Part I: How We Got Here
From Hunter-Gatherers to Homeowners
The Kalahari Bushmen and Dani offer two peeks into humanity's ancient prehistoric times: hunter-gatherers and early farmers who lived off what the land gave and built no riches over the entire life course.
The domestication of animals and the introduction of large-scale farming marked the beginning of civilization. Despite this, most people were impoverished by today's standards for countless generations. They lived on or near subsistence, always vulnerable to sickness, the weather, and predators.
Large numbers of individuals have recently generated more money than they consumed and have lived far longer and better lives.
Graphs that chart economic growth from about 8000 BC to the present show a nearly horizontal line for most of that history. It quickly curves upward in hockey-stick fashion in the last three centuries, with most of the spike coming in the previous century.
By contemporary standards, life generally was brutally harsh before this line's sharp "elbow." Several of the delights and beauty of life in ancient cultures must have escaped Thomas Hobbes' notice. However, his renowned depiction of the envisioned condition of nature might have been applied to any time in history.
"No arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish and short," according to Hobbes.
The farm was at the core of the early American Dream. After leaving an aristocratic, agricultural society in Europe and working as tenant farmers, America's early colonists dreamed of a location where they could work the land and own a portion of it.
For most Americans, a house has been the most valuable singular asset and the focal point of familial life for a long time.
The credit would very certainly be used for property purchases as well.
When consumer culture combined with government social engineering, the housing crisis resulted in a perfect storm. We would not have had a subprime mortgage crisis in 2008 if policies had not fostered reckless risk and disintegrated underwriting rules on housing loans.
Simultaneously, additional challenges have accumulated throughout time. The rising expense and decreasing value of a college degree is yet another government-created bubble. Another impediment is the loss of morality and the disintegration of the family.
These are fueled by various well-intentioned but misguided policies. The loss of industrial employment and the rapid disruption of the industry have also taken their toll.
Rise of the Robots: Will Smart Machines Eat All the Jobs?
The industrial revolution ultimately led to the information age, just as the agricultural period gave way to the industrial.
The new economy, and the American Dream that goes with it, is defined not by farms, manufacturing, or homes. But rather, by more intelligent robots that can accomplish things that we once thought the only man could do.
On the other hand, fear did not begin or cease with the Industrial Revolution. For centuries, we've been making labor-saving technologies:
- cotton gins
- steam turbines
The majority of these machines supplemented rather than replaced human work. As economists phrased it, they provided jobs for some while allowing the rest of us to climb up the value scale.
Previously, technology was only helping human labor. Not only does information technology appear to be replacing human work, but it also appears to be replacing thinking.
- Travel agents are being replaced by websites like Kayak and Orbitz.
- TurboTax takes the role of entry-level accountants.
- Financial reporters are being replaced by complex writing algorithms (rule sets).
- Ad agents are being phased out in favor of A/B testing tools.
- Factory employees and roughnecks are being replaced by robots.
One of the journalists who raised the alarm was John Markoff of the New York Times.
The fulfillment center from Amazon's 2014 video was "clearly an interim solution toward the ultimate goal of building completely automated warehouses," he cautioned in his book, Machines of Loving Grace.
Because most blue-collar workers can drive, many may become Uber or Lyft drivers. It wasn't an awful job, but it wasn't a long-term one either. Uber and Lyft drivers would eventually feel the strain from self-driving cars when those companies completely upset the limo and taxi businesses.
Semiautonomous long-haul trucks will clog the motorways before self-driving vehicles take over Manhattan's streets.
And if you're thinking to yourself, "Well, my work can't be automated," reconsider.
Like just a medical professional, Watson can ask questions concerning patients and get comments from doctors.
- It can track millions of relevant papers in PubMed, including the flood of new research published every year, unlike a real doctor.
- It can assess the signs of over ten thousand human ailments in seconds.
- It can also look for patterns in millions of MRIs, CAT scans, and X-rays from patients already diagnosed.
In fact, every job that requires a lot of data and can be simplified to a set of rules will go the way of the dodo bird, with little fanfare.
