The Free-Agent Diverarchy
|Venkatesh Rao||Nov 10, 2017|
Free-agency as a distinct, Internet-powered conceptual alternative to traditional employment is 20 years old at this point. Dan Pink wrote Free Agent Nation in 2001 when the phenomenon was already past its early-Internet infancy. Tim Ferriss wrote 4-Hour-Work Week in 2007, a decade ago. I personally have been a free agent for nearly 7 years now.
I would guess that for the youngest middle-class millennials (born 1980-2000) and the oldest Gen Z kids (born after 2000) of all classes, free agency is going to be the default, not paycheck careers. Under the loosest definition of free agency, I suspect at least a third of working people under 35 in the developed world, who make enough to support themselves and dependents, are free agents. I'm not counting unemployed people pretending to be free agents.
Let's take stock of the current state of what I call the free-agent diverarchy 20 years in. I'll explain the term in a minute.
The free-agent diverarchy.
In the last decade, careless observers have been increasingly conflating the free agency phenomenon with precarious, unsustainable, low-agency "under the API" contract work that is less free than paycheck employment. But the original concept is still quietly growing and thriving. The future of work is continuing to take shape, faster and faster. Just a lot more quietly than during its noisy first act.
The reason people miss this phenomenon (besides the peak hype phase being behind us) is that we are used to thinking of work in the context of hierarchical organizational forms and convergent temporal trends. Economic activity that creates big new institutions or dramatic grand finales.
Work in the free-agent mode is a divergent economic activity, an evolutionary phenomenon that explores outward from a constantly expanding frontier, and acquires more depth, richness, and variety with every passing year. I call this a diverarchy -- the historical trace of a naturally divergent, expansionary, evolutionary pattern based on variation and natural selection of relatively stable forms.
The free-agent diverarchy is now twenty years old.
Convergent economic phenomena are hard to miss because they snowball to dramatic finales or the appearance of large new institutions. Divergent phenomena are quieter. An entire diverarchy can steadily form around you without you noticing. Before you know it, you're a boiled frog wondering when exactly the world changed around you, why the old center is now the periphery, and how you managed to miss the memo.
I've sketched the current state in the cartoon above. The red rocket's trajectory is the one I'm trying to create for myself. If you choose free-agency, your trajectory may differ. If you choose to remain in the shrinking employee world, it's probably important to understand what the rest of us are up to, and why. Let me explain the diagram.
Turn on images if you don't see the picture above, this annotation key will make no sense without it.
Our diverarchy begins not at 0 or 1 but at -2.
-2: The under-the-API precariat who share some peripheral traits with free agents, but are really like extra-disempowered old-fashioned, pre-Internet contract labor, with less agency than paycheck types. This is not co-extensive with the Uber/AirBnB class. Whether you are precariat depends on how you play the game, not which game you play.
-1: This is the API/bot layer that doesn't actually have any humans in it.
0: The traditional employee class, increasingly becoming a bastion of very high-value specialists who can't really create value as free agents.
At this point, the free-agent diverarchy begins. There is no "trunk" line with a 1.0, 2.0...3.0 linear progression. It is forks all the way out to the frontier. But there is a sort of "ascent of free agents" gradation of levels, based on levels of actual (not nominal) freedom relative to paycheck types.
Level 1: This is the level at which you are really just making different tradeoffs than paycheck employees rather than gaining freedom: more autonomy for less certain income. It is still an important qualitative difference though, since you're starting to "weather proof" your life from the vagaries of paycheck-world weather. You need to because you live "outdoors" in the ecosystem (or better, the near-to-shore littoral zone) of the paycheck world, exposed to the economic elements.
1.1: Tethered free agency: including consulting work of the sort I do, and Patreon-type support from a mass audience. You may not have a boss, but your work is still strongly tethered to the expectations of customers who have a very non-trivial capacity to punish or reward you financially based on whether you make them happy or unhappy.
1.2: "Passive" income: where the scare quotes are because there is no such thing as passive income. There is always maintenance work required to keep an income-generating asset healthy. Both ongoing and occasional upgrade spikes. This is not as strongly tethered to the paycheck world, but it is still pretty strong. At one extreme, you may be no different from pre-Internet independent service professionals like accountants or bookkeepers. At the other extreme, you may be doing something genuinely novel.
Level 2: At this level, you are starting to generate enough of a surplus in some form -- financial capital, network capital, or brand equity -- that you start accumulating some overall freedom and deserving the "free" label in free agent. You can begin to do things that are beyond the tradeoff space in the tethered world. You are leaving the littoral zone and starting to enter the blue ocean part of the free agent economy. Or going from suborbital to orbital if you prefer a space metaphor.
2.1: Personal brand capitalism: you have enough personal brand equity (the concept isn't dated, it's just well past its hype cycle and is now a background infrastructure concept) that you can reliably attract opportunities and begin to pick and choose what you take on.
2.2: Extreme early retirement: You work the cost arbitrage side extremely aggressively to maximize personal autonomy at the expense of quality of life. Cutting the tether to the mainstream economy is your obsession. Because you hate 99.9% of humanity.
