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- Companies Exist to Serve Customers, Not to Employ People
Companies Exist to Serve Customers, Not to Employ People
I’m not sure when it happened, but somewhere along the American history timeline people became convinced that employers owe people jobs.
They don’t.
Companies have employees for one reason alone: it helps them serve their customers better. The moment this stops being true is the same moment the company will get rid of employees.
This is what people don’t get about the automation / artificial intelligence / robots situation. There’s a common misconception that companies won’t fire most of their employees because…well…because there’s no place else to work! Or because if they fire all the employees then nobody will have money to buy their products!
This is a completely juvenile way of looking at business. Does anyone really think that company A will maintain a massive employee burden, which harms its profits, all because it believes that company B and company C are looking out for them by taking massive business losses in the name of national altruism?
It’s pure fantasy.
Companies do what’s best for them, and they don’t gamble their livelihood on the assumption that everyone is looking out for their best interest, because they know this isn’t true.
If the business makes more money by firing everyone in the short and medium term, but they have a chance of being harmed in some potential long-term future, what do you think they’ll do? They’ll fire everyone. Every time.
Manufacturing is a great example. People keep talking about the fall of American manufacturing, but if you look at the numbers you’ll notice that the U.S. is making as much now as we ever have, but we’re outpouring this much productivity with a tiny fraction of the workforce.
So manufacturing doesn’t have a problem at all. The problem is manufacturing jobs.
This same trend will hit industry after industry until the industries are doing great and some massive percentage of the country is unemployed.
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At that point we’ll start to see that there’s a limit to how much the economy can grow, even with the best products, because you can’t sell things to people who don’t have money.
This will take some time, however, since many products will still sell to those who do have money. They money isn’t going away; it’s just going to fewer and fewer people.
But yes, this will eventually become a problem, and we’ll need something like Basic Income to solve it.
But don’t think for a moment that companies are already anticipating this, and holding onto their employees so that they have salaries to buy what they’re making. It’s fiction. Companies work on the timescale of quarters and fiscal years, not generations.
If your company can make more money without you, they will fire you. Period. But that’s not actually the interesting part.
The interesting part is that we should expect them to. And if you don’t, then you don’t understand business.
Companies are there for themselves, for shareholders, and for their customers. Those who put altruism before a healthy business become ex-companies.
Machine learning, AI in all forms, and robots are making it increasingly possible to fire humans and dramatically improve productivity and profits. That means more unemployed humans, and there aren’t many businesses who will avoid upgrading because of what might happen to the greater economy in 20 years as a result.
Prepare yourself for the future that’s coming, not the future you wish were coming.