educators
can buy and sell lesson plans, she was
curious to find out whether the materials
she had created for her own students would
appeal to other educators.
A couple of years ago, she started posting
items, priced at around $1, on the site. Her
‘Whose Cell Phone Is This?’ work sheet has
now sold more than 4,000 copies.
‘For a buck, a teacher has a really good tool
that she can use with any work of literature,’
Ms. Randazzo said. ‘Kids love it because
it’s fun. But it’s also rigorous because
they have to support their characterizations
with evidence’.”
www.TeachersPayTeachers.com
131

NEIGHBOR-TO-NEIGHBOR FARMING
Neighbor-to-neighbor farming is also transforming
into a mini-career. In Brooklyn communities, many
residents gain access to CSAs by volunteering a
certain number of hours in them. It’s a smart idea:
much of the cost/carbon footprint of food has
to do with distributing it. So why not, in a post-
capitalist fashion, decentralize that production?
Many entrepreneurs are working to improve
vertical farming enough that families, small
communities and even small grocery stores can
serve dual purposes as farming environments,
too. Such supermarkets already exist in Germany.
Also in NY, GrowNYC’s new initiative creates
farming communities within high-rise buildings in
all kinds of neighborhoods, from Brooklyn to the
Bronx to Manhattan.
Using the ample sunlight available on rooftops
plus the many advances in gardening created in
recent years, residents create mini-CSAs where
some choose to work in the gardens in return for
vegetables and fruits, and other residents buy
them from those who choose to work.
132

The Berlin grocery store – Inhabit
Tech will continue to look for the weakest
points in the economy and capitalize on them,
the places that are the most bloated and the
most broken. Food production is a really good
example of such a place because there are so
many inefficiencies, and for most people, the
end product isn’t actually healthy.
A GrowNYC rooftop garden: Some residents work in the garden
(in exchange for produces and/or pay) while others purchase the produce
133

Venture capitalists and governments from Japan
to Europe are investing heavily in robotic home
care aides, as ABI research predicts that the
industry will ‘quadruple in value by 2025.’
These aides run the gamut between tools that
help seniors better interact with the world around
them (e.g. find someone to run an errand for a
small fee) to tools that allow humans to act more
like nurse practitioners (the computer is doing the
diagnostic work, the human adds a layer of real-
world logic onto the whole affair).
Already, manufacturers sold 4,416 elderly and
handicap assistance robots worldwide in 2014 alone.
ROBOT-ENABLED HOME
HEALTHCARE AIDES
Credit: http://thenetwork.cisco.com
134

One very heartening model: a startup called Spot
Hero. (Yes, a startup! We’ll say one nice thing
about a startup.)
Spot Hero chose not to outsource its customer
service, and instead used its own employees
to field customer calls. When the job became
miserable and turnover reached an unacceptable
level, the company completely remade the job,
calling the customer service reps “Heroes.” They
wore capes. Cheered each other on. Calmed down
in the company “Zen Den” after a rough call. And
became the startup’s greatest asset.
True service work and
THINGS TECH WON’T TOUCH
Talk about an example of turning the worst jobs
into the best jobs by way of something utterly
un-tech—simple humanity. Many companies leave
this customer service to a website FAQ.
135

THE TECHNOLOGICALLY
ENHANCED WORKER
According to NPR, UPS is one of the world’s
most futuristic companies. For years, their data
engineers have been using technology to enhance
their human employees, not renounce them.
Hundreds of tiny sensors work in concert with
human beings (and a vast computer network).
136