2.3: Angelism: You are generating enough surplus that you can start to invest in others to some extent. Money is the most powerful kind of surplus, but sharing a platform that offers exposure, or a distribution channel, are activities in the same sort of bucket. Less savory kinds of zero/negative-sum network capitalism, such as access capitalism (in the sense of access journalism) and influence peddling also start to become possible. There are a lot of incentives for bad behavior in this zone.
Level 3: At this level, you are no longer a cookie-cutter type free agent. You start to acquire genuine differentiation as a human being, not just the superficial differentiation of a shallow personal brand. You start to acquire an identity in the free agent world. This is similar to the level in the paycheck world where you are considered a leader in your field and head-hunted for positions that are created specifically with your abilities in mind.
3.1: Community capitalism: I don't like doing this personally since I don't think communities ought to be viewed as "capital" to be "invested" in or "monetized" but it is definitely possible. I believe that if you happen to play a catalytic role in one, it should largely be considered an accidental responsibility rather than a cultivated resource. It is best to just be a minimalist, laissez-faire steward of goodwill, and avoid seeking to directly or indirectly benefit. People are not plants. Communities represent obligations far more than they do privileges. But that's just me. This is also a zone with strong incentives for lots of bad behavior, like Angelism.
3.2 Fuck-you libertarian survivalism: This is the natural successor to 2.2, the extreme early retirement zone. I think this is an evolutionary cul-de-sac: there's nowhere further to go, and you find yourself lonely and stuck, surrounded by dumb people all derping the same derp of free markets, absolute individual sovereignty, and secretly hoping for some sort of apocalypse where cabins in woods, seasteads, or gun caches might be needed. It's a boring place: using fuck-you money to actually say fuck-you, and waiting for the apocalypse.
3.3 Lifestyle business: Bootstrapped lifestyle businesses are the natural successor to "passive" income once you give up the delusion of passivity. Often "angels" who get bored of only being on the sidelines also move to this zone. If, from this zone, you accept OPM (other people's money) to grow faster than a lifestyle business can, and start hiring proper employees instead of subcontracting with other free agents, you're on the path back to the paycheck world, just as a startup boss who is on the hook to make payroll rather than receive paychecks.
Level 4: Isolation versus interdependence. This is the level at which you have to decide whether you want to stay connected to the broader currents of humanity or vanish from the human stage by disappearing across your own personal event horizon.
4.1: Indie creative autonomy: This is the zone I'm personally targeting right now. I have no real interest in building personal brand equity, communities or companies for their own sake. I also have no interest in amassing more wealth than I can spend in my lifetime on my personal wants and needs (where my tastes tend to low-end rent-over-own luxury). The point of this zone is optimizing for creative rather than economic freedom. I have no problems being financially interdependent with others so long as I have the opportunity to choose who I work with from a wide and interesting set. But I do like to keep increasing my capacity for independent creative action. None of my creative ideas demand much capital beyond my own living expenses.
4.2 Micro-LPism: LP is "lending partner" -- somebody who passively lends capital to others to deploy. This used to be mainly an institutional role for big investment firms and university endowments who give money to active investors. Increasingly, people do this sort of thing in the free agent world. At smaller scales, and in more varied forms (financial, social, distributional etc). This is something to think about if you are starting to generate more "freedom" than you can use but don't want to be an active manager of surplus capital. It's a way of being on the passive side of an interdependency.
Beyond there is the frontier, where more patterns of free agency are constantly being discovered, explored, mapped and stabilized. Some of the active frontier areas today include anything in the overlap with blockchains, and various sorts of free-agent philanthropy.
One frontier area that interests me is what I call deep free agency. Free agency in deeply specialized parts of the world that are the bastions of high-value expertise. Free agents can build websites and design apps, but it's hard to get a piece of the action in (say) Mars missions, or large-scale cloud computing, or big-budget movies and games, without being a paycheck employee. There are still too many things out of reach of free agents.
This is changing, but slowly.
You don't get to design the next jetliner as a free agent, but you can design your own drone. You don't get to do complex heart and brain surgeries, but you can play with CRISPR. You don't get to run experiments on the large hadron collider, but you can get time on open-access big telescopes. You can't build production grade autonomous cars, but you can hack some autonomy into a regular car with commodity hardware, open-source software, and open data. You can't play central banker and explore how to manage large economies, but you can play with smart contracts and learn to govern large financial flows. Just last week, some crypto-newbie managed to blow up $280 million worth of other people's ether. You used to have to be a central banker to do that kind of accidental damage.
The free agent diverarchy is just getting started. In the paycheck world, there used to be a saying: dress for the job you want, not the job you have. The analogous idea in the free agent world is: learn to exercise the freedoms you might acquire, not just the freedoms you have.
In my cartoon, I've showed the rocketship at a particular point, but really, as a free agent, you're both wave and particle. As wave, you're flexing your freedom muscles all along your chosen trajectory, as far out towards the frontier as you can see. As a particle, very real constraints locate you at a specific point. I can't pretend I'm not in the tethered zone, or that I'm doing anything wildly innovative on the frontiers of free agency, but I've definitely learned to exercise the freedoms all along the trajectory that interests me.
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