towards dual ownership model of platform companies

Towards Dual Ownership Model of Platform Companies

Digital Transition, Post-Capitalism and Universal Basic Income

Min Geum(Institute for Political & Economic Alternatives)

Disruptive Technologies and Social Crisis1

Platform Capitalism as twenty-first-century Capitalism2

List of Alternatives3

Critique of Post Work Society & Post Capitalism4

Platform Capitalism and Money Circulation 5

Limits of traditional regulation6

Big Data Commons & Dual ownership model of the platform company 7

Solutionism versus Commoner Democracy8

Contents

The 1st Gyeonggi Province Basic Income International Conference | April 29~30, 2019

Recent technological development presents an economic paradox: productivity increases, but employment may not.

With such disruptive technologies as artificial intelligence, automation and robotics, what can be named as the decoupling of productivity, employment, wages and income has become strikingly visible.

“There is no economic law that says digital progress will benefit everyone evenly.” (Brynjolfsson, 2012)

1

Great Decoupling (McAfee and Brynjolfsson, 2016)

Disruptive Technologies and Social Crisis


2


3

The Effects of Digitalization on Labour Market

Technical Unemployment: Frey & Osborne (2013), WEF (2016)

Compensation theories: Arntz et al. (2016), Goos et al. (2014), Graetz and Michaels (2015), Gregory et al. (2015), Marcolin et al. (2016), OECD (2015)

The recent rise in wage inequality is usually attributed to skill-biased technical change (SBTC)

Employment Polarization: The lowest-skilled occupations slightly increased employment share, and the highest-skilled occupations increased employment share significantly; on the other hand, all of the middle-skilled occupations lost employment share (Autor and Dorn, 2013)

The Rise of the platform workforce: Berg and De Stefano (2018), Huws (2018)


4

Smoothed changes in employment by occupational skill percentile,1979-2007


5

Platform capitalism as twenty-first-century capitalism

Characteristics of Platform Capitalism

- Data driven value creation: direct network externality and cross network externality- Two-sided markets and cross-subsidization

Types of Platform Capital: 1) Advertising Platforms (Google, Facebook), 2) Cloud Platforms (Amazon Web Services, IBM), 3) Industrial Platforms (Siemens, GE), 4) Product Platforms (Rolls Royce, GE, Pratt & Whitney), 5) Lean Platforms (Uber, Airbnb, Amazon Mechanical Turk)

The financial Crisis of 2007-2008 and the Emergence of platform capitalism


Effect of Platform Capitalism

- Productivity Effect: Platform companies shorten the turnover period of capital. Thus, the need for the formation of idle money capital is reduced.

- labor share decline

6

Platform capitalism as twenty-first-century capitalism

Privatisation of Social Infrastructure- Smart City (Cisco, Google. Simens, IBM, Phillips) The tendency towards monopolisation is inevitable according to a data-centric logic. Unlike the classic vertical integration of Fordist firms, platforms take on a rhizomatic form of expansion.


technological optimism versus technological skepticism

7

Pendulum movement between a patial revision of old laboristparadigm and the technology hostile Neo-Luddism

New Vision and New Paradigms

Job Guarantee and Modern Money Theory (MMT)

post work society, accelerationism and post-capitalism

Universal Basic Income (Tax based)

Universal Basic Income (Social dividend from digital Commons; dual ownership model)

List of Alternatives


Tax based UBI have difficulties in taxation issues.

8

Dual ownership model of platform companies: All members of society have Big Data ownership and should have commons capital stock for platform companies based on this ownership.

Rather than just regulating corporate platforms, efforts should be made to create dual ownership model and public platforms.

Universal Basic Income as Share of Common Wealth


It is implied in accelerationism that technological development needs an intervention in order to change the society, but that political intervention should be done in the direction of technological development. This position is reasonable.

9

Post-Capitalism: Mason (2015)Accelerationism: Srnicek and Williams (2016)Fully automated luxury communism: Bastani (2015)

A positive feedback loop leading led by a higher level of basic incometo a wage rise, and from higher wages to more automation and moreacceleration towards post capitalism is valid in economics.

Critique of Post-Capitalism


10

Critique of Post-Capitalism

However, it is a clear error to equate the decline of wage labor with the end of capitalism.

Post-Capitalism is the abolition of the form of capital, m-c-m’.However, it is not the end of surplus production, but the emergenceof new circulation form where surplus is distributed to all members ofsociety.

The distribution of surplus to all members of society can be achievedthrough tax based UBI and by models in which commons have dualownership of platform companies.


Platform Capitalism and Money Circulation

Capitalism as a Service

Platform companies contribute to surplus value creation by shortening Time of Capital Turnover.

If platform capitalism grows dominant, the new type of tax like digital service tax is introduced, and Universal Basic Income is established, then most of the money flow in the whole society starts from platform capital and comes back to it.

