Social Europe
politics, economy and employment & labour
The Human Economy: Creating Decent Livelihoods In Digital Capitalism
by Marc Saxer on 9 June 2017
13.5K Shares
Share
Tweet
Share
Email
Marc Saxer
Ever since the Second Industrial Revolution petered out, global capitalism has faced a demand crisis. If you think that all we need now is to stop austerity and spend our way out of the crisis, think again. Over the past few decades, developed economies were kept alive through artificially created demand. The inflation of the 1970s, the public debt of the 1980s, the private debt of the 1990s and the quantitative easing of the 2000s were all strategies to inject future resources for present consumption. Even if the dystopian vision of a world without work does not come true, workers’ waning consumer power can no longer fuel growth. This means progressive hopes for a Keynesian revival or a return to Fordism are misguided.
Progressives must find new answers to the challenges posed by the digital revolution. In a global economy, rejecting technological innovation is not an option. But the new technologies should also be embraced in their own right: the automation of dirty, dangerous, physically demanding tasks is set to improve workplace safety and satisfaction.
Yet, digital capitalism is ripe with potentially fatal contradictions. Mass un- and underemployment could aggravate the demand problem to a point where the world economy implodes. If digital automation continues to threaten the security and dignity of the majority population, the current revolt against globalism will only be a small foretaste of what is to come.
What we need is a new development model for the digital age. Front and centre of this new model must be the need to create decent livelihoods. Our best chance to create decent livelihoods in the digital age is the Human Economy.
The Human Economy is composed of two interwoven economies. The digital capitalist economy, which generates the surplus needed to remunerate work for the common good. And the human commons, which creates the consumption demand needed to keep the digital capitalist economy going.
Decent jobs: Make the workforce fit for the digital economy
In the digital economy, entrepreneurs will hire humans to perform new tasks. Human work also continues to be in demand in the service industries, from tourism to entertainment, from design to fashion, from food to arts and crafts and from research to development. To realise this potential for decent human jobs, the skills of the workforce will have to be permanently upgraded.
Decent livelihoods: Remunerate work for the human commons
The human economy needs to be built around the recognition of human contributions to the common good. Millions of livelihoods could be generated in the human commons, from health services to elderly care, from child raising to education, from providing security to generating knowledge. However, many of these tasks, which are beneficial for society, do not generate enough income in the capitalist economy. In order to create decent livelihoods, remuneration mechanisms for these tasks must be created.
Five policies to bring about the Human Economy
Level the playing field for human work. Under fair conditions, there is still a need for humans to work together with Artificial Intelligence, robots, and algorithms. By shifting the tax burden from labour to capital, the playing field can be levelled for human workers. We need to explore how robots and data can be taxed with the aim of delaying the rationalization of work until new livelihoods are created.
Invest in full capabilities for all. Humans excel at communication and social interaction, creativity and innovation, experience and judgement, leadership and foresight, flexibility and learning. Harnessing these talents is the industrial policy of the Human Economy. To fully explore human talents, our education systems need to be fundamentally overhauled. To allow for the necessary public investment in public goods, the austerity paradigm must be reversed.
Boost consumption demand through basic income. The debate over the best way to boost consumption demand has sparked the first political battle of the digital age. The opposing camps in the debate over basic income run counter to the left-right formation characteristic of the industrial society. On one side, Silicon Valley techies who seek to boost consumption demand, Davos billionaires who fear the coming of the pitchforks, neoliberals who want to cut back the welfare state, corruption fighters who seek to cut out the middleman, and Marxists who dream of the end of alienating work in the leisure society; on the other, unions who defend their role in collective bargaining, socialists who smell a Trojan horse to do away with social security, economists who warn against moral hazard and social justice advocates who fear social exclusion. As the debate shows, the usefulness of basic income schemes will depend on their design, and many alternative approaches are being introduced. The Institute for the Future calls for Universal Basic Assets, e.g. entitlements to open source assets such as housing, healthcare, education and financial security. Yanis Varoufakis calls for a Universal Basic Dividend, financed by a Commons Capital Depository.
