Those of us born after 1980 were born in the final years of the Industrial Age, and especially in our economic thinking, are products of that age. We owe all of our concepts to the worldview peculiar to that age. That age began with the mechanization of work, and in those final years we were mesmerized by the success of that idea, as robots replaced humans in the factories and the speed at which work processes moved was measured in nano-seconds. What had been termed the Age of the Machines had morphed gracefully into the Age of the Intelligent Machines. We Industrial Age people were certain we would be remembered as the ones who built a new age in which human work had been made effortless through the use of the technology we were proud to have produced. This would be the crowning achievement of the Industrial Age.

 But in October 1989 one of those technological innovations had an unexpected effect. Rather than just making life easier, it completely redefined the rules governing that life. In the instant of a single keystroke, everything changed. And almost nobody noticed. In retrospect, we can now see that the signs were there, but our Industrial Age eyes were unaccustomed to the environment. So we saw, but we didn’t see. We thought we were looking at just another expression of the success of our technology, making our age easier. But what had happened was bigger than technology. Much bigger.

 To begin to understand how things had changed, we might imagine ourselves about a thousand years ago, at the dawn of the Industrial Age, coming out of the Agrarian Age.

 In the Agrarian Age everyone was self-employed. Or they were in the process of learning the skills needed to be self-employed. Everyone was born into their social station – serf or nobility – and it was futile to seek upward movement. The best serf or the laziest nobleman both were fixed for life. And a wealthy person was someone who owned lots of farm land and animal stock.

In this new Industrial Age, the unit of commercial measure was a new concept called the job, where people worked at tasks that had no immediate outcome for them, for wages not necessarily related to their sweat. The measure of a worthwhile enterprise was the number of jobs it could sustain.

 In this new age, everybody was expected to be employed. Wealth was now defined in terms of the size of the estate on which job-sustaining factories or other job-related structures were built. These included the housing needed for these job-holders and the commercial buildings that sold them their daily needs. This kind of estate was called “real estate”.

 In this new age, social station could be changed. You could go from the equivalent of serf to nobleman by marshalling three things: education, labor and money. And one could go the other way by squandering the same three things.

 To support this new concept called a job, the Industrial Age developed some supporting institutions. The first was the union, the tool for negotiating the relationship between those who needed the labor and those who needed a job. The second was the pension, based upon the need to ensure that when a job-holder became unproductive due to age, he could be “retired” and replaced by younger, stronger workers. The third was tenure, the development of a more-or-less permanent job as a result of reciprocated loyalty. All politics throughout the Industrial Age was framed by the manipulation of these job-related institutions for “public” benefit.

 This is the age into which those of us born before the final quarter of the twentieth century stepped. And it is the world we assumed was natural.

 But that world is gone. And with it the institutions that gave it life.

 First to go was the job. Those who need labor in this new age are no longer tied to the dynamics of employment. Let me give a few examples. When a General Motors needed someone to answer the telephones, they could choose between hiring a dozen telephonists and sending out a Request for Proposal for a call center operation. The call center’s relationship would be contractual, free of the issues of employment. Further, the call center would be manned by individuals offering their services to the call center operator on a strictly item-related basis, being paid by the call. And the housewife answering the telephones while the children are at school need not leave her kitchen, in whatever country she happens to live in, yet there is no discernable difference in the delivery of the service.

 What has happened is that the focus has been moved from the worker to the task, and the worldwide web now allows the work to be performed free of the shackles of employment. This has become evident in almost every form of business enterprise, and at all levels of sophistication. In the recent American elections, both parties lamented the loss of American jobs overseas. What neither recognized was that the jobs had not left the US, but rather the tasks involved was simply now being carried out by entrepreneurs offering to complete a task for a fee. No salary, no insurance, no 401K. No job.

 If the job is obsolete, so then are the derivative institutions. And we have seen them fall. The concept of the union has become so confused that managements now claim to belong to unions. This is nonsense, of course, since unions were created to act for labor in their relationship with management, which represents the owners. The fact is that unions are now lobby groups, whose missions are determined by social convenience. The concept of the union is obsolete.

 Retirement is obsolete.

