How Farming - and Work More Broadly - Changes as the Economy Shifts from an Agricultural to Industrial to Information Economy

To say that we've moved from an agricultural to industrial or industrial to information economy is not to say that we didn't still have farmers in the industrial economy or factories in the information economy.

One, when the economy shifts the source of new jobs and wealth shifts. Are you creating new jobs and wealth in farming, factories or cubicles?

So the first question in regards to policy is, Where are we creating new jobs and wealth? In the early 1800s, the answer to that question was in land-based industries like farming, forestry, fishing (including whaling) and mining. In the early 1900s, the answer was in manufacturing and retail (to sell those mass manufactured goods). It's a waste of money to resist these shifts; by contrast, you get a huge return on money by investing in these shifts.

Two, there is the question of how anyone in any sector works. A farmer in 1820 worked very differently than a farmer in 1920 who worked very differently than how one worked in 2020.

One of the many reasons agriculture employs only 1 or 2% of the workforce now is that it has been transformed twice: by the capital of the industrial economy and by the IT of the information economy.

The average farmer today has about a half million in capital for tractors and machinery. That would sound like crazy talk to farmers in 1820.

A few years ago, a young guy from northern Saskatchewan spent a couple of nights with us. He had acreage and had done really well the previous year. Some extreme weather event (I can't remember if it was drought or flood) had screwed up India's crops. As he was planning what to plant, he could easily see this news and what it meant for the global market price for chickpeas, so planted those and was able to sell them at a good price.

Now think about how extraordinary this would seem to a farmer in 1920. He is sitting in northern Saskatchewan yet knew about the crop failures in India about as quickly as anyone in India. Not only that but he's able to find a market for whatever seed and knowledge he needs about the timing of planting, any special fertilizers, etc. He might be farming but he's part of the information economy. We still call it farming but it has almost nothing to do with the job of a farmer in 1920, much less 1820.

Similarly, about 20% of today's factory workers are engaged in jobs like programming robots; we still count them as factory workers but the folks punching timeclocks in 1940 would not recognize what they're doing as factory work and the other jobs have greatly changed as well.

The popularization of entrepreneurship will change work again. It already is. As machinery automated more manual work, more workers were free to (forced to?) move into knowledge work. As AI automates more knowledge work, more workers will be free to (forced to?) move into more entrepreneurial activities. Just as the industrial economy meant that nearly everyone was using unprecedented amounts of capital and the information economy meant that nearly everyone is using unprecedented amounts of information technology, the entrepreneurial economy will mean that everyone will be more involved in the creation of new systems, new products, new markets and new wealth. And depending on how we classify their jobs, we may even still call them farmers, factory workers and knowledge workers.