There will always be spare change


“There will always be change,” wrote Thomas Friedman in his 2012 column “Average Is Over.” “But the one thing we know for sure is that with each advance in globalization and the I.T. revolution, the best jobs will require workers to have more and better education to make themselves above average.”

Economics professor and blogger Tyler Cowen borrowed Friedman’s title for his most recent book, Average Is Over: Powering America Beyond the Age of the Great Stagnation, but his emphasis, in surveying the opportunities opening up in today’s labor scene, is not exactly on more and better education. “I see marketing as the seminal sector for our future economy,” Cowen writes:

We can expect a lot of job growth in personal services, even if those jobs do not rely very directly on computer power. The more that the high earners pull in, the more people will compete to serve them, sometimes for high wages and sometimes for low wages. This will mean maids, chauffeurs, and gardeners for the high earners, but a lot of the service jobs won’t fall under the service category as traditionally construed. They can be thought of as “creating the customer experience.” Have you ever walked into a restaurant and been greeted by a friendly hostess, and noticed she was very attractive? Have you ever had an assistant bring you coffee before a meeting, touching you on the shoulder before leaving the cup? Have you gone to negotiate a major business deal and been greated by a mass of smiles and offers of future friendship and collaboration? All of those people are working to make you feel better. They are working at marketing.

I would just like to interject here that I am feeling better.

It sounds a little silly, but making high earners feel better in just about every part of their lives will be a major source of job growth in the future. At some point it is hard to sell more physical stuff to high earners, yet there is usually just a bit more room to make them feel better. Better about the world. Better about themselves. Better about what they have achieved.

Welcome to the mendicancy economy.

Cowen uses a happy metaphor to sketch out the contours of interpersonal competition in this new world:

The more that earnings rise at the upper end of the distribution, the more competition there will be for the attention of the high earners and thus the greater the importance of marketing. If you imagine two wealthy billionaire peers sitting down for lunch, their demands for the attention of the other tend to be roughly equal. After all, each always has a billion dollars (or more) to spend and they don’t need to court each other for favors so much. There is a (rough) parity of attention offered and received. Of course, some billionaires are more important than others, or one billionaire may court another for the purpose of becoming a mega-billionaire, but let’s set that aside.

Compare it to one of those same billionaires riding in a limousine, with open windows, through the streets of Calcutta. A lot of beggars will be competing for the attention of that billionaire, and yet probably the billionaire won’t much need the attention of the beggars. The billionaire may feel overwhelmed by all of these demands, and yet each of these beggars will be trying to find some way to break through and capture but a moment of the billionaire’s attention. This in short is what the contemporary world is like, except the billionaire is the broader class of high earners and the beggars are wealthier than in India.

That’s an awesome analogy, really felicitous, but it has one big flaw. What billionaire is going to drive through Calcutta in a limo with the windows open? I’m sorry, but that’s just nuts.

UPDATE (9/6): Cowen offers an even sunnier speculation today: “It is an interesting question how much that will prove to be the equilibrium more generally, namely the genetic superiority of slaves because they can reap more external investment. After all, capital is more productive today than in times past, so evolution might now produce more slaves.”

Remember back when we were beggars? Those were good times.

Image: “undesirables” by shannon.

9 thoughts on “There will always be spare change

  1. snottzoid

    Let’s see—looking attractive, touching shoulders, serving coffee, and getting a billionaire’s attention. Well, you can count me out. (I always knew marketing wasn’t my thing.)

  2. Brutus

    Billionaires at luncheons and/or riding in limos are not marketing opportunities; they’re targets for every sycophant, hustler on the make, and disgruntled (armed) former employee with nothing to lose. The megawealthy know they’re targets, and they insulate themselves from the rabble accordingly.

    I think the author watched Lee Daniels’ The Butler a bit too admiringly and missed the larger point.

  3. Laraine

    In other words, disparity of income is going to continue to increase and those of us who don’t want to starve had better learn how to better service the wealthy.

    I’m hoping Cowen is not a cheerleader for the world he envisions but only seems so when his descriptions are taken out of context because what he describes doesn’t sound a little “silly”; it sounds like an all to possible return to the kind of crude capitalism of the Gilded Age, minus the sweat shops, which will be outsourced while those who work at home will be creating a great “customer experience” for the rich and, of course, the super rich. Aargh!

  4. Faza (TCM)

    The main problem with Cowen’s vision – regardless of whether he sees it as a good or bad thing – is that any kind of elitism needs the acceptance and approval of the unwashed masses. I posit that this is a ship that sailed centuries ago.

    Prior to the French Revolution (give or take), it was concievable that the oppressed classes would accept the world order they are born into without question. The “lack of imagination” in the servile classes meant that – unless things got really bad – direct coercion was not really necessary.

    Not so these days – not in the developed world. The Great Unwashed are simply too well educated these days not to question the established order. It’s a risk/reward calculation, but rebellion is now an ever-present possiblity. Putting the rich up against the wall is very much on the table, especially given that the “average” are now perfectly aware that billionaires and mega-billionaires are completely superfluous – much like the aristocracy of old. Remove them from the equation and life goes on, because they are in no way crucial to the functioning of the institutions that raised them to their current level.

    There’s even no need to get violent. All that’s required is for the people who actually do the work to refuse to play the game. The only sane response to a proposition like the one quoted (“making high earners feel better”) is FTS.

  5. Brian Runciman

    Wasn’t there a female character in a Douglas Adams book whose job was to make rich people feel better about themselves by telling them it was ‘OK to be rich’? I thought Adams was a satirist, not a prophet.

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