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New Technology Has Always Created New Jobs: This Time Is No Different

John Tamny, New Jobs, Technology

With John Tamny, Political Economy Editor at Forbes, Editor of RealClearMarkets.com, a Senior Fellow in Economics at Reason Foundation, Author of The End of Work: Why Your Passion Can Become Your Job

From time to time, Steve invites innovative, independent thinkers as guests on his show.  One such person is John Tamny.  John is Political Economy Editor at Forbes and a Senior Economic Advisor to Toreador Research & Trading.  John is the author of several books. Steve and John discuss his latest book, The End of Work: Why Your Passion Can Become Your Job.

How Automation Unleashes Human Creativity

In The End of Work, John makes the case that technological automation frees humans from the drudgery of repetitive and uninteresting tasks.  This freedom unleashes the creativity hidden within us. It also allows people to showcase their unique skills and intelligence.  Consequently, work is no longer work but is transformed into people hard at play, doing what they love.

A lightbulb went off in John’s head when he was at a Fleetwood Mac concert.  He saw the band’s 70-something members still excitedly banging away at their drums, strumming their guitars, and singing with gusto.  He realized that they were “working incredibly hard, but hardly working”. They were passionate about what they were doing.

John hypothesized that as the economy grows, it creates new opportunities, allowing more people to specialize. By specializing, they amplify their talents and their capacity for work skyrockets.

History Confirms John Tamny’s Theory

With automation threatening the livelihoods of programmers, lawyers, and even doctors, many worry that their children and grandchildren may have a hard time making a living. Their fears, however, are unfounded.

History shows us that disruptions cause short-term pain but long-term gain.  For example, 150 years ago world economies were driven by agriculture.  As soon as a child was able, he was put to work on a farm, six days a week or more.  Back then, people directed their energies to the gathering and creating food in order to survive.  Those who did not like farming were looked down on as lazy and incompetent.  They often died of joblessness and starvation.

Eventually, the tractor changed all this.  It was the biggest job destroyer of its time because it greatly shrank the number of people needed to produce food.  Furthermore, it put farmers and farm hands in bread lines.  On the other hand, the tractor freed people to direct their talents at things other than the creation of food.  Consequently, people focused on science, technology, medicine, and other fields that they cared about.  As a result, diseases were cured, the airplane and the car were invented, and the technological revolution began.

Today’s Expanding Economy Offers Many New Opportunities

Living in today’s globally connected world, people have many more opportunities to showcase their talents and get paid to do what they are passionate about.

Today’s job descriptions run in the thousands, compared to just a handful 150 years ago.  To demonstrate, people have the opportunity to be happier by becoming exponentially more productive doing what they love and getting paid for it.  It also allows for enjoying more free time.  John predicts that due to people having more free time, demand for entertainment will go through the roof.

To prove his point, John cites the NBA’s decision to kick off NBA2K.  The NBA2k is a draft for players for video gaming leagues.  Yet another example of new professional avenues that cater to people’s passions and talents.  Today, more people visit Twitch, a site for video gamers, than MLB.com.  It’s also allowed video game players to earn as much as over a million dollars a year!

Talent Drives Economic Opportunity

John compares the dreariness of Youngstown, Ohio to its 50-mile away booming neighbor, Columbus Ohio.  Youngstown isn’t dying because its factories are closing.  It’s dying because its talent is moving elsewhere, to places like Columbus, Silicon Valley, and New York.  What’s different?  These places have almost no factories but instead, offer vibrant professional opportunities.  Vibrant cities are smelting cauldrons where new jobs are created by destroying old ways of doing things.

Think Uber, AirBnB, and self-driving cars.  Then reflect on the DNA of Americans old and new, who crossed oceans to re-build their lives in this new land we call home.  As Alexis de Tocqueville put it, Americans are “restless amid abundance.”  This restless mobility of our ancestors is still within us, driving us to destroy and create anew.

Grit Is Overrated

In today’s economy, grit counts for much less than it did 150 years ago.  Grit can make us work harder, but it can’t replace our innate talents.

