The Plight of the Parasites

Guest Post by The Zman

Probably since the dawn of settled society, there have been people who found some way to live off the labor of others. Even hunter-gatherer populations had some freeloading, as some members of the group would be less productive than others. Settled society made freeloading a bit easier. Settled life required rules, which required enforcement and that meant government. Even the most streamlined administrations had extras and hangers-on, who figured out how to game the system so they could get paid to do nothing.

In modern America, government is a form of workfare for the most part. There are roughly 2.8 million Federal workers, not including uniformed personnel. When you add in state and local government, there are roughly 22 million people employed by government in the United States. The labor force is roughly 150 million so that means 15% of the nation’s workers are employed by government. Of course, literally no one knows the size of the contract workforce. The best guess is about 5 million, but it could be much more.

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Then you get into the vendor side of things. The Imperial Capital is ringed by companies that do nothing but serve the government. It is not uncommon to run into firms that have done business with no one other than government. Some of these firms exist solely to fulfill diversity clauses in government contracts. There are firms around DC that don’t actually do real work. They just provide the right amount of color to the vendor pool as subcontractors in a contract. How many of these exist is an unknown.

The fact is, about a third of the people working today are in jobs that exist because of government. The fact that blacks are over represented in these fields is well known and deliberate. In cities across America, a city job has been a form of workfare and patronage for generations. If the government was ever pared back to just what is needed, the essential services like police and road maintenance, tens of millions would be thrown out of work and we would have riots in our major cities. A government job is riot insurance.

The thing is, even without automation, most of these jobs are pointless. There’s no getting around the fact that we support millions of freeloaders this way. The cost of the job is not the only cost. There’s the nuisance factor and the damage caused by battalions of government bureaucrats meddling in the productive economy. Then there is the layer of senior bureaucrats that sit atop the workforce, dreaming up ways to game the system so the managerial class can skim from the economy. This is very expensive riot insurance.

Of course, this leads to the basic question of where is the tipping point? At what point does it become prohibitive to carry all of these freeloaders? That’s been a libertarian topic for generations. A bigger question though is what happens when the essential point of government becomes less important? In a town with no crime, for example, there’s no need for cops. If renewing a driving license can be done at a kiosk or on-line, what’s the point of having a department of motor vehicles fully staffed with bureaucrats?

Smart people like to wring their hands in public about the robot revolution eliminating jobs for the Dirt People, but there’s a similar force working on the Cloud People and their army of soldiers known as the bureaucracy. It’s not just robots taking the jobs of functionaries at the Post Office either. It’s changes in society that are eliminating the need for constant supervision by our rulers. Crime is the most obvious example. For instance, car theft has collapsed as a criminal pastime due to technology. The same thing is happening with home security systems that make burglary a high risk, low reward occupation.

It is not just the government end of the managerial state that will come under extreme pressure from the changes wrought by technology. Look at the media. CNN draws an average 2 million viewers for its top shows. They get a little over a buck per month from every cable household, even though 99% do not watch CNN. Cord cutting is blowing up this model, which means technology is threatening 95% of CNN’s revenue base. This is the crisis facing every cable TV channel. When the damn breaks and those revenues disappear, it means jobs for media people disappear with them.

Just look at the pop music business. Technology obliterated their business model. The mp3 revolution killed the album business and now less than half the number of people are employed in the music business compared to twenty years ago. Not only that, there’s less music being produced. It turns out that all those extra people in the music business were busying themselves making records that no one bought. In other words, the changes that come with technology seem to be closing off the points of entry for freeloaders.

The thing is though, the Dirt People have been adjusting to automation for decades. The dreaded private sector is already very automated and efficient as anyone with a job can attest. It is not unusual to walk into an office of an old company and see a lot of empty desks. The reason is they used to have many more people but automation eliminated the need. The real impact for Dirt People has been the slowing of job growth, not so much the elimination of existing jobs.

The world of the Cloud People, on the other hand, has always been littered with freeloaders. In fact, it is a world where most are freeloaders, which is why they invest so heavily in the self-actualizing part of the career. In the Cloud, you are not defined by your work product, so much as by your titles within your field. A “senior correspondent” for CNN does the same thing as a correspondent, but the “senior” modifier to his title confers extra status. Title are coveted in the Cloud because hardly anyone does real work so titles are how they keep score.

There’s a lot of extra that can be cut even before technology knocks the legs out from under them. This is why newspapers went through round after round of layoffs in the last 20 years. Long before technology undermined them, they suffered from what all monopolies suffer, a lack of cost control. As a result, there was much that could be cut, but a resistance to doing it. When the red ink spread, we saw wave after wave of cuts and downsizing. The same fate awaits many parts of the Cloud economy.

Much of the Cloud infrastructure has value to the people in charge so they will seek to maintain much of it. Billionaires buying dead newspapers being an obvious example. Other parts of the system will she sloughed off, like the vast army of vendors and contractors that work as a shadow government. Just as technology made private enterprise more efficient and more ruthless, the world of the Cloud people is about to get smaller and much more ruthless, with one another at first and then with the rest of us.