Reflections on the cliff-face scrabble for work

A proposal for a start-up (please steal)

I recently got a full-time job. Having a job is good. Reader, as you can imagine, getting a job was not good. We all know this. Hiring is a largely circular process in which one strives to convince people you’re good enough to work for them on the basis of people you have previously convinced that you are good enough to work for - i.e., previous roles held. Even your performance at past jobs doesn’t matter all that much- yes, in theory you have references, but in practice we all cherry-pick them, and they’re not called till near the end of the process. So, the greatest determinant of getting picked is having been picked previously.

University degrees were supposed to bring some meritocracy into the process, but it hasn’t worked because degrees are now so common. In Australia, no one looks at your grades, and it scarcely matters where you went to university. Even in America, if you didn’t go to one of a relative handful of Ivy Leagues or similar, your alma mater and grades are largely irrelevant, from what I can tell. Maybe in some areas it’s different- I’ve heard that computer programming-related areas are a bit more of a true meritocracy-, but overall, it’s a horrible, path-dependent hall of mirrors in which judgements on your capability are made by assessing past guesses and so on.

Not only is the process illogical, but the path-dependent nature of it amplifies the benefits of nepotism and dishonesty. It amplifies the benefit of nepotism, because nepotism acts as an “in” to the job market- a start to allow you to begin accumulating positions so you can accumulate more. It amplifies the benefits of dishonesty because under a system like this, often the only way to make a start in an area is to mislead others into thinking you already have experience through exaggeration or outright lies.

What’s going on here from an economic perspective? I suspect that would-be employers are trying to free ride on the work of others in picking out quality candidates. But they’ve all done that, so hiring becomes guessing on the basis of others’ past guesses. The reason employers free ride like this is that hunting for talent that doesn’t have the CV to back it is 1. Costly 2. Risky 3. And finally, the talent you find is quite likely to walk once they’ve worked for you for a while, so what was the point of going to all that work to discover them? Incidentally, this is why employers also likely underinvest in training relative to the social optimum, because many of the social benefits would be captured by other employers.

But at the level of society as a whole, having no real new talent finding machine except extreme luck, and “someone’s uncle knows someone who knows someone who” is neither fair nor efficient.

IQ tests have often been contemplated as a solution, but are probably infeasible as an option for a wide variety of reasons- not all of them political, as their supporters often claim.

Ideally, I’d like to see this solved through government policy that encourages new talent hunting. Being that we don’t live in a perfect world, let me suggest a private sector solution. My proposal is some kind of start-up that essentially lets anyone get “certified” in an area for a fee. Wait! You say. “Haven’t you just reinvented the University or college?”. No, this wouldn’t be an institution for training- indeed, it must not be, as that would be a conflict of interest. This is an institution for hard, discriminative testing, which everyone knows requires high calibre to pass and is deliberately engineered to have an appreciable failure rate to increase its value as a competence signal.

At present, this sort of service is generally only available with computer skills- Excel, programming, that sort of thing- I want to expand it to all assessable, valuable skills.

For example, perhaps you want to work on writing analytical reports. You go to, say, a three-day program and attempt a bunch of extremely difficult and novel tasks in this area. There is a pass-fail system, and the fail rate is at least 30%- enough that even if you are interested in the area, you might well fail. We want the test to be hard enough that you genuinely must be good, not just mediocre, to pass. The tasks you do are randomly picked from a large battery of possible tasks, so as far as possible, you can’t train for the test except by training the skill itself. Speed, accuracy, completeness, problem solving, and, to the extent possible, creativity are all tested for.

Maybe it says something unpleasant about me that I find this idea attractive. Does the world need to be more competitive? I am just so incredibly tired of writing trite little essays on how I am a committed problem solver, have excellent communication skills, and organisation. I would like the option to demonstrate rather than boast about my qualities. I am sick of a bizarre game in which the way to win is to show that the last people thought you were winning. It’s false and it encourages falsity. We should not build our economy, and a third of our lives, on bullshit. All this will all become even more true as AI gets better and better at secreting smooth responses to selection criteria and hyping up previous roles. As employers are flooded with machine-written applications, they’ll beg for alternative forms of assessment.

Congestion taxes on marketing, hiring and more

We should have a congestion charge on hiring costs and marketing.

Pigouvian taxes work like so. To the extent that a certain economic arrangement or transaction harms others that are not party to that arrangement or transaction, the activity is taxed. Pigouvian taxes are ideally charged at the rate of the marginal per-unit harm of the activity in dollars. They make all the negative costs of a transaction internal.

Congestion taxes are a kind of Pigouvian tax. They are a little bit different from other Pigouvian taxes in that the primary victims of congestion (people stuck in traffic) are also the perpetrators. However, this doesn’t change the essential logic of the Pigouvian tax.