In The End of Work, John quotes Warren Buffett who said he would have failed miserably in life had the United States been a sports-based economy.  Buffett’s point was that no matter how hard he worked, he would never have become a star sportsman because it simply wasn’t in him.

Instead, the breadth of opportunity within our economy helped people like Buffett and the band members of Fleetwood Mac redirect their talents toward doing what they love.  It elevated them into world-class experts in their respective fields.

People who love what they do are typically hard workers.  As Keith Richards of The Rolling Stones said, “I could never retire. This is what elevates me. How could I ever leave what I enjoy so much?”

In closing, John Tamny admits that life’s practical realities, such as providing for your family, make it hard to give up a job and pursue a passion. While job-related happiness eludes most people today, expanding economic opportunity gives them hope for the passionate members of future generations.  So, parents, stop worrying about children indulging their passions.  Instead, worry more if they have no passions!

Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

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Steve Pomeranz: I like to talk to innovative and independent thinkers, and today’s guest is one such person. His name is John Tamny, Political Economy Editor at Forbes, Editor of RealClearMarkets.com, and a Senior Fellow in economics at the Reason Foundation, plus so much more. John has a new book. It’s entitled The End of Work: Why Your Passion Can Become Your Job, and there’s a lot to cover, so let’s get started. Hey, John, welcome to the show.

John Tamny: Hey, Steve. Thanks for having me on. I really appreciate it.

Steve Pomeranz: My pleasure. On the surface, the title might sound like you’re advocating some governmental program to pay everybody a stipend, whether they work or not, the end of work. Is that the thesis here?

John Tamny: No, not at all. It’s the exact opposite. My argument is that as the economy grows, more and more people get to showcase their unique skills and intelligence in the workplace and because of that I’m making the case that as prosperity grows, people actually want to work more because the odds are much, much greater that when they go to work, they’re doing something that reinforces their unique skills. So, prosperity begets more work, and so the end of work, all that means is it’s a play on words that more and more people will be doing something that they love, hence, they won’t be working anymore.

Steve Pomeranz: Yeah, I saw a video, and you were talking about a concert you went to, where you saw Fleetwood Mac, not necessarily a band that you were interested in, but it got you thinking. Give us a rundown of what you thought and saw there that explains your thinking.

John Tamny: Well, my wife and I went to the concert on the assumption that they’ll probably retire soon, so we should probably go see it, and that’s why the concert was such a revelation. Seeing Mick Fleetwood just abusing his drum kit, the joy in his face, and then watching Lindsey Buckingham on the big screen, the excitement in his eyes as he sang and played guitar. And what I realized there is that they’re both working incredibly hard, but they’re hardly working. That’s why they can do it.

They are doing what can uniquely elevate their skills, so it’s not work to them. To me, the revelation there was that as the economy grows, more and more people get to specialize. And when they get to specialize, when they get to do what amplifies their talents, their capacity for work skyrockets.

Steve Pomeranz: All right, let’s put this in context. 150 years ago, most people did what for a living, John?

John Tamny: Most people, 150 years ago, were born and as soon as they were able, they worked six days to a week on the farm. There wasn’t much talk of what will I do when I grow up. Most people knew what they would do when they grew up. They would direct all their energies towards the creation of food.

And then these robots came along, things like fertilizer and maybe even more important, the tractor—easily, the biggest job destroyers in history because they freed … they greatly shrank the number of people necessary to create the food that we need to eat. So, apart from putting people in bread lines, they just freed enormously talented people to direct their talents to things other than the creation of food. So, diseases were cured. We got the car. The airplane was created, the computer. If you think about the progress we get when we destroy work.

Steve Pomeranz: So, if you were born in that period, 150 years ago, you may not have had the talent or the desire or the love to work on the farm, so a lot of people would have had to work on the farm, but maybe they didn’t put their best effort forward. Maybe they were lazy. Many of them would have failed, and they would have been looked down on in that society as being something negative, as I said, lazy, or the like. But in your idea, that’s really not the case; they’re just not fit necessarily for the job or the task that they back then had very little options to pursue other things.

