Q&A  | 

The need for economic alternative systems, by Peter Flemming

"There are ways of organizing economic activity that do not sacrifice everything to endless expansion, as indicated by the zero-growth and anti-growth movements."

Tags: 'Cambio climático' 'capitalism' 'Climate change' 'Cuarta revolución industrial' 'Digital transformation' 'Future of work' 'Job precariousness' 'labour market' 'Platform work' 'Riders' 'The Death of Homo Economicus'


Reading Time: 5 minutes

Professor Peter Fleming holds a position at University Technology Sydney and has previously lectured at the University of London and the University of Cambridge. His research focuses on transformations of work and employment in the neoliberal era.

Fleming was also the authour of a popular opinion column in The Guardian and several acclaimed books among which The Death of Homo Economicus (Pluto Books, 2017), "a scathing, stylish polemic that calls for a de-privatisation of the public sphere and a fellowship of the precarious", following a review by The Guardian.

Following Joseph Alois Schumpeter, the three technological revolutions we’ve lived so far have granted a new social group access to “the good life”. Do you consider us to be living a new revolution with the same potential impact on society?

One of the dominant narratives coalescing around new forms of technology in society is that it’s a double-edged sword.

What was once thought to harbour socially progressive effects also contains a darkside that’s important to keep in mind. It’s hard to imagine, for example, that Uber, Amazon and Facebook were once heralded as emancipatory, democratic and against the tyranny of authority. That was ten years ago. Few would think that now.

Moreover, it’s really important to keep in mind two further points. The divisions already present in society – wealth inequality, for instance — have largely been amplified with the digital technological revolution.

And second, the economic benefits of computerization in the economy has been overblown somewhat. We see this in relation to productivity figures, which took a major downturn in most advanced economies from the 1990s onwards. Hence economist Robert Solow famously observed that the computer age was everywhere except in the productivity statistcs.

Nevertheless, experts warn about the emergence of a new technology savvy underclass in the heart of the platform and ghost work economy, and about how debt has become “a way of life” and jobs are increasingly precarious. What’s your opinion on this?

I agree. The quality of work and employment has particularly declined over the last year in terms of pay and conditions. Casualization and precarity will son be the norm for most. This is made even more difficult given the cost of living crisis (including personal debt) that we see with the continuing degradation of the welfare state and the extension of market forces ever deeper into society.

However, I think we must be careful about blaming technology for all this. Digitalization (by and large) reflects power imbalances that came prior to its application of economic activity: the decline of unions; the rolling back of the welfare state and conversion of public spending (on education, for instance) into personal debt; the awful marketization/financialization of the housing market, consigning a whole generation to renting substandard apartments. Uber, for example, is a business model that merely capitalizes on these trends.

When we look to the future of work, we’re fixated on robots replacing humans in either a dystopian serfdom or a utopia where life is leisure. Nevertheless, job projections in developed countries show that the biggest increase in employment from 2018 to 2028 is the home health aide followed by the personal care aide, a reflection of the growing older population in the world. How do you think work will evolve in the next 20 years?

Automation has been occurring since the industrial revolution. And it has mostly augmented work, affecting it partial rather than rendering employment obsolete.

We clearly see this today with digitalization. It has not really destroyed jobs en mass but integrated itself into a certain role, often removing the highly skilled component of a job (and thus the part that leads to better pay).

I think the human side of many roles will therefore remain in the future. However, emerging work forms will bifurcate in the next twenty years I believe: on the one hand a large majority of low paid/service orientated jobs will rapidly grow. On the other a small group of good jobs will be taken by the elite.

Given the inequalities and consternation this will cause, digital technology is likely also to take on a more managerial orientation, regulating workers (of the human kind) as much as undertaking value-adding tasks. Indeed, I predict big developments in what we might call the automation of the managerial function. 

Most economic choices we’ve made in recent decades make it more likely for jobs to become inputs into an equation, without recognition, value or access to a safety net. But the pandemic has shown us how important social services and a strong public system is. Can disaggregated workforces managed by algorithms destroy the public system and the welfare state?

For me, two interesting things are happening in this regard. Firstly, what you call ‘disaggregated workforces managed by algorithms’ are isolated and individualized. Although a ride sharing firm may have thousands of workers, they operate as independent units and seldom interact with each other.

There are cases where such workers have sort of become collectivized, of course, but by and large the individualization process has been successful in its mission: to push almost all of the costs of employment (that a company once saw as their own) onto the de facto employees themselves. So not much room for the public sphere here. This we might term the ultra-privatization of the economic realm.

However, this leads to a second point. Workers in precarious situations almost always rely upon the welfare state for tax breaks, housing subsidies, free healthcare and so on. I think the gig economy externalizes those costs (that an employer should be responsible for via wages and conditions) not only onto the employee themselves, but the welfare state too since it ultimately picks up the slack (at least in countries where the remnants of a welfare state remain).

A ride sharing firm pays no employment tax, for instance, which would have fed into the public healthcare system. However, its drivers still access doctors. There is thus something rather parasitical about the gig economy business model in my opinion.

Has the mass production era reached its saturation and do we need a change of paradigm?

Yes, we certainly do need to change the paradigm. And there is some good work being done on alternative economic systems. However, mass production still seems to be the norm. Just look at the exponential increase in Jeff Bezos’ wealth during the pandemic.

My guess is that the limits of the mass production era will be determined by ecological forces, more droughts and fires during summer, increased incidences of species extinction and rising sea levels. It feels to me that the paradigm is so entrenched that it will take some kind of external jolt to change course.

Some call for and consider there’s a real chance of smart, sustainable and global growth ahead. A new Golden Age. But do we need to keep growing?

As I mentioned earlier, growth appears to have plateaued in most countries since the 1990s. A key reason for this relates to the shift from industrialism to post-industrialism.

But beyond that, I have to say I agree that we need to rethink the idea that growth — no matter what — is the only indicator of human wellbeing. There are limits to growth, which we see in terms of consumerism and its impact on the ecology. And, of course, there are ways of organizing economic activity that do not sacrifice everything to endless expansion, as indicated by the zero-growth and anti-growth movements (that has found a receptive audience even among some economists).

But once again, the socio-economic forces that have deified growth are fairly entrenched. We need to think not only about alternatives – since there are now many to choose from – but methods of moving forward from the present situation.

What sort of political movements and ideals would be sufficient to displace the status quo and be compelling enough to realize a truly human-friendly ‘Golden Age’ (as opposed to one that is based upon a narrow set of economic criteria whose usefulness are no longer apparent)?