Whatever tools may be at the disposal of the Federal Reserve and the US federal government will not be able to undo the damage to reputation and relationships upon which so much commerce bases its functions on day-to-day. As much as humans fancy themselves civilized and sophisticated, as a whole, societies still have serious trust issues internally and therefore externally. That’s why the concept of “credit” exists worldwide for the most part and is a component of trade, of alliances, and of good will.

By first taking a chainsaw to the global relationships of a worldview nature — most easily seen in the conflict of the Russian invasion of Ukraine and the rightful concern expressed by Western interests…credit has been damaged. By next taking a chainsaw to the global trade relationships which have functioned for decades and, while problematic, have enabled commerce to proceed at a reasonable level…credit has been damaged. By exploiting internal divisiveness of the political spectrum and the wealth inequality where the investor class seemingly has unchecked rule over hundreds of millions of disenfranchised people in the United States…the nation can no longer trust itself.

Since 1949, job growth under Democratic presidencies has been more than twice as large as that during Republican administrations (2.47% to 1.07%). Excluding public sector jobs, the advantage is even greater (2.55% to 0.97%). Other key averages reveal a similar distinction during this period: Real business investment growth advanced 6.58% under Democratic presidents and 2.98% under their Republican counterparts; real personal income — excluding government transfers — increased 2.66% and real economic growth per capita (net domestic product) advanced 2.6% under Democratic chief executives, but only by 1.41% and 1.28%, respectively, under Republican leaders. Inflation has also been much more modest under Democratic presidents (2.91% compared to 3.28% under their Republican counterparts), with an even more decided advantage when volatile energy and food markets are excluded (2.87% compared to 3.59%).

Of the 11 U.S. recessions we’ve endured over the past 75 years, 10 began in Republican presidential administrations; only Jimmy Carter — embracing Republican-style fiscal, monetary and regulatory policy much more completely than any other recent Democratic president — presided over a “Democratic” recession. The two “double-dip” recessions of 1980 and 1981-82, straddling the late Carter and early Reagan administrations, are almost indistinguishable in their policy origins.

We are reminded consistently by pundits, journalists and scholars that tax cuts represent what may be our most readily available and useful tool for economic stimulus. Flat, or flatter, taxes, we are told, are the only means to the achievement of tax simplicity and tax compliance.

Even on the question of who tends to favor lower or higher taxes, it is easy to be deceived. When income taxes are reduced (at the federal and state level) and the entire tax code is rendered less progressive as a result, two things happen almost automatically: other much more regressive taxes rise to fill the vacuum created by universally demanded (if not readily acknowledged) public services and consumer demand falters as higher taxes begin to fall on those compelled to spend all that they earn. Overall economic activity and prospective revenue growth, in turn, begin to stagnate, triggering a vicious cycle of tax rate increases (among the untouched regressive tax vehicles), just to maintain public services and economic activity.

Republican politicians have stumbled upon a remarkably effective political strategy: preach tax cuts as the be-all and end-all of successful economic policy; ignore the ways in which federal income tax cuts often lead to increased tolls, fees and property, sales, and excise tax increases; relinquish all but rhetorical opposition to the federal deficits created by federal tax cuts; and cap it off by hinting repeatedly that more could be done — allegedly to great effect — by reducing government spending directed at “undeserving” and “unambitious” poor people of color.

Republican political leaders have their cake and eat it too, riding a diffuse anti-tax sentiment to political victory. Actual results in this game don’t often matter, at least as long as their Democratic opponents succeed in staving off the most precipitous decline with safety nets and the preservation of some progressive fiscal policy elements.

Begun quietly with what Republican activist and Wall Street Journal editor Jude Wanniski called the “Two Santa Claus Theory” — under which Republicans could counter the Democratic social spending Santa Claus with their own tax-cutting Kris Kringle — this approach promised political “success” even amid policy failure, for opponents could be pinned with the deficits and damage it produced.

Exploiting normal psychological tendencies to imagine that “more money in my pocket” and “less money in theirs” simply must be good policy, the widespread ignorance of actual public spending and significant intergovernmental fiscal policies (where federal change forces state and local change, or vice versa), and the compelling notion that personal economic opportunity or success must be derived from personal talent and initiative (rather than significant public policy reform), the “Two Santa Claus” strategy has buoyed a Republican Party that has consistently delivered sub-par results.

an engineering culture has developed in recent years in which the object is to “hide the works,” rendering the artifacts we use unintelligible to direct inspection. Lift the hood on some cars now (especially German ones), and the engine appears a bit like the shimmering, featureless obelisk that so enthralled the cavemen in the opening scene of the movie 2001: A Space Odyssey. Essentially, there is another hood under the hood.