UPS drivers continually enrich the network’s knowledge, adding
information like “There’s a dog at 55 Goldfinch Trail who runs
off-leash, look out for him.”
And they’re not stopping anytime soon, as reported by the WSJ,
“At its hub in Louisville, Ky., United Parcel Service Inc. recently
rolled out 100 industrial-grade 3D printers to make everything
from iPhone gizmos to air-plane parts. UPS wants to find out if
3-D printing centers could shorten supply chains and cut into its
$58 billion-a-year transportation business—or give it a leg up in a
potentially emerging market for local production and delivery.”
Economists theorize that this is how a lot of our jobs will look in the
future—still the basics of what we do, just drastically enhanced by
network knowledge. The home heart monitor doesn’t replace the
doctor, it simply makes it easier for her to do her job.
137

to help them conduct quality checks on tractors
and chemical sprayers. Logging quality checks
is up to 20% faster with the use of Google Glass,
said Peggy Gulick, director of business-process
improvement.
About 14.4 million U.S. workers will use “smart
glasses,” such as Google Glass and HoloLens,
in 2025, up from 400,000 this year, according to
ForresterResearchInc.Largecompanieswillspend
$3.6 billion on smart glasses in 2025, up from $6
million in 2016, according to Forrester. The global
3-D imaging market, which includes holograms, is
expected to grow from $4.9 billion in 2015 to $16.6
billion by 2020, according to Markets and Markets,
a research firm in India.”
Source: http://www.wsj.com/articles/augmented-reality-hologram-like-
images-enter-the-workplace-1481551202
YOU’RE EXPERIENCING
MUCH MORE THAN
YOU’RE ANALYZING
Think about how much time big companies spend
analyzing their own data, preparing PowerPoints
and cutting the numbers in different ways in
querying their own sources, and now think about
how inefficient a way that is to interact with what
we know:
“The future of data visualization is unfolding on
the factory floor of AGCO Corp., a manufacturer
of agricultural equipment. Factory workers in
Jackson, Minn., don augmented-reality glasses
that display diagrams and images of instructions
138

139

THE DEATH
OF POWERPOINT
Being a CEO means commissioning and
then analyzing a lot of presentations
from your direct reports.
Often times tens (if not hundreds) of
people are involved with creating and
vetting those reports, both in structuring
the information and in accidentally
loading it full of human bias.
Instead imagine that CEO just walking up
to his computer system and asking it to
visualize the answers to his questions.
No PowerPoint prep needed.
Yes, a team of humans is still needed for
the spirited debate, yes the consultants
can all still file their invoices, but there
is a class of jobs that get abandoned in
that situation.
140

Lizenzen 10
Rabatt 0%
Single Su
Group 27,000
Professional 70,000 70
Enterprise 135,000 1.3
Unlimited 270,000 2.7
Open as App 5,00 5
Mixed
Professional 20 1.4
Enterprise 20 2.7
Unlimited 5 1.3
45 5.4
Now imagine a CEO walking around with an app
that contained all the data in the world about her/his
company, so that any query could be answered.
“What products are the most profitable
among Gen Xers in Europe? What sells the
most volume worldwide, by year, for the
last 10 years?”
Open As App is an application that can
instantly turn your boring Excel data
into an interactive mobile app.
These sorts of data inquiries are still handled the
extremely old fashioned way — executives’ opinions are
asked. They mine through troves of data and give an
opinion on it, which to varying degree may be correct.
Such requests can take weeks or even months to
complete, review, comprehend, edit.
141

THE EVOLVING
FUTURE OF THE
COLLEGE EDUCATION
Harvard and Stanford and their peers will
survive any economy—their well-heeled
benefactors will surely see to that fate—but
as for the mid-to-lower tier schools, and most
certainly the egregious for-profit schools, the
future is looking shaky.
I got a little preview of a post-college world
could look like when talking with a former
Facebook employee a couple of weeks ago.
This gentleman had taken the courses
required to become a Facebook Blueprint
Certified Professional when it comes to using
their ad exchange tools. The certification’s
demands are pretty extensive; Facebook
has loaded its advertising tools full of
variations and subtleties. As he spent a few
hours trying to explain the exchange to me
and several others, we were fascinated but
soon overwhelmed. I have to hire this kid,
I thought to myself, because I’ll never learn
how to do this stuff as well as he can.
With considerable alacrity, he’d reinvented his
entire career, and taught himself a valuable skill.
142

Facebook Blueprint is extremely smart
(and ahead of the curve) to encourage the
personal development of such experts. More
trained professionals circulating out there in
the world means Facebook is only bettering
the strength of their own user experience
and heightening the value of their own
advertisements. And all will relatively modest
investment on their part.
Facebook Certified Professionals are likely
only the beginning. How about a Squarespace
Pro? Adobe Photoshop World Class Design
Guru? What other stratifications could other
knowledge software providers grant their
uppermost echelons of users? What other
badges will soon exist?
www.facebook.com/blueprint/certification
143

