Judgment Specificity

Oliver Williamson’s central variable was asset specificity—the degree to which an asset loses value when redeployed outside a particular relationship. The higher the specificity, the more a governance structure is needed to protect the asset from the hazards of market exchange; the lower the specificity, the more markets can do the work. AI has introduced a bifurcation of unprecedented sharpness into the knowledge economy: execution capability is being despecified, and judgment capability is being respecified. Execution—the ability to write code in a particular language, to design an interface, to analyze data, to draft a document—was once highly transaction-specific: it took years to acquire, was difficult to substitute, and created the bilateral dependencies that justified long-term employment relationships. AI has made it generic. Any competent professional equipped with AI tools can now perform, at a level sufficient for most organizational purposes, tasks that once required specialists. The specificity has dropped, and with it the bargaining power of workers whose value resided primarily in execution. But