Garett Jones Workers

· January 23, 2019

Recently, Arnold Kling posted a list of Klingisms, which is worth a look. One caught my eye in particular:

 Most of us are Garett Jones workers.

I wasn’t very familiar with Garett Jones or what his workers were, which led to a) discovering (another) interesting GMU economist and b) listening to this econtalk episode from 2010, where he talks about the tweet and conversation that inspired the Kling quote. 

The gist of it, as I understand it, is that a much larger percentage of workers than in the past spend their time building intangible assets, and beyond that, most of the folks working on those intangible assets are building organizational capital. Their day to day work isn’t in contributing directly to the production of the goods their firm makes, but instead is in creating the structures, processes and knowledge necessary to produce those goods (or variants) in the future. 

This is  comparing the work of designing the procedures for running a fast food restaurant, managing the books, or working on branding for it to actually working in the restaurant delivering burgers. Even in high-intangible businesses like Google or other software companies you can see a difference.A percentage of the work on software (an intangible) is really tightly connected to the products Google operate, and likely has some market value: the source code to the Gmail Android app is a non-trivial asset that could be useful to another company in an imagined Google firesale. A lot of the work of software engineers inside Google doesn’t have that property though, from the design documents to the source code for the internal tools that are too tied to Googles structures to ever have a life outside. 

One of the takeaways in the podcast is that this kind of work is weird in productivity terms. You could lay off substantial parts of Google without effecting its revenue at all, at the cost of forgoing some future opportunities. In terms of productivity statistics, this would be make Google look more productive: the same production is being generated by fewer people. As the final parts of the production process get less labor intensive (which has happened in hard industries like car making too), an increasing percentage of the workforce is putting their efforts into capacity for the future rather than into production for the present, which is very different to the world 60 years ago.