Wednesday, 16 November 2016

Trump, tech and the dangers of the early Digital Economy

My friend and colleague Paul Lee forwarded me the following article on the role the West Coast Tech industry played in the election of Donald Trump a week ago. The article is interesting and here:

It raised some interesting thoughts for me about parallels between the sense of hopelessness that may be behind those voting for any change and that of similar people during other economic transitions. All the following is my instinctive off-the-cuff response to the article. I apologise in advance for any lack of compassion and empathy, also for occasional drifting into future musing. Take it as read that I'm another out of touch member of the Liberal elite!

The article is interesting in that it highlights the challenges of our shifting economic system. The point it makes is incomplete in that it is not just tech employees that have benefited from this economy – it is the relatively large, educated middle class population who have been brought up to take ownership of their betterment rather than rely on the protection of the Late Industrial Economic system. The difference between now and the last economic revolution (to the Industrial Economy from the agrarian) is that we have universal enfranchisement and thus the people who have been left behind have a means – in their minds – to take control of their situation by voting for change.

The fundamental difference, however, is that in the early 19th Century a fear of eternal damnation and a sense of paternalism meant that the upper classes provided a degree of protection for their workers within the boundaries of their own self-interest. Perhaps they felt guilty for the price of progress – Blake’s dark satanic mills. As their interest waned the cause was taken up first by Fabian Liberals and then the Labour and Communist movements. The leaders of those movements were intellectuals or industrialists themselves and often deeply idiosyncratic. They were able to flourish because they had determination and principles that led them to flout the system in defence of the general population. They changed the system because they deeply believed that they had to give something back and were not heavily influenced by the media. In doing so they left us varying types of welfare state that provide protection against destitution – contrast the situation of poor Britons or Americans now versus those portrayed in Road to Wigan Pier or Grapes of Wrath.

Brexit and Trump are the results of the same distress and dismay against the final death of Industrial Capitalism. The systemic change to the Digital Economy is as hard to understand for people today as the sudden rise of factories and railroads was to the workers in the subsistence economy of the 1780’s. Instinctively we think that because we’ve lived through the introduction of electrification, digital computing, cellular phones, reliable and cheap air travel that we should be equipped for this change. But we’re not. If you look back at videos of miners and steel workers being made redundant in the 1980’s many of them talk about their physical ability and desire to work. That tragically demonstrates their lack of understanding of the economics of their situation – they were used to making something tangible and physical. Global supply chains made that redundant input into the western economic system. Of course many of them retrained to use another piece of their biological machinery – their brain – to adapt to more specialised manufacture in the car industry or at the very least could become call centre workers. I’m not saying that they gained the same respect and satisfaction out of those jobs as they did from being part of the community of men in the mines, but they at least had the dignity of earning a living wage.

As you know, that last piece of economically useful bio matter is becoming rapidly less valuable. Infinite computing and algorithmic power connected by ubiquitous wireless networking to cheap actuators and sensors renders the human brain of secondary importance to the running of the processes that make up the Industrial Economy. The pinnacle Industrial system that existed pre-Lehmann will relatively soon be just a use case of the Digital Economy, in the same way that farming is of the Industrial. The rules of what enables some people to thrive in the post-human (joke) era are totally undefined. But fundamentally a very large number of people have nothing economically useful to offer and thus are rendered to the indignity of scrapping for the shrinking number of pure service jobs in the economy or to long term unemployment. A further wave of migration to innovation hubs for those able and willing to move increases the hopelessness of the situation for the ‘silent majority’.

And so you get Trump. He and the Brexit politicians not the same as the rich, paternal and socially motivated benefactors and intellectuals who gave us the Welfare State. They are purely self-interested and not god fearing. They practically lack the resources and freedom to just do it and damn the torpedoes. For the boosting of their narcissistic supply, they have successfully persuaded the now enfranchised mass of disadvantaged people to vote for change. The lack of substance behind the nature of, or execution roadmap for that change is irrelevant to the voters because they don’t understand their own condition or the end state in the first place.

Misusing the Johari Window, most of the population are in the unknown-unknown zone, but are used to being in the known-known: they perceive the underlying cause of their condition and believe that the state sees it the same way. The trouble – and I encounter this all the time in management teams – is that if you believe that you understand the nature of the current state and the nature of the environment then you will employ a strategy that is wildly unsuitable for the actual situation. In this case that strategy was to vote for ‘change’, assuming that the promoter of that change understood the root cause of their situation. But of course they don’t. Besides being cynical self-promoters, Trump and the Brexiteers are arrogant enough to believe that they are in the known-unknown zone and thus have advantages that others do not… Notice how fast the politicians scarpered once the true magnitude of Brexit became slightly clear.

My personal concern in all of this is that we have a rapidly developing social situation in which a majority of the population are becoming completely unemployable in any capacity. There is literally nothing we can do about this future. It can’t be reasoned with. It doesn’t feel pity or remorse or fear. That is a deeply troubling issue for our society and in my view requires a fundamental reassessment about the purpose, scale and scope of our welfare system. Because of the need to respond to a partisan and real time media, politicians will only advocate for a faster horse, which can practically never be delivered as the system is being assailed by increased demand from too many sides for central resource allocation to work effectively. As in business, the first step to surviving and thriving in the Digital Economy is to accept that one is in an unknown-unknown state, suspend one’s ego and to set out to understand how to achieve outcomes by conceiving, testing and scaling things from the ground up. Top-down decree no longer works. We simply don’t have a homogenous, hierarchical system anymore.

We are also challenged by the disconnect between enterprise and society. Whenever a new business model emerges that radically disrupts an industry, the incoming idea faces an uphill struggle through a legislative and regulatory apparatus that is designed to protect the vulnerable but doesn’t take into account the total system consequences of their actions. In the case of big scary tech’ the response to state action/ inaction is flat out refusal to pay taxes because they believe (sometimes rightly) that they deliver far more efficient ways of improving people’s life outcomes than the state. They would also say that their purpose is far clearer and their ability to achieve it more long-termist than any government.

The quality of debate, however is fixed on surface details of the situation: immigrants, the media, banana straightness. In my view we need to think hard as a society about how we’re going to equip people to understand their environment and how to protect our society in the long term. In my view we should be aiming for a utopian situation of universal avoidance of poverty, total gender equality, focus on – and personalisation of – short and long term life outcomes instead of talking about ‘better’ things and ‘change’. But I’m an optimist.

For what it’s worth, my view is that the system we need is probably a welfare state that is outcome rather than process or domain-focused and consists of an ecosystem of micro-services. There’s also a strong case, in my view, for a path towards universal basic income to be considered. I’m no expert.

As it happens I wasn’t at all surprised that Trump won. I also don’t really care because it doesn’t materially change my worldview or the nature of the issue we collectively face as a society and an economy. As with Brexit, we have to knuckle down and create change on the micro level. Personally that means creating a great, exciting place to work in my team and helping my clients grow their businesses in a more radical, socially sustainable way. I don’t see how pontificating about macro change and posting mournfully on Facebook will help so I’m not doing it. And yes, I see the irony in that statement given that I’ve written a short essay of musings in response to a one-line link!