 What? But retirement is a God-given right. At least that’s what the Industrial Age mythology was. The irony is that long before the worldwide web made the job obsolete we knew retirement as a concept was in trouble. With the creation of the defined-contribution pension in 1974, the idea that a pension would last for life died. After that, you could go fishing only as long as the amount you once thought was huge, but now realize is meager, lasts. So Walmart institutionalized the after-retirement re-entry, and AARP became the source of good CEO’s for start-ups.  And while we still refuse to accept the obsolescence of the concept, we have all known for years that we would have to create some form of income for that post-job period, or our standard of living would drop dramatically. With no spread between savings rates and inflation, we finally have realized that savings will not provide lifestyle for long. Income for life is no longer an option.

 Of course, the corporation that lasts for centuries is also a thing of the past, as consumers find alternative ways to satisfy their needs. Large department stores compete with small mail-order firms who now have the same relationship with suppliers and distribution systems. Or consumers buy directly from the manufacturers. Large publishers compete with print-on-demand companies who deliver a single copy of a novel, something unheard of by the giants. Where fifty years was once proof of commercial acceptance, ten years is now considered a good run. So the idea of tenure has also bitten the dust.

 What does all this mean? How does this affect planning for a future in this Information Age? It means that in almost every area of economic promotion we are barking up the wrong tree. There are few, if any, economic birds there. Whether the economists accept it or not, most of the rules they considered sacred must now be redrafted, with some very strange parameters. Here are a few.

  •  For the first time in history, all men are equal. That is,” men” in commercial terms no longer means human beings, but consumers and providers. And in this new world order both consumers and suppliers are faceless entities in cyberspace. Arguments that not everyone has access to the internet are as irrelevant as the fact that not everyone had an automobile during the Industrial Age.
  • The second is that it no longer takes a traditional education to make money. In the Industrial Age money was made by assembling a team of “educated” people, some labor and financial support. In this new age, it takes innovation and marketing, neither of which is inherently connected to formal education. Ideas are everywhere, generated by anyone and may be marketed almost effortlessly on the internet, using tools and terms not even in existence in 1990. For example, a housewife can market her cookies to 100 million people without leaving her kitchen,  and with no advertising budget. Her teenage daughter, meanwhile, creates a stream of income by “hooking up” her friends in a social network and selling ads. This is not to suggest that serious study is not needed, but that the system of credentials developed over the past thousand years is also largely obsolete. The expertise needed to exploit this new world is no longer dispensed in ivy-covered buildings or certified in solemn right-of-passage ceremonies. It may now be acquired in a multitude of ways, from classroom to computer, video seminar to webinar, the weekend conference to weeklong retreat. While college degrees still get the interview, they no longer ensure the big bucks. When Fortune magazine published its first “40 Richest Americans Under 40 Years Old” in 1990, three quarters of the top 20 had no college degree, and the next ten were almost all athletes and entertainers. Those who still think that was an anomaly might ask themselves who the wealthiest people in their circle are.
  • The third, as noted above, is that there is no longer anything to “retire” from. The corporation has devolved into a constantly shape-shifting thing, with no permanent participants. The only constant is the need to make a profit. Even public utilities are “privatizing” at a steady, but relentless rate, outsourcing everything from human resources to security, maintenance to accounting.
  • Finally, age has become irrelevant. The young have energy and technological familiarity on their side. The old have the experience and the treasury of relationships on theirs. In cyberspace, their identities are established by their actions. In cyberspace there are no old or young people, just people who use the tools of the Information Age to their advantage.

Having not recognized these new principles, most of our circle still follow Industrial Age patterns. Unions still determine the agendas of the remaining corporations. Politicians still promise jobs as both the first and last resort. And parents still measure their success at preparing their children for the real world by their academic results. The very fact that no one complains about the ineffectiveness of these systems confirms that this obsolete Industrial Age thinking will be part of our reality for several more years.

 In the meantime those who recognize the change and plan accordingly will be rewarded by exponential growth, while the rest of us reel to the confusion of disappearing jobs, ineffective unions and school systems that compete with the so-called “streets”. While our Industrial Age minds struggle to keep up with the improvements in technology, certain that the difference between yesterday and today is merely the speed of computer chips, our children will soon inform us that the difference between the Industrial Age and the Information Age is more than technology. It’s a brand new world.

 Patrick Rahming

March 2009