The turkey economy

The word apprenticeship may seem a little quaint now, but if you look it up in the dictionary, it still seems familiar.

“Apprenticeship is a system for training a new generation of practitioners of a trade or profession”

The root of the word is ‘Aprendre’, French for learn (for Spanish swap the final ‘re’ to ‘er’). I guess they both stem from Latin. In any case, it’s an old word. Nowadays, it’s used more to refer to specific schemes to train blue-collar workers – this is limiting. Everyone who gains mastery in anything goes through an apprenticeship of some sort, whether you are an accountant, a software engineer or a barista serving yuppies their morning cortado. But at its core, an apprenticeship is the earnest pursuit of mastery in a field, over the first 10 years or so of one's career.

On the first day of my (first) apprenticeship, I felt pretty good. I’d graduated with a first-class engineering degree, and bs’d my way to a competitive position on the engineering graduate scheme for one of the UK’s biggest automotive companies, I was excited to learn the trade.

After a pre-packaged corporate welcome, I was handed a Lenovo ThinkPad and a spotty teenager. ‘Here’s J—— ‘ my manager said, ‘He’ll be mentoring you for the next few months’

It wasn't obvious to me what kind of mentorship I could expect from someone who looked like he spent his free time grinding weapon upgrades in World of Warcraft. But J—- knew his stuff. He was 19, a nation-state labelled apprentice who'd been there two years. He had no student debt (the company was paying for his education), earning nearly my salary, and was clearly more accomplished than me. I didn't feel that good anymore. I felt 4 years, and about £150k behind.

After less than 6 months, for reasons we’ll get to, I left my dream job to embark on a self-directed apprenticeship. It was probably the best decision I ever made.

A few weeks ago (6 years since our first meeting) I caught up with J—-, he’d just been promoted to ‘Level 6’, earning around £60k. Not exactly a standout result, but not a bad one either. On the surface, it might seem J— had traded upside for security. While I got the low probability of a decent payday, he had opted for the certainty of a monthly wage, at a large company, with a needed skillset. I chose to be fairly successful in 10 of 100 parallel universes, he’d chosen to be mildly successful in 99.

But only on the surface. As we’ll explore in the article J— has taken a huge risk with his choice of career, in a non-trivial portion of parallel universes he will lose his job and be nearly unemployable.

This illusion of security is perhaps the most harmful myth of modern corporate apprenticeships. While they ostensibly promise valuable real-world skills, they train you to be dependent on increasingly fragile systems. In this article, we'll trace how apprenticeships evolved from a path to independence into a tool to create dependency, and explore an alternative path that I and a handful of my friends have taken. A path that offers both better upside and more security in a world that we can’t hope to understand.

Apprenticeships, a brief history

Throughout history, apprenticeships have enabled workers to gain mastery in a field. This is important, as, unless you are the third cousin of a Saudi prince, labour is your only option to build wealth. Labour being any type of useful human work, from CEOs of multinational corporations to blacksmiths, both of whom (nepotism discounted) will have gone through some kind of apprenticeship phase in their career.

In the Medieval and Renaissance world, apprenticeships were guided by the guild system. The guilds were the original pencil-pushing bureaucrats and economic gatekeepers, controlling trading standards. A tradesman would work as an apprentice for 5-10 years, starting at around the age of 12, presumably to initially observe and keep their master hydrated. After this, they would travel around for 5 years as a journeyman, training under different masters before presenting their masterpiece to the guild, now being granted the privilege of opening their own shop, having learned the skills to run their business end to end.

The goal of an apprenticeship was always to give workers the required skills to work for themselves. The incentives for the worker and the guild were, broadly, aligned. Workers sacrificed pay in the short term for the skillset to be masters of their own destiny, in clear opposition to the apprenticeships of today.

The industrial revolution changed everything. As corporations replaced guilds, the comprehensive craftsman's education gave way to narrow specialisation. Workers no longer learned their entire trade - a textile worker might master one machine without understanding the broader fabric industry. Apprenticeships shifted from a tool for the individual to gain independence to a tool used by corporations to enslave the individual to his machine. Apprenticeships became a system to create productive employees rather than future business owners.

