Dehiring: The Job of Job Destruction
“Full unemployment: the ideal state in which no one has a job, because no one needs one, and all economic effort is voluntary.”—a working definition
Two well-dressed men happen to be sitting beside each other on a commuter train. Having left his newspaper in his office, one of them starts a conversation.
First man: “Too bad these trips always have to be round-trip.”
Second man: “Sorry?”
1st man: “Too bad that these commutes have to be round-trip. It would be nice to just do the return trip home and not have to be back at the office on Monday or any other day, ever again.”
2nd man (smiling): “I hear you. But, hey, that’s life, that’s work.”
1st man: “Actually, I can’t complain. Mine’s not bad. But, the commutes…They eat up my time.”
2nd man: “What do you do?”
1st man: “I’m a recruiter….for a downtown agency.”
2nd man: “That’s ironic.”
1st man: “How’s that?”
2nd man: “Well, you fill jobs; I empty them.”
1st man: “What do you mean?”
2nd man: “I’m in M&A.”
1st man: “Mergers and acquisitions?”
2nd man: “Yep. Sometimes my wife teases me when I get home with ‘Hey!…the Grim Reaper’s back.’ You know, because I often help destroy more jobs than I create. But then, sometimes you can’t make an omelet without cracking the whip.”
1st man: “Yeah…I suppose it must be tough, knowing that M&A can cost so many employees their jobs after the deal.”
2nd man: “True. Excuse the pun, but, yes, there really can be a lot of ‘collateral damage’.”
1st man: “Well, if you ever wanted to switch careers, with your deal-making skills, you’d probably make a good recruiter, although I’m sure a lot less money.”
2nd man: “No. I could never do your job.”
1st man: “Why not? The money?”
2nd man: “It would be against my principles.”
1st man: “What principles?….I mean, which principles?”
2nd man: “Well, I know there’s the stereotype that portrays M&A types as Wall Street Geckos—money, money, money, nothing but the money; to hell with the staff, to the bank with the cash. But that’s Hollywood. In fact, some of us are in this business because we believe we are doing some real good and believe in the results we get.”
1st man: “Which results?”
2nd man: “Oh, in my case, job destruction.”
1st man: “Job destruction is a moral principle for you?”
2nd man: “Yes.”
1st man: “How can you idealize destroying people’s livelihoods or obstructing job creation?”
2nd man: “Negative-growth ethics and the ideal of full unemployment.”
1st man: “What do you mean?”
2nd man: “Most people—and I suppose most recruiters—believe in ‘growth’, and in that slick Fortune 500 mantra sense of ‘growing the business’, a notion that blurs the all-important distinction between growing something by raising it to maturity and growing something by expanding it.
To grow corn in your field you don’t have to relentlessly expand your field (into other people’s gardens and fields)—unless you are Monsanto.
The truly misguided corporations are the ones that plot endless expansion at the expense of the Earth and its limited resources—not the companies looking to M&A to downsize, streamline and operate more efficiently. Bottom line: M&A is more environmentally friendly than endless corporate expansion and recruiting.”
1st man: “But M&A expands the acquiring corporations, which are generally already big to begin with. As for mergers, they position the new entity very favorably for expansion, given the pooling of assets, markets and the like. So, you can’t seriously believe that M&A is all that ‘green’ or anti-growth.”
2nd man: “But enough of it is precisely that to justify my continuing in this career. It’s like being a doctor—you can’t save everybody, but it’s the ones you do save that make it all worthwhile. You wouldn’t expect a doctor to switch professions just because he can’t save all of his patients. No, you do the good you can. What matters is not how much good you can do, but whether you can do any at all.
My job, as a kind of business doctor is to do the best I can to not save any job that isn’t a replacement for some other job. On balance, it’s better to have corporation revenues grow than have the labor force grow, but only if those earnings are the result of gains in productivity and efficiency that reduce the strain on the Earth’s limited resources.”
1st man: “As a recruiter, I believe I do good too. Not only am I helping people find work, but am also helping many of them find jobs with companies that share your own environment-friendly Earth-saving mission. As for growing companies, when an innovative company, sector or product debuts, demand for their output and for workers will naturally expand—that’s growth in both the sense of ‘raising’ and ‘expanding’, and it is ‘good’ growth too.
Who would want to prevent or reverse any of that?”
2nd man: “In Economics 101 you learn that human wants are infinite. In Ecology 101 you learn that resources are finite. Right there you’ve got an inevitable collision. Sure, some people and books like God Wants You to Be Rich talk about mining resources endlessly, like fractals, without limit, through new technologies and new uses; but there’s no guarantee that will always be possible. So, in my thinking every new industry will ideally replace an older one, as cars replaced horses, and tires replaced horseshoes. No need for endless growth and more jobs.
Different, more modern jobs, yes; more jobs, no. My own job fits this model: M&A specialists are not additional workers; they merely replace some bankruptcy lawyers—at least in terms of GDP.”
