The Role of Technology in Political Economy: Part 3

Yochai Benkler 

In the prior two posts in this set I described how the leading mainstream economic explanation of rising inequality and its primary critique treat technology.  The former takes technology as central, but offers too deterministic or naturalistic a conception of both technology and markets such that it functions, in effect, to legitimize the present pattern of rising inequality and to limit the institutional imagination of how to deal with it.  The latter focuses so exclusively on the institutional determinants of bargaining 46038488 - law concept: circuit board with  scales icon, 3d renderpower, that it largely ignores technology as a distraction.  Here, what I’ll try to do is synthesize out of the work of many of us in the field an understanding of a political economy of technology that gives technology a meaningful role in the dynamic, but integrates it with institutions and ideology such that it becomes an appropriate site of struggle over the pattern of social relations, rather than either a distraction or a source of legitimation.

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The Role of Technology in Political Economy: Part 2

Yochai Benkler 

Yesterday I outlined the ways in which the dominant “skills-biased technical change” and “winner-take-all economics” explanations of inequality share an idealized view of both markets and technology as natural and necessary.  Today I’ll write about the most influential criticism of these dominant stories that have been developed by labor economists.  These focus on the central role that institutional choices played in shaping 46038488 - law concept: circuit board with  scales icon, 3d renderbargaining power, and through it, the ability of the managerial class and shareholders to cause stagnating wages for the median worker and the great extraction by the 1%.  Larry Mishel of the Economic Policy Institute, with various co-authors, played a central role for over twenty years in pushing back on the SBTC narrative. Richard Freeman early emphasized the central role of unions, work later extended and deepened by David Card and collaborators. The pro-labor economists’ story is that policy choices as diverse as minimum wage erosion (particularly for women), deregulation, monetary policy, trade, immigration, as well as legal and political attacks on unions and unionization combined to weaken labor’s negotiating power and enable managers and shareholders to extract an ever-growing share of productivity growth, leaving labor running as fast as it can just to stay in place, at best.

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In this framework, widely used in left-leaning labor economics, technology is absent as an explanatory dimension.  Its role is, at most, to divert attention from the political origins of the shape of inequality in society.  If they are right, then those of us spending our lives thinking about how technology shapes social relations are spinning our wheels and wasting energy—at least insofar as we are trying to explain the future or work or the rise and response to inequality.

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The Role of Technology in Political Economy: Part 1

Yochai Benkler 

What role does technology play in rising inequality?  Is it, as the dominant view among policymakers argues, the primary explanatory variable, operating in reasonably efficient markets to shape the value of different workers, and hence the pay they can command?  Is it, as labor economists critical of the mainstream imply, a side show, since inequality is overwhelmingly a consequence of political choices that shape bargaining power in markets pervaded by power? If we think that technology matters; that platforms and 46038488 - law concept: circuit board with  scales icon, 3d renderrobots, ubiquitous sensors and algorithms do exert a real influence on the pattern of social relations that make up the economy, but we doubt that technology causes inequality by a “natural” process driven by its own intrinsic affordances and constraints interacting with markets, then we owe ourselves a clearer story than we have given to this point.  While the past quarter century has seen a lot of work on technology and freedom, there has been substantially less critical work on economic inequality and technology.  In today’s post, I’ll describe the limits of the mainstream economists’ answer, which lies at the foundation of “the robots will take all the jobs” and the legitimation of winner-take-all markets.  Tomorrow’s post will outline the limits of the dominant left reaction, as well as the limits of Karl Polanyi’s approach, which has provided so much inspiration for the present resurgence of political economy.  Finally, in the third post I’ll outline a view of the political economy of technology.

I see technology as imposing real constraints, and providing meaningful affordances that are sufficiently significant, at least in the short to mid-term, to be a substantial locus of power over the practice of social relations.  And yet, technology is neither exogenous nor deterministic, in that it evolves in response to the interaction between the institutional ecosystem and the ideological zeitgeist of a society, such that different societies at the same technological frontier can and do experience significantly different economic and political arrangements.  In the short to mid-term, technology acts as a distinct dimension of power enabling some actors to extract more or less than their fair share of economic life; in the long term, technology is a site of struggle, whose shape and pattern are a function of power deployed over the institutional and ideological framework within which we live our lives.  The stakes are significant.  A left that ignores the implications of technology as a site of meaningful struggle risks falling into a nostalgia for the institutions of yesteryear.  But a left that continues to disdain the state and formal institutions, and to imagine that we can build purely technological solutions to inequality risks abandoning the field to the Silicon Valley techno-utopian babble that has legitimated the extractive practices of oligarchy’s most recent heroes.

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