I have been reading Sen’s excellent memoir ‘Home in the World’ published recently. His reflections on Marx, Adam Smith and Srafa are a valuable reading to explore the long arc of key ideas in economics. One of those ideas is the idea of value. Taking a leap from there, the following is a reflection on how gig work has continued to remain of little regard and paid poorly.
Every occasion of a mobile app delivering a service for an unreasonable expectation by a customer, is made into a cause to celebrate by the market. It is a win for technology that achieved the feat, a win for investors who paid for development of such a service and a win for consumers who climb a notch up on enhancements made to their lifestyles. Arguably, all of them are valid reasons.
However, there are two contrasting trends that are in need of an explanation. The app company continues to receive several rounds of investments at increasingly higher valuations as the app users grow. At the same time, the earnings of delivery riders also change but in a reverse direction. As an app grows the earnings of its workers decrease.
The conflict in this market space is a fundamental one that does not find room in mainstream economics. Labour theory of value asserted that the relative prices of commodities reflected the amount of labour involved in producing those goods or services. The difference between the relative price and wage paid to the workers would point towards profit or surplus gained by capitalist. The difference would also indicate a measure of ‘exploitation’ of workers.
Mainstream economics questioned this simplistic assumption of labour as the only factor of production in determining the price of commodities. For mainstream economics, and reasonably so, non-labour resources cannot be ignored. A better picture of the price of commodities is obtained when non-labour resources such as capital are accounted for. In this way mainstream economics reasoned its way into developing a theory of prices which accounts for a wider range of factors of production such that labour, arguably, became a much smaller contributor. In such a framework, it would be hard to diagnose exploitation.
Mainstream economics has de-emphasized labour in production. As a theory of prices, labour theory holds little in terms of accuracy or relevance in the modern economy. But, as Sen has argued, ‘when seen as a normative theory with a moral content, it tells us something about the inequalities in the world and how the poor labourers get a raw deal under capitalism.’
The real conflict in gig work is that the role of human work in the making of goods and services has been significantly de-emphasized to an extent that considering labour as a smaller, perhaps dispensable, factor of production is normative to modern economics.
While gig workers continue to make attempts to ask for better earnings through this work, the companies gain ground in making the markets and the society believe that the economics of new products and services is built on technology and capital with very little to do with labour.