The Revolution in Earnings Capacity in a World Without Jobs
Chapter 8
"God is not mocked: for whatsoever a man soweth, that shall he also reap." — GALATIANS 6:7
The Big Shift
Major changes in how we produce goods or protect ourselves always reshape society. They change who has wealth and who has power. The Information Age isn't just about computers—it's about a complete transformation in how we live, work, and distribute resources.
In this new age, physical location matters far less. Organizations tied to geography—governments, labor unions, regulated professions—will lose influence. Because governments can no longer control resources through force as easily, their power to redistribute wealth will decline.
Wealth that governments once seized will stay with those who create it. The most capable entrepreneurs and innovators worldwide will accumulate growing fortunes.
Winner-Takes-All Economics
Globalization means the most talented people in every field will earn exponentially more than everyone else. This mirrors what we already see in sports and entertainment: a few top performers earn vastly more than the rest.
The problem? Success in the Information Age requires high literacy and mathematical skills—and millions lack these basics.
The American Competency Crisis
A U.S. Education Department study found that 90 million American adults over fifteen cannot write a letter, understand a bus schedule, or do basic math—even with a calculator. As writer Bill Bryson put it: "They couldn't find their way out of a paper bag."
If you can't read a bus timetable, you won't navigate the Information Superhighway. This group—roughly one-third of Americans—forms an emerging underclass unprepared for the digital economy.
At the opposite end sits a small elite (perhaps 5%)—highly educated information workers and capital owners. They are the Information Age version of feudal landowners, except they specialize in production, not violence.
Ammon's Turnip: Why Talent is Rare ⭐
In the late 1800s, German economist Otto Ammon studied why some people succeed while others don't. He argued that success depends on the random distribution of human abilities—like drawing numbers from a lottery.
1. Intellectual Traits
This encompasses all aspects of rational thinking: quick comprehension that allows you to learn fast, strong memory for retaining and applying knowledge, sound judgment for making good decisions, inventive power for creating new solutions, and other cognitive abilities that form the foundation of mental capability.
These traits determine how well you can process information, solve complex problems, and adapt to new situations. Intelligence is the engine, but it's only one part of the machine.
2. Moral Traits
These character qualities include self-control in managing impulses and desires, willpower to pursue long-term goals despite obstacles, industry in maintaining consistent effort, perseverance through difficulties and setbacks, moderation in avoiding excess, deep regard for family obligations and relationships, unwavering honesty in all dealings, and similar virtues that build trust and reliability.
These traits determine whether someone can be depended upon and will honor their commitments. Ammon noted that a brilliant mind without moral steadiness would often collapse under the weight of poor decisions or lack of discipline. You can be the smartest person in the room and still fail if you can't control yourself.
3. Economic Traits
This category covers practical business abilities: organizing talent for managing people and resources, technical skills relevant to your field, appropriate caution in avoiding unnecessary risks, clever calculation of costs and benefits, foresight to anticipate future trends and needs, thrift in managing resources wisely, and other competencies that enable material success.
These traits determine how effectively someone can create and preserve wealth. Intelligence tells you what to do. Moral character ensures you follow through. But economic traits determine whether you can turn ideas into money.
4. Bodily Traits
To these mental traits, Ammon added a fourth category that's often overlooked: physical capabilities. This includes the power to work long hours without fatigue, endurance for sustained effort over time, ability to handle physical and mental stress, resistance to various pressures and temptations, natural vigor and energy, robust good health that supports consistent performance, and other physical attributes that enable sustained achievement.
These traits determine whether someone has the stamina to execute their plans consistently. You can be intelligent, disciplined, and business-savvy—but if your body gives out, none of it matters.
The Rarity of Excellence
Ammon's key insight: these traits are distributed randomly, like a lottery with millions of combinations. The person who scores highly in all categories is extraordinarily rare—perhaps one in a million.
Most people have a mix of high and low scores. Someone brilliant but undisciplined may fail despite their gifts. Someone hardworking but unimaginative may plateau in mediocrity.
As Ammon wrote:
"Like a lonely mountain peak, or rather like the spire of a cathedral, rise the men of high talent and of genius above the broad mass of mediocrity… The number of the highly gifted is so small that it is impossible that 'many' such exceptional individuals could have been held back simply due to flaws in social institutions."
Translation: True excellence is rare. Society doesn't hold back millions of geniuses—there simply aren't that many.
Income Distribution: The Diamond Shape
Ammon studied income patterns in Germany and London and found they matched his probability theory. Most people clustered in the middle class, with small minorities at both extremes—very poor and very wealthy.
Modern industrial societies follow this "diamond shape":
- Small wealthy elite at the top
- Large middle class in the center
- Small poor class at the bottom
In London today, there are more millionaires than homeless people.
The Factory Age vs. The Information Age
The skills needed in the Factory Age (now ending) are fundamentally different from those required in the Information Age. Most people could operate mid-twentieth-century machines. But those jobs have been replaced by smart machines that control themselves.
An entire category of low- and middle-skill employment has vanished.
If we're correct, traditional employment will mostly disappear, replaced by project-based "spot market" work. As researchers Clive Jenkins and Barrie Sherman noted:
"Most unemployed young people have no qualifications whatsoever."
"Qualifications" here don't mean diplomas—they mean technical literacy, analytical thinking, and adaptive problem-solving. These are now prerequisites for economic participation.
The Bottom Line
The Information Age rewards rare combinations of intelligence, character, skill, and stamina. Those who possess these traits will thrive. Those who don't will struggle.
The question isn't whether this is fair—it's whether you're preparing for it.
Check out the first chapters I posted weeks ago:
