Why can't workers benefit more from the tools of the sharing economy?


Comment: Internet technologies are tailor-made for organising people – so why haven't workers used these tools to push back against exploitative business models?

13th April 2016
By Stian Westlake

It's become a truism that the latest wave of digital technologies is great for the rich, but bad for the average worker. High-skilled cabbies lose out to low-paid, precarious Uber drivers. Taskrabbit and Deliveroo create a new underclass of boxwallahs. Amazon's warehouses are latter-day satanic mills in which unhappy pickers are ordered around by metronomic algorithms.

In the ongoing struggle between capital and labour, capital is decisively winning the current round, and digital technologies are a big part of why it is winning.

If this trend continues, it is a problem. After all, we know that labour share of income (how much of the rewards of the economy go to workers) has been falling since 1980 in much of the world. But the thing no one ever seems to discuss is how very surprising it is. Why has capital proved so good at exploiting new digital technologies, and labour so bad?

For anyone who cares about workers it would be a good thing if the labour movement found new ways of making use of digital technologies

Many new technologies are inherently more appealing to capitalists than to workers, not least because they are capital-intensive. If you want to build an automobile assembly line, or an electrical power plant, or an international containerised supply chain, you need lots of investment.

Capitalists, by definition, have better access to capital than workers do, so they are more likely to take up new technologies. Under some circumstances, workers can organise to share in the rewards (for example, by successful unionisation, or potentially through more radical tactics like the Meidner Plan or the Lucas Experiment). In capitalist economies, this is always going to be a struggle.

But digital technologies are both qualitatively and quantitatively different.

First of all, as innumerable pundits have observed, internet technologies are tailor-made for organising people, which is something that workers have a strong interest in doing. Clearly it is possible to organise workers in all sorts of ways, some of which are in the interests of their employers (for instance, the putting-out system, Taylorism or Uber), and some of which are in the employees' own interests (unions, cooperatives, the British Medical Association).

But given that organisation is an important way for workers to improve their lot, a technology that is inherently about organising things ought to be the kind of thing the labour movement seizes with both hands.

The second reason internet technologies are different is that they are much less capital-intensive than important technologies of ages past. Building or renting your own factory or railroad is difficult unless you're rich. Access to computers and to the internet is relatively cheap, thanks to 50 years of semiconductor price deflation and innovations like cloud computing, which is really just a vast rental scheme. Of course, human capital matters too, and being able to program computers is not a trivial skill; but even here, the availability of free online coding courses suggests that the costs of using digital technologies are lower than the costs of making use of earlier generations of new technologies.

With all this in mind, it is something of a mystery to me that workers haven't taken up digital technologies anything like as assiduously as the forces of capital have. I'd expect to see a vast global wave of the use of social technologies to organise labour and to push back against exploitative 'sharing economy' business models.

As far as I can tell, this global wave doesn't exist. There are some pioneers: the UK's Trades Union Congress has been using petition technologies as a way of organising in programmes like Going To Work; Izabella Kaminska at the FT reports rumblings of digital unionisation among Uber drivers; there are accounts of informal use of online forums by workers (the shift-exchange described in this JRF report, say), but often not in a formal or union-backed way. I've heard talk of Chinese factory workers organising action over social networks, but I've struggled to find out how widespread this is. And of course the broader left has shown itself to be very good at using digital technology for organising, as evidenced by everything from the Obama digital campaign to Change.org to Jeremy Corbyn's online supporters. But the use of technology to organise labour seems nothing like as advanced.

I can think of a few possible explanations:

It's happening, it's just that I don't know about it

Of course, I'm not an expert on labour mobilisation or trade unionism, so I am sure there is stuff happening that I am unaware of. If so, please let me know what's going on and remedy my ignorance.

It's happening, it's just taking a while

Perhaps we are on the verge of a huge transformation, but it just hasn't happened yet. This is, as I understand it, one of the main ideas in Paul Mason's PostCapitalism. Kaminska's recent piece on Uber drivers implies that, sooner or later, there will be an inevitable push-back from exploited labour, perhaps using technology. This may well be true. On the other hand, history shows that exploited people can – sadly – stay exploited for a very long time, and that Marxian predictions of revolution often end up delayed sine die.

It's too late

Perhaps this technology arrived a few decades too late. What if unions and the labour movement have been so weakened by the last 30 years of capitalism that they can't take advantage of a technology that would otherwise have been perfectly adapted to their needs? This idea has a certain poignant irony to it, but I'm not convinced it explains things. While it's true that unions are generally far weaker than they were, and the ideology that underpins them has taken a beating from individualism and consumerism, not all unions everywhere in the world are equally weak. Surely if this were the whole problem, we'd see some uptake of digital technology somewhere.

Something about digital technologies perverts the cause

You know when you sit down to do some work and then spend 30 minutes in a black hole of cat videos or Wikipedia? Perhaps there's something about the sociology of social technologies that makes it harder than it appears to use them to organise labour. It has been argued that social media channels like Twitter generate bubble of groupthink that make it harder to build effective coalitions, and (more speculatively) that the left is more susceptible to these problems. Perhaps something like that is going on here: people set out to use the internet to organise labour but other related political projects end up seeming more attractive, and the next thing you know, you've missed your deadline and you're reading the Wikipedia entry for the Scilly Naval Disaster of 1707.

It's just hard, and resources are scarce

There's one further possibility I can think of. Perhaps it's true that while building new ways of organising labour oughtn't to be capital-intensive, in practice it is. You can build apps and buy computers and smartphones cheaply. But perhaps working out what works and building networks is actually really hard. This would explain why Uber and AirBnB, which have almost no fixed assets, have raised $9bn and $2.4bn respectively.

There are also a couple of problems of innovation management to contend with. There's the 'innovator's dilemma', where incumbents are slow to take up new technologies or ways of working; and because trade unions are good at organising labour, perhaps that has made it harder for them to seize new technological opportunities. Moreover, while dynamic new firms in the business world can at least sometimes get risk-capital going, it's less clear who will bankroll the disruptive social movements of the future.

Given that organisation is an important way for workers to improve their lot, a technology that organises things ought to be seized with both hands by the labour movement

We also know that deploying new technologies depends significantly on management skills and practices. John Van Reenen's work suggests that companies with skilful management and flexible labour forces have benefited more from computerisation than others. I don't know whether trade unions have less skilled general management than typical businesses, but I could imagine they have less flexible labour forces, so this might also be a barrier to technological change.

So where does all this leave us? It strikes me that for anyone who cares about workers (and in particular about the extent to which they share in the success of the economy) it would be a good thing if the labour movement found new ways of making use of digital technologies.

To do this, it's helpful not to start from a position of resignation ("of course capitalists will be the ones who gain from the internet"). Instead, the labour movement should be asking why a capital-extensive, inherently social new technology hasn't been better exploited by the workers, and seeking to put that right.

With thanks to Antonia Bance of the TUC and Andrew Harrop of the Fabian Society

Image by Charis Tsevis via Creative Commons BY-NC-ND 2.0


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