“Any sufficiently advanced technology is indistinguishable from magic”
You’ve probably heard a lot about a new buzzword….
AI … or Artificial Intelligence
Some of you have experimented with it. Some of you may be using it daily. And others may even be afraid of it.
Some people have science fiction fears that this is the start of the war of the Robots vs the Humans.
Today I’m going to cover a different fear about AI though… The fear that AI is going to take all our jobs.
Dario Amodei, CEO of Anthropic—a leading figure in artificial intelligence—recently sparked headlines with a stark prediction: within five years, AI could replace half of all entry-level jobs, potentially driving unemployment rates up to 20%.
And some other predictions go much further than that.
I will say this… The future is uncertain… And whenever the future is uncertain, I like to look to the past for clues.
There have been similar fears in the past when innovations occurred, so let’s see what lessons we can find.
Farming
Farming was once the backbone of America’s economy. In America’s early days, we needed about 90% of the U.S. workforce to be directly involved in farming to produce enough food for all of us.
Then modern machinery started coming along.
The machinery made farming processes more efficient, meaning we needed less farmers to make the same amount of food.
If you asked a pessimist at the time what they thought about this… they would say: ‘Those tractors are going to take all the jobs’
And they were right… Kind of…
Today, only about 2% of US workers are farmers.
It was a dramatic shift to go from 90% of people being farmers to just 2%…
First of all though, it didn’t happen overnight.
And Secondly, in the grand scheme of things, it wasn’t catastrophic.
In fact, it spurred new innovations and opportunities across countless industries. (Many of which never existed before.)
The end result was that the OVERALL job market outside of farming expanded in spectacular fashion.
So what happened to all those farmers?
The farmers who were the best at their jobs and who embraced the new technology kept farming. And they did their job better than ever.
The farmers who could not keep up with the most efficient farmers had to look elsewhere for work. Their labor became available for other industries—sparking expansions in manufacturing, resource extraction, food packaging, construction, logistics, transportation, and an explosion of entirely new service-oriented jobs.
Society was better off because of all that. And we are still reaping those rewards today.
How about Electricity?
Before widespread electrification, jobs like lift operators, residential fuel delivery, lamplighters, and ice delivery were essential.
Electricity gradually displaced these roles, but its broader impact was so profound, it’s practically immeasurable.
It birthed industries and jobs nobody could have imagined: electricians, electrical engineers, appliance manufacturers, and later, professions in television, radio, computing, and telecommunications.
Not to mention that nearly EVERY industry and EVERY consumer wound up using electricity in a multitude of ways…. Because it made our lives better. And again, we continue to reap the benefits from that today.
What about Cars?
Cars were also transformative in how they reshaped the world. Before cars, horse-drawn carriages dominated transportation. And we were very limited in the distance that we could travel.
In the early days, the roads weren’t built for cars, there weren’t gas stations, there weren’t enough mechanics, and the cars had all kinds of issues.
In less than a generation, all of those problems were solved.
Cars had so much potential to improve our lives, that the market demanded solutions to all the problems. Inventors, engineers, investors, and entrepreneurs were thrilled to step in and provide the solutions to this new booming industry.
Cars disrupted traditional roles such as horseshoeing services, blacksmiths who specialized in wagon parts, stable workers, and wagon manufacturing.
But this transformation also simultaneously created a vast amount of new opportunities – including engineers, mechanics, gas station attendants, and assembly-line workers.
And the ripple effects once again were astounding; Leading to the sprawling suburbs that expanded real estate markets and construction jobs.
Plus it gave us the freedom to travel in a way that we NEVER had before. And we’ve been enjoying that luxury ever since.
More recent examples are the Internet, smartphones, and Social Media. All of which created MILLIONS of new jobs.
Each example points to the same predictable pattern. The trend reveals that the end result is MORE jobs, not less. Many of the jobs will be different though.
During most of these transformative shifts, there were skeptics and critics of the new technology. Many people voiced concerns and fears of the changes it would bring and the impact it would have on current jobs.
New technologies do initially disrupt traditional jobs, but they ultimately create a broader, richer economy for all of us.
I think most of the evidence points towards that trend continuing as we enter the age of Artificial Intelligence.
We didn’t need to protect the farmers, or the horse and buggy operators, or the switchboard operators from the new emerging technologies. Their old jobs became obsolete. So that new labor and brainpower was freed up to go do something else that was more productive in this new evolving world. That was the reality. We can’t fight reality, even if we don’t like it.
AI is here, and it’s here to stay. Embracing it and adjusting to it is what will lead us to the best long-term results.
In fact, AI played a role as my assistant when I was researching and structuring this exact newsletter. And I was able to write it faster and more thoroughly because of it. Which means more concise and complete information for you, and more time for me to focus on my most important responsibilities.
And the positive ripple effects will continue far beyond what we can see today.
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