Technology progressed slowly enough, and humans were an important enough part of the technology that this semi-skilled labour class was still required by capital. The rising tide of productivity also caused wage growth, but the increasing gap between the capital-owning class and the labour class was now set in motion.

The apprenticeship of modernity

Since the mid-20th century, the principal means for the majority of people earning a living has skewed more and more towards ‘knowledge workers’. In the Global North, over 60% of the labour class are now knowledge workers. Again, all workers who have reached some kind of mastery have gone through some form of apprenticeship programme. Before we tear down the in-built fragility and risk hidden from the current knowledge worker, let’s outline the strong-man argument for undertaking the apprenticeship of modernity.

Richard is an accountant. After a generic degree in something with ‘business’ in the title, he took to maximise flexibility (read, absence of self-knowledge) he landed a job on a graduate scheme for PWC. PWC paid for all his exams, and, after giving 4 years of his life to the company, earning a modest, but fair wage, he became a chartered accountant (apprenticeship phase). At this point, aged 25, his wage rose to £70k (nearly double the national average). Richard has gained fungible skills, in a highly liquid market of management accountants, he moved between three of the four ‘Big Four’ accounting firms, learning from different managers on the way, and gradually specialising (journeyman phase). At 29, Richard is now a senior manager in an audit division of KPMG, his goal is to become a partner, which, if he continues giving his all to the company, could happen in the next 5 years, at which point his earnings would skyrocket to around £600k.

Finishing his apprenticeship, It may seem like Richard is winning, he’s found a stable profession where he has achieved mastery, and is earning a good salary, he also has a chance (through being made partner) of fairly wild success. But Richard’s position is actually very, very fragile. He’s locked himself into near complete dependency on the world remaining static.

The illusion of safety

The first illusion we must address is the fungibility of Richard’s career. All we mean by fungible is his ability to be independent of one specific employer, which is important if your employer fails (like 90% of S&P companies in the last 100 years). Richard thinks his career is fungible because he has worked for three employers in the last four years. In reality, these four employers are the same company operating in an oligopoly with a larger degree of differentiation in their typeface than anything of substance. All share the exact same risk profile. Their business models are the same and are largely based on regulation rather than any real competitive advantage. Disruptions like AI, blockchain auditing, regulatory changes, or indeed any change that we cannot foresee, will damage all companies equally. These companies are part of a highly connected, and thus highly fragile ecosystem.

Probability of loss v number of assets. Any portfolio must also be uncorrelated to provide diversification, it is not simply enough to add more assets. This is not the case when working for a highly correlated oligopoly (like the Big Four accounting firms)

This illusion applies not just for accountants but almost all career knowledge workers. We think these careers are safe, and dedicate a large portion of our lives apprenticing for them, based on nothing more than that they have been safe in the past. This is not logical, we have lived through a period of surprisingly little change, with the rising tide of globalisation (helped by the internet) causing knowledge workers to increase earnings without threatening their job stability. Stability is not security.

The illusion of skill

One of the things that disenfranchised me from pursuing an engineering apprenticeship was the amount of time I spent improving skills that were irrelevant, boring and, mostly useless in the real world. I was spending more time learning about internal purchasing processes, review meeting structures, very specific software (that was only used by my automotive company), and a lot of other nonsense. While I did learn a fair amount about manufacturing processes, how to give presentations and how to negotiate with suppliers, it constantly felt like an uphill push to improve skills that were close to the fundamentals of the value I was supposedly delivering.

Richards's problem is the same. He thinks he’s accumulating valuable, transferable expertise, but much of what he’s learning is firm-specific process knowledge. The incentive of the employer is not to make Richard employable across a number of domains, it’s to extract as much value, and make him as efficient at the highly specific job he’s doing, as possible. It’s a common joke that when you ask someone what they do, you just hear back a lot of jargon. I asked a friend the other day to explain her job ‘I align delivery teams to deliver projects on our global platform’ This is just words, there is no value here. You’ve found a very specific niche multiple levels of abstraction away from actual value and should a black swan or even smaller crisis make your job redundant, well, to quote Buffet ‘only when the tide goes out do you discover who’s been swimming naked’.

