Discussing platform cooperativism

On Monday, 7 December 2015 at Telecom ParisTech, I was discussant at a seminar by New School scholar Trebor Scholz on “Unpacking Platform Cooperativism“.

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Internet platforms carry an unprecedented potential of value creation, exploiting the extraordinary power of data and algorithms to extract and distribute information to an extent never seen before. Information, we know since Hayek’s times, is the fuel that keeps markets going, that eliminates “lemons” and ensures an ever-better coordination between buyers and sellers, borrowers and lenders, or landlords and tenants. At the same time, the internet has channeled the dream of a viable non-market society, since Rheingold’s 1993 revival of the “community” and Barbrook’s 1998 “hi-tech gift economy“. So, can we put this informational efficiency to the service of a more humane economy, based on relationships, solidarity and reciprocation, rather than on the sheer market system?

The so-called “sharing economy” suggests answers, but also displays a tension: the efforts of myriad grassroots associations to develop collaboration as a value and a practice, sharply contrasts the spectacular growth of firms like Airbnb and Uber, now large multinationals, and their alleged cavalier attitude to anti-trust regulations and workers’ rights. If some say Uber is not really about sharing and collaboration, it is difficult to draw the line.

This ambiguity is fostered by a public discourse that focuses on the sharing of assets – the spare room in your home, or a sit in your car – that digital platforms enable. Asset-sharing has economic and social appeal: it increases efficiency by preventing assets from lying idle, while reducing waste, shifting emphasis away from consumerist values (“access is better than ownership“), and facilitating sociality beyond mere consumption.

But it is often forgotten that asset-sharing does not produce value by itself: it involves extra labour. In economic jargon, capital and labour and complementary production factors. In practice, if you want to put your spare room on Airbnb, you must produce an ad, monitor your message inbox and reply swiftly. You must clean the room and do the laundry before and after a guest’s visit. You must show your guests around when they arrive.

More importantly, the very opportunity of asset-sharing changes the incentives that shape labour supply – people’s willingness to sell their time and effort against a payment. Because of the expected compensation, some people will renounce use of a (non-spare) room to accommodate visitors instead, and others will do more journeys to drive passengers around – so it’s not really about sharing unused assets, it is about self-employment and starting a micro-business. A work opportunity as a complement to (and sometimes a substitute for) a main job.

This is where debates on internet platforms and the sharing economy rejoin the growing literature on digital labour — and where the contribution of Trebor Scholz is illuminating. Where others see assets (ie, capital), he sees labour. He shows us that the bottlenecks here are about labour, not capital, and that the success — be it economic or social– of the sharing economy is closely tied to the destiny of labour. Whether it appears on the surface as self-employment, micro-entrepreneurship or salaried work, doesn’t really matter. Trebor reminds us of Marx’s fundamental principle that production relations are central to our (capitalist) society, and value generation rests ultimately on labor. If this very crucial part of the human experience goes wrong, even the best side of the sharing economy – the one that endorses trust, reciprocity, and zero-waste – may fail to perform any transformative effects on society.

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Scholz’s contribution is highly critical: this is ultimately on-demand labour with no permanent employment contracts, low pay, little or no insurance. The tip of an iceberg of deterioration of workers’ rights, which, he says, is taking growing proportions in America and elsewhere. The “sharing” ideals pale against a reality of precarity.

But Scholz is constructive at the same time, as he does have a solution: platform cooperativism – a reversal of what Sascha Lobo called “platform capitalism“. Well before the internet, cooperatives brought ownership back to workers, reconciling capital and labour. I live in the UK where the cooperative tradition is strong; so it is in Spain, an example often cited by Scholz. Cooperatives haven’t overthrown capitalism of course, but have mitigated some of its excesses. Scholz’s suggestion is to do the same in the digital sector, and points to  initiatives that head in this direction.

ECN4This is refreshing and reassuring: the dream of a truly sharing economy does not have to fade away because of the excesses of a Uber or Airbnb. I see cooperativism as a way to bring hope back to the sharing economy (not as an alternative to it as Scholz seems to suggest). But there are questions and challenges: how do we ensure it works?

Take the problem of coordination. Some would object that cooperatives involve long and tortuous decision-making, interminable meetings, and all the drawbacks of heavy formal structures against the light touch of market-based coordination. But so do large for-profit companies. The reality is that between the two extremes of company charts and arms’ length transactions, people coordinate informally through social networks. I’m a social networks scholar and I’m not talking about the likes of Facebook — but more generally about the ties that connect us as individuals and groups. Sociological research has shown that through networks of relationships, people in the same industry collaborate – without this leading necessarily to (often illegal) collusion. A famous study of the Sydney (pre-internet!) hotel industry provided evidence of friendship between competitors, partly instrumental and partly disinterested, and how this ultimately enhanced performance. I expect something like that to happen in the sharing economy as well, all the more so as non-economic motives play such a large part in it. Industry-wide events such as the OuiShareFest, I believe, offer opportunities to form and nurture such ties. But perhaps at the moment, networks of friendship and collaboration involve activists and entrepreneurs more than the file-and-rank Airbnb host, Uber driver, or TaskRabbit service provider. If these people have to gain ownership and decision-making power, enhancement of their social networks must be part of the project. Shall we organise more OuiShareFests, or exploit the power of algorithms to enhance computer-mediated ties à la Facebook? I don’t have a precise answer, but there is scope for creativity here.

And then, there’s the issue of inequalities within the labor force. The fragility of today’s labor is as much the result of the empowerment of capital (profit shares rising consistently above  wage shares) as of emergence of highly paid working elites against a growing share of unprotected freelancers. One reason for this is the quest for talent – in particular in digital industries, the quest for highly skilled data and algorithmics scientists, crucial to design and develop platforms. Their work enables the coordination of those who have something to offer and those who need it. Without their contribution, the sharing economy wouldn’t exist at all and the work of cleaning rooms, driving cars, and running errands wouldn’t be performed. But if this part of the workforce is well remunerated, would a hypothetical cooperative version of Uber attract them? And if the cooperative ideal is unlikely to suffice, would they have to be paid as much as in the capitalist version of the platform? Put differently, is there a potential trade-off between a pay gap — which may be hard to reconcile with cooperativist ideals — and the need for an essential production factor? I’m aware I’m playing the devil’s advocate here. Not that I like it, but anticipating issues is the first step towards solving them — and I open the debate and (cooperative?) search for solutions.

Tha Storify of the event is available here.

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