John Tamny: Yeah, you articulate it so well. 150 years ago, I would have been an object of pity; I probably would have starved. Is it any wonder that death by starvation wasn’t exactly uncommon back then because your only way of eating was to do something that for probably many people, for millions, billions, was inimical, that had nothing to do with their skills. So, my argument in the book is that no one lacks work ethic, no one lacks intelligence, but historically, there are very few ways for anyone to showcase their capacity for work.

It showcased their intelligence simply because the range of jobs was so small. Back then, the range of job classification … you can fill one page with it, at best. Nowadays, the different jobs out there, it’s in the thousands and thousands, and it grows by the day. So, think what that means for the average worker, the way in which you can be skillful, the way in which you can earn a living has exploded, and that’s beautiful because it’s allowing more and more people to be like Lindsey Buckingham in their chosen profession.

Steve Pomeranz: Right. My guest is John Tamny. The book is The End of Work: Why Your Passion Can Become Your Job, and we’re creating a scenario here to follow the thesis of this book. So, we’re coming out now of the agrarian period now in the United States, where options were pretty limited and then, as technology took place, options for millions of people exploded and whole decades of creativity took place.

Now, let’s fast forward to the present, and we’re experiencing a new change here. There’s technology, which is taking over all of these jobs that the economy has gotten used to, and millions are being displaced or will be displaced, but there doesn’t seem any clear way or clear path for these people to take. Explain where they’re going to go.

John Tamny: Well, if I knew exactly where they were going to go, I would be a billionaire.

Steve Pomeranz: Come on, John. Tell me.

John Tamny: What I will say is that it’s where jobs are being destroyed the fastest is where they’re being created the fastest. If all we wanted to do was create jobs, it’d be simple. We’d just abolish the tractor, the computer, and the ATM machine, then we would be working. Now, we would be incredibly poor, but everyone would have jobs.

All technology does is bring out our genius because it saves us from the work that we don’t need to do. Think about a pin factory and Adam Smith’s Wealth of Nations. As he pointed out, one person working on his own can maybe produce one pin a day, maybe. But ten people working together can produce thousands and thousands a day because they were dividing up work. Everyone had a specialty. So, all technology means is that more and more were able to specialize, just as when we divide up work among humans, we get to do what we do best.

Think about what technology means for us. It takes away the work that we’d rather not do and allows us to focus on what we do best. So, robots won’t put us out of work, they’ll just make more and more of us geniuses at work.

Steve Pomeranz: Okay, all right, yeah. I get your point. But, there are crazy new jobs being created. You talk about the football draft. It’s not the draft that you think. Tell us about that.

John Tamny: Well, yes, it’s a basketball draft. The NBA staged it a little over a month ago or two months ago— NBA2K. This isn’t a draft for basketball players; it’s for video game players. You would play on a team in NBA2K. Your starting salary would be $40,000 a year. You’ll get a housing stipend, a relocation bonus. This is the future—more and more people will get to do as a job what they grew up loving.

So, just to give you a sense of my prediction, precisely for future work, precisely because robots are going to make us exponentially more productive, I predict, of course, that we’re heading rapidly toward a four-day work week. So, what does that mean? It means that the demand for entertainment is set to skyrocket. So, describing professional video gaming leagues, this is the start of something huge. More and more people will get to do, to act, to play video games, to play sports for a living, simply because the demand for entertainment in a productive world is set to go through the roof.

Steve Pomeranz: My guest is John Tamny. We’re going to take a quick break, and we’re going to be back with him shortly.

Steve Pomeranz: I’m back with John Tamny. His new book is The End of Work: Why Your Passion Can Become Your Job. We were talking about how an expanding economy creates more opportunity. If you think about 150 years ago, we had an agrarian economy. There wasn’t a lot of other things that people could do. Technology came in, changed the work path for millions. We’re now going through the same process here where technology is disrupting us like crazy. We’re all worried about where are these people going to work. Even the government is saying, hey, let’s give people a job.

