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This episode is brought to you by my friends@public.com and their podcast the Rundown. I have followed and tracked markets for 20 years, every day, all day. I love watching it. It doesn't necessarily influence my behavior and how I invest, but I love tracking markets and if you are one of those people as well. The Rundown is a daily podcast that helps you stay in tune with the markets and the economy and the story shaping business. And just like this podcast, it is short in under 10 minutes. Not about reacting to the headlines, it's about trying to make sense of them and the window into behavior that tracking markets can be. Search for the Rundown wherever you get your podcasts or tap the link in the description of this episode. I saw this amazing chart recently. It was of ChatGPT usage, the number of people, the number of queries on ChatGPT, and it showed a chart of that usage over the past year. And around June 1st of this year, it collapsed. It plunged not a little bit, but really plunged. And people were speculating what what the heck happened here? What happened around June 1st where people stopped using ChatGPT? And a couple people chimed in with what I think was the best answer, the most certain answer, which was school ended, colleges, high schools ended, test taking, finals ended, and ChatGPT usage collapses. Now what's interesting about this theory is like any new technology, this has always been the case. Younger people tend to be the forerunners, the people who are using it and incorporating it most in their lives. And this I think you can see why there is so much anxiety among not just young people, but all ages these days, of what is the future of work? Given AI and young people who are using it as their entire college experience for tests and studying and cheating and legitimate uses, of course they're going to be among the most anxious of looking at their career path and saying, what's left for me, given this new technology, that all of these jobs and career paths that looked stable and prosperous a couple years ago might not even exist next year because of AI. All these tasks, all these skills that they have been preparing for their entire life in terms of analysis and thinking and production can now be done virtually for free in AI. Now let me read you something else that I read recently that I thought summed this up very well. It said, quote, for the moment, the very rapidity of these changes is hurting us and bringing difficult problems to solve. Countries that are not at the vanguard of progress are suffering. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal of in the coming years. And that is technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor, outrunning the pace at which we can find new uses for labor. Now the AI stuff that I just talked about was very real and that is modern. But that quote that I just read to you was written by John Maynard Keynes in 1930, which is just to say that the issue of AI eating our jobs, taking our jobs is new. And I don't think anyone truly understands what's going to happen next. But the idea of technology taking our jobs, that we become more productive, and that jobs that used to exist are no longer relevant because machines or computers or technology can do them. That is old and there are many examples of this. One interesting example that I found of this while reading a book by Harvey Firestone. The late tire magnet is talking about this anecdote of Harvey. Harvey Firestone. Henry Ford and Thomas Edison used to go camping together in the early 1900s. You can imagine what those camping trips must have been like and how interesting that must have been. But one day on these camping trips, they are going past a farm and Henry Ford turns to Thomas Edison and Harvey Firestone and he points to a horse drawn plow and he turns to the two others and he says, do you see that? Do you see that horse? That's going to be mechanized someday. That's not going to exist in the future. All of that is going to be mechanized. By which he means machines, tractors is coming and those jobs wouldn't exist anymore. And there are plenty of more examples of this. In 1964, a group of businessmen wrote to President Lyndon Johnson and they warned of, quote, a system of almost unlimited productive capacity which requires progressively less human labor. They worried about all the technology that was coming into manufacturing and steel manufacturing and factory lines was getting make it so that we didn't need humans anymore. There is such a long history going back hundreds of years over the fear that technology is going to take your job. And Keynes writing about this in 1930. Now keep in mind 1930 was a dark and terrible time in the US economy that was near the bottom of the Great Depression. Nobody was optimistic about nearly anything in the world. Keynes was actually fairly optimistic about what in his terms was technological unemployment meant for the future. He could foresee that we were becoming so much more efficient and that that growth was going to continue uninterrupted for as long as the eye could See, and Keynes in this essay was forecasting 100 years in the future. So to the year 2030, very roughly today, he's talking about what the world is going to be like for his grandchildren, which is to say, roughly us. And by his forecast, because we were inventing so much new technology and was making us all so much more productive, his forecast was that by the year 2030, the average US family would be between four and eight times richer. And I just went back and looked at the actual numbers. What has actually happened since 1930? And the answer is, GDP per person, adjusted for inflation, is almost exactly eight times higher today than it was in 1930 when he made that forecast. So he basically nailed it. He could foresee how much technology was coming down the pike, what it was going to do to the US Economy and how rich it was going to make us. He absolutely