Marketing should have a Pigouvian tax associated with it for the same reason that congestion should. When Coke spends a dollar on marketing, at the margin, Coke gains one dollar plus epsilon and Pepsi loses 80 cents. So Coke and Pepsi engage in an arms race in which the vast majority of their marketing spending just serves to nullify their opponent's spending. This is not harmless from the point of view of society, because it reallocates resources from more useful things to marketing, without even the usual net effects of marketing.

Society might be better off if companies could engage in a compact wherein each would advertise less in exchange for their competitors also advertising less. SALT for marketing. Of course, letting rival firms make compacts about how they compete is normally a terrible idea because it would allow them set up a cartel. But if, somehow, Coke, Pepsi, and all other firms selling soft drinks could make a compact, but only about how much they advertise, we’d all win.

Alternatively, we could just tax marketing according to the principles of Pigouvian taxation.

I think everything I’ve said above is also essentially true of hiring processes- although admittedly the argument is more speculative here. The five rounds of interviews- all of that- the benefits that accrue to companies are like the benefits that accrue to Coke for advertising- they are mostly extracted from other companies. Hiring has become an arms race of more and more expensive hiring managers to try to filter out hidden duds who are then usually picked up by competitors instead, but ultimately this does not deepen the talent pool. We all pay with 6-month-long hiring processes.

Meditations on having a bad Uber rating

I have an Uber rating of 4.6, I am told this is bad- so bad it’s alarming from a driver’s perspective. I find this perplexing because I have never raised my voice, said a harsh word, vomited in a car or done any of the typical things you’d associate with a bad rating.

If I had to guess, I’d say I’ve probably gotten my bad rating from:

1. Not knowing my strength and slamming doors by accident more often than I’d like (I worry about not shutting them properly)

2. The place I used to live was accessible only through an incredibly narrow alleyway, almost unnavigable. At the mouth of the alley- probably only about 20 meters from my house, I’d tell uber drivers to stop because I didn’t want them getting stuck. Maybe some of them took offence. But it would be less than 1/200th of the fee!

3. A few times I’ve had intense conversations with friends in the backseat of the car- not sexual or personal- just intense. For example, one time I was talking with a friend in the backseat about the logistics of nuclear war.

I have never given a driver anything but a 5-star rating. This is because, as creepy and off-putting as I find being rated, what really bothers me is the drivers getting rated- it’s how they live. I’m told that the minimum benchmark for drivers is 4.6, but in practice, everyone who gets business seems to be well north of 4.9. You could easily dip below that by being a hijabi, or having an irritating voice, or being just a bit too talkative with those customers who want silence, or… And might mean the loss of your livelihood.

I hate being rated, so I hate other people being rated, and I take it this is a common view. Ratings are for businesses, not people. People should be policed by rules not by a standing demand to maximise quantified reputation orelse.

Most people- do not want to be entrepreneurs, but so much of contemporary capitalism is about trying to force us all to be entrepreneurs to survive. We want a system in which, at an absolute minimum, a commitment to making an honest go of it comes with guarantees of everything turning out well, absent the uncontrollable forces of illness, accident, and death. We have more than enough wealth to ensure this, but it is incompatible with a world in which your Uber driver privileges can be cancelled because you’re visibly Muslim and you had three anti-Muslims in a row. To fix it, we need to think mindfully about the economy, recognising the value of economic security- a value no less important than, but less widely discussed than values like opportunity, meritocracy, equality, and plentitude.

True, once upon a time all human beings lived or died by their wits, pointing out you broke no rule won’t save you from a hungry tiger, but what the fuck is the point of being wealthier than our ancestors if we have to keep hustling to live? Even when we did live by our wits, we usually did it in solidaristic groups. Hustling alone in an atomised economy to live is nightmarish! We may have to work to live, but no one should have to hustle to live.

Why I suspect legislation-mandated job security probably maximises the sum of compensating benefits

I believe labour market security is efficient in this sense- the monetary value to the worker is greater than the loss to the employer.

I believe that most people would be better off enhancing contracts, if necessary, with somewhat reduced salaries to compensate for reductions in job market stability. In particular, information problems make it impossible to achieve job security-granting contracts because offering contracts with job security would be a market for lemons, at least in many cases- but government or union action on the Labor market can.

Take a job security enhancing contract as one that forbids firing an employee except (1)- For cause (2)- As part of a restructuring in which the worker’s job is eliminated, and no similar jobs that could be given to the worker are created.