What ordinary people once made, they buy; and what they once fixed for themselves, they replace entirely or hire an expert to repair, whose expert fix often involves installing a pre-made replacement part.

So perhaps the time is ripe for reconsideration of an ideal that has fallen out of favor: manual competence, and the stance it entails toward the built, material world. Neither as workers nor as consumers are we much called upon to exercise such competence, most of us anyway, and merely to recommend its cultivation is to risk the scorn of those who take themselves to be the most hard-headed: the hard-headed economist will point out the opportunity costs of making what can be bought, and the hard-headed educator will say that it is irresponsible to educate the young for the trades, which are somehow identified as the jobs of the past.

It was an experience of agency and competence. The effects of my work were visible for all to see, so my competence was real for others as well; it had a social currency. The well-founded pride of the tradesman is far from the gratuitous “self-esteem” that educators would impart to students, as though by magic.

Skilled manual labor entails a systematic encounter with the material world, precisely the kind of encounter that gives rise to natural science. From its earliest practice, craft knowledge has entailed knowledge of the “ways” of one’s materials — that is, knowledge of their nature, acquired through disciplined perception and a systematic approach to problems.

Because craftsmanship refers to objective standards that do not issue from the self and its desires, it poses a challenge to the ethic of consumerism, as the sociologist Richard Sennett has recently argued. The craftsman is proud of what he has made, and cherishes it, while the consumer discards things that are perfectly serviceable in his restless pursuit of the new.

The central culprit in Braverman’s account is “scientific management,” which “enters the workplace not as the representative of science, but as the representative of management masquerading in the trappings of science.” The tenets of scientific management were given their first and frankest articulation by Frederick Winslow Taylor

Scattered craft knowledge is concentrated in the hands of the employer, then doled out again to workers in the form of minute instructions needed to perform some part of what is now a work process. This process replaces what was previously an integral activity, rooted in craft tradition and experience, animated by the worker’s own mental image of, and intention toward, the finished product. Thus, according to Taylor, “All possible brain work should be removed from the shop and centered in the planning or lay-out department.” It is a mistake to suppose that the primary purpose of this partition is to render the work process more efficient. It may or may not result in extracting more value from a given unit of labor time. The concern is rather with labor cost. Once the cognitive aspects of the job are located in a separate management class, or better yet in a process that, once designed, requires no ongoing judgment or deliberation, skilled workers can be replaced with unskilled workers at a lower rate of pay.

the “jobs of the future” rhetoric surrounding the eagerness to end shop class and get every warm body into college, thence into a cubicle, implicitly assumes that we are heading to a “post-industrial” economy in which everyone will deal only in abstractions. Yet trafficking in abstractions is not the same as thinking. White collar professions, too, are subject to routinization and degradation, proceeding by the same process as befell manual fabrication a hundred years ago: the cognitive elements of the job are appropriated from professionals, instantiated in a system or process, and then handed back to a new class of workers — clerks — who replace the professionals. If genuine knowledge work is not growing but actually shrinking, because it is coming to be concentrated in an ever-smaller elite, this has implications for the vocational advice that students ought to receive.

The trades are then a natural home for anyone who would live by his own powers, free not only of deadening abstraction, but also of the insidious hopes and rising insecurities that seem to be endemic in our current economic life. This is the stoic ideal.

Copywriting, tax preparation, customer service, and many other tasks are or will soon be heavily automated. I can see the beginnings in areas like software development and contract law. Generally, tasks that involve reading, analyzing, and synthesizing information, and then generating content based on it, seem ripe for replacement by language models.