We must cultivate qualities such as the courage to fail and learn from our mistakes and the ability to serve and collaborate with others and express our creative freedom. We'll have to concentrate on what makes us human, on our competitive advantage, and on what no computer can replace.
Part II: Rebuilding a Culture of Virtue
The Human Difference: What Only We Can Do
What job will be left for humans if we can construct computers that can do everything? The solution to this topic isn't based on technological predictions or attempts to reshape human nature.
The answer rests in something that may appear abstract or old-fashioned now. Still, it will become even more important in the future economy: human virtue.
But before we get into the specifics, we must first define virtue and dispel the fatalist notion prohibiting us from ever getting started.
As a consequence, these attitudes have the potential to become self-fulfilling. If you don't believe you can improve your situation, you won't even bother. You're much more inclined to attempt if you think you can succeed.
Although this seems self-evident, it's wonderful to have some study to back it up.
The good news, according to Dweck, is that a development mindset can be taught. You may have lived your entire life with a fixed attitude. You may choose to adopt a growth mentality right now. However, you'll need to make it a habit.
The future scenario revolves around five qualities of happy and fulfilled people, each of which corresponds to a characteristic of the digital economy.
The killer applications of the third American Dream are these.
- Courage: the willingness to take a chance and fail.
- Antifragility: defined as the ability to learn from failure and adversity.
- Altruism: defined as behaving in the best interests of others.
- Collaboration: engaging with and learning from other people.
- Creative freedom: Mastering oneself and the talents required to produce value for others is the key to creative freedom.
Fear Not: Courage in an Age of Disruption
Failure is a regular part of the tale of fledgling businesses, particularly during economic downturns. Many individuals are devoid of optimism, believing that the future is cursed or that the system is rigged and giving up at the first hint of failure.
Brad Morgan ventured into the unknown in the face of a current and potential future failure. He attempted what the experts said could not be done. That is bravery. It's not about not being afraid but about taking risks in the face of adversity.
John Wayne once remarked: "Courage is being scared to death but saddling up anyway." Unfortunately, courage appears to be in short supply these days.
Maybe the Greatest Generation didn't have anything special to offer. A Depression then a civilization-threatening war pushed the generation to struggle, stockpile, limit food, labor hard, and battle Nazi Germany and Imperial Japan.
A well-intentioned safety net has turned into a gigantic spider web for many individuals in recent generations. It traps beneficiaries in a type of developed-world poverty that differs from that experienced by most people throughout history.
My point isn't that we need to engage in another world war or rip up every safety net to reclaim our bravery. Instead of being a need, we must nurture courage as a virtue.
So much the better if we can get together around some basic policy improvements that foster rather than punish daring. To attain excellence, we should be ready to risk failure, whatever we handle it.
Keep Growing: Antifragility in an Age of Exponential Change
We can't stop making mistakes because we can simply operate in the present and not predict the future. Even if we create something that others won't, we may not anticipate using it.
That's why perseverance in the face of adversity is so important. If you do it effectively enough, you'll be able to transform necessity into knowledge. "It's not failure," explains Clara Shih, the creator and CEO of Hearsay Social, "It's data."
However, we've had the opposite situation in recent years. According to social psychologist Jonathan Haidt, we teach our children to be fragile. Pampered by permissive parents and then schooled in an academic "victimhood culture," millions of people believe they are victimized.
Of course, some people are injured by others. On the other hand, victimization has become a fragile illusion for the rest of us.
The grit of Americans who lived through the Great Depression and World War II has been overtaken by hypersensitive twenty-somethings. These young people want counseling and demand "safe spaces" if the librarian offends them.
You'll be crippled rather than learning from the school of life if you focus on nursing grievances, perceived or real.
As Scott Adams demonstrates, Antifragile people have yet another related virtue: endurance. Psychologist Angela Duckworth coined the term "grit" to describe this quality.
Like Carol Dweck in her book Mindset, Duckworth has conducted an extensive study on grit. She found that people who persevere, learn from their errors, and don't give up easily are more likely to thrive and prosper.