Absence of skin in the game

While the absence of Richard’s job security, and the skills he’s acquiring are fairly hidden, his absence of skin in the game is not. While this absence is particularly egregious in the finance industry – where practitioners can take short-term, highly fat-tailed bets, and not suffer the consequences when those bets eventually blow up – it’s commonplace across nearly all of knowledge work.

The only real impact I had in my short apprenticeship in automotive was saving the company some money due to realising we were being vastly overcharged on brake clips. Those tiny bits of plastic that dampen the vibration of a brake pipe attached to the chassis, turns out that if you’re buying millions of them and getting overcharged a dollar, it adds up. I got a pat on the back for my work, no more, no less, it’s what I was getting paid £2,500 a month to do. This may seem unfair, but it’s not, if I’d screwed up (like potentially the last grad to be assigned my job) I would bear none of the downside. No skin in the game.

Absence of skin in the game is not natural, it’s a modern invention that stunts learning. You fall off a bike, you get hurt, you adjust, and your probability of falling off again is lowered. If you deliver an overpriced PowerPoint presentation on business strategy to a Canadian Railway, and ten years later that company sees its share price drop 30% due to some major accident from faithfully following said plan, chronically underinvesting in critical infrastructure, you are not exposed to the downside, you are likely not even in the same company. You have avoided risk in the short term, at the cost of long-term fragility.

The modern apprenticeship, a summary

The argument above is not that modern apprenticeships have been a poor way to earn a living over the last 50 years—millions have benefited from them. Nor is it an argument that you cannot earn a good living as a Big 4 auditor. I am simply highlighting the significant risks embedded in the system. Contrary to popular belief, these careers are not as secure as they seem.

The apprenticeship of modernity, to find a large company to work for, learn the ropes of that industry, and slowly over time move to an increasing level of specification, is fraught with unseen downsides. The model only works if tomorrow looks like today. If unusual things happen, the fragility of this system will be revealed, and usually, unusual things do happen. You would not train as a radiologist or a cab driver, the disruption technology will have on these industries is obvious. This does not mean that other careers, that are not as immediately in the reaches of AI are any less fragile.

Fragility v stability. Waiter earnings (top) v Knowledge worker (bottom).

An alternative

It may seem arrogant to suggest undertaking an apprenticeship in a different way from the norm. It is the exact opposite. By taking a career in consulting, accounting, law, or any other traditional apprenticeship path, you are actually making a large, (arguably arrogant) bet. You are assuming that the next 30 years will look much like the last 30 and that the ‘skills’ you will learn in the most important period of your life, your 10ish-year apprenticeship, will be desirable once you’re apprenticeship is over.

The guiding principle of the apprenticeship I am proposing is simple – you want to live happily in a world you do not understand, and you want changes to the current system, whether technological, political or legal, to benefit your apprenticeship, not threaten it. It is the opposite of arrogance, it’s humility of our inability to predict the future. I call this apprenticeship the ‘antifragile apprenticeship’

Your author has skin in the game, he eats his own cooking. The apprenticeship I’m going to outlay is the one I have followed over the last 7 years. I know perhaps half a dozen other friends who have followed something similar. I’ve (due mostly to randomness) had a better outcome than most, but it would be hard to argue that any of us are in a more fragile position than our peers who went down the apprenticeship of modernity.

Just as we swilled creamy pints long before we understood the science of fermentation, in nearly all things, theory comes after practice. I (and none of my peers) set out on our own antifragile apprenticeship with these principles (at least explicitly) in mind, it’s much easier to connect the dots after the fact.

Principles for an Antifragile Apprenticeship

The goal of any apprenticeship is mastery. But, for the most part, the antifragile apprenticeship is not about specifying any particular skills to master. It’s a set of principles to follow to put you in a position to thrive in a world of uncertainty.