Let’s have them work in the parks. Let’s have them join the government. People are looking for options here to help people who have been displaced, but we were talking about the NBA draft that is no longer, in this case, there’s a new NBA draft, NBA2K, where they’re drafting video game players, and John, I want to bring you back into the conversation, of course. If you’ve got players now, do you have coaches? Do you have assistant coaches? Is this now expanding a whole new realm of job possibilities?

John Tamny: Absolutely. Imagine when you and I were young if we had told people, yep, we’re going to play video games for a living.

Steve Pomeranz: It’s crazy.

John Tamny: They would have looked at us like we had one eyebrow. If we had said, “oh, no, our plan, Mom and Dad, is to become video game coaches,” we would have been committed, but, in fact, there are now video game coaches. So lucrative has video gaming become simply because viewership of it is skyrocketing. More people visit Twitch, the site for video gamers than they do MLB.com and all sorts of the ones that we’d expect. Nowadays, video game players at the high end earn over a million dollars a year, and with that—precisely because their earning power is so lucrative—they now have video game coaches.

The pay is in the $50,000 a year range. It’s set to increase just as more and more people follow video game players, but it’s beautiful. Think about what this means. Everyone’s good at something, but historically, a lot of talent was suffocated, and now more people get to get up in the morning and think, “I am going to do something that amplifies what’s unique and amazing about me.” This is to me the greatest aspect of free enterprise—is it frees more and more people from dread on Sundays.

Steve Pomeranz: Let’s talk about some of the communities that have failed or are going through rough times. It’s almost become a cliché. We’re talking about maybe Youngstown, Ohio, Middletown. These are places where they have been hit the hardest. Yet 50 miles away, Columbus, Ohio, is booming. What is the difference between these two types of cities so close in geography and yet so far in economy?

John Tamny: I think the major difference is one of talent, of human capital. A closed factory or a dying company could never ruin a city. The only thing that can ruin a city is the departure of talent, and so, what does Columbus have?

It has new companies and new ideas. Columbus has very few in the way of factories. Silicon Valley has no factories at all, realistically. New York City used to be the number one manufacturing city in the United States, that it doesn’t is a sign of its prosperity. And so where change is greatest, where jobs are being destroyed most rapidly is also where they’re being created most rapidly. And so the answer is to migrate to where there is opportunity.

Steve Pomeranz: Let’s talk about that migration. We’re a country of individuals who migrated without the ability to go back. They migrated to this country and did what they could to improve their lives, so we are a mobile country, and you’re saying that that mobility is still within us and still possible.

John Tamny: Without question. What did Alexis de Tocqueville say about Americans when he visited in the 19th Century. As he put it, “restless amid abundance.” We descend from the people who literally risked their lives crossing oceans and borders in order to get here, and they came to an uninhabited land and got over massive amounts of land before the days of roads and motors and all the things that and airplanes and trains and buses.

And so if our ancestors could do that, I say it’s not asking very much for people who, if they’re in a town where there’s very little opportunity to get on a bus—in this case from Middletown where the Hillbilly Elegy took place a bus ride from Middletown to Columbus is just, it’s 50 miles—and so it’s something that everyone’s capable of doing. What was difficult is what our ancestors went through. Today, we live in a country that allows us to be immensely mobile in pursuit of opportunity. That’s an amazing thing and what an amazing endorsement of the United States that is.

Steve Pomeranz: Kind of an air-conditioned Greyhound business trip versus an arduous trip across the country with covered wagon and all kinds of people competing for the land that you’re looking to acquire. I want to move the conversation to the topic of grit. It’s kind of an American personality trait or idea that you’ve gotta have grit. Yet, you think grit is over-rated. Buffet actually tells a story about him having the choice of joining an NBA team or a football team. No amount of grit would have helped him. Tell us about that.

John Tamny: Absolutely. Grit is a big lie, in fact. It’s a dangerous lie I would say. We thrive in the United States precisely because we avoid grit. Warren Buffet is an apt example that I use in the End of Work, as he once put it in a Wall Street Journal op-ed, “Imagine if the United States were a sports-based economy.”