Because most future jobs don't exist yet, you won't specialize in them. Yes, technical skills are important, and several of them can be taught for a low price (more on that in a bit). A degree in science, engineering, or business will still pay off handsomely.
If you do these things, you won't starve:
- Avoid taking on too much student debt.
- Achieve better marks at a great university.
- Graduate with a BS in a high-demand subject like computer science.
- Find new jobs in new places.
Certain people only make broad generalizations. Others specialize to the point of hyper-specialization.
For college-bound students, a preferable method is to mix the most expansive abilities with a cutting-edge specialty. Become rational, educated, and intellectually curious, as these skills are the foundation for all other cognitive capabilities.
Get a BA in philosophy from a program that emphasizes logic and a minor in programming, a summer course in business writing, a self-directed certification in application development, and a social networking internship.
That would be more useful than a bachelor's degree in literature and a summer job opposing minimum wage laws.
Do Unto Others: Altruism in a Digital Age
Did Danielle just find out a way to extort money from a group of stressed-out brides-to-be? That is how a capitalist critic may perceive it.
But consider this: Danielle Tate struggled to change her name when she married. She recognized that millions of women would benefit from a service that made the procedure much easier. As a result, she redirected her aggravation and creative energy into providing just that service.
These women pay 30 bucks for a service worth at least 30 bucks to them.
The only way to make this into a story about greed is to consider greed as any action that benefits oneself, which is ridiculous. MissNowMrs.com is the epitome of a win-win situation.
Tate's tale is the basic story of most successful businessmen, by implication, most successful firms and workers in a capitalist economy. They don't achieve because they are greedy or self-absorbed. Rather, they anticipate people's needs and wants, take chances to meet those needs, and learn from their successes and failures.
Entrepreneurs must first collect cash before they can use it. As a result, unlike gluttons and egoists, businessmen save rather than spend a large portion of their riches.
They bravely risk instead of stockpiling what they have accumulated, giving stability for others who get employed as a consequence.
Throw away the idea of the selfish capitalist and develop this form of charity to attain the third American Dream.
Furthermore, today's safest employment is for "people persons." Managers, sales representatives, physical therapists, fund-raisers, preachers, clergymen, and counselors are among the jobs robots will not replace anytime soon.
And the finest and simplest way to express interest and care for others is to be intrigued by and worried about others (bring out your marker for this).
No One Is an Island: Collaboration in a Hyper-Connected Age
James Surowiecki explains how a huge, mixed crowd of amateurs can guess the number of jellybeans in a container or answer questions from Who Wants to Be a Millionaire better than a tiny, homogeneous group of experts.
He discusses it in his 2005 book, The Wisdom of Crowds. Ask enough people how many beans are in a container and calculate the average guesstimate. It will be uncannily close to the right answer!
Google is, without a doubt, the best algorithm for leveraging the knowledge of crowds.
Page devised a wonderful approach. But what if he had only a few people and a small part of the Internet? In that parallel reality, the network effect would have had no impact on Google's search engines.
This refers to how various items, such as beehives, public transportation, and insurance policies may improve as the users grow in number.
People have always collaborated, for sure. Even great brains, particularly tremendous geniuses like Isaac Newton, were reliant on the efforts of others. To create his laws of planetary motion, Newton relies on Johannes Kepler's findings. "If I have seen farther than others, it is by standing on the shoulders of giants," he told a rival, Robert Hooke, a natural scientist.
Airbnb and other similar businesses provide what Uber and Lyft do for automobiles: connect people with space to rent.
Four things become possible thanks to these peer-to-peer networks.
- For starters, they enable underutilized, costly "durable items" to become wealth-generating assets for their owners.
- Second, these platforms establish a "trust protocol " or "digital trust infrastructure." A small percentage of us would like to rent out our homes for the weekend or travel across town with a total stranger. Especially without a hotel or rental car company's tight regulations, even if we could find random people willing to do so. Thanks to peer-to-peer networks, it now happens millions of times every day across the country.