Anyone who makes a living through  delicate and varied movements guided by situation specific know-how can expect to work for much longer than five more years. Thus, electricians, gardeners, plumbers, jewelry makers, hair stylists, as well as those who repair ironwork or make stained glass might find their handiwork contributing to our society for many more years to come

Finally, I expect there to be jobs where humans are preferred to AIs even if the AIs can do the job equally well, or perhaps even if they can do it better. This will apply to jobs where something is gained from the very fact that a human is doing it—likely because it involves the consumer feeling like they have a relationship with the human worker as a human. Jobs that might fall into this category include counselors, doulas, caretakers for the elderly, babysitters, preschool teachers, priests and religious leaders, even sex workers—much has been made of AI girlfriends, but I still expect that a large percentage of buyers of in-person sexual services will have a strong preference for humans. Some have called these jobs “nostalgic jobs.”

It does seem that, overall, unemployment makes people sadder, sicker, and more anxious. But it isn’t clear if this is an inherent fact of unemployment, or a contingent one. It is difficult to isolate the pure psychological effects of being unemployed, because at present these are confounded with the financial effects—if you lose your job, you have less money—which produce stress that would not exist in the context of, say, universal basic income. It is also confounded with the “shame” aspect of being fired or laid off—of not working when you really feel you should be working—as opposed to the context where essentially all workers have been displaced.

One study that gets around the “shame” confounder of unemployment is “A Forced Vacation? The Stress of Being Temporarily Laid Off During a Pandemic” by Scott Schieman, Quan Mai, and Ryu Won Kang. This study looked at Canadian workers who were temporarily laid off several months into the COVID-19 pandemic. They first assumed that such a disruption would increase psychological distress, but instead found that the self-reported wellbeing was more in line with the “forced vacation hypothesis,” suggesting that temporarily laid-off workers might initially experience lower distress due to the unique circumstances of the pandemic.

By May 2020, the distress gap observed in April had vanished, indicating that being temporarily laid off was not associated with higher distress during these months. The interviews revealed that many workers viewed being left without work as a “forced vacation,” appreciating the break from work-related stress and valuing the time for self-care and family. The widespread nature of layoffs normalized the experience, reducing personal blame and fostering a sense of shared experience. Financial strain was mitigated by government support, personal savings, and reduced spending, which buffered against potential distress.

The study suggests that the context and available support systems can significantly alter the psychological outcomes of unemployment—which seems promising for AGI-induced unemployment.

From the studies on plant closures and pandemic layoffs, it seems that shame plays a role in making people unhappy after unemployment, which implies that they might be happier in full automation-induced unemployment, since it would be near-universal and not signify any personal failing.

A final piece that reveals a societal-psychological aspect to how much work is deemed necessary is that the amount has changed over time! The number of hours that people have worked has declined over the past 150 years. Work hours tend to decline as a country gets richer. It seems odd to assume that the current accepted amount of work of roughly 40 hours a week is the optimal amount. The 8-hour work day, weekends, time off—hard-fought and won by the labor movement!—seem to have been triumphs for human health and well-being. Why should we assume that stopping here is right? Why should we assume that less work was better in the past, but less work now would be worse?

Removing the shame that accompanies unemployment by removing the sense that one ought to be working seems one way to make people happier during unemployment. Another is what they do with their free time. Regardless of how one enters unemployment, one still confronts empty and often unstructured time.

One paper, titled “Having Too Little or Too Much Time Is Linked to Lower Subjective Well-Being” by Marissa A. Sharif, Cassie Mogilner, and Hal E. Hershfield tried to explore whether it was possible to have “too much” leisure time.

The paper concluded that it is possible to have too little discretionary time, but also possible to have too much, and that moderate amounts of discretionary time seemed best for subjective well-being. More time could be better, or at least not meaningfully worse, provided it was spent on “social” or “productive” leisure activities. This suggests that how people fare psychologically with their post-AGI unemployment will depend heavily on how they use their time, not how much of it there is

Automation-induced unemployment could feel like retiring depending on how total it is. If essentially no one is working, and no one feels like they should be working, it might be more akin to retirement, in that it would lack the shameful element of feeling set apart from one’s peers.

Women provide another view on whether formal work is good for happiness. Women are, for the most part, relatively recent entrants to the formal labor market. In the U.S., 18% of women were in the formal labor force in 1890. In 2016, 57% were. Has labor force participation made them happier? By some accounts: no. A paper that looked at subjective well-being for U.S. women from the General Social Survey between the 1970s and 2000s—a time when labor force participation was climbing—found both relative and absolute declines in female happiness.

