Originally published on 2 November 2018.
Get born. Go to school. Study hard. Get a good job. Marry. Have kids. Work for 45 years. Retire. Die.
This is the routine life of a “successful” person.
The reason I’ve put successful in quotation marks is because, in this instance, I’m measuring success solely in terms of wealth and prestige – as most of society does.
This distinction is important. You’ll see why as we go on.
In order to live this successful life, you must choose an appropriate subject to study and an appropriate career path to follow.
The most well-regarded and highest paying of these are in law and finance.
A career in these disciplines will bring you respect, wealth, and in many cases, power.
Today, and for most of humanity’s history, your career has defined who you are as a person. Perhaps more than anything else.
Surnames explaining people’s professions became popular in the Middle Ages and have stuck with us ever since.
Smith, Clark, Cooper, Dyer, Farmer, Page, Taylor, Fisher, Glover, Gardener, Hunt, Judge, Potter… the list goes on and on.
Most families with occupational surnames now have nothing to do with those careers. But the moniker sticks. Our careers, and even the careers of our ancestors, are defining.
And many, if not most, in law and finance great pride in their careers.
And why shouldn’t they? They studied hard, they work long hours and they earn well.
But what most people in these occupations don’t realise is their careers are next in line for the chop.
This is perhaps the last generation where a career in law or finance will all but guarantee a successful life.
The reason why comes as no surprise. Automation.
What happens when automation hits the high earners?
Automaton has been replacing jobs for centuries. However, up until now it only affected “menial” workers.
It never touched or endangered the lives and legacies of the prestigious professions.
It was simply not something a lawyer, fund manager or investment banker needed to concern themselves with.
That time has come to an end.
Within the next few decades, all those years of education, all those hours in the office, all that pursuit of prestige will be of little consequence.
Automation will simply supersede these people, just as it superseded smiths, coopers, thatchers and factory workers.
In finance, high-frequency traders no longer need to think. They simply need the fastest internet connections and latest algorithms. The number of people needed to keep these algorithms going is absolutely minimal.
Adding to this, the number of people investing in active funds has massively declined over the last few years. Investors now favour a technology-led passive investing approach. Fund managers’ days are numbered.
And in law, AI is already better than humans.
From Tech Spot:
A recent study by LawGeex pitted its machine-learning AI against 20 human lawyers to see how it would fair going over contract law. Each lawyer and the LawGeex AI were given five nondisclosure agreements to review for risks. The humans were given four hours to study the contracts. The results were pretty remarkable.
The lawyers took an average of 92 minutes to complete the task and achieved a mean accuracy level of 85 percent. LawGeex took only 26 seconds to review all five contracts and was 94-percent accurate. The AI tied with the highest scoring lawyer in the group in terms of accuracy.
Twenty-six seconds of work for an AI, vs four hours for a human. And the AI was far more accurate to boot.
Altman Weil’s 2017 Law Firms in Transition Survey, which questioned 386 leading US law firms, revealed:
49% of firms are currently using technology to replace human resources with the aim of improving efficiency. Many more (84%) believe this will be a permanent trend in the profession.
None of this is really news to anyone. And most people settled in these professions today now likely not have to change the course of their careers.
But for people just entering, and for those currently still in education, it’s an entirely different story.
Pursuit of these prestigious career paths will not lead to success. It may even lead to unemployment – the antithesis of a “successful” life.
Only this time it will be different.
When a “good job” is no good any more
By now you’ve probably noticed I have put a lot of emphasis on prestige. That’s because none of the jobs taken by automation in the last century or so were prestigious ones.
They were mainly “menial” jobs done by the working class.
My question today is what happens when powerful, prestigious people start being replaced by automation?
What happens when a routine life of success becomes unsuccessful?
It’s fair to say the majority of people following these career paths already have money behind them. But that won’t last forever.
As AI and automation really gets going over the next decade or so, It will be those traditionally “good” jobs that are replaced.
Creative and artistic careers are the ones which automation will have the least effect on.
You wouldn’t want to watch a play acted out by robots. You wouldn’t want to watch an automated orchestra. And you wouldn’t value an artwork painted by an AI.
Of course, robot plays and AI artworks and computer-generated symphonies will draw attention at first. But once their newness wears off, their appeal will fade. As is the nature of novelty.
The safest careers today are the most artistic and creative ones.
You’ll notice that these are the exact career paths many “successful” people tend to frown upon.
Don’t go out and pursue your creative endeavours unless you have a steady career in law or finance to fall back on, young people are told.
Now it turns out those who went the other way, those who studied art, acting, sports science or music – “mickey mouse” subjects, as they are often called – may be the ones with the safest jobs.
Those that followed their “calling” may have in fact made the smart choice. Those that followed the path of power and prestige may end up with neither.
Of course, people who pursue finance and law tend to have money behind them. So this trend may take a while to play out. But play out it will.
When even these most prestigious of jobs have been eaten by automation, what will be left?
Personally, I believe the only viable solution to ever increasing automation is universal basic income (UBI).
And I am far from the only one, as I have written about many times before. So I won’t go into it today. But you can read my most recent UBI article here to find out what it’s all about.
If basic needs really can one day be covered by UBI, we will see a whole lot fewer lawyers, bankers and fund managers, and a whole lot more artists, musicians and craftsmen.
Would that really be such a bad thing?
Let me know your thoughts on this at: email@example.com.
I’ll publish a selection in my next “letters” issue. But more than that, I am interested to hear your opinions.
Until next time,
Editor, Exponential Investor