Everywhere what we call the “blue social model” is collapsing and in its place a new economic order is rising. What some are calling the “gig” or “sharing” economy has been growing rapidly in recent years, with startups like Uber and Airbnb changing the way we work and how we consume. TAI‘s intrepid interns attended a recent discussion at The Century Foundation called “A Survival Guide to the Uber Economy,” eager to glean some insight from the progressive Left’s analysis of the gig economy and its responses to the challenges and opportunities presented by the post-blue model era. Here’s a video of the event:While we did learn a thing or two from the discussion, and we’re glad labor rights advocates are thinking about how workers’ access to benefits will change as the blue model declines, on the whole the event demonstrated just how much thinking remains to be done about this challenge (and how much myopic Marxian thinking the Left will have to discard).Our first objection has to do with the framing of the discussion as a matter of “survival,” a word with an almost Darwinian connotation evoking a life-and-death struggle of noble workers against the greedy capitalists who could care less about them. What was mostly missing from the conversation was the possibility of workers thriving in the new normal. After all, the rise of the sharing economy has brought about some benefits for workers, such as the accommodation of Millennials’ demands for workplace and work-life flexibility. It’s not just disrupting old industries, but also creating entirely new sectors. In some instances, it’s possible to earn more freelancing than in a full-time job. And the new economy also allows ordinary people to leverage their latent assets (that is, property from bikes to houses that can sit unused for long stretches of time). For everyone except the wealthiest Americans, most personal wealth is tied up in the home and a few other possessions; now those can be used to generate income. Instead of acknowledging these important new developments, the discussion veered into dubious anecdotal territory as one panelist discussed his personal encounters with people working in today’s new arrangements, alleging that, in his interactions with Uber drives, they’re predominantly unhappy with their jobs.Also missing was any discussion of why the gig economy exists in the first place: Consumers love it! Instead, the same participant repeatedly made the argument that Uber and similar companies were not actually innovative. Denying that sharing economy companies represented a major technological breakthrough thanks to apps linking consumers and renters as never before, he repeated the old Marxist saw that capitalists primarily make money by dodging regulations, exploiting workers, and denying employees their benefits by “illegally misclassifying” them as contractors. Of course, flexible hours are a part of Uber’s business model, but it’s difficult to maintain that these new companies aren’t genuinely innovative and don’t generate lots of new value for consumers.The gig economy is here and it’s just getting started. From business consulting and college counseling to grocery deliveries and multimedia work, it is ripe with potential. What global supply chains and technology did for goods they are now doing for services. Even Hillary Clinton, the Left’s presumptive flag-bearer, has refused to be a modern day King Canute, standing on a shrinking beach with the workers and trying to roll back the economic tide. She’s recognized that when it comes to the sharing economy, there is no going back; besides, she’s courting progressive Millennial voters who are some of Airbnb and Uber’s most enthusiastic customers.The Right is by no means immune from neo-luddite responses to disconcerting changes from last century’s employment models. However, today it is the Left that is fighting tooth and nail to stop these developments in their tracks; and, Hillary Clinton aside, the Left’s intransigence on a state and local level could have real electoral consequences. The Democratic politicians most invested in the fight against the gig economy—egged on by unionized supporters—are also heavily dependent for votes and future talent upon its most dedicated consumers and entrepreneurs: young, educated liberals. It is neither good policy or politics to live in the past.It is undeniable that the arrival of new post-blue model innovations like the gig economy pose genuine challenges. They demand genuine and thoughtful responses. Portable benefits may have to be organized. Protections may have to be built in. It is in everyone’s interest that a thriving sharing economy be one where growth and benefits are shared. However, no such answers can currently be heard in the liberal echo chambers; only repeated cries for more state-administered benefits, labor categorizations, and unionization. When it comes to the changes in the economy and the end of the blue model, it’s clear the Left doesn’t have any answers. This kind of 20th-century thinking about the blue model is doomed to fall flat.
Blue Model Blues20th-Century Thinking at the Century Foundation