The thesis we have been advancing in the last few interventions is that the essence of capitalism is "relative overpopulation". Here are two recent articles in support of our more theoretical analysis.The first is by Satyjat Das on the so-called "sharing economy", which is anything but what it calles itself - if only I could get hold of the neck of those rotten bastards that run airbnb and the pigs that sponsor them and the likes, I would then not be responsible for my actions, friends.
The second is more directly on the projected overpopulation of conurbations by a technocratic architect who can see the problem but has not a clue about its real cause. Here they are:
The sharing economy benefits its creators, but this may be at the expense of those who do the work or provide the service — as well as the broader economy.
The real reasons for the sharing economy are simple.
The existing industries targeted by these platforms are frequently inefficient. Over time, regulations have accreted, evolving to serve narrow interests rather than to maintain service standards and protect users. Competition has fallen, and development has been impeded.
Proponents argue, with justification, that sharing-economy competitors frequently provide a superior product. This highlights the need to reform existing regulatory frameworks. It is not self-evident that replacing the existing system with non-professional service providers and substituting a new monopoly for an existing one is the optimal response.
The sharing economy has developed in response to weak economic growth and a depressed labor market. Workers unable to find work or needing supplemental income use these platforms to earn additional income.
The arrangements are intended to avoid labor laws that cover minimum wages, working conditions and benefits. Technically, the worker isn't “employed” but a “contractor” not subject to these regulations, though there is debate in some jurisdictions about the exact legal status and rights of sharing-economy workers.
The sharing economy is part of the trend to contractual and temporary work, which masks the real health of the employment markets. It is also part of a global process of reducing overall labor costs.
The development affects both unskilled and skilled work. Professionals, such as engineers, radiologists and designers from Eastern Europe, Asia, Africa and Latin America, are undercutting peers in advanced economies. It is what financier Jay Gould once envisaged: “hire one half of the working class to kill the other half.”
Sharing-economy platforms exploit these factors. In the latest gold rush, venture-capital investors are betting that low prices — due to paying providers less and avoiding expensive regulations — will create mass markets for services once reserved for the wealthy. Uber has raised more than $15 billion in equity and debt, valuing the business at around $70 billion despite the fact that the company’s car-sharing business isn't currently profitable.
Cheerleaders frame the sharing economy in lofty utopian terms: The sharing economy isn't business but a social movement, transforming relationships between people in a new form of internet intimacy and humanitarianism.
Exchanges are economic. Buyers are primarily concerned about access to services at low costs rather than social objectives. Providers are motivated by money, using their assets and labor to get by in an unforgiving and poor economic environment.
Read: 11 things fans of the sharing economy get wrong
The major financial backers of the sharing economy aren't philanthropists. They are Wall Street and Silicon Valley’s 1%, related venture-capital firms and a few institutional investors, such as sovereign-wealth funds. The amount of capital provided is substantial. Given the normal five-to-seven-year cycle for such investments, the pressure to deliver results will increase, bringing it into conflict with the social or altruistic objectives espoused.
Ultimately, the sharing economy will influence how traditional businesses operate. Traditional automobile makers could offer a car-sharing service, such as BMW’s Drive Now. Users can access a car as needed, paying only for usage. These types of changes may decrease rather than increase revenue as it substitutes hiring arrangements for outright purchases.
But perhaps the real issue is that the sharing economy reverses progress in labor markets. Whatever the gains from increased efficiency, it recreates a Dickensian world for a part of the population. Formal employment protects labor from exploitation and deprivation to varying degrees. The sharing economy transfers the risk of economic uncertainty from the employer to the employee with potentially tragic consequences.
Most important, the underlying economic premise is false. Consumption constitutes 60%-70% of activity in advanced economies. In 1914, Henry Ford doubled his workers’ pay from $2.34 to $5 a day, recognizing that paying people more would enable them to afford the cars they were producing. Reduction of income levels and employment security ultimately reduces consumption and economic activity, impoverishing most within societies.
And here is the second contribution from "The Guardian":
This week in Quito as many as 45,000 people have gathered for Habitat III, the global UN summit which, every 20 years, resets the world’s urban agenda.
Why should we care? Well, to start with, in the next 20 years, we will witness more than two billion more people moving to cities. Depending on what we do to accommodate them, this could be good – or very bad – news.
It’s good news because people are demonstrably better off in cities than outside them. For the poor, cities are efficient vehicles to satisfy basic needs. Having people in a concentrated space makes the implementation of public policies more effective (think of access to sanitation, and the consequences for reducing child mortality and epidemic disease).
For the middle class, meanwhile, cities are a concentration of opportunities for jobs, education, healthcare and even recreation. They offer the promise of social mobility. And for a certain elite, cities are a powerful vehicle to create wealth; their critical mass generates the appropriate environment for knowledge creation and prosperity in the broadest sense of the word.
In short, cities are like magnets, with the potential to take care of everything from the most basic needs to the most intangible desires.
Now for the bad news, which we could call the “3S menace”. The scale and speed of this global urbanisation, and the scarcity of means with which we must respond to it, has no precedents in human history.
Of the three billion urban dwellers today, one billion live below the poverty line. In two decades’ time, five billion people will be in cities, with two billion of them below the poverty line.
To accommodate such growth humanely, we would need to build a city of one million people every week, spending no more than $10,000 per family. If we don’t solve this equation, it’s not that people will stop coming to cities; they will still come, but they will live in awful conditions.
What’s at stake here is not just poverty but inequality too. Cities express in a very concrete and direct way the distance between the haves and have-nots.
