Imagine that your country’s road network is owned by one private company. That would be quite the monopoly.
How do you think such a company would use its power? The answer, of course, is to make as much money as possible – through maximum extraction of value from all the economic activity that depends on access to the roads. In one way or another, we’d all end-up working for the road company.
Competitors would be doomed – rival companies either being purchased before they became a threat or having their roads disconnected from the main network .
Of course, no sensible government would tolerate such a situation – and especially not if the big road company were foreign-owned and shy of paying taxes.
And yet, in the digital sphere, we’ve allowed tech companies to establish increasingly dominant positions in one market after another – such as search, social media and advertising.
Time to topple the technopoly
Even in sectors where the products aren’t digital, online platforms are becoming key to market participation and coordination (online retail and ride-hailing being obvious examples). Therefore, these sectors too are becoming vulnerable to domination by big tech.
Is this future of the digital and digitally-enabled economy? A sequence of gated markets in which the gate-keepers collect all the money and then decide how much to give to the people who actually do the work?
Writing for the American Conservative last year, Elias Crim was full of foreboding:
“It turns out that the sharing economy is mostly about exploitation of workers and earning yourself an enforced membership in the precariat, that mass of short-term (‘flexible’) contract employees who now make up about 40 percent of the worldwide labor force.
“These are people who live precariously with no guarantee of a job beyond the short-term, generally less than 40 hours of paid work per week, as well as no unions or industry regulation to speak of, given the dramatic disparity in bargaining power here. Where is this all going, we may well wonder.”
Is there an alternative?
“…platform cooperativism, a marriage of the historic cooperative model of business and digital platforms aimed at bringing genuine democracy to the internet, especially in the form of distributed ownership…
“What if Uber drivers set up their own platform, or if a city’s residents controlled their own version of Airbnb? How about if enough Twitter users got together to buy the company in order to share its ownership?”
There are some examples of successful cooperative enterprises (Crim mentions the Mondragon Corporation). However, from a worker’s point of view, the predominant model of capitalism is employment. In most cases, where an enterprise is too big and complex for self-employment, there is no other option.
The growing influence of the digital platform offers a new model (Crim refers to it as “uberisation”), in which technology replaces many of the coordinating functions performed by a conventional employer, thus enabling a looser relationship with the workforce. This can be criticised as giving the platform owner most of the benefits enjoyed by employers, but few of the obligations. Yet, the same technology that enables “uberisation” could facilitate cooperation instead. It would largely depend on who owns the platform.
In the case of a national road network the only practical means of mutually owning the ‘platform’ is state ownership. But in the case of digital platforms for smaller-scale markets, a workers’ co-operative could conceivably run the show.
But how would a workforce of, say, taxi drivers in a particular city find the resources to buy the digital platform they depend on – or, perhaps, develop their own?
"Sneckdowns" and desire lines: A parable for the big data age
Crim emphasises the importance of “digital commoning” – the “public ownership of civic data” in support of “new forms of social innovation”. There’s plenty of potential for that – because unless the stale stays resolutely analogue, it is simply too big and its reach too wide not to become a major player in the digital sphere. The tech companies are using their control over data flows to empower themselves; the state must therefore use its digital resources to empower us.
Building platforms for the people will require money as well as data. This could be obtained by taxing the tech companies’ revenue streams at source – not once they’ve been filtered through the usual avoidance schemes. In a previous UnPacked, I proposed a platform tax for online advertising. This should apply to the other online monopolies too – indeed the more complete the monopoly, the higher the rate of taxation.