Buggy Whip Workers, Unite!
Imagine that in 1890 you left school at age 11 to begin an apprenticeship making buggy whips at the H. M. Van Deusen Whip Company in Westfield Massachusetts. You worked 10-hour days, six days a week and made $3 per week. You worked hard, became skilled in your trade, and after four years you became a buggy whip maker and were paid $12 a week.
By the time you’re 25 you’re married with children. But you notice something is happening. One-by-one the 42 whip-making businesses in Westfield close. Instead of horses pulling buggies those new-fangled automobiles are everywhere. However, you believe they’re just for the rich and keep making your leather whips.
The Van Deusen Whip Company’s business declines and when you hear about Henry Ford’s company paying workers $5 day you move your family to Dearborn Michigan to work at the Ford Motor Company’s Highland Park factory making Model T Fords.
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A version of this story has been told tens of thousands of times. Businesses and industries are born, thrive and die as new technologies arise in their place.
Over the last two hundred years, our economy and society have been shocked by business and scientific improvements.
The advent of steam power and interchangeable parts in the early 1800s began the shift of workers from farms to factories. Workers went from being manual laborers to those having skills. The invention of the cotton gin made cotton more accessible to textile manufacturing (unfortunately in the south it made slavery more important).
The invention of the telegraph, coupled with the proliferation of railroads, created many new jobs in the areas they were located and also created whole new categories of jobs in transportation and communications.
The mechanization of farming, led by McCormick, John Deere and others, decreased the amount of labor required for farming, allowing workers to take jobs in steel mills and assembly lines that were just then becoming a reality.
Electrification brought whole new industries: electric tools and appliances. Electric lighting extended work hours.
The advent of computers in the 1940s created whole new industries and transformed existing ones. IBM went from selling typewriters and cash registers to mainframe computers. Jobs as computer technicians and programmers were created where none had existed.
To give you an idea of how the workforce has changed, I asked my friend Grok to make me a chart.
As you can see, over 200+ years the composition of our workforce has changed dramatically. In fact, in 1825 there were zero technical/professional workers.
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One of the fears of the advent of AI is that jobs will be lost. Probably. At the same time, jobs that we can’t even imagine will be created. 50 years ago, would a taxi driver believe that any person with a car could become a taxi driver simply by using something called Uber? Would the coffee shop down the street get a big chunk of their business from Door Dash?
In economics there are disciplines of the macro and micro. Macroeconomics is about the economy as a whole. But even in a great economy you can lose your job (that’s the micro). Often the macro and the micro are at odds with one another.
It’s that way with the creative destruction that changes in technology can bring to us. With AI, some jobs will be lost forever. Will newspapers need editors? Writers? Will newspapers even exist? Will fast food restaurants all start using the Flippy Fry Station for burgers and fries? Will humanoid robots start performing tedious assembly line jobs?
Even if many jobs and companies don’t survive the move to AI, there will still be some that continue, just in limited numbers.
BTW, you can still get a really beautiful buggy whip today at the Westfield Whip Manufacturing Company.