nailed that. But what I think is even more interesting is what John Maynard Keynes thought it was going to do to the US labor market. Now, in his view, what he thought was going to happen by 2030 is that we would all become so productive and so wealthy from this new technology that the average American worker might only work 15 hours per week because that was all they would need to meet their basic needs. And because we were all so productive, if you worked 15 hours a week, that might cover your basic rent and your basic food and your basic clothes, and you could devote the rest of your life to leisure and art. That was effectively what he forecast, what he envisioned the world was going to look like by 2030. And so back then, the question in 1930 of, we have all this new technology in factories and manufacturing, what is that going to do to jobs? Where are all these people going to work in the future? Kane's answer back then was effectively, you're not. You're not going to work as hard. You're not going to work as many hours in the future. You don't need to. If you can just work a couple hours per week in your very productive manufacturing job to cover your basic needs, you can devote the rest of your life to leisure and art. Needless to say, that did not happen. He absolutely nailed the forecast of how much technology and how much wealth creation there was going to be over the subsequent century. But he completely failed to realize what people were going to do with that. And so here's what did actually happen. Rather than using all that new efficiency and technology and innovation to simply work less and keep your lifestyle stagnant, what people did is they increased their standards and they found new things to do, they found new jobs. So you can imagine in 1930 of someone saying, look, if the factories become more productive because of all this new technology, what are the people going to do if there's no more factory jobs, where are they going to work? There's nothing left to do. And I think what was very difficult, if not impossible to envision in 1930 were all the jobs that would be created over the subsequent decades in technology, in health care, in entertainment, all these new industries that you could not even fathom in 1930 that became huge employers over the coming decades. To show you what I mean, I found this incredible statistic from the MIT economist David Autor, who has estimated that 60% of the jobs in the United States in 2018 did not exist in 1940. 60% of the jobs, and that's 2018, it's probably 70% today, did not exist in 1940. And I would say not only did they not exist, you could not even fathom what those jobs may have been. Even if you're being creative, it was very difficult to understand what those jobs may have even been. Imagine in 1940 explaining to somebody the job of an app developer or social media manager or a cloud engineer or a solar energy technician or a cybersecurity analyst. Like, you could not even fathom what those fields or those jobs would even be, even if they seem like second nature to us today. And so this is one of the points that Keynes missed. Very interestingly, he saw the technology coming, he knew what it was going to do. He completely misunderstood and did not envision. The two things that were most important was that we would create new industries, we would create new jobs. And rather than people falling back on, on that new productivity and saying, I'm just going to relax and live a life of leisure and art, they said, I'm going to find something else to do. I'm going to make more money. I'm become richer, I'm going to become wealthier. Of course the details are always different, the technology is different. But I think there is a same as ever idea in this, that today, in the year 2025, when all of the college students who have devoted their lives to ChatGPT and are wondering what happens next, when those people sit here and say, what am I going to do in the future? Where are the jobs going to be in the future? I used to think I was going to be an investment banking analyst or a young lawyer or a computer coder. And I don't know if those industries are going to exist anymore. What the heck am I going to do that? There is a very long history that backs up the idea that you're going to do something in some career, in some field. It just doesn't exist yet. Now, that's not necessarily an optimistic, don't worry about it. Take. That doesn't mean you have nothing to worry about. There's a wonderful quote from the author, Douglas Adams, where he's talking about technology and he says anything that is around when you were born is normal and natural. Anything invented between when you're age 15 and 35 is exciting because you can make a career out of it. Anything invented after age 35 is against the natural order of things. I think what he's saying is, look, if you are a young person looking at new technology, it can be amazing because there's an endless opportunity for you to do new things. If you're a little bit older and more established in your career, it can be absolutely terrifying. Now, this was true 150, 200 years ago when the Industrial Revolution made it so that a lot of people who used to be farmers and farmhands and manual labor were suddenly out of work because they were tractors and machines and motors that could do their job more effectively. Now, a lot of those people said, what the heck am I going to do? And some of them found work in factories. But if you were older or you lived out in the middle of nowhere and there were no factories nearby, it sucked. It was not good. And those were tough times for you. Now, the people who were a little bit more flexible and younger and had stronger backs and could merge their agricultural skills into factory work did just fine. But it still left out a big chunk of the population who did suffer. That's always been true. So you can't just say, don't worry, you're going to find new jobs doing something else and assume that that's a solution for