I don’t know if I’ve heard anyone say this and I am not quite sure what I think about it myself, but one way to view the economy in the Information Age is that the returns to specialization are falling.
So, those who like such things can go all the way back to Adam Smiths pin factory and think about all the tasks involved in making pins and how each person could become more suited to that task and learn the ins and outs of it.
However, in the information age I can in many cases write a program to repeatedly perform each of these tasks and record every single step that it makes for later review by me. The individualized skill and knowledge is not so important because it can all be dumped into a database.
What really matters is someone who gets pins. Not the various steps involved in making pins but the concept of the whole pin. What makes a good pin a good pin. How do pins fit into the entire global market. What the next big thing in pins.
This individual will be able to outline a pin vision that she or just a few programmers can easily implement. One could say this is the story of Facebook or Twitter. Really good ideas and just a few people needed to implement them.
However, as IT progresses and machines can do more things it could be the story of the economy generally.
In contrast to The Great Stagnation, I would call this The Rise of Generalist or perhaps to be consistent The Great Generalization.
Even if you stop and think for a minute about all of the things that your computer or now even your phone can do, are you now wielding the most generalized tool ever conceived?
18 comments
Comments feed for this article
Friday ~ September 16th, 2011 at 10:31 am
Johnnie Linn
We are in a golden age in regard to the availability of economic information–for example, what we can obtain from the Federal Reserve Economic Database (FRED). Formerly, we would have had to go to a federal repository at a major library and photocopy information by hand and analyze it by hand. In economics, which is not capital intensive, we should no longer expect to see centers of research in economics departments at great universities but among collections of scholars linked by the Internet.
Friday ~ September 16th, 2011 at 11:32 am
wrigglefreeabc
being a generalist (i am one, sort of) is difficult because you have to be extremely good at more than one thing, and that goes against the compartmentalization of knowledge.
Friday ~ September 16th, 2011 at 11:47 am
Curt Doolittle
I’ve witten a bit on this topic before, and became concerned with the conclusions, not comforted by them. That is, that prosperity comes from differences, and was created by the division of labor. If returns decrease on specialization then to some degree, everyone must become poorer, must they not? Or at least, must that not lead to a great stagnation from a decline in relative differences, and therefore a decline in opportunities?
If we were all miraculously made equal in age, ability, resources and geography tomorrow, we would soon starve to death.
We are not wealthier than cave men, we simply produce more with our time, and therefore everything is infinitely cheaper.
Property, money and prices are technologies needed for information, incentives and planning. Without differences there would be nothing we could plan, and without status there would be no desire to.
The challenge created by the adaptability of the human mind is that if we pursue a purely hedonistic and consumptive economic strategy, (which is easy to do in the short run) and because people are easily attracted by consumption and cheap stimulation, and all the while give up learning how to find pleasure in restraint (capitalization) and innovation (specialization). It is simply easier to be attracted by cheap stimuli. But the fact is, we adapt to that stimuli. The consumptive model will universally lead to stagnation, and relative decline. It alway has. Look at all thirty odd civilizations in history. We only live in the garden of eden because we have made it through capitalization.
Stagnation caused by consumption rather than invention is something which can only be solved by totalitarianism. Which is suspect is how you would prefer the world run instead.
Friday ~ September 16th, 2011 at 3:35 pm
wrigglefreeabc
no, because ability to span specialization is itself a specialization, and a rare one at that.
Friday ~ September 16th, 2011 at 12:55 pm
bdbd
For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic. This fixation of social activity, this consolidation of what we ourselves produce into an objective power above us, growing out of our control, thwarting our expectations, bringing to naught our calculations, is one of the chief factors in historical development up till now.
— Karl Marx, The German Ideology (1845)
Friday ~ September 16th, 2011 at 1:17 pm
Chap
You’d really dig “A Whole New Mind” by Dan Pink.
He tosses around similar conclussions.
Friday ~ September 16th, 2011 at 1:28 pm
Jason Bradfield
@Doolittle:
“That is, that prosperity comes from differences, and was created by the division of labor. ”
I don’t think this holds true if what the author is saying is also true, viz. gains to specialization are declining.
Of course, I don’t really think gains to specialization are declining. What’s going on is that the gains to certain kinds of specialization are rapidly declining due to technological innovation and globalization. The gains from older forms of specialization are declining.