Let us suppose there are three types of agents:

1. Bosses

2. Workers

3. Slackers

Workers want job security. They’re generally competent, but hey, bosses can be weird sometimes. It would be really nice to be protected against being fired without a reason- in fact given that being fired would lead, for many people, to economic doom, it is very desirable.

But there is a class of people who want not to be fired even more desperately; call these people slackers. Slackers aren’t necessarily lazy (they might be incompetent, or rude, or otherwise the kind of people one wants to fire), but we need a convenient term. In real life, the worker-slacker dichotomy is a multidimensional spectrum, not a binary, but we will simplify for the model.

Bosses would ideally like to be able to fire anyone, but they know that offering job security makes them attractive to would-be employees; thus if there were no slackers they would offer it as an attractive perk in a competitive job market. Their real fear is the dangers of hiring a slacker and having to go through a few months of hassle firing them- documenting it all, etc. Thus, if there were a way they could offer job security to workers, but not to slackers, they would.

The problem is, if any particular employer offers job security, the slackers will swarm to it. If any particular worker demands job security, then during the vulnerable period of job negotiations, they give out a signal that they are more than usually interested in job security- possible evidence that they’re a slacker. The only exceptions will be where signals of skill and competence are exceptionally clear, and workers negotiating positions are quite strong- and indeed we do see some negotiated job security for very high-skilled workers.

What I’ve described is a hypothetical dynamic. In order to determine whether or not it is persuasive, we need, among other things:

1. An estimate of the economic costs of requiring that firing be for-cause or in response to a bona fide restructure.

2. An estimate of the costs to individuals of being fired, and extrapolating from here, the value to individuals in the expectation of job security.

I very much expect that 2 will outweigh 1, given the enormous literature on how harmful being fired is. Job security is, or would be, worth several thousand dollars to the average employee. My argument above shows why employers and employees won’t necessarily negotiate job security, even if it maximises aggregate wealth.

Understanding people

We are much more defined by what options we regard as feasible than by what we choose from among our feasible options.

People want the right decisions

I think the following is the dynamic of government in the Anglosphere.

1. Ordinary people want the right decision made.

2. The government feels they can’t guarantee the right decision will be made, so instead, they opt to make a defensible decision, or what they think will be a defensible decision. Often, this means following clear criteria, even when they’re clearly wrong.

3. Periodically, this blows up because the logic of making superficially defensible decisions leads to stupid decisions that aren’t even defensible. “We were just following the criteria” falls flat when something goes badly wrong.

4. Because the government is afraid of these blow-ups, they tighten the leash on the bureaucracy, adding measures to increase “accountability”, leading to more defensiveness, leading ultimately to more wrong decisions, further reducing trust, leading to even more defensiveness, etc. etc.

Final thoughts on work

I look out at the next looming catastrophe, AI, and I can’t help but think back to Turchin.

I don’t know whether the whole Turchin framework of elite overproduction is correct, but at least this much is true. There’s an awful lot of intelligent, or at least bright, people who feel like they were promised elitehood, or a fair shot at being elite, and feel rightly or wrongly that society has not made good on that promise. There’s probably never been more in history than there has been in the last 15 years or so.

Maybe it won’t mean much in the end. Arguably peak “25-year-old who thought his mid to high-tier degree was going to mean something” has already passed. Perhaps it was over before it really began- when Occupy went splat. Still, I wouldn’t rule it out yet.

Especially if AI deflates white collar job market.

What I’m going to say next might sound disconnected, and maybe the way things turn out will make it a non-sequitur, nevertheless.

When I think about this possible movement of disaffected would-be middle-class professionals, I think about armies and armies of people aching to be proved right- to be proved to have been very special boys and girls all along-to be proved to have been Ahead of Their Time and not Behind It. I see traces of that in contemporary politics- left and right- “I had a golden ticket because of my exceptional merit, but I was ripped off” is a recurring complaint that wears many different masks. Sometimes it might even be true.

But a movement like that- focused on meritocratic vindication- isn’t going to change the dreadful and stupid logics that took us here. A healthy movement might start in the quest for vindication, but it cannot remain there. Being proved right or being proved bright won’t fix anything, let alone remake it.

I want to caution then against what we might call the politics of vindication- politics centred around trying to show that you were right all along. What I talked about above- trying to prove that you deserved to win the meritocratic competition and were robbed- is just one variation of a large phenomenon.

So much of our politics now is a politics of vindication. If Trump wins, maybe the kids will finally talk to me because all that woke shit is nonsense will go away. If Trump is beaten, maybe my shithead sister will finally see that Drumpf is bad for The National Interest. No doubt some of us are right and some of us are wrong, but I wish the dream of being proved right had never crawled its way into my head- and it’s never hollower than what you’re trying to prove is your own qualities.

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