Friday, June 05, 2020

Capitalism Alone (3) Flexibilisation

In his book Capitalism Alone, Branko Milanocvic says that running parallel to commodification is the flexibilization of employment relations.

The commodification of what had previously been noncommercial to tends make every person do many jobs and even, as in the renting of apartments, to transform them into daily capitalists. But saying that workers do many jobs is the same thing as saying that workers do not hold durably individual jobs and that the labor market is fully “flexible,” with people getting in and out of jobs at a very high rate... The type of work that is likely to exist in the twenty-first century is not viewed as desirable because it lacks a sense of call or dedication to a profession (p. 191).

Thus workers indeed become, from the point of view of the employers, fully interchangeable “agents”. Each one stays in a job for a few weeks or months: everyone is about as good or bad as everyone else. We are coming close to the dream world of neoclassical economics where individuals, with their unique characteristics, no longer exist; they have been replaced by agents—interchangeable avatars that might at most differ in terms of some general characteristic like educational level, age, or sex. Once these characteristics are taken into account, individuals, lacking any personal features, are fully interchangeable.

It thus becomes apparent that these three developments (i) the change in family formation (atomization), (ii) the expansion of commodification to new activities, and (iii) the emergence of fully flexible labor markets with temporary jobs. If we have one, we cannot but have all three.

The problem with this kind of commodification and “flexibilization” is that it undermines the human relations and trust that are needed for the market economy to function smoothly. If people stay in the same job for a long period, they try to establish relationships of trust with the people they interact with frequently. That is, they engage in what economists call “repeated games”. But if everyone moves from one place to another with high frequency and changes jobs every couple of months, then there are no repeated games because everyone is always interacting with different people. If there are no repeated games, people adjust their behaviour to reflect the expectation that they will play just a single game, have a single interaction. And this new behavior is very different (p.192).

The consequence of flexibilization and commodification is that human relations are weakened.
Investing in being nice is costly, the effort it takes is justified by the expectation that this niceness will be reciprocated. But if the person with whom you interact will not be there in a month, what is the point of being nice? It is just a waste of effort. The same reasoning of course, is made by the other side: why should that person care about you if they are already eyeing their next gig.

The numerous reviews now available of both providers and users of services are a way to try to ensure “niceness” despite the lack of durable relationships. This is indeed an improvement compared to not having any review system. But the system can be gamed. And the point is that in a globalized world with a flexible labor force, durable business relations would be very rare; personal knowledge of the other and responsibility toward that person are replaced by a points system, which, although in some ways providing more information, is impersonal.

Since commodification has entered our personal sphere, we can think of hardly anything that exists and that is beyond or outside it.

The spread of commodification does away with alienation. In order to be alienated, we need to be aware of a dichotomy between ourselves as ontological beings and ourselves as economic agents. But when economic agency is within ourselves, the order of things is internalized in such a way that there is nothing jarring anymore (p. 193).

The increasing commodification of many activities along with the rise of the gig economy and of a radically flexible labor market are all part of the same evolution; they should be seen as movements toward a more rational, but ultimately more depersonalized, economy where most interactions will be one-off contacts… The shortness of interactions makes investing in cooperative behavior prohibitively expensive.

Christians are being caught up in these changes, but they are the opposite of what Jesus wanted for his people.

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