The fungible worker – or not

Here‘s an interesting article by Jeff Lonsdale about what he calls the “fungible worker”. Jeff examines some of the old arguments about whether technology spells the end of the human worker, whether it will drive everyone out of work, etc. He dismisses the classic Luddite argument and instead lands on an interesting point:

Amazon can quickly train employees as well as track them to make sure they are not underperforming. There is a smaller difference between one employee and their potential replacement. If an employee decides to leave their replacement is guided by technology that makes the new worker’s productivity very close to that of a good worker.

Before these technological advancements, workers enjoyed mini-monopolies. The warehouse worker couldn’t be easily replaced because their replacement might be way less efficient as they learned the layout of their workplace. As technology more directly guides low and mid skill workers in their jobs the workers are losing their mini-monopolies. Workers don’t need job specific experience to be hired so the supply of workers available to every technology guided job has increased. A higher supply leads to a lower price (the price of a worker is their wage). After full employment is reached the general wage level may increase for low skilled workers, but for now the impact of the Great Factor Price Equalization and the More Fungible Worker are suppressing the wages of middle and lower class developed world workers.

It’s actually quite hard to disagree with this point, and in fact I won’t – because I believe it’s true. Certain kinds of applications of technology turn human beings into replaceable, indistinguishable cogs and levers and wheels and bolts in the name of efficiency above all things.

Now, I’m a big fan of efficiency. Huge fan. I love being able to buy stuff on Amazon for cheap and getting it delivered the next day. Yay for efficiency.

However, I think there’s all sorts of ways to measure efficiency. Which efficiency are we talking about anyway? The efficiency of providing the service is the obvious one. How about the efficiency of use of natural resources? Debatable, off topic for this article, perhaps. Efficiency of fulfilling the right orders, those that add the most value to humanity, instead of just fulfilling every online shopping spree no matter how useless, selling whatever the hell is in demand right now no matter whether it’s actually useful or even downright dangerous? We’re starting to get somewhere.

How about the efficiency of the human capital being put at work – is it really delivering its highest potential value to the rest of humanity? Er, no. A human turned into a robot that follows instructions and turned into a fully replaceable piece of a large and complex logistical machinery is definitely not delivering on his or her potential.

Ultimately, I think that situations like Amazon are temporary. Eventually, all low-skilled jobs will be replaced with automated machinery1. In the meantime, however, while I see that “fungible workers” are inevitable for the time being, I’d like to propose, to entrepreneurs, managers, and other people in charge of creating or managing such jobs, a different philosophy of efficiency:

Aim to improve the efficiency of how the potential of humans is being deployed at work.

If you do that, you’ll probably build a different business. You’ll certainly do so – a business whose fundamental principles include enabling every person within it to develop to their full potential will not end up looking like Amazon. In this business, the very concept of fungible workers will be bizarre and alien. But such a business will  be far more efficient (in the sense of reduced waste and overheads, as well as in the human potential efficiency) than Amazon can ever dream of being, and the tradeoffs of shop-floor efficiency vs. human potential efficiency may well turn out to be surprisingly tilted to the latter side.