Why Blockchain Won’t Make Humans Obsolete and what it will do instead

Lawyers are annoying. I would know: I’m one of them. We are so annoying in fact that they are the subject of endless jokes, some of which are quite funny.

But lawyers will not be replaced by blockchain technologies. Neither will accountants, bankers, or any other job role.

Rather these job roles will be “disrupted” meaning that their current essential roles will change. An example might help…

From computers to computers

Until the 1950s, “computers” were largely assumed to be humans. That’s right: humans who computed data.

Starting from advances made during World War II, machine technology became increasingly sophisticated so that these roles would be played by machines. A business or government no longer needed a small army of human computers: just a few people who could work a calculator or a machine computer.

So what happened to the small army?

A small number of them got became the first group of (machine) computer programmers. They had a direct hand in crafting how these machine computers would operate along with other technical experts who helped initially create them.

A slightly larger number got retrained on the new machines and worked them. Their jobs were now different, but in many ways the same. They were still in charge of computing large, complicated numbers but, with the aid of machines, they were able to do more with less effort per calculation.

The largest number simply moved on, either to other jobs or no jobs at all. Though the hope is that the new technology causes a net increase in jobs, this is difficult to test and the reality is much more complicated.

These changes are the essence of Clay Christensen’s famous “disruptive innovation”, a term and concept largely cribbed from Schumpeter’s “creative destruction”. They are explanations of how capitalism creates innovation and are essential components of why capitalism beats out centrally planned economies, espoused most famously by Schumpeter, Hayek, Mises, and the rest of the Austrian economic school.