Unions are a Solution to an Industrial Problem. Platform Coops are Their Post-Industrial Successors
From Workplace Resistance to Collective Control
A while back, I wrote an article that discussed intangible capital:
In it, I explained the concept of intangible capital — a concept from economics that many socialists would find delightful, if they bothered to learn about it.
As I explained in that essay:
Capital is usually separated into intangible assets and physical assets. Physical assets are talked about often enough — they are the physical means of production. Intangible assets, though, are too-often missed in socialist discussions of economics.
Intangible assets are all the forms of capital that one cannot directly pick up and hold. It includes human capital, relational capital, and structural capital.
Human capital is all the attributes inherent to actors. This includes, but is not limited to, the knowledge and skills that actors have. It also includes their inherent mental and physical attributes.
Relational capital is the relationships that an actor has with other actors. The most lucrative form that this takes is in the mind-share that platforms have — the biggest thing standing in the way of making a competitor for Uber or Lyft (for example) is that it would be hard to get others to download your competing app. The most common form that this takes, though, is in one’s personal reputation and personal contacts — “it’s not what you know, it’s who you know”.
Structural capital is all the institutional infrastructure that makes up a firm. It is the org chart, the company culture, the knowledge passed around the office, the methods developed to deal with specific issues within the specific firm, etc, etc..
When an economist uses the word “rents”, they are referring to a more general concept than what you are used to — rents are any revenue that is derived from the ability to withhold something from the process of production. For example, if a feudal lord runs a chain across a river, and only lowers the chain if a toll is paid by passing boat traffic. Another way to think of rents is that productive labor is an attempt to get more by making the pie bigger — while rents are an attempt to get more by making your own share of the pie larger — which necessarily requires taking from others.
Unionization is an attempt by workers to build structural capital (the union itself) between them and derive rents on it, countering the ability of the company to derive rents on its capital. The company, in deriving profits off of their ownership of the physical capital that the workers must work with, makes their share of the pie larger, making the workers’ smaller — so the workers respond by making their share larger, making the company’s smaller again. However, the workers can never claw all of the value of their labor back from the owners — if they did, there would be no more incentive for the company to invest or even to operate. The union is the result of workers making the best of a bad situation.
As the forms that capital takes have shifted, unionization runs into more difficulties. This is not the factory-dominated (and, thus, physical capital-dominated) economy of the 1800s and 1900s. This is a “service economy” or “knowledge economy” — a post-industrial economy, which has less and less use for massive machinery and more and more use for creativity, intensely specialized skills, and caring labor — i.e., work that is really only doable by human beings.
A post-industrial economy is one that is dominated by intangible capital. If you do a valuation of the full (both physical and intangible, rather than merely physical) capital stock of America, at least some people put the value of physical capital at less than 10% of the value of the total. Human capital is probably most of this total.
This means that in many workplaces most of the means of production (by monetary valuation) are already in the hands of the workers. In the case of human capital, those means of production are the workers. In the case of relational capital, the relationships between the workers, and of workers to clients, are difficult for the firm to seize and difficult for the firm to replace — though, firms are known to attempt to do so; my mother was fond of telling the story, from her hairdresser days, of how one of her employers tried to make her use a false name to lock in her client-base and prevent them from finding her easily if she attempted to go and work elsewhere. In the form of structural capital, the intangible capital is — essentially — in the hands of whoever is able to exploit and control the procedures of the company; approximately, this is the managers, though the natural seniority of long-time non-managers knowing how things are done does have an effect.
If all this is true, and the workers already have most of the capital, what is there to seize? What need do the workers have to beat the boss — when they could just continue onwards without him?
Unionization may be becoming obsolete: in an economy dominated by human capital it could be much more worth it to start a cooperative, taking all of your human capital with you, and taking all of the profit later. There has, indeed, been a movement to do just this — both in conventional worker co-operatives (the co-op sector has increased in revenues year-over-year) and in new “platform cooperatives”:
These platform cooperatives are the natural response to the rise of platform capitalism — Uber, Lyft, AirBnB, Doordash, and even Google, Facebook, and Amazon. These businesses largely center around their control not of factories, but of data — our data. Couldn’t we simply withdraw from this, and create a different app — one that is controlled by the users?
