1 October 2019

The Tories must take on the challenge of platform capitalism


We are often told there are two cleavages in politics: cultural and economic. To these however, I would add a third – or more accurately perhaps, the fourth – dimension: time.

Attitudes towards the past and especially the future shape our politics in profound and unexpected ways. Take, as an example, questions about automation and a potential world where millions of existing jobs are rendered utterly obsolete. Should we encourage this as the productivity-raising brilliance of capitalism in action? Or is it a dystopian nightmare that politicians should use all available levers to resist? There is, of course, no objective answer. Your response can only come down to political instinct and ideology.

One might think this technological divide maps neatly onto our party political spectrum. After all, with the Conservatives the clue, surely, is in the name. What is more, the great Labour election victories of Messrs Attlee, Wilson and Blair all involved casting their party as the agent of an onrushing future. Yet it is not always quite so straightforward. Mrs. Thatcher too was an instinctive futurist who often saw her political opponents as enemies of economic and technological progress. Meanwhile, the Labour Party has a barely concealed nostalgic streak. Indeed, no less a Tory as Roger Scruton has talked approvingly of the Miners’ strike as “fighting the same cause” of conservative resistance.

True to form, today’s left is divided on technology and the future, even on labour itself. On the one hand the trade union movement bitterly resists the work that emerges from platforms like Deliveroo. However, on the radical left there is a more accelerationist strand that views untrammelled technology as the destructive force which might end work and ultimately capitalism. And, with his recent four-day week announcement and flirtation with a universal basic income, it is this strand of leftism that Shadow Chancellor John McDonnell is increasingly beginning to embrace.

But what about the Tories? To be charitable, it does not seem like debates about technology figure particularly highly in the party’s collective imagination. But this casual disregard is a dereliction of political duty on two fronts. Because not only does it allow the McDonnellites uncontested political access to the future, it also betrays a lack of imagination on arguably the most important political question of all. For surely one cannot begin an argument for popular capitalism without a proper analysis of where our economic system might be headed?

On that front, the crucial question is whether the success of platform businesses herald a genuinely transformative model of work. There are certainly legitimate grounds for scepticism, not least about whether a model based on intermediating the supply and demand of production can be as innovative in the long-run as managerial coordination. Nevertheless, free market leaning Tories must surely be curious about the radically flexible agency such models can potentially grant the individual worker. For contained within them is also the promise of returning self-employment – which Adam Smith saw as the true deliverer of free citizens from “servile dependency” – to a more central role within our economy.

Might then a rejection of corporatism and an embrace of platform capitalism be the accelerationist tradition the Tories have currently misplaced? Maybe, but this will involve a corresponding focus on policy areas sometimes viewed with suspicion across the right, namely reform of the welfare state.

The writer Laetita Vitaud has called the 20th century “bargain” a “division of labour in exchange for a bundle of benefits and security”. But the policy systems – employment legislation, tax and benefits, education and training – that make up this “bundle” are still stuck in a world built around traditional one-employer full employment. A society where platforms might mediate work across six or seven firms however, would need entitlements that were both portable and pro-rated. Benefits would need to accrue no matter how small the task, and follow individual workers between jobs and platforms.

Now, it should be abundantly clear that such a system could not be delivered by the state alone. And already the market is beginning to react. Last week, Uber announced a partnership with the Open University that would see entitlements to higher education training accrued through trips completed and driver ratings. Meanwhile, at the RSA – where, in my day job, I lead its Future Work Centre – we are supporting entrepreneurs to develop new services for gig workers, such as income smoothing tools, or specialised insurance products, through our Economic Security Impact Accelerator programme.

But coordinating private portable benefits like this into a universal system of coverage for all gig workers – let alone as society’s default ‘bundle’ – is emphatically a job for politics. It will not be easy, but the Tories should take it on. A fairer world of work and a freer capitalism could depend upon it.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Alan Lockey is a former adviser to a Labour MP and leads the RSA's Future Work Centre