Immigration, globalism, and nationalism have been in the news a lot lately. Now, this blog is usually about code and so I wouldn’t normally talk about politics, but there are interesting intersections between code and the global economy that I think are worth surfacing. I haven’t thought through them very carefully yet, so forgive the fuzziness of some of these ideas, and help me sharpen them if you can.
First, code is what makes much of our global economy possible. The ships, trains, boats, planes and trucks that move goods and planes between our cities, countries, and continents are only possible because of the optimization possible from digital logistics. I’ve learned about a lot of countless local Seattle companies that either manage shipping logistics or create software to manage and streamline shipping logistics. Software is at the heart of accelerating the movement of goods and people, making it possible to have large volumes of products and people move through multiple countries, creating those jobs in developing countries that so many people are sorry to see move elsewhere, and moving people to those jobs. This means that the rise of information technology as a key infrastructure places at the center of migration and global competition.
Another trend is the dislocation of work, home, and commerce made possible by software and the internet. Many people no longer have to live where they work, working 100% remotely, as many teams are already distributed across the globe. Many people can work where they live, writing, editing, designing, and developing at a distance, where 100% of the value they provide can be shoved through fiber optics. With businesses like Airbnb, some people even have property that they don’t live or work in, renting it out without ever meeting the renters face to face. My mom recently started hosting an Airbnb, and she set up a digital lock that she can update over the internet. She wants to meet her guests, but she doesn’t have to: they can slip in and out without ever meeting her, allowing her to move anywhere in the world and still collect her rental income. If we eventually see driverless cars (and buses, etc.), people will have the same ability to rent out their vehicle (or fleet of vehicles) and live anywhere, just as services like Car2Go and ReachNow do in the United States as German companies.
That people still migrate to jobs is a sign that not every kind of work (yet) be digitized. Otherwise, why would they leave their home? Simultaneously, the number of job types that aren’t being digitized is rapidly dwindling (relative to the speed of history), meaning that migration will likely slow as well. This is going to force an interesting paradox on pay: should people be compensated for information work based on the work, or based on the local economy in which they reside? Should a Mexican who owns a driverless Uber car in San Francisco be paid the same rate as someone in San Francisco who owns the same kind of driverless Uber car, or should they be paid less, because their cost of living is so much lower?
What is the end game with all of this? I predict fewer jobs (because of automation), lower migration (because fewer jobs and a higher proportion of digitized jobs), and even greater income inequality as those with neither physical jobs or digital jobs can find work. Those with physical jobs will face even fiercer competition for those jobs as the world population increases, migration becomes easier, and the number of those jobs decline, whereas those with information jobs will face increased competition as people realize that education is the only path to getting those information jobs. There will be a large number of those in the middle class who can’t get lower paid jobs (because they’re elsewhere in the world) and can’t get higher paid jobs (because they don’t have the education).
What will these people do? Some have suggested that humanity will continue its path toward leisure investment. But does the world really have infinite capacity for new television, games, and books? It seems that globalization has only led to a consolidation of attention, with 80% of the world watching the same three television shows, plus a long tail of niche art that doesn’t sustain most people’s income.
My prediction? The end game of software-driven globalization is a return to local economies. Politically, I’m not at all against globalization and see huge benefits for increasing the global quality of life, but I think the only possible path is that most people start local small businesses offering goods and services that are geographically relevant. Software will also make this more feasible, reducing barriers to starting and sustaining those local businesses. Think of Portland, OR, for example, with its abundance of local restaurants, cafes, bike maintenance shops, and boutique local manufacturing shops. These are businesses that work because supply and demand is scoped to a city; there’s nothing someone in Frankfurt can do to compete with Screen Door. The end game could easily end up improving local communities, bringing people closer to where they live, and increasing the cost of moving anywhere else.
If this is right, the upheaval we see in politics is more due to the friction of transition, rather than some permanent instability. I do believe that software is at the heart of this transition, and that it’s just going to take a century before the implications of the above trends work their way through everyday life. The industrial revolution took 50 or 60 years; there’s no reason to think that the revolution from information technology won’t take just as long or longer, given its far reaching applicability. Also, given the slow change of culture and human behavior, there’s also no reason to believe we can accelerate this change. After all, human psychology is the key driver of culture change; technology is just a catalyst.
So let’s start the clock at 1980 and count. I predict that by the time I’m 80 (in 2060), things will be stable. Until then, we’re going to continue to see rapid change, political upheaval, and profound transformation of how we live. It’ll be an exciting, but also frightening time to live. I hope that by the time I die, we’ll see the end of the tunnel, and a glimpse of the next phase of human civilization.