Distribute sources of wealth more evenly. If robots replace humans, then the question is: who owns the robots? In an economy where capital increasingly replaces labour, capital ownership needs to be democratized. Richard Freeman suggests a ‘workers share’ could spread the ownership of companies amongst employees to make them less dependent on wage income. An alternative can be Sovereign Investment Funds which could re-socialise capital returns.
Remunerate socially beneficial work. If the digital capitalist economy fails to create enough jobs, the state needs to play the role of employer of last resort. This economic necessity may become politically useful. In the vertigo of change, more effort is required to strengthen social cohesion. The state can encourage such contributions to the common good by remunerating them.
The social democratic path to the human economy
Creating decent livelihoods in the digital age will require massive investment in public goods. Generating the revenue to pay for these investments is not an easy political task. While the rich too often find ways to dodge taxes, the poor cannot afford to pay them. The middle classes, feeling abused by the “self-serving elites” and the “entitled poor,” are in open revolt. This is the political reason why the tax burden must be shifted from labour to capital.
In the political economy of today, however, the proposed policy shifts will certainly be an uphill battle. Whether the political economy of digital capitalism will be more conducive for the Human Economy is an open question. On the one hand, distributed technologies and the networked economy have the potential to democratize the means of production. On the other hand, the unprecedented concentration of power in the hands of digital platform companies like Google, Facebook and Amazon points to the opposite direction.
The bizarre alliance around basic income schemes indicates a window of opportunity. Digital capitalism is reshuffling political fortunes, and progressives should go out of their way to build coalitions around the need to boost demand. After half a century of supply-side economics and cost-cutting politics, putting incomes back into the centre of economic thinking is an opportunity progressives must not miss.
Building the Human Economy is not a technical task, but the outcome of political struggles. Only a broad societal coalition will be able to implement the necessary policy shifts. To build this transformative alliance, we need a platform onto which as many communities as possible can come together. This platform cannot be a smorgasbord of policies, but a narrative which explains how we can make the digital transformation work for everyone.
What could this narrative sound like? Amidst the conflicts over sovereignty, identity and distribution transformation, we need to strengthen the foundations of solidarity among all members of the society. This can only be done through a new social contract for the digital society. This social contract needs to be brokered around a compromise between all stakeholders.
The Human Economy offers such an inclusive compromise. In essence, it transcends the conflict between capital and labour by making human capital the engine of the economy. For capital, the Human Economy offers a solution to the existential threat of collapsing consumption demand. For the working population, the threat of mass unemployment is mitigated through decent livelihoods. And for political decision makers, the looming threat of social unrest is relieved.
The social democratic path to development, in other words, creates the necessary demand to sustain the digital economy, the social security people need to embrace permanent change, the political stability required for the implementation of disruptive reforms. The social contract for the digital society, in a nutshell, is to provide full capabilities to everyone who is willing to contribute to the common good.
13.5K Shares
Share
Tweet
Share
Email
About Marc Saxer
Marc Saxer is Director of the Friedrich-Ebert-Stiftung India office.
Join our almost 30.000 subscribers and get new publications for free!
“Social Europe publishes thought-provoking articles on the big political and economic issues of our time analysed from a European viewpoint. Indispensable reading”.
Polly Toynbee, Columnist for The Guardian
Partner Ads
Most Recent Posts
Dimitris Papadimoulis
Boosting Domestic Demand And Investments Is Good For Germany – And The Eurozone
Dimitris Papadimoulis
Growth Is Back! So What?
Éloi Laurent
Don’t Be An Asshole
Start Worrying, Details To Follow
Agnieszka Piasna
Where Do We Stand With “More And Better” Jobs In Europe?
Agnieszka Piasna
Susanne Wixforth
Reversing Brexit: Legal Route Via Vienna Convention
Susanne Wixforth and John Weeks
Most Popular Posts
Paul De Grauwe
Catalonia And Brexit: The Same Nationalism
Paul De Grauwe
Germany: What Happens Next?