His point was no matter how much training given him and no matter how much effort, no matter how much grit he showed, he would have failed. He would’ve been an object of pity in basketball or football, but thankfully, we live in an economy that elevates all sorts of talents. Warren Buffet avoided grit. He migrated to what elevates him uniquely. He’s one of the greatest capital allocators in the history of mankind. His avoidance of grit is what made him successful. Had he bit his lip and said, “I’m going to become a great basketball player,” we would never have heard of him.

Conversely, if Lindsey Buckingham had tried to make his living as an investor, we would probably never have heard of him. He avoided grit and found what elevated him. Also, he found work that doesn’t feel like work because it’s reinforcing our unique talents. And so that’s what we live in today, thankfully. Not everyone, but more and more people get to pursue what makes them great. There’s thousands and thousands and thousands of work classifications that didn’t exist before, and it’s a beautiful thing because it means that people get to do what they do best. They show up to work as experts as opposed to having to grit their teeth just to make the money to survive.

Steve Pomeranz: Now, the avoidance of grit doesn’t mean the avoidance of hard work or pursuing a strong focus and a lot of time these things that you love to do. There’s a difference there.

John Tamny: Oh, absolutely. I’m so glad you said that. People who love what they do are enormously hard workers, so let me be clear. I’m not saying that Warren Buffet doesn’t like hard work. His capacity for work is Promethean. When you look at music stars like Lindsey Buckingham, like Keith Richards, The Rolling Stones. Keith Richards freely admits that most concerts, he’s throwing up behind the stage, he’s working so hard, but he adds I could never retire…this is what elevates me…how could I ever leave what I enjoy so much.

People who are doing what they love, hence, “not working” are, in fact, working enormously hard. Again, I say that no one lacks work ethic. No one’s lazy, but if you’re doing what has nothing to do with your skills, you are ultimately going to be lazy, and you’re going to be miserable because no one’s happy when they’re not productive. And so it’s incumbent—happiness is hard, but if you can find what you love, and we live in a world in which more and more people can do what they love for a job, think about what you’re freeing yourself from. You’re freeing yourself from dread on Sundays, miseries on Mondays.

Steve Pomeranz: All right, John, hold on a second here. Let’s bridge this gap here. I love the idea. It’s a cliché in a sense. Find your passion. Do your passion, and so, but how do you make that transition? It’s not easy; you’ve got to support yourself. Maybe you’ve got to support a family. You’re taking risks. Maybe there’s a risk of failure, and maybe you can’t afford to fail. How do you make this transition to this passionate life?

John Tamny: It’s such a good question. In my case, I took a lot of jobs unrelated to writing to pay the bills so that I could read and write, so that I could work at night. I was so into writing, but no one was going to pay me for it at first. No one was going to pay me for my books about economics, but I believed in it so much that I took a job as a fundraiser, totally unrelated in a sense to what I was doing so that I could write. And so I point out in the book that happiness is hard. It may take losing a job or losing several jobs in pursuit of the kind of work that elevates you. Maybe it takes doing a totally different job to pay the bills.

For some parents—I’m not going to hide from it—it may be that they never get to do this because they’ve got these responsibilities. They don’t want to take the risk, but what’s beautiful is that their kids will. If you show me a passion today, if you show me a love of football, shopping, wine, pets, designing diets for pets, I’ll show you a career, a remunerative career that exists. And so parents worrying about their kids…their kids maybe don’t like school, don’t worry. What should worry you is if your kids have nothing they’re interested in. If they can find what they love, we, thankfully, live at a time in which passion can become a job. Wasn’t always true, but it’s more and more true today.

Steve Pomeranz: The book is The End of Work: Why Your Passion Can Become Your Job. To hear this again, listen to the full show to get a summary of all the stuff that we discuss here today, go to stevepomeranz.com. While you’re there, sign up for our weekly update where we’ll send you weekly commentaries and interviews just like this one right into your inbox so you can pick and choose what topics and subjects interest you, and you can follow your passion by going to stevepomeranz.com. Hey John, thanks so much for your time.

John Tamny: Steve, thank you so much for having me. I really appreciate it.