- Third, these platforms enable hundreds or even thousands of micro-businesses to operate.
- Fourth, there are few barriers to entry with these technologies.
Many of today's most popular goods flourish precisely because they provide new methods for regular people to exchange and interact creatively. The platforms that transform customers into contributors tend to win big rewards.
The third American Dream—the sharing and creation of value itself—belongs to the collaborators for about the same reason. Collaboration is linked to the characteristics of modesty, rationality, and compassion as a virtue.
For example, our old acquaintance Ayn Rand portrayed the entrepreneur as a lonely entity who seeks to advance without regard for the concerns of others. She reflected the American myth of the staunch libertarian in this way. That's exactly what it is: a myth.
Families, unlike lone cowboys, made up the majority of individuals who traveled west. Even the cowboys were part of teams.
Be Fruitful: Creative Freedom in an Age of Ever More Information
In a nutshell, this is why robots will never completely replace human work. We cherish the fact that some items are handcrafted, that the supply is limited, and that each one is unique.
As manpower has grown more scarce, it has become an output rather than an input for some things. The proof is that we are willing to pay more for variable and handcrafted goods than for standardized and machine-made goods.
Such items will continue to exist in the future. They'll have a far larger market. Those who can find methods to add value in these areas will be successful.
Etsy, by whatever name, demonstrates how technology can substantially grow the market for handcrafted and artisanal items rather than kill it.
Amy Larocca notes in New York Magazine, "Some people like to make things, other people like to buy things that others have made, and now, thanks to the internet, these people could be brought seamlessly together..."
Meet Ms. Global, Mr. Local. Etsy connects small craftsmen to a worldwide market (1.6 million vendors and 24 million consumers in 2016). It also essentially eliminates their start-up costs. Etsy receives 20 cents for each item posted, plus a 3.5% share on all sales.
A mass-produced traditional male suit will be substantially less expensive than a custom suit with every swath suited to one guy's body for the same reason.
The trade-off would be that the ordinary man's factory-made suits will be proportioned to the market's congested middle section. And not its ever-narrowing long tails. The center of the curve will be standardized, while the tails will become longer.
However, according to what we now know, two safe bets are:
- There will be considerably more small-scale production on the periphery for an increasing number of specialized industries.
- The distance between innovator and entrepreneur will narrow. This will enable many more people in far more areas to manufacture physical items for use, sale, and enjoyment, in addition to digital information.
Our new economy and the third American Dream are designed to benefit people who practice creative freedom. True freedom necessitates the virtue of self-mastery.
They will only be fully free to play the piano with such self-disciplined mental and physical limitations. Only then would they be able to express themselves freely.
Considering the struggles ahead—which we'll go over in-depth in the following section—we have considerably more options for earning a livelihood than we could ever investigate in a lifetime.
You may now study practically any topic from the comfort of your own home. And there has never been a time when there are so many different things to learn now.
Tomorrow, the following day, and then the next day, there will be more to accomplish and learn.
Put bluntly, you must be prepared to confine yourself in the ideal ways—ways that allow you to generate new value for yourself and others. That's why creative freedom is so valuable when it harnesses boldness, antifragility, and ingenuity.
Part III: How to Pursue Happiness
Blessed Be: Happiness and How to Pursue It
The American Dream is all about ordinary people having a better life. We always want to be happy, but we also recognize that happiness cannot be taken for granted.
What exactly is this quest for happiness? Is this a positive thing?
Ruth Whippman, a British writer, relocated to California a few years ago after her husband accepted a position with a software start-up.
After a few months, she concluded that, unlike Britons, Americans are preoccupied with happiness—and it's causing us to be sad. If you obsess about your joy far too much, it might backfire and make you nervous instead.
There have even been a few studies conducted by Cal Berkeley psychologists that support this.
"The higher the respondents rated happiness as a distinct personal ambition," Whippman says. "The less happy they were in their lives generally and the more likely they were to experience symptoms of dissatisfaction and even depression."
