An Allocation Society or a Knowledge Value System? Pick One, Please!
February 20, 2024
This essay is the work of a dumb dinobaby. No smart software required.
I get random inquiries, usually from LinkedIn, asking me about books I would recommend to a younger person trying to [a] create a brand and make oodles of money, [b] generate sales immediately from their unsolicited emails to strangers, and [c] a somewhat limp-wristed attempt to sell me something. I typically recommend a book I learned about when I was giving lectures at the Kansai Institute of Technology and a couple of outfits in Tokyo. The book is the Knowledge Value Revolution written by a former Japanese government professional named Taichi Sakaiya. The subtitle to the book is “A History of the Future.”
So what?
I read an essay titled “The Knowledge Economy Is Over. Welcome to the Allocation Economy.” The thesis of this essay is that Sakaiya’s description of the future is pretty much wacko. Here’s a passage from the essay about the allocation economy:
Summarizing used to be a skill I needed to have, and a valuable one at that. But before it had been mostly invisible, bundled into an amorphous set of tasks that I’d called “intelligence”—things that only I and other humans could do. But now that I can use ChatGPT for summarizing, I’ve carved that task out of my skill set and handed it over to AI. Now, my intelligence has learned to be the thing that directs or edits summarizing, rather than doing the summarizing myself.
A world class knowledge surfer now wins gold medals for his ability to surf on the output of smart robots and pervasive machines. Thanks, Google ImageFX. Not funny but good enough, which is the mark of a champion today, isn’t it?
For me, the message is that people want summaries. This individual was a summarizer and, hence, a knowledge worker. With the smart software doing the summarizing, the knowledge worker is kaput. The solution is for the knowledge worker to move up conceptually. The jump is a metaplay. Debaters learn quickly that when an argument is going nowhere, the trick that can deliver a win is to pop up a level. The shift from poverty to a discussion about the disfunction of a city board of advisors is a trick used in places like San Francisco. It does not matter that the problem of messios is not a city government issue. Tents and bench dwellers are the exhaust from a series of larger systems. None can do much about the problem. Therefore, nothing gets done. But for a novice debater unfamiliar with popping up a level or a meta-play, the loss is baffling.
The essay putting Sakaiya in the dumpster is not convincing and it certainly is not going to win a debate between the knowledge value revolution and the allocation economy. The reason strikes me a failure to see that smart software, the present and future dislocations of knowledge workers, and the brave words about becoming a director or editor are evidence that Sakaiya was correct. He wrote in 1985:
If the type of organization typical of industrial society could be said to resemble a symphony orchestra, the organizations typical of the knowledge-value society would be more like the line-up of a jazz band.
The author of the allocation economy does not realize that individuals with expertise are playing a piano or a guitar. Of those who do play, only a tiny fraction (a one percent of the top 10 percent perhaps?) will be able to support themselves. Of those elite individuals, how many Taylor Swifts are making the record companies and motion picture empresarios look really stupid? Two, five, whatever. The point is that the knowledge-value revolution transforms much more than “attention” or “allocation.” Sakaiya, in my opinion, is operating at a sophisticated meta-level. Renaming the plight of people who do menial mental labor does not change a painful fact: Knowledge value means those who have high-value knowledge are going to earn a living. I am not sure what the newly unemployed technology workers, the administrative facilitators, or the cut-loose “real” journalists are going to do to live as their parents did in the good old days.
The allocation essay offers:
AI is cheap enough that tomorrow, everyone will have the chance to be a manager—and that will significantly increase the creative potential of every human being. It will be on our society as a whole to make sure that, with the incredible new tools at our disposal, we bring the rest of the economy along for the ride.
How many jazz musicians can ride on a particular market sector propelled by smart software? How many individuals will enjoy personal and financial success in the AI allocation-centric world? Remember, please, there are about eight billion people in the world? How many Duke Ellingtons and Dave Brubecks were there?
The knowledge value revolution means that the majority of individuals will be excluded from nine to five jobs, significant financial success, and meaningful impact on social institutions. I am not for everyone becoming a surfer on smart software, but if that happens, the future is going to be more like the one Sakaiya outlined, not an allocation-centric operation in my opinion.
Stephen E Arnold, February 20, 2024
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