Companies that weather the changes of
the next 10 years will be able to make
money with far less employees. That’s
a given. One of the more interesting
considerations is to think about how
different industries might profit off of all
those burgeoning mini-careers to be had
in the world. For example:
CONCLUSIONS,
THE NEW CAREERS
WHAT DOES THIS MEAN FOR ME?
144

Think about the Facebook Certified Professional
example—is there a certification that your own
company can offer? If you’re The Home Depot,
is there a badge that your best, most honest
contractors could earn? How can you be a
coveted badge or seal of approval on a best-in-
class professionals resume?
WHY BE A FOOD COMPANY
When you can be a gardening
company?
WHY SELL SOMEONE A DRESS
When you can lease them one?
WHY SELL A DEVICE ONCE
When you can sell a permanent
subscription to that device, the next
device and the next device?
C
B
A
145

CONCLUSIONS,
BUSINESS MODELS
OF THE FUTURE
In the conclusions of the company
and career sections, we talked about
the implications for your place
of employment and your personal
progression. Let’s get into the broader
models that we’ll see represented in the
new economy:
146

POST-CAPITALIST BUSINESS MODELS
The “freemium” model works extremely well
in a knowledge economy. Evernote is famous
for pioneering freemium software. They make
a basic (very good) product and give it away
for free. Then there’s a better product for a
subscription cost. They continually update
both products. The New York Times has been
very successful with freemium, too. Everyone
gets their 10 free articles a month. Some pay
for more.
www.evernote.com
147

WHY FREEMIUM WORKS FOR
POST-CAPITALISM
“Information wants to be free.” If your product
is so good, you can give some of it away for
free as its own form of advertising, go for
it. All products improve from having more
users. Take Evernote: let’s say it has 10,000
paying clients (mostly organizations) and
1,000,000 non-paying clients. The paying
clients benefit, because the tool’s widely
adopted. All Microsoft and Apple software
has grown in profitability only when widely
adopted. Machine learning means that more
people using a tool, querying a tool, offering
suggestions for a tool only serve to make it
better. (In a way, all those free users can work
for you if you know how to properly utilize
them/set them up to succeed and help you.)
Subscription works well, too. One flat,
reasonable cost for a whole bevy of access.
Netflix is the godfather here. (Far more so
than Spotify, because Netflix has created
profitability while being a friend to artists, vs.
Spotify, who robs them blind.) Adobe Creative
Cloud has done gang-buster. And once you
create something valuable enough that
I pay to buy the new Photoshop updates as
they happen via a flat monthly fee, you can
see add-ons, too. That’s why Adobe bought
Behance. They bought the community for the
graphic designer because they already made
the tool for the graphic designer. They want
01
148

that same person to be able to make their art
in Adobe and then find their buyer/client in
Adobe. Genius.
WHY SUBSCRIPTION WORKS FOR
POST-CAPITALISM
There’s a sincerity to subscription that’s hard
to top. It naturally wants to be expansive,
networked, and benefiting from the hive
mind. The important thing is to make sure
it’s judicious. The subscriptions of the future
will struggle with maintaining little fiefdoms
(e.g. HBO) and will thrive when tending
towards openness (e.g. Netflix licensing the
best from everyone).
Lifetime guarantees are another way that
the more industrial-style goods are standing
out in a marketplace socioculturally/
philosophically designed to dislike them.
L.L. Bean was light years ahead of its time
when they created the lifetime guarantee.
Every L.L. Bean fan (like my mom) has their
favorite story of the time the company
replaced something even though it was a
thousand years old.
02
149