I think women’s work and AI is a relatively optimistic story. Women have been able to automate unpleasant tasks via technological advances, while the more meaningful aspects of their work seem less likely to be automated away.  When not participating in the formal labor market, women overwhelmingly fill their time with childcare and housework. The time needed to do housework has declined over time due to tools like washing machines, dryers, and dishwashers. These tools might serve as early analogous examples of the future effects of AI: reducing unwanted and burdensome work to free up time for other tasks deemed more necessary or enjoyable.

it seems less likely that AIs will so thoroughly automate childcare and child-rearing because this “work” is so much more about the relationship between the parties involved. Like therapy, childcare and teaching seems likely to be one of the forms of work where a preference for a human worker will persist the longest.

In the early modern era, landed gentry and similar were essentially unemployed. Perhaps they did some minor administration of their tenants, some dabbled in politics or were dragged into military projects, but compared to most formal workers they seem to have worked relatively few hours. They filled the remainder of their time with intricate social rituals like balls and parties, hobbies like hunting, studying literature, and philosophy, producing and consuming art, writing letters, and spending time with friends and family. We don’t have much real well-being survey data from this group, but, hedonically, they seem to have been fine. Perhaps they suffered from some ennui, but if we were informed that the great mass of humanity was going to enter their position, I don’t think people would be particularly worried.

I sometimes wonder if there is some implicit classism in people’s worries about unemployment: the rich will know how to use their time well, but the poor will need to be kept busy.

Although a trained therapist might be able to counsel my friends or family through their troubles better, I still do it, because there is value in me being the one to do so. We can think of this as the relational reason for doing something others can do better. I write because sometimes I enjoy it, and sometimes I think it betters me. I know others do so better, but I don’t care—at least not all the time. The reasons for this are part hedonic and part virtue or morality.  A renowned AI researcher once told me that he is practicing for post-AGI by taking up activities that he is not particularly good at: jiu-jitsu, surfing, and so on, and savoring the doing even without excellence. This is how we can prepare for our future where we will have to do things from joy rather than need, where we will no longer be the best at them, but will still have to choose how to fill our days.

what consequences has the rise of management consulting had for the organization of American business and the lives of American workers? The answers to these questions put management consultants at the epicenter of economic inequality and the destruction of the American middle class.

Managers do not produce goods or deliver services. Instead, they plan what goods and services a company will provide, and they coordinate the production workers who make the output. Because complex goods and services require much planning and coordination, management (even though it is only indirectly productive) adds a great deal of value. And managers as a class capture much of this value as pay. This makes the question of who gets to be a manager extremely consequential.

In the middle of the last century, management saturated American corporations. Every worker, from the CEO down to production personnel, served partly as a manager, participating in planning and coordination along an unbroken continuum in which each job closely resembled its nearest neighbor.

Even production workers became, on account of lifetime employment and workplace training, functionally the lowest-level managers. They were charged with planning and coordinating the development of their own skills to serve the long-run interests of their employers.

At McDonald’s, Ed Rensi worked his way up from flipping burgers in the 1960s to become CEO. More broadly, a 1952 report by Fortune magazine found that two-thirds of senior executives had more than 20 years’ service at their current companies.

Top executives enjoyed commensurately less control and captured lower incomes. This democratic approach to management compressed the distribution of income and status. In fact, a mid-century study of General Motors published in the Harvard Business Review—completed, in a portent of what was to come, by McKinsey’s Arch Patton—found that from 1939 to 1950, hourly workers’ wages rose roughly three times faster than elite executives’ pay. The management function’s wide diffusion throughout the workforce substantially built the mid-century middle class.

The earliest consultants were engineers who advised factory owners on measuring and improving efficiency at the complex factories required for industrial production. The then-leading firm, Booz Allen, did not achieve annual revenues of $2 million until after the Second World War. McKinsey, which didn’t hire its first Harvard M.B.A. until 1953, retained a diffident and traditional ethos

A new ideal of shareholder primacy, powerfully championed by Milton Friedman in a 1970 New York Times Magazine article entitled “The Social Responsibility of Business is to Increase its Profits,” gave the newly ambitious management consultants a guiding purpose. According to this ideal, in language eventually adopted by the Business Roundtable, “the paramount duty of management and of boards of directors is to the corporation’s stockholders.” During the 1970s, and accelerating into the ’80s and ’90s, the upgraded management consultants pursued this duty by expressly and relentlessly taking aim at the middle managers who had dominated mid-century firms, and whose wages weighed down the bottom line.