11

platform capital digital service tax UBI productive capital platform capital


Taxation problem

- Permanent Establishment

OECD, Base Erosion and Profit Shifting Project (BEPS)

Virtual PE, significant digital presence

- digital service tax (European Commission, 2018)

Difficulties of antitrust legislation- “consumer welfare” (Robert Bork, The Antitrust Paradox, 1978) and two-sided (multi-sided) market

-Lerner Index and two-sided (multi-sided) market

12

Limits of traditional regulation


13

Big Data Commons & Dual ownership model of platform companies

On of the most increasing shares in today’s economy does not emanate from labour but from data extracted from human activities. The central question is how the future progressive governments will deal with Big Data.

Barcelona Initiative for Technological Sovereignty (BITS): City Data Commons (Bria, 2018)

Big Data and Value Creation: the value of data collected from individuals can be enormous but the value emanating from a single person is virtually zero. It is only on an the aggregate level that the data become valuable

Dual Ownership Model: Thomas Paine (1969[1796]), James E. Meade (1993[1964]), Yanis Varoufakis (2016).


14

Solutionism versus Commoner Democracy

Morozov (2013) critiques what he calls "solutionism"

– the idea that given the right code, algorithms and robots, technology can solve all of mankind's problems, effectively making life "frictionless" and trouble-free.

Transition from Property Owning Democracy to Commoner Democracy


References

• Arntz, M., T. Gregory and U. Zierahn (2016). “The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis”. OECD Social, Employment and Migration Working Papers, No. 189. pp. 1~35, Paris: OECD Publishing.

• Autor, D. and D. Dorn(2013), “The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market,” American Economic Review 103(5), pp. 1553∼1597.

• Bastani, Aaron (2018). Fully Automated Luxury Communism, London: Verso.

• Bork, Robert H. (1978). The Antitrust Paradox, a policy at war with itself, New York: Basic Books.

• Bria, Francesca (2018). “A New Deal for Data”, In McDonell, John (ed.), Economy for the Many, London: Verso.

• Brynjolfsson, E. and A. McAfee (2016). The second machine age: work, progress, and prosperity in a time of brilliant technologies, Paperback, New York and London: W. W. Norton & Company (2014).

• Brynjolfsson, E. and A. McAfee (2012). Thriving in the Automated Economy, The Futurist, March-April 2012, pp. 27〜31.

• Frey, Carl B. and Michael A. Osborne (2013). “The future of employment: how susceptible are jobs to computerisation?”. Oxford Martin School, Programme on the Impacts of Future Technology, Reprint: Technological Forecasting and Social Change114, 2017, pp. 254~280.

• Goos, Maarten, Manning Alan and Anna Salomons (2014). “Explaining job polarization: routine biased technological change and offshoring”, American Economic Review 104(8). pp. 2509~2526.

• Graetz. Georg and Guy Michaels (2015). Robots at Work. IZA Discussion Paper No 8938.

• Gregory, T., A. Salomons and U. Zierahn (2015). Technological Change and Regional Labor Market Disparities in Europe,Mannheim: Centre for European Economic Research.


References

• Huws, U., Spencer, N. & Syrdal, D. S. (2018). “Online, on call: the spread of digitally-organised just-in-time working and its implications for standard employment models”, 10 Jul 2018, In New Technology, Work and Employment, 33, 2, pp. 113-129.

• Marcolin, L., S. Miroudot & M. Squicciarini (2016). Routine jobs, employment and technological innovation in global value chains,OECD Science, Technology and Industry Working Papers No. 2016/01, OECD Publishing: Paris.

• Mason, Paul (2015). Post-capitalism: A Guide to Our Future, Penguin Books.

• De Stefano, Valerio (2018). “Negotiating the Algorithm: Automation, Artificial Intelligence and Labour Protection”, In Comparative Labor Law & Policy Journal, May 16, 2018, Available at: https://ssrn.com/abstract=3178233

• Morozov, Evgeny (2013). To Save Everything, Click here. The Folly of Technological Solutionism, New York: PublicAffairs.

• Morozov, Evgeny and Francesca Bria (2018). Rethinking the Smart City. Democratizing Urban Technology. Rosa-Luxemburg-Stiftung New York Office, Available at: http://www.rosalux-nyc.org/wp-content/files_mf/morozovandbria_eng_final55.pdf

• Paine, Thomas (1969[1796]). “Agrarian Justice”, The Complete Writings of Thomas Paine, New York: Citadel Press, Vol. 1, pp. 605~624.

• Srnicek, Nick (2017). Platform Capitalism, Cambridge: Polity Books.

• Srnicek, Nick and Alex Williams (2016). Inventing the Future: Postcapitalism and a World Without Work, London: Verso.

• Varoufakis, Y. (2016). “The Universal Right to Capital Income”, https://www.project-syndicate.org·commentary·basic-income-funded-by-capital-income

• World Economic Forum (2016). The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution, Global Challenge Insight Report.


THANK YOU

Min Geum([email protected])


towards dual ownership model of platform companies

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