The Declaration of Independence does not even imply a right to happiness. It's a right intended to be protected by the American founders. It does not logically follow that concentrating on one's satisfaction is the best way to achieve it.
That has never been the meaning of the American Dream. That Dream has always been centered on the notion that there is value in seeking, striving for, and attaining something you can be proud of. Not weekend workshops on How to Release Your Inner Happy Clown, but the result of hard labor and virtue.
According to economist and happiness specialist Arthur Brooks, the term "happiness" can refer to three different concepts:
- happy sensations that come and go
- on a scale of happiness
- life's moral character
In his book, The Happiness Project, researcher and psychologist Arthur Brooks identify three predictors of happiness: "genes, events, and values."
Certain people have quite a higher happiness baseline than others, just as some begin with more than their due proportion of compassion.
According to studies done by University of Minnesota psychologists on identical twins between 1936 and 1955, we get up to 48% of our happiness from our parents.
Then there's the fact that Brooks's other two predictors of happiness—"events and values"—include certain uncontrollable factors, such as our birth and upbringing circumstances.
Even among the situations we control, some are like simple carbohydrates, such as winning a match or purchasing a new automobile. They just provide us with brief flashes of enjoyment before fading away.
Work, the final factor mentioned by Brooks, stands out among the others. Far beyond the fact that it allows us to produce money, we're aren't used to thinking of our work as a source of enjoyment.
Although money may not purchase happiness, it does correlate with happiness at lower income levels. Unemployment stinks at the bottom of the income scale.
"Abstracted from money," says Brooks, "joblessness seems to increase the rates of divorce and suicide, and the severity of the disease."
Do you have all of your fundamental requirements met? If that's the case, fantastic. This is critical for both happiness and merely surviving. But it's not the whole deal.
We also need to satisfy the demands of others to be genuinely happy. We must add value to the equation. To thrive in our new economy, we must develop important virtues. These values are most likely to make us happy, as they are the most important.
Fight the Good Fight: Overcoming Obstacles to the Third American Dream
The primary impediments to the third American Dream will thus be anything that stifles fresh job creation and the qualities that enable us to prosper.
Red tape is one of these impediments. Attempts to fund the American Dream that generates detrimental incentives are also included. We must overcome these obstacles if the future American Dream is universally shared.
Progressive leaders and the press claimed for over a century that if businesses are left to their own devices, they'll deceive, rob, cheat and swindle their consumers and the general public. They frequently say that the only solution is increased regulation. As a result, the regulatory state has grown steadily over the previous century.
Since 1975, the number of pages in the Code of Federal Regulations has grown from 65,000 to 180,000.
What are the key takeaways? Suppose we want many small, budding businesses, some of which will create many new jobs. In that case, we need soil that isn't so clogged with a regulatory brush where only the large established trees can thrive.
Avoiding Bad Programs Like UBI
Furthermore, most proponents of a UBI wish to supplement rather than replace the present system.
Martin Ford, for example, appears to have authored Rise of the Robots to argue just that point. You can skip to the following part if you're already persuaded that a UBI is a horrible idea and don't care about the facts.
But, because I'm certain that a universal basic income will weaken the values we most need, I'd like to explain why we should avoid it at all costs.
What if a program like this had existed in the eighteenth century when farming was no longer a possible option for most Americans?
Certainly, the ordinary Midwest farmer had considerably fewer alternatives than the average American has now when practically any knowledge can be found for free on the Internet. Several ex-farmers would have been content to be paid to do nothing. How many of their descendants would now be state-administered wards?
Yeah, but does technology make us dumber in the long run? I seriously doubt it.
Clive Thompson's book Smarter Than You Think documents the various ways computers and the Internet may improve our brains and abilities—if we utilize them correctly.
For example, they make education accessible to everyone. They can assist us in adjusting to new work settings more rapidly.
Consider the fast chess players who use chess programs: they can teach us unique abilities.
Working with network technology acclimates us to working with people we may have never met in person. Because of their exposure to editing software, many people gain highly tuned aural and visual judgment.