Management consultants thus implemented and rationalized a transformation in the American corporation. Companies that had long affirmed express “no layoff” policies now took aim at what the corporate raider Carl Icahn, writing in the The New York Times in the late 1980s, called “corporate bureaucracies” run by “incompetent” and “inbred” middle managers. They downsized in response not to particular business problems but rather to a new managerial ethos and methods; they downsized when profitable as well as when struggling, and during booms as well as busts.

Downsizing was indeed wrenching. When IBM abandoned lifetime employment in the 1990s, local officials asked gun-shop owners around its headquarters to close their stores while employees absorbed the shock.

In some cases, downsized employees have been hired back as subcontractors, with no long-term claim on the companies and no role in running them. When IBM laid off masses of workers in the 1990s, for example, it hired back one in five as consultants. Other corporations were built from scratch on a subcontracting model. The clothing brand United Colors of Benetton has only 1,500 employees but uses 25,000 workers through subcontractors.

The shift from permanent to precarious jobs continues apace. Buttigieg’s work at McKinsey included an engagement for Blue Cross Blue Shield of Michigan, during a period when it considered cutting up to 1,000 jobs (or 10 percent of its workforce). And the gig economy is just a high-tech generalization of the sub-contractor model. Uber is a more extreme Benetton; it deprives drivers of any role in planning and coordination, and it has literally no corporate hierarchy through which drivers can rise up to join management.

In effect, management consulting is a tool that allows corporations to replace lifetime employees with short-term, part-time, and even subcontracted workers, hired under ever more tightly controlled arrangements, who sell particular skills and even specified outputs, and who manage nothing at all.

the managerial control stripped from middle managers and production workers has been concentrated in a narrow cadre of executives who monopolize planning and coordination. Mid-century, democratic management empowered ordinary workers and disempowered elite executives, so that a bad CEO could do little to harm a company and a good one little to help it.

Whereas at mid-century a typical large-company CEO made 20 times a production worker’s income, today’s CEOs make nearly 300 times as much. In a recent year, the five highest-paid employees of the S&P 1500 (7,500 elite executives overall), obtained income equal to about 10 percent of the total profits of the entire S&P 1500.

as Kiechel put it dryly, “we are not all in this together; some pigs are smarter than other pigs and deserve more money.” Consultants seek, in this way, to legitimate both the job cuts and the explosion of elite pay. Properly understood, the corporate reorganizations were, then, not merely technocratic but ideological.

corporate reorganizations have deprived companies of an internal supply of managerial workers. When restructurings eradicated workplace training and purged the middle rungs of the corporate ladder, they also forced companies to look beyond their walls for managerial talent—to elite colleges, business schools, and (of course) to management-consulting firms. That is to say: The administrative techniques that management consultants invented created a huge demand for precisely the services that the consultants supply.

Consulting, like law school, is an all-purpose status giver—“low in risk and high in reward,” according to the Harvard Crimson. McKinsey also hopes that its meritocratic excellence will legitimate its activities in the eyes of the broader world. Management consulting, Kiechel observed, acquired its power and authority not from “silver-haired industry experience but rather from the brilliance of its ideas and the obvious candlepower of the people explaining them, even if those people were twenty-eight years old.”

A deeper objection to Buttigieg’s association with McKinsey concerns not whom the firm represents but the central role the consulting revolution has played in fueling the enormous economic inequalities that now threaten to turn the United States into a caste society.

Meritocrats like Buttigieg changed not just corporate strategies but also corporate values.

GM may aspire to build good cars; IBM, to make typewriters, computers, and other business machines; and AT&T, to improve communications. Executives who rose up through these companies, on the mid-century model, were embedded in their firms and embraced these values, so that they might even have come to view profits as a salutary side effect of running their businesses well.

When management consulting untethered executives from particular industries or firms and tied them instead to management in general, it also led them to embrace the one thing common to all corporations: making money for shareholders. Executives raised on the new, untethered model of management aim exclusively and directly at profit: their education, their career arc, and their professional role conspire to isolate them from other workers and train them single-mindedly on the bottom line.

American democracy, the left believes, cannot be rejuvenated by persuading elites to deploy their excessive power somehow more benevolently. Instead, it requires breaking the stranglehold that elites have on our economics and politics, and reempowering everyone else.