Urban inequalities are often reflected in brutal ways – from the distance people must travel to work every day, to the lack of quality public spaces, urban amenities and civic services. No wonder so much anger and resentment is accumulated in the peripheries.
Of course, this is problem is not exclusive to developing countries. Rich countries, despite having solved all their basic needs, experience a similar accumulation of social pressure as if it was a ticking time bomb.
The second is more directly on the projected overpopulation of conurbations by a technocratic architect who can see the problem but has not a clue about its real cause. Here they are:
The sharing economy benefits its creators, but this may be at the expense of those who do the work or provide the service — as well as the broader economy.
The real reasons for the sharing economy are simple.
The existing industries targeted by these platforms are frequently inefficient. Over time, regulations have accreted, evolving to serve narrow interests rather than to maintain service standards and protect users. Competition has fallen, and development has been impeded.
Proponents argue, with justification, that sharing-economy competitors frequently provide a superior product. This highlights the need to reform existing regulatory frameworks. It is not self-evident that replacing the existing system with non-professional service providers and substituting a new monopoly for an existing one is the optimal response.
The arrangements are intended to avoid labor laws that cover minimum wages, working conditions and benefits. Technically, the worker isn't “employed” but a “contractor” not subject to these regulations, though there is debate in some jurisdictions about the exact legal status and rights of sharing-economy workers.
The sharing economy is part of the trend to contractual and temporary work, which masks the real health of the employment markets. It is also part of a global process of reducing overall labor costs.
The development affects both unskilled and skilled work. Professionals, such as engineers, radiologists and designers from Eastern Europe, Asia, Africa and Latin America, are undercutting peers in advanced economies. It is what financier Jay Gould once envisaged: “hire one half of the working class to kill the other half.”
Sharing-economy platforms exploit these factors. In the latest gold rush, venture-capital investors are betting that low prices — due to paying providers less and avoiding expensive regulations — will create mass markets for services once reserved for the wealthy. Uber has raised more than $15 billion in equity and debt, valuing the business at around $70 billion despite the fact that the company’s car-sharing business isn't currently profitable.
Cheerleaders frame the sharing economy in lofty utopian terms: The sharing economy isn't business but a social movement, transforming relationships between people in a new form of internet intimacy and humanitarianism.
Exchanges are economic. Buyers are primarily concerned about access to services at low costs rather than social objectives. Providers are motivated by money, using their assets and labor to get by in an unforgiving and poor economic environment.
Read: 11 things fans of the sharing economy get wrong
The major financial backers of the sharing economy aren't philanthropists. They are Wall Street and Silicon Valley’s 1%, related venture-capital firms and a few institutional investors, such as sovereign-wealth funds. The amount of capital provided is substantial. Given the normal five-to-seven-year cycle for such investments, the pressure to deliver results will increase, bringing it into conflict with the social or altruistic objectives espoused.
Ultimately, the sharing economy will influence how traditional businesses operate. Traditional automobile makers could offer a car-sharing service, such as BMW’s Drive Now. Users can access a car as needed, paying only for usage. These types of changes may decrease rather than increase revenue as it substitutes hiring arrangements for outright purchases.
But perhaps the real issue is that the sharing economy reverses progress in labor markets. Whatever the gains from increased efficiency, it recreates a Dickensian world for a part of the population. Formal employment protects labor from exploitation and deprivation to varying degrees. The sharing economy transfers the risk of economic uncertainty from the employer to the employee with potentially tragic consequences.
Most important, the underlying economic premise is false. Consumption constitutes 60%-70% of activity in advanced economies. In 1914, Henry Ford doubled his workers’ pay from $2.34 to $5 a day, recognizing that paying people more would enable them to afford the cars they were producing. Reduction of income levels and employment security ultimately reduces consumption and economic activity, impoverishing most within societies.
And here is the second contribution from "The Guardian":
This week in Quito as many as 45,000 people have gathered for Habitat III, the global UN summit which, every 20 years, resets the world’s urban agenda.
Why should we care? Well, to start with, in the next 20 years, we will witness more than two billion more people moving to cities. Depending on what we do to accommodate them, this could be good – or very bad – news.
It’s good news because people are demonstrably better off in cities than outside them. For the poor, cities are efficient vehicles to satisfy basic needs. Having people in a concentrated space makes the implementation of public policies more effective (think of access to sanitation, and the consequences for reducing child mortality and epidemic disease).
AdvertisementHide
In short, cities are like magnets, with the potential to take care of everything from the most basic needs to the most intangible desires.
Now for the bad news, which we could call the “3S menace”. The scale and speed of this global urbanisation, and the scarcity of means with which we must respond to it, has no precedents in human history.
Of the three billion urban dwellers today, one billion live below the poverty line. In two decades’ time, five billion people will be in cities, with two billion of them below the poverty line.
To accommodate such growth humanely, we would need to build a city of one million people every week, spending no more than $10,000 per family. If we don’t solve this equation, it’s not that people will stop coming to cities; they will still come, but they will live in awful conditions.
What’s at stake here is not just poverty but inequality too. Cities express in a very concrete and direct way the distance between the haves and have-nots.
Urban inequalities are often reflected in brutal ways – from the distance people must travel to work every day, to the lack of quality public spaces, urban amenities and civic services. No wonder so much anger and resentment is accumulated in the peripheries.
Of course, this is problem is not exclusive to developing countries. Rich countries, despite having solved all their basic needs, experience a similar accumulation of social pressure as if it was a ticking time bomb.
No comments:
Post a Comment