1st man: “But even if needs are kept in check and don’t continually expand, population does. So more workers and more jobs are inevitable. As a recruiter, I have to help make sure there are enough workers to meet expanded demand, at least to accommodate existing and growing wants and needs. Besides, there is no simple one-to-one correspondence between a job in an obsolete industry and a job in a new one. For example, the idea of replacing one blacksmith with one tire-molding autoworker is unrealistic and inaccurate.”
2nd man: “The key reason that you are forced to do absolute (not relative) expansion hiring is population growth and the contributing fact that most corporations think that babies are like corporations rather than like corn in a small field: they have to be “grown-expanded” in numbers—not just “grown-raised” to maturity. As for everybody else, because most people don’t think about their ecological footprint, babies have in fact grown at a rate that surpasses the replacement rate and ignores the replacement ideal that should apply in both recruitment and in population dynamics.
What your job and my job should accomplish is to rein in both employment growth and population growth. One way for you to do that is to make it your policy and practice to hire replacement staff only—replacement of retirees, people fired, etc., within an existing industry, or through hiring related to replacement of an entire existing, yet obsolete industry, just as we should biologically only replace ourselves. Limit ourselves to replacement babies and replacement employees. It’s that simple.
As for the one-to-one correspondence issue, it is true that at the micro-level it probably does not exist for most jobs. However, at the macro-level of the national economy, gains in productivity, efficiency and technological innovation should be able to approximate or even beat that ratio.”
1st man: “Even if that were a desirable goal, it would be impossible to track all hiring in order to determine whether a given job applicant would be merely replacing someone, since the person replaced might go to work for a new and expanding company. Besides, what about unmet demand for some new product, like an iPhone? People have got to be hired on the production and marketing side to supply the phones.”
2nd man: “There would be no problem if everyone got on board and stuck to the program. Try to head-hunt the new Apple workers from whatever companies that produce the obsolete products the iPhone replaces. Besides, like a physician, you don’t have to be God. You just have to be good, even if you, like the average physician, think otherwise. Just try to get it right often enough to justify doing it all.”
1st man: “So, you aren’t really talking about job destruction. You are aiming at zero job growth—in numbers. Right?”
2nd man: “No, in the short term, I am talking about negative-growth rates, decreases—at least in employment. As long as some companies are expanding their hiring, rather than merely replacing staff, somebody’s job will have to be destroyed to achieve zero job growth and a plateau of both job numbers and zero job growth rates. In any case, to staff who are let go when their companies get downsized in an M&A deal, it certainly feels like job destruction.
As for population, a decrease through lower-than-replacement birth rates won’t be necessary if productivity gains through automation, robotics, efficiency, etc., continue to pile up and if the environment can continue to handle our present numbers. At least we have to make sure that the world population plateaus. Simple logic suggests that if your goal as a recruiter is to hire more additional staff than non-replacement staff, population growth will be a prerequisite for sustaining your model.”
1st man: “No. Not necessarily. A higher employment participation rate, e.g., return of retirees to the labor pool or more housewives opting to work could add workers without expanding population.”
2nd man: “Only in the short term. Over the long term the non-replacement job-added model will require population growth.”
1st man: “What about non-replacement jobs being filled by robots?”
2nd man: “That would depend on the environmental-resource cost-benefit profile for each category of robot—it’s ecological ‘boot-print”, so to speak. If the ecological production and distribution benefits exceed the costs, sure. In fact, it’s probably one of the best long-term strategies for achieving continued prosperity and job destruction.”
1st man: “Still, ‘job destruction’ sounds so negative.”
2nd man: “No, it’s quite the opposite. Mankind’s eternal dream is a utopian society in which any labor or other effort is entirely voluntary, not compelled by the need-to-feed or by any other necessity of life. The goal of employment and recruiters, like the ultimate goal of medicine and physicians, should be to become unnecessary—to create a world in which jobs, recruiters, physicians and medical care are not required. Your job, as a recruiter, should be motivated by the long-term idealistic goal of contributing to and creating 100% unemployment—in other words ‘full unemployment’—at least for humans. That’s what job destruction is really all about.”
1st man: “So, the key is in the timing. Now, 100% unemployment would be catastrophic. In the utopian future, it would be perfect. Right?”
2nd man: “Right. But there’s no time like the present for getting the ball rolling. Someday, somebody will be the last commuter taking his last ride home.”
1st man: “Of course, you believe that this is not the time to completely destroy your kind of job, even if it is a replacement job.”
2nd man: “Of course. The job of job destruction will be the last job to be destroyed—‘self-destroyed’, actually. That’s an inescapable logical conclusion.”
1st man: “That makes sense—almost poetic sense.”
2nd man: “How’s that?”
1st man: “Well, since it’s too late for you, as an M&A specialist, to have the distinction of being a member of the world’s first and oldest profession, I guess you’ll have to settle for being a member of the last.”