Develop Lindy Skills

A book that has been in print for 1000 years, has a much higher likelihood of being in print than a book that’s only been in print for 6 months. A restaurant that’s been in business for 50 years, is more likely to survive this year than one that’s only been in business for 5. This is the lindy effect, given no other information, the thing that has survived longest has a better chance of survival. The same is true for the labour market. Unless you have a very strong conviction in a particular skill, the default should always tend to lindy.

Writing well is probably one of the lindiest skills out there, and precious few people can do it. Marcus Aurelius, Churchill, Paul Graham and Bezos, have all been prolific (and skilled) writers. Good writing is a combination of technique and clear thinking, both of which can be practised by writing more. Five years ago I couldn’t really write, I started a newsletter and wrote an essay each week, now I’m only a half-decent writer, but still better than nearly anyone I come across in the working world, this usually helps me get my own way (not always a good thing). Write a 2000-word essay every week for a couple of years and your writing will improve immeasurably.

Real-world maths is another lindy skill that surprisingly few people have a proper grasp of (even developers). Being able to do fag packet calculations to quickly model different business models and scenarios is a skill that will help with persuasion and also with your thinking. If you couldn’t do maths at school, don’t despair. I have a trader friend who was in remedial maths and now has a better grasp on real-world numbers than anyone I know, some people just need skin in the game. Most days I do a ‘Femi problem’ and ask myself pointless questions like ‘How many aeroplanes are in the world’, and ‘how much of a fully grown oak tree was needed to make this table’. I don’t think there are many better ways to broaden your reference points and mental maths.

The list of lindy v non-lindy skills is too long to go into detail on each, and probably warrants a separate article, but once you get into this way of thinking of looking at skills in relation to their past staying power, rather than their expected future benefits (which are unknown) it should help you identify where to spend your time. I’m not saying to never spend time on non-lindy skills, it’s inevitable you will, and often the medium of learning a non-lindy skill (such as coding, preferably backend) will have second-order effects of learning a lindy skill (engineering thinking). It’s also likely optimal to spend some portion of your apprenticeship learning skills that are not lindy, but we’ll come to that.

Learn to build, learn to sell

I said the antifragile apprenticeship wasn’t going to be prescriptive, but there are two meta-skills of which you really must learn one if you are going to have any kind of antifragility in your career. That is either learning to build or learning to sell, have both, and it’s difficult to see an environment you won’t thrive.

Building sounds intimidating, but in the world of bits we live in, you can be pretty loose with the definition, I’d define building as anything that results in a product you can sell. Creating a video is building, coding a software product is building, writing an ebook (or paid newsletter) is building, and creating products in the real world (hardware) is of course also building. Being able to build is antifragile, you are not reliant on a corporation or external team to execute for you. If a good software developer is made redundant, he can just open up his laptop and make something people might want to use.

Selling is equally, if not more important. By selling I don’t mean internal selling of an idea, or convincing your head of department for a budget increase, this is the world of corporate back-scratching. I mean the ability to actually get consumers or companies to part with money for something. The only way you can get good at selling is by selling, you can do this working in a normal career, one of my first jobs was working in a call centre where I had to call people up (mostly nice middle-aged ladies) selling them on the idea of giving money to victims of human rights abuses in papa new guinea. Of course, the ideal would be to try and sell something you’re building. This phase of my life was so humbling, I do not even like to recall the indignity of it. There’s nothing like the instant feedback of having real customers ask you why are you wasting their time with your nonsense product to very quickly level up both your sales and building skills.

Skin in the game

You need to have skin in the game. This is not a moral argument, it’s just about effective skill acquisition. In my first job in startupland, I was hired into a (slowly dying) 6-person company, my job was to take their marketplace software, reimagine it slightly, and sell it to other companies. I failed and the business failed, I, along with 5 other people on the team, was fired with 3 days of notice. Feedback loop. I learned how hard it was to sell unproven software, and if I was going to ever succeed at it I needed to a) pick a much easier market b) give everything I had to it c) have an engineering team that could iterate at the speed I could promise unreleased features on sales calls. I don’t think I’d have felt these lessons so keenly if my paycheck and those of my comrades hadn’t been extinguished, and likely wouldn’t have managed to sell software in my own startup.

