All this is true but it extrapolates in the wrong direction, I think. The gig economy is a symptom of the end of a long economic era called a K-wave after Schumpeter and Kondratiev. A K-wave lasts 50 to 60 years and is started by a disruptive innovation. The innovation percolates through the economy and civilization for about half that time raising wages and living standards because the innovation must be built out by lots of relatively low skilled workers.
The second part of a K-wave begins commoditization and consolidation led by efforts at economy and efficiency. The second half is where capital makes its greatest returns and leaves the same relatively unskilled workers and some of the middle class high and dry. Consequently you see tiny, small scale entrepreneurship like the gig economy blossoming. But the gig economy doesn’t pay more than subsistence wages. It’s a way-station not an ultimate result.
The big turnaround happens when a new disruptive innovation starts a new K-wave. There have been 5 K-waves in history and they only go as far back as the Industrial Revolution (the first). That’s no surprise because Capitalism got started then with the attempts of people like Adam Smith (“The Wealth of Nations”) and David Ricardo (rent seeking behavior) and many others to explain what was goinog on.
More poetically, go back to musical theater to “Pygmalion” or Lerner and Lowe’s “My Fair Lady” to get a glimpse. Eliza Doolittle, the protagonist, is an Edwardian era flower girl trying to sell flowers on street corners to make a living. It’s gig economy 101. It’s a fruitless endeavor; her family has been without work or the security of a “normal” life for generations which you can see in her good-for-nothing father.
The Edwardian era came after the Victorian in which the first K-wave, textile manufacturing, commoditized and left the English Midlands bound for lower wage countries. Textile manufacturing has circled the earth looking for such low wage places and is today regarded as a stepping stone on the economic ladder. Think China and then Bangaladesh.
We’re at the end of the 5th wave, what I call the Age of Information and Telecommunications. To see just how far commoditization has taken us you need only remember the big computer rooms full of mainframe computers of 30 to 40 years ago and then reach into your pocket to find the same computing and communicaitons power.
The gig economy is bad, no doubt about it. It saps the vitality of our emerging workers. But it’s not the whole story. Capitalism doesn’t end with the whimper of a gig to nowhere. It restarts itself about twice a ceentury. The next thing we should all be looking at is disruption in energy supply, automotive development, natural resources stewardship, and other things related to sustainability. These are the disruptions already leading us into The Age of Sustainability.