WHY LIFETIME GUARANTEES WORK
FOR POST-CAPITALISM
Hey, we’re still going to buy goods (no one’s
ever learning how to sew a Chanel jacket or
construct a durable axe), so why not believe
in what you make enough to guarantee it for
life? Think of it like a ‘subscription’ to your
good. You can charge a premium here, too.
Nodal, or local/glocal production models
(I’m slightly making up these terms, there’s
just not enough words to describe the things
post-capitalism requires yet) are another
great option. As previously detailed, take food
production. The worst aspects of its industrial
production come from the fact that the food
has to travel immense distances. GrowNYC
has sponsored with all levels of New York
real estate developers to use spare building
space to create gardens. Residents can either
work in the gardens (and earn money/get
free food) or buy from the gardens (and
support their neighbors/eat hyper locally/
support the earth). Vertical farms ARE the
future. There’s a reason why Amazon’s new
headquarters is a greenhouse.
WHY LOCAL/GLOCAL MODELS WORK
FOR POST-CAPITALISM
They chop out the costly, polluting middle
of antiquated business practices (like
shipping strawberries 2,000 miles) and offer
03
04
150

a much more healthy, minimalist solution.
They can also seize the latest technological
advancements, like seniors and software that
monitor soil.
Hyper-transparency is another technique,
and one that’s especially good for industries
plagued by obfuscated business practices,
like finance and energy. Industrialization/
capitalism relied heavily on obfuscation.
Google Ventures is behind a startup called
Digit. It knows that people are terrible with
money. So it manages their money for them,
without asking. Its goal is to stuff away as
much savings as your financial life can bear,
before you have the chance to spend it on
frivolity. The kids LOVE it.
WHY HYPER-TRANSPARENCY
WORKS FOR POST-CAPITALISM
Tech works best when it isn’t used to confuse
people/work against the individual or broader
interest. Tech is meant to make things better.
Use it to do so!
05
151

DEATH
THE
OF THE
STARTUP

Only 4% of software developers
in the burgeoning app economy
have made over $1M.
75%
HAVE MADE LESS THAN $30,000
Source: The Second Machine Age, p151
154

Their culture glorifies sexist, racist and elitist
work environments; their “gurus” and “heroes,” the
venture capitalists, use hyper-leveraged, secretive
financial practices to take companies public that
are utterly unfit for trading (like Groupon, Twitter,
and I strongly suspect Snap Inc.) because they
have no sustainable means of delivering a return
on investment.
Startups are also a bad distraction because at a
certain juncture they *almost seemed* like they
were building an economic future for America.
They’ve surely been able influence psyches of the
corporate executive—nowadays even people at big
companies talk about how they need to “Fail fast!”
“Move fast and break things!” or “disrupt, innovate
or die!” We need ping pong and video games and
IT’S FUN
TO HAVE
SOMETHING
TO HATE,
AND I REALLY
HATE STARTUPS
155

bring-your-pets to work Wednesday! Beer pong
and game rooms and video!! Take your cat to work
week! Ride a donkey to work year! Meanwhile, 90%
of America is still out there coping with the hell of
flat wages, while Waltons don’t pay taxes and VCs
fund ways to deliver on-demand grilled cheese
sandwiches to San Franciscans’ doors.
The startup was supposed to be the creator of
the new economy. Startups, for a while, were our
most aspirational employers.
The startup came along in an era replete with
technical advantage and economic instability.
In other words, many people had things
disproportionately harder than other people, and
for once it seemed like we finally had the kind of
tools that could fix their problems.
156

Around the end of 2016, the startup backlash
began not only in the tech blogosphere, but
in the mainstream pages of Fortune and Wall
Street Journal business press:
FUCK YOU STARTUP WORLD
That’s right, I said it.
Fuck your startup scene with your 30 minute
morning routines of reading TechCrunch, TNW,
Wired, Gizmodo, Mashable, The Verge and
ProductHunt- all so you don’t feel ‘left out’. Fuck
your weird fucking conversations, things like
“OMG did you see Snapchat’s new feature? OMG
Instagram is totally copying Snapchat? Did you
see Zuck’s live townhall? OMG did you see what
Elon Musk tweeted? OMG Uber raised another
round!” Fuck that. Nobody cares.
-Shem, self-published on Medium,
republished by Hacker News, October 2016
FRAUD IN SILICON VALLEY:
“As the list of startup scandals grows, it’s time
to ask whether entrepreneurs are taking “fake
it till you make it” too far.”
-Fortune Magazine, January 2017
THIS TECH BUBBLE IS BURSTING
-WSJ, May 2, 2016
157