all the worry. There's a lot of history that backs up that idea as well. But here's where I'm going to get a little bit more speculative in my forecasts. There was a book I read several years ago. It was a pretty good book, very interesting book that got me thinking. The book is called Bullshit Jobs. And the thesis of the book is a lot of the white collar jobs that have been created in the last 30 to 40 years are jobs that are unnecessary. We were putting people to work because they needed something to do, they wanted something to do. Managers needed to show that they were managing people. So we created a tremendous number of administrative jobs that didn't really need to be there. So without offense, if you are in one of these jobs, but project managers, middle managers, consultants, regulators, a lot of these jobs didn't necessarily need to be there. The most stark and stunning example of this is when Elon Musk took over Twitter in. When was that? 2022, I guess. Fired 75% of the staff, 75% of all the employees at Twitter. And what happened next? The answer was not much. The answer was a lot of those people were good, hardworking, honest, smart people who deserve your respect and empathy, but were working in a job that was not particularly necessary. A lot of those jobs exist. It's a very uncomfortable thing to come to terms with because a lot of us, maybe me, maybe you, might have at least aspects of our job that fall into that category. But here's what makes me a little bit optimistic. If AI is going to take a lot of these white collar consulting administrative jobs, which is probably a pretty good bet, is it a bad world if instead of wanting to be a lawyer or a project manager or a consultant, that young people again aspire to be carpenters and plumbers and nurses and maybe teachers, is that a bad thing? If we had fewer lawyers and more industrial engineers, is that a bad thing? If we had fewer stock traders, more firemen, police officers, is that a bad thing? You could create this scenario which a lot of the bullshit jobs disappear because of AI, and it pushes young people into wanting to do things that cannot necessarily be automated, at least as easy doing things with their hands. Plumbers, carpenters, contractors, teachers, home health aides, Go on down the list, whatever it might be. You can imagine that world. And there's part of me that wants to look at that world and say, that would not necessarily be a bad thing, would it? It's very hard to make that happen on its own over the last 20 years to make people more interested in those kind of blue collar working with your hands jobs than a project manager sitting in a cushy air conditioned office building job. But if there's an explosion of AI, that just eliminates a lot of those jobs. And by necessity, younger people are forced to start looking at jobs that had been, until now, underutilized and underappreciated. Would that necessarily be a bad thing? And so that's one element to this. But I put those two things together. One, when people sit here and say, what is the future of work if all these jobs are going to be eliminated, There's a part of me that wants to say, look, what history would say about that is, you have no idea, I have no idea. But it's going to come. It's in industries that we cannot even envision, we cannot even imagine. And that's pretty exciting to think about. The second thing I think about is there are lots of jobs today right now. There are lots of things to do, there are lots of things to build, lots of things that we need. They're just not necessarily the kind of jobs that a lot of particularly young people have been pushed to aspire to in recent decades. But they're still very important and necessary jobs in the economy. One of the thesis of the book Bullshit Jobs was that people were attracted to those white collar administration jobs because they weren't necessarily that difficult, they weren't that hard, but they paid pretty well and they carried a certain amount of prestige. But if you take those two things away, the pay and the prestige, maybe we will automatically go to a world where the old jobs of working with your hands again, carpenters, nurses, those kind of jobs will gain more prestige. I think we're already seeing that anecdotally, maybe around the edges. I was at my niece's high school graduation a couple weeks ago and they made an announcement at the graduation of the number of students in the high school class who were going on to trade schools to become welders and carpenters and plumbers. And it was not a small number, and it made me happy to see that. And I think that's at least one of the answers, a very small answer to this problem of what are people going to do next? That we don't know what they're going to do because there's going to be new industries that we cannot even fathom and there's plenty of work. It's just that today, under current expectations, are not necessarily the jobs that people have historically aspired to, but we should and are very likely going to at some point in the near future. I don't know how much of that makes me optimistic about what's going on now versus terrified of what's going on now. Nobody should minimize the impact of technology upending millions of jobs and what that can do to people's lives, their home life, their psyche, their optimism. What a lack of optimism and what a surge of fear can do to people politically and socially. Nobody should minimize that. But sometimes when you're a little bit of a student of history, it can be comforting to look back on these things and say, we've been in these situations before. The details are different. The technology is different, the cast of characters is different. But the idea that there is an explosion of technology that's going to make tomorrow's world look very different than today's is a problem that's been as old as time. That's it for this episode. Thanks again for listening, and we'll see you next time.
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