You don’t need to own your own company to have skin in the game. Contrary to popular belief, not everyone should start a startup, probably less than 5% of the population have the combination of masochism and delusion to lean towards it. It’s also not about experiencing the upside of success, it’s about experiencing the downside of failure. I have a friend who took a 100% commission sales job straight out of uni, equally valid.

Barbell Strategy

In investing a barbell strategy refers to a strategy where the majority of your cash is in low-risk, boring plays, with a small percentage reserved to capitalise on volatility. This could be something like 90% of your cash in T-bills yielding a hopefully slight above-inflation rate of return, while 10% is in more spanky stuff like out-of-the-money call options (short) or angel investments (long). For disclosure, your author does not follow this strategy, unfortunately suffering from the all too common ailment of domain blindless, abiding by the principles of antifragility in his career, his penchant for fasting and his love of lifting excessive ferrous metallurgy, but not in his portfolio (where he has been brainwashed by index-fund theory) and is unlikely to do so until he feels the consequences of his actions (skin in the game).

One of the downfalls of the modernity apprenticeship is that it leaves limited to no time (or energy) outside of your contractual employment to pick up new skills. An antifragile apprenticeship should be structured in a way that a non-trivial portion of your time can be allocated to learning trending skills that are perhaps adjacent or complementary to your lindy skill set. Four years ago I devoted a lot of time to learning about crypto. I read countless whitepapers, wrote about it, got into trading ‘shitcoins’ and spoke to probably 100 people in the space. Crypto is not lindy, now makes my skin crawl and its medium-term relevance is uncertain (if the culture remains as it is now, I sincerely hope it dies). Despite the reprehensibility of the sector, you cannot deny the trillions in capital that have poured into the space. Without crypto, I would not have made my first bit of money trading, and it is also unlikely I would have the modest success I have. It turned out to be a good bet.

An antifragile apprenticeship doesn’t ignore trends, it just recognises them for what they are, and that the true value of an apprenticeship is mastering lindy skills that will give you value in nearly all parallel universes. Still, by incorporating a barbell strategy and learning the techniques of AI prompt engineering, the technology of quantum computing, how to build VR apps, or use advanced software to help with your sales, you can maximise the upside of these more volatile technologies taking off, while still ensuring you are protected if they go nowhere.

Conclusion

When I met J—— on my first day at that automotive company, I thought I was lagging behind. In a way I was, at least on that specific path. What I as then too blind to see was the fragility of the modernity apprenticeship. The movement from self-reliance to company/industry reliance has created an environment where employees are becoming so highly specialised and spending so much of their most important learning years in ways that only seeks to serve the short-term needs of the company, they are becoming highly fragile.

In a world where technology growth is slow, the global landscape remains consistent, and things generally look the same, going to work for a big company, getting a good salary from the off, steady career progression and the ability to tell your friends and family you are doing what is expected of you by earning a monthly salary is a good bet, but you have to see the risk, a turkey is most confident in the generosity of its master the day before thanksgiving.

An alternative route, working in smaller companies, or for yourself, prioritising learning lindy skills and sacrificing a good starting salary might seem like the riskier option, this is one of our biggest illusions. While, of course, there is more volatility in the short term (startups fail, owning your own business makes you dependent on clients), you are reducing your exposure to a single institutional risk.

In 1795, 75,000 workers apprenticed in hand-loom weaving. The next year, the industrial mill was created, 10 years of specific knowledge, created by capitalism, for nothing. These people found work, probably operating the machines that replaced them, but this is beside the point, they spent 10 years of their most productive years learning something that was irrelevant, and their career capital was reset. Today are not bound to a single trade or guild, or family profession. And yet, most people still default to the safest-looking option, picking the path that leads them straight into dependence. We mistake stability for security.