Claus Offe
Jón Baldvin Hannibalsson
What Can We Learn From The Nordic Model?
Jón Baldvin Hannibalsson
The Human Economy: Creating Decent Livelihoods In Digital Capitalism
Marc Saxer
Michalis Pattakos
Open Vs Closed: An Old Divide, The French Election, And The Ongoing War Of Ideas
Michalis Pattakos
Other Social Europe Publications
Inequality In Europe
Can Neoliberalism Be Saved From Itself?
OP 13: How To Deal With Poland And Hungary
A Chronicle of Crisis: 2011 – 2016
Saving the Euro: Redesigning Euro Area economic governance
Join The Conversation
We encourage critical discussions about our posts but don't accept personal attacks or hate speech. Due to editor moderation, there might be a delay before your comment appears online. You can also flag inappropriate contributions in the upper right-hand corner of the comments.
New Social Europe Book
There is increasing evidence of widespread disillusion with the major shift to neoliberal economic policies that has taken place across much of the world. In this account of neoliberalism’s failings, Colin Crouch recognises some of its positive contributions but also notes conflicts within the neoliberal camp – particularly those between ‘market’ and ‘corporate’ forms of the strategy. Finally, he considers to what extent those behind the great experiment are now capable of accepting its reform.
MORE INFO
ILO Advertisement
This ILO flagship report provides a global overview on recent trends in social protection systems, including social protection floors. Based on new data, it offers a broad range of global, regional and country data on social protection coverage, benefits and public expenditures on social protection.
The report follows a life-cycle approach, starting with social protection for children, followed by schemes for women and men in working age, including protection in case of maternity, unemployment, employment injury and disability, and those for older persons, including pensions.
Hans Böckler Stiftung Ad
The world of work will change fundamentally in the coming decades. What forces are at work in the labour market? What changes are to be expected? And what does this mean for the actors in labour market policy? This final report by the Work of the Future Commission, whose members included academics, practitioners and representatives from businesses and the trade unions, offers a diagnosis of the present situation and a range of views on the future of work.
ETUI Advertisement
The Why And How Of Working Time Reduction
This guide maps the discussion on working time reduction by examining the recent trends, the different reasons for implementing such a reduction, and the ways in which it can be organised. Illustrated with numerous real-life examples and insights from research, this guide is a valuable resource for anybody wishing to know more about the working time reduction debate.
Eurofound Advertisement
Long-term Unemployed Youth: Characteristics And Policy Responses
Young people are more affected than other age groups by long-term unemployment. While long-term youth unemployment is certainly not a new policy challenge for Europe, it now affects a wider range of young people than it ever did before, ranging from those with third-level degrees to the most disadvantaged young people. Eurofound's new report on long-term unemployed youth identifies the factors that increase the risk of a young person being in this situation and looks at the overall impacts on well-being and long-term employment prospects.
Social Europe Edition Book
Zygmunt Bauman was a towering intellectual who saw and analysed – right up to his death in early 2017 – the great socio-political changes, often convulsive, in modern western society long before his peers. Here we highlight his prescient insights into what he dubbed ‘liquid modernity’ with 24 chapters on topics ranging from online loneliness via precarity/poverty/inequality to migration, fear of the ‘Other’ and the decline of the nation state. Chronicle of Crisis, 2011-16, written by one of the great chroniclers of our times, will be read and re-read for decades and more to come.
MORE INFO
Bertelsmann Stiftung Advertisement
Social Justice Index
Rising poverty, youth unemployment and impending sovereign bankruptcies – Europe has been undergoing a stress test almost permanently since the financial crisis began in 2008. For a number of years, the opportunities for people to participate in society worsened considerably in most EU states. But now a discernible upward trend is emerging in the EU as regards social justice.
Social Europe
Editorial Team & Advisory Board
Article Submission
Copyright, Disclaimer & Contact
RSS Feeds
All Content
Columns & Interviews
Blogs
Talks & Events
Search Social Europe
© Social Europe 2018
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment