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Thank you for the comment. That is a really very interesting analysis, and a nice way of looking at things. I can see that specialisation implies fragility and

Thank you for the comment. That is a really very interesting analysis, and a nice way of looking at things. I can see that specialisation implies fragility and an increased downside risk-exposure to volatility; but I am less convinced that self-sufficiency can be equated with generality. Surely we also need to consider flexibility / transient-specialisation? Furthermore, there are (presumably) lots of ways to be fragile, so there may be some other implications not considered here. ... (perhaps if I sleep on this for a few days I might think of something). A relevant application domain for this analytical approach: The explosive growth in the rate of production of information and data, combined with the equally explosive growth in it's availability and dissemination combines positively with the world's currently increasing population of educated, involved, and connected individuals. These factors are trending upwards together, inevitably resulting in a dramatic increase in the volume and complexity of available information; posing new challenges for organisation, analysis, digestion and action -- all of which seems (perhaps) to presage a dramatic increase in intellectual specialisation. In simpler terms: Given that we have access to more information than we know what to do with, a key competitive differentiator is and will continue to be how organized we are at selecting & processing that information.

msandford 13y ago
I'll make an investing analogy. Investors understand very well the importance of diversification in a portfolio to reduce volatility and as a result, enhance yields. It is easy for them to do this as the overhead for buying a stock might be as small as pressing a "buy" button. Obviously there's some thinking and research as well, but it is probably measured in days or weeks. Human beings tend not to be diversified in their skills portfolio because the efficiency gains of specialization has strongly encouraged people to specialize by way of greater income or profits. Most years this is excellent as the demand for goods and services tends to change fairly slowly. That makes it possible for supply and demand to roughly line up and for people to be gainfully employed. But when there is a demand shock it wreaks havoc upon industry as the highly tuned, efficient machine (or group of people) can now produce 2x or 3x the demand. There are some who do have a diverse set of skills who I would argue are resilient to demand shocks. Someone who is a carpenter and a mechanic is less affected by the demand which is out of his control and more affected by the decisions he makes for which skill to offer on the market. The demand for fixing cars and carpentry is likely much less correlated than the demand for carpentry and carpentry (perfect correlation) or the demand for carpentry and plumbing (highly correlated). Now obviously it isn't easy or free to be both a mechanic AND a carpenter and over a single year it's obviously a waste of time to pursue both. But over 10 years or a career it would likely be beneficial. The time spent learning a second trade is effectively an employment insurance premium. It's a costly one to be sure but you could look at it that way. Society benefits from this skills diversity as well. Aggregate demand is higher with full employment and full employment is easier to attain when people can recover from job loss in days instead of months.
- w_t_payne 13y ago
  I remember watching a documentary that claimed that a good deal of the economic success of the US in the late 19th and early 20th centuries came from the fact that it had a mobile workforce able to move to where the jobs were -- benefiting from a flexibility in terms of location, if not expertise. Of course, the complexity of modern technology creates a demand for increasing levels of human specialisation these days, and real-estate prices make it much harder to move across the country than it was 50-100 years ago. (Having said that, the last 3 years have seen me working in London, New York, and back to the UK again, so perhaps we are just as mobile now as we ever were....)
  - msandford 13y ago
    If you're on HN there stands a very good chance that you're in a mobility category that most aren't. Highly skilled labor has always had lots of options. The options for unskilled or moderately skilled labor are far slimmer if they've bought a house.

msandford 13y ago

I'll make an investing analogy. Investors understand very well the importance of diversification in a portfolio to reduce volatility and as a result, enhance yields. It is easy for them to do this as the overhead for buying a stock might be as small as pressing a "buy" button. Obviously there's some thinking and research as well, but it is probably measured in days or weeks. Human beings tend not to be diversified in their skills portfolio because the efficiency gains of specialization has strongly encouraged people to specialize by way of greater income or profits. Most years this is excellent as the demand for goods and services tends to change fairly slowly. That makes it possible for supply and demand to roughly line up and for people to be gainfully employed. But when there is a demand shock it wreaks havoc upon industry as the highly tuned, efficient machine (or group of people) can now produce 2x or 3x the demand. There are some who do have a diverse set of skills who I would argue are resilient to demand shocks. Someone who is a carpenter and a mechanic is less affected by the demand which is out of his control and more affected by the decisions he makes for which skill to offer on the market. The demand for fixing cars and carpentry is likely much less correlated than the demand for carpentry and carpentry (perfect correlation) or the demand for carpentry and plumbing (highly correlated). Now obviously it isn't easy or free to be both a mechanic AND a carpenter and over a single year it's obviously a waste of time to pursue both. But over 10 years or a career it would likely be beneficial. The time spent learning a second trade is effectively an employment insurance premium. It's a costly one to be sure but you could look at it that way. Society benefits from this skills diversity as well. Aggregate demand is higher with full employment and full employment is easier to attain when people can recover from job loss in days instead of months.

w_t_payne 13y ago
I remember watching a documentary that claimed that a good deal of the economic success of the US in the late 19th and early 20th centuries came from the fact that it had a mobile workforce able to move to where the jobs were -- benefiting from a flexibility in terms of location, if not expertise. Of course, the complexity of modern technology creates a demand for increasing levels of human specialisation these days, and real-estate prices make it much harder to move across the country than it was 50-100 years ago. (Having said that, the last 3 years have seen me working in London, New York, and back to the UK again, so perhaps we are just as mobile now as we ever were....)
- msandford 13y ago
  If you're on HN there stands a very good chance that you're in a mobility category that most aren't. Highly skilled labor has always had lots of options. The options for unskilled or moderately skilled labor are far slimmer if they've bought a house.