“Getting pins” is, in fact, a form of specialization, it’s just a specialized skill set that previously didn’t return as much as having other sets of specialized skills. Now it is returning a lot more, which means those who have the “getting pins” skill set can now command premium compensation and those who have the old skill sets are left wondering why the “New Economy” doesn’t value their skills.
I believe this explains a big chunk of the unemployment problem. The other part is explained by people with skills that were “bubble-specific”, e.g. construction labor, mortgage brokers, etc.
Friday ~ September 16th, 2011 at 2:41 pm
Steve the hyena
This is correct. If you spend enough time on Hacker News, you’ll notice that the people who “get” something tend to be the people most deeply embedded in it as both consumers and producers. My general anti-Facebook argument is that Zuckerberg doesn’t “get” social media since no one “gets” social media yet; it’s too new.
Friday ~ September 16th, 2011 at 2:59 pm
Roland Stephen
Excellent post and discussion. I always used to think of money as a “meta” tool–it can get you any other tool you might need. Its clear that a smart phone is even more “meta” (if you will excuse these expression). You can use it to get everything money can get, and money itself!
The discussion on generalists catches the important elements–Single specialists are in decline. “generalists” who succeed don’t just know a little about a lot, they can connect islands of deep knowledge into a bigger picture. Steve Jobs’ gift, or at least among his gifts, is an ability to “listen” to the technology community and discern deep tropes where others hear only noise..
Friday ~ September 16th, 2011 at 3:29 pm
lfvoss
No, I don’t think this is fundamentally different from the past. The generalist, the person who gets the big picture, was always at the top and in the best position. It’s just that a lot more work is becoming automated, so the specialists below him are being replaced by computers.
Friday ~ September 16th, 2011 at 3:39 pm
Kevin Evans (@KevinWEv)
Buckminster Fuller echoes your sentiment here:
“We have learned in biology and anthropology that extinction has been the consequence of overspecialization and our specialization is leading to extinction of the species. The only thing humans need is the ability to think. Unfortunately they think mostly about how to make a living and get along in the system rather than about what the universe is trying to tell us.”
Great Insight
Friday ~ September 16th, 2011 at 5:52 pm
Benny Lava
I’m sorry but I don’t see it that way. Instead all evidence points towards more specialists. Whereas in Adam Smith’s pin shop each employee was only slightly skilled, today’s work force is highly trained and specialized. Someone generally bright could work in the pin shop and do every job with minimal training. Not so today. You need years of job training or a degree from a school to be able to work as a CNC press operator or the modern equivalent. And that isn’t counting the specialization needed to design the machinery in a modern factory. The design of the pin factory was crude and could be performed by a generally smart person. The design of a modern factory takes an army of specialists.
Saturday ~ September 17th, 2011 at 10:56 am
The Rise of the Generalist | zmetro.com
[...] Karl Smith: I don’t know if I’ve heard anyone say this and I am not quite sure what I think about it myself, but one way to view the economy in the Information Age is that the returns to specialization are falling. [...]
Monday ~ September 19th, 2011 at 9:47 am
Matthew Butler (@_mbutler)
There are already far too many “idea people” who don’t understand just how difficult it is to build IT products.
“This individual will be able to outline a pin vision that she or just a few programmers can easily implement.”
That means it takes the same or more people to implement an idea as it does to conceive of the idea. Anyone who works as a specialist in IT knows how frustrating it is to work with people who think of themselves as “big picture” people with very little technical skill to actually do the work themselves. Coming up with ideas is easy. Implementing is much harder.
What we need to do is let our specialists have a little breathing room to be creative and brainstorm.
Tuesday ~ September 20th, 2011 at 10:29 am
Anonymous At Work
Two comments. First, since information technology has increased worker productivity, businesses are hiring 1 generalist with good IT support to do the work of 2 specialists without the IT support. Second, businesses are finding it cheaper to cross-train Specialist A in the duties of Specialist B than it is to hire or replace Specialist B. If/when unemployment drops back to 5% or below, I suspect that the pendulum will swing back the other way to some degree.
Saturday ~ September 24th, 2011 at 4:15 am
Bonnes lectures de la semaine #3 | Tête de Quenelle !
[...] The Rise of the Generalist (Modeled Behavior) [...]
Tuesday ~ October 25th, 2011 at 6:42 am
dina manzo
Tremendous blog post..
Monday ~ November 7th, 2011 at 11:55 pm
Links for 2011-09-16 « Den's Random Ramblings of Rude Reality
[...] The Rise of the Generalist on Modeled [...]