This is the second part of the series “AI, Blockchain and the Decentralization of Work”. In the original article I explored the emergence of the ‘pretend job’ as a consequence of the decentralization and eventual demonetization of human work.
Organizational structures are a inevitable consequence of the evolution of complex systems. Groups of participants decide to cooperate to ensure the continued existence (or survival) of members of the group. Groups that are successful will be more prevalent because they cooperation provides the an advantage over competitors.
Organizations however have a intrinsic downside in that members relinquish autonomy in exchange for membership. At the level of human awareness, the balance between individual autonomy and the benefits of membership can be a constant balancing act. Furthermore, organizations lead to internal politics simply as a consequence of the fact that members are individuals that are autonomous. Every member has a the very least a different learning strategy than other members. Therefore, there is a game that exists of deciding how members steer the organization.
Organizations therefore are most stable if there is less autonomy among its members (and of course that it is steered in an optimal way). Corporations (or Arificial Pershonhoods) are typically structured hierarchically in its decision making. The higher up one is in the hierarchy, the more influence one has in the direction of the company.
In the modern economy, there is a massive move towards the decentralization of work. Platformization specifically is a business and organizational model that outsources its production to decentralized participants. Example of these platforms are Youtube, Uber, AirBnB and eBay. The participants are not employees, but participants who participate in the marketplace that is created by the platform. Platforms outsource production in a decentralized way and all coordination is kept to a centralized core.
The concern about work in either a traditional corporation or a platform based corporation is whether the individuals that are responsible for production get their fair share of the profits over the individuals who are responsible for the coordination. Organization that are larger tend to be the ones that are more profitable. Therefore, the average profits are larger for those who participate in a larger organization. Larger organizations however require more people responsible for coordination.
The evolution of all organization will gravitate towards the creation of a core of coordinators that are independent of the production. How does this core coordinate? Who is steering the direction of the coordinators? Depending on existing immutable governance, it will all devolve into a competitive game. It devolves into a game of influence. A game of influence among humans has as its currency the number of humans that follow another human. More specifically, the number of humans that are not autonomous but follow a leader. A leaders influence is measured in the size of his fiefdom. This is where bullsh*t jobs come from. As the administrative component of an organization grows, the politics grows and the currency of politics is the number of non-autonomous follows in a sub-organization. Bullsh*t jobs exists as a proxy of influence within administrative organizations. Your job is BS if its only purpose is to serve as a token or currency of someone else’s influence.
There are no fiefdoms in the decentralized group of people responsible for production (unless of course this group decides to unionize, but that’s not decentralized).
In what context human production valued over human coordination? Only when an individual has his own monopoly of what he can produce and that monopoly is in demand. Decentralized productions however implies that an individual’s production has been commoditized. This actually is not true for certain marketplaces like AirBnB where there is a natural monopoly that one has in having a unique home at a unique location. In general, even in commoditized market places, an individual has some kind of value proposition that permits higher profitability. For example, an Uber driver can gain higher profits by situating himself in a high demand location. This requires a competitive advantage in situational awareness.
Harold Jarache has a compelling framework as to how work is evolving in the emerging network economy. As work is being increasingly automated, compensation for human work is shifting towards work that requires greater curiosity, creativity and empathy. That is, if you are part of decentralized production, then profitability will depend on individual uniqueness and value.
Our current network economy is based on platforms where there is a relationship between a large organization responsible for coordination and many smaller parties responsible for production. Harold Jarche has this graphic that expresses the relationship of existing organizations and the individual who is participates in a networked marketplace:
The conventional organization has a high level of efficiency due to economies of scale. These organization will have highly automated environments such as in agriculture or in manufacturing. Organizations that perform production at scale can do so at a cost per item far lower than any individual artisan can do because there are few customizations per item. Jarche refers to this kind of efficiency as process efficiency.
In the domain where individual production can thrive is where customization is demanded and individuals can charge more for unique products or services. This unfortunately is where with the advent of artificial intelligence, with its ability to scale cognitive processes, the advantage of the individual to provide price competitive customization is dwindling away. An an example, a famous actor value is attached to his individual appearance. If there are scenes of great risk that in a movie where an actors appearance can be hidden, then an actor is substituted by a stunt double. With artificial intelligence, rendering an actors appearance becomes possible. Thus, an actors value in the future will be in the rights to his appearance and not necessarily his acting. Individual monopolies can be baked into laws of commerce through property rights. It is property rights that lead to sustainable wealth and individual production is just a means to those rights.
Therefore, in the new networked AI economy of decentralized work, the only sustainable scenario for individuals is access to property rights. That is ownership of tokens or currency. This is in contrast to BS jobs where an individual is the token. This is why blockchain technology, with its primary utility of tracking ownership rights, is critically important to the future sustainability and profitability of decentralized work.