Fear the Market

The idea of the universal basic income has recently come somewhat into vogue. The idea being that a society depending on wholly mechanized production will be a society both mind-blowingly wealthy and with little economic role for labor. If those two conditions come true, there will be few alternatives to paying those not to work. The reasons to doubt this future are clear enough – it is a staggeringly expensive utopian scheme. Furthermore, it will have to be paid for entirely by those few who still make a living in this future society, those who own all the capital. They may not be keen on it.

But Karl Polanyi offers a reason to suspect it may still happen, and sooner than we think. Polanyi suggests that people hate acting as economic agents, particularly in the labor market. In fact, the history of the labor market primarily revolves around people acting to insulate themselves from the raw forces of the market. In modern American society, its notable that while the path to the upper class is founded on meritocracy, the jobs once you’ve arrived are notably not. Professors have tenure, but even in most upper-class private-sector jobs being fired is quite difficult. There are generous safety nets provided to those who make it, ranging from tenure to old-fashioned pensions to CEOs’ golden parachutes.

Tyler Cowen suggests that these days are coming to an end. With the advent of algorithms, assessing productivity has become more practical than ever before. As Cowen aptly points out:

True meritocracy is quite psychologically oppressive. Our failures and shortcomings hurt and depress us more than learning about our virtues. I think this is one of the troubling aspects of this new world where everything gets measured. People don’t really like that. They want to think that they’re better than they are. That they are more productive than they are. That they have maybe have a brighter future than they do.

He is right that it has become possible to objectively assess white-collar professional work as never before. It would be a mistake to conclude that white-collar professional work will therefore be assessed objectively.

The world of “Average is Over” is a Polanyan nightmare. One where every move is tracked and assessed by the cruel eye of the market. Cowen is absolutely correct about its psychological effects, and I think “oppressive” might be putting it lightly. Technology has finally made it possible to assess the upper-middle class the way that the working class has been assessed for decades. But unlike the working class, the upper-middle class is the driving engine of political change in America.

When the market finally comes to their lives, I do not think they will like it very much.


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