According to Fortune,
January 2017, 174 private
companies are each worth
$1 BILLIONOR MORE. YEAH.
158

I am not saying that venture funding is disappearing.
I am, however, saying that startup culture will not play
the dominant, all-knowing role in the future economy
that it played in our recent past. No longer will the
hoodie-wearing, inexperienced twenty-something be
our business guru. After Theranos, Lending Club,
Zenefits, and Hampton Creek blatantly scammed
investors, the questions will get tougher. Investors will
be forced to downgrade or write off a number of formerly
valuable, privately held “unicorns.” And when people get
burned, they learn.
159

A LAST NOTE ON
THE INEVITABILITY
OF THE UNIVERSAL BASIC INCOME
160

“The curse of poverty has no justification
in our age. It is socially as cruel and blind
as the practice of cannibalism at the dawn
of civilization, when men ate each other
because they had not yet learned to take food
from the soil or to consume the abundant
animal life around them. The time has
come for us to civilize ourselves by the total,
direct and immediate abolition of poverty.
The solution to poverty is to abolish it directly
by a now widely discussed measure: the
guaranteed income.”
– Martin Luther King Jr., 1968
161

Not everyone knows that Dr. King’s last book was largely an
argument for his idea for a Guaranteed Minimum Income,
or an assurance that citizens who met certain expectations
(such as a willingness to volunteer) would have income
sufficient to live on.
Prior to Dr. King, Thomas Paine had proposed a similar idea
called the “Citizen’s Dividend,” which was about a citizen’s
right to some portion of profits made from natural resources.
Both of these models differ a bit in their details: some are
payments simply for being a citizen, whereas others come
attached to some expectation of service.
In a sense, Social Security was something of a precursor.
The system began functioning in 1935, after being drafted
during FDR’s first term as president. It took the Depression
to get us there, but perhaps historians will look back on our
present day inequality (and the present day President) and
see little difference between the two epochs.
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Many members of Congress see some
form of basic income as such an
inevitability, it’s a concept that enjoys
substantial bipartisan support. As PBS
put it in 2014, “There aren’t a lot of policy
issues that unite Sarah Palin and Clinton
labor secretary Robert Reich. But in
Palin’s home state of Alaska, both agree
that oil tax revenue should be used to pay
equal dividends to all state residents, as
it has been since 1982.”
There is a future out there for us, our
kids and our grandkids that involves
a reinvention of the career and a new
expectation for the company. Just as
we were able to do away with massive
coal pollution and widespread child
labor when the Industrial Revolution
gave way to the technological one, we
can abandon extreme inequality as an
unintended economic reality, too.
A RARE MATTER OF
BIPARTISAN SUPPORT
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“Capitalism had been dominant for over a
century when Karl Marx in the first volume of
Das Kapital identified it (in 1867), as a distinct
social order. The term “Capitalism” was not coined
until thirty years later, well after Marx’s death. It
would therefore not only be presumptuous in the
extreme to attempt to write The Knowledge today;
it would be ludicrously premature. All that can be
attempted—all this book attempts—is to describe
society and polity as we begin the transition
from the Age of Capitalism (also, of course, the
Age of Socialism).
But we can hope that a hundred years hence a
book of this kind, if not one entitled The Knowledge,
can be written. That would mean that we have
successfully weathered the transition upon
which we have only just embarked. It would be as
foolish to predict the knowledge society as it would
have been foolish to predict in 1776—the year of
the American Revolution, of Adam Smith’s Wealth
of Nations, and of James Watt’s steam engine—
the society of which Marx wrote a hundred years
later. And it was as foolish of Marx to predict
in mid-Victorian Capitalism—and with “Scientific
infallibility”—the society in which we live now.
But one thing we can predict: the greatest change
will be the change in knowledge—in its form and
content; in its meaning; in its responsibility; and in
what it means to be an educated person.”
-Peter F. Drucker, 1993
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