There have already been successful local attempts at outcompeting ride-sharing apps. There are even multiple organizations devoted to networking platform cooperatives together, and even helping them get started. One of them, the platform cooperative consortium, reported the creation of five new ones in the last few months of 2019:
SignCo.io in the UK offers health interpreting services for Deaf people
Beceer in Indonesia is a co-operative vegetable delivery service
FoodFairies in Berlin offers cooperative food-delivery services
Kolymar-2 is a new food delivery service also in Berlin
Mensakas is a unionized platform co-op of delivery and messaging workers in Barcelona
So this is not only the logical next step for a post-industrial labor movement, but also a proven strategy.
However, even now, several things stand in the way of doing this.
Firstly, all businesses begin as money-losing ventures — workers mostly do not have the savings to live without a net positive income for the time it would take to reach profitability. This is much less of a problem for platform cooperatives, because they neither require workers to work closely together nor require much in the way of overhead costs — beyond, perhaps, server hosting costs.
Secondly, long-standing businesses generally have built-up a stock of relational capital — both with other firms, and with customers. Cory Doctorow has noted both this problem, and a promising potential solution for it:
I first hailed a Ride [the name of a platform cooperative] car at South By Southwest, not long after Lyft and Uber had exited the city, and everyone going to the festival had been repeatedly warned that they would have to download the Ride app to get around the city (Austin’s taxi fleet hasn’t been up to the SXSW crowds for more than a decade, and never less so than now, having been crippled by Uber and Lyft).
So I was prepared. When I land in another city, the first app I try when I need to get around is Lyft, then Uber (Uber was a godsend in Shanghai, where we were repeatedly cheated by regular cab drivers, but where the Uber app kept everything aboveboard). Some or all of these cities might have co-op rideshares, but there’s no easy way to know about it, and without passengers, there’s no incentive for the drivers to drive for the co-ops, so even when you do try to hail a co-op, there won’t be any drivers available.
Lyft and Uber have moved back into Austin, and their drivers get fingerprinted. I just got my speaker-info package from SXSW for the 2019 festival, and the advice to download Ride before touching down is no longer the top of the checklist. I imagine that most of the attendees at SXSW will be getting around with Uber and Lyft, and 25% of the money they spend will go to those companies’ shareholders, not to the drivers.
But imagine a disruptive app that disrupted the disrupters.
Imagine if I could install a version of Ride (call it Meta-Uber) that knew about all the driver co-ops in the world. When I landed, I’d page a car with Uber or Lyft, but once a driver accepted the hail, my Meta-Uber app would signal the driver’s phone and ask, “Do you have a driver co-op app on your phone?” If the driver and I both had the co-op app, our apps would cancel the Uber reservation and re-book the trip with Meta-Uber
The solution to the uncompetitive nature of modern-day markets is not to discard markets and competition altogether — it is to create and then defend alternative economic institutions that improve competition. As others have noted, we should let the free market eat the rich.
Third, where it would be possible for workers to easily leave and start their own companies (software engineering would be an example) employers and employees are both aware of this — and it becomes much more commonly a tool in bargaining within the labor market than a tool for escaping the labor market. However, even this has an upside — as I have noted elsewhere:
Being in a union doesn’t just increase your income. It increases the income of every other worker — that’s the invisible hand of the market. If workers at one workplace are paid more, bosses at other workplaces will have to pay those non-union workers more (and treat them better!) or those workers will quit to go work at a unionized workplace.
Because of this, from a perspective of enlightened self-interest, even nonunion laborers should support union actions. Just as there are positive externalities from unionization, the same effect applies to cooperatives — and, therefore, it should be possible for the labor movement (whether it deploys unionzation or cooperatives) to get the help of workers in high-paid industries — they merely need to be shown how a help to one is a help to all.
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