Apps Uber Alles

Let's review. WhatsApp had about 50 bodies and sold for $3 billion, and likely in the end, more. Uber is valued at $18 billion, and has, according to reports, 550 bodies right now. Given how much longer it's been around, I'd assert they're both in the same ballpark vis-a-vis development and business plan.

Both those of the Left and Right are drinking from the same bucket of Flavor Aid: education and tech will solve the employment problem. Not. The balance of this missive explains why.

In the 19th century, the USofA imported (not always willingly on their part) lots of folks from other countries and continents to, mostly, support agriculture and construction projects. Africans raising rice and cotton, Chinese building railroads, and Irish canals. And so on.

Come the early 20th century, and manufacturing enters the assembly line (mass production) era. There are multiple waves of displaced agricultural workers going to cities to fill said factories. Displaced by machines coming out of cities, mostly Up North. The skill level of assembly line work is, arguably, lower than that needed to farm successfully. There was, in any case, sufficient demand to employ both the displaced and further immigrations from Europe (Irish, then Italian). Labor productivity was still low, as automation was minimal. Capital generally replaced craftsmanship, not low skill assembly labor.

There is no evidence that the "tech economy" is on pace to absorb displaced workers this time. Productive labor has been sent to autocratic countries wherever they can be found. Labor productivity (time per widget), due to increasingly sophisticated machinery, continues to increase. Kind of like dark energy exploding the universe until no celestial object can see any other. That's some billions of years away, thankfully.

As WhatsApp and Uber make clear, a bit of code goes a long way. It's nowhere near comparable to 19th and 20th century farm workers taking jobs on the line at Ford, GM, RCA. Not even close. To make matters yet worse, from a macro survival perspective, so long as the USPTO and courts allow anyone to patent a ham sandwich recipe, there will be no competition within a newly defined market. But, given the leverage displayed by WhatsApp and Uber, we'll need literally millions such newly minted companies to absorb all those highly educated techies.

Guess where most cybercrime comes from? Yeah, you guessed it: countries with lots of idle highly educated techies. Be careful what you wish for.