Uber and the Luddites

The fight against the sharing economy, and Uber in particular, can be disorienting. Opposition is often painted as techno-phobia. The good guys in this story are Uber and progress; on the other side are opponents afraid of flexibility and smartphones, kicking and screaming against a future already here. In many ways, this is like the fight of the Luddites (machine smashers) 200 years ago at the dawn of the Industrial Revolution. While the Luddites were fighting the way technology was used to further exploit rather than liberate workers, they were and are misrepresented as simply afraid of and opposed to technology.

Just as power looms and other machines inaugurated a technological revolution that ultimately produced more work for the many and greater wealth for the few, so too modern technologies are enriching Silicon Valley’s billionaires at the expense of drivers, delivery folk and all manner of service workers. The sharing economy that is experienced by consumers as a friendly convenience is a low-wage, precarious trap for workers. It would sound all too familiar for the skilled cloth-makers who wanted machines to give them more leisure and continued control over their work, but instead found themselves subsidizing the profits of the machine owners in England’s “satanic mills.” (more…)

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Economic history in the present: The wage fund and the minimum wage

How many bushels of wheat do you make a year? While this is not the most relevant question to be asking about wages today, some of the discussion around the minimum wage is taking inspiration from a very old economic idea according to which questions like this would be right at home. The idea is that of a “wage fund”: a fixed amount of total wages available to an economy for a given period that dictates the average wage. If such a fund exists, then any aim to raise wages within the period for which the fund is fixed will inevitably end up harming workers – most likely those with the lowest wages and the least power. Today’s arguments against increasing the minimum wage at times mirror this flawed logic – and for reasons that, oddly enough, reflect on why the theory was discarded in the first place. (Click here if you want to skip the history and get to the present; otherwise read on.)

wagefund2 (more…)

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Economic history in the present: Potlatch and tax

This post inaugurates an occasional series I’m calling, “Economic history in the present”. This series will look at vignettes from global economic history with an eye to current phenomena or particular events. Some will be more speculative, drawing on anthropology and philosophy; some will be more rigorous. Hopefully, both aspects of this approach will produce interesting juxtapositions that illuminate the present via the past. Without further ado, here is the opening salvo…

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While redistribution is a bit of dirty word today, it has been a key economic activity across human history. As resources move from the periphery of society to its centre through means more or less refined – from robbery and pillage to rents, taxes and tithes – the need arises for mechanisms to move some resources back from the centre to the periphery. Whether to pacify, reward or simply keep from starvation, the powerful have long given part of their take back to the powerless. Over the course of human history, the vehicles for redistribution have varied considerably: from the haphazard to the ritualized, from the simple to the elaborate.

potlatch-ceremony

One oft-cited means of redistribution comes from the lands now occupied by British Columbia. The Pacific Northwest of North America has a rich tradition of the potlatch, a highly complex, formal redistributive process frequently drawn upon by anthropologists. In ceremonies lasting from several hours to several weeks, wealthy and powerful leaders of kinship groups gave away their wealth to guests from the surrounding area that included members of their own group and often entire rival groups. The more that someone gave away, or even destroyed, the more prestige they garnered and the wealthier they became in the eyes of others – despite the fact that a potlatch might leave them temporarily near penniless. Social status was conferred via giving rather than having.

The potlatch with its ironic twist on wealth should not, however, be mistaken for some kind of utopic ritual; the powerful could give away so much precisely because they had the power to obtain it in the first place. Redistribution is fundamentally about restoring a semblance of social balance; the potlatch gift is a counterpoint to the potential and actual exploitation and violence inherent in the prior process of distribution. It points to redistribution as pivotal in keeping social peace and ensuring continued social cohesion and survival. (more…)

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