The Automation Problem
Most people are labor sellers. They need to sell their labor to business owners in order to survive.
The automation problem, put simply, is the fact that the advancement in automation technology is threatening the business interests of most labor sellers (workers). Automation technology is advancing to a point where they will become a better and cheaper substitute for most services which can be purchased from labor sellers.
This worrying trend demands that, in order for civilization to be preserved, the relationship between the majority of workers (most of whom are in the developing world) and the majority of businesses needs to be altered substantially or that relationship shall be ended.
The Enterprise and the Worker
In a relationship between a worker and an enterprise (complex project) or entrepreneur , it is usually the enterprise that initiates the relationship. For example, in the case of a labor seller and enterprise, the worker (labor seller) may go job hunting and actively seek out those who would be willing to purchase their labor. The enterprise may also actively seek out potential labor sellers. In either case, it is the enterprise that decides to purchase, thus initiating the relationship.
There are at least 5 relationship models an enterprise can use to guide decisions concerning workers . Some of these models have become dominant at different points in history. Take a guess which one is dominant (or most ubiquitous) today.
- Workers as Products: The enterprise controls the apparatus and the product, workers are part of the apparatus.
- Workers as Debtors: The enterprise controls the apparatus and the product, the enterprise allows the worker to use the apparatus to render services as debt payment.
- Workers as Seller: the enterprise controls access to the apparatus and the product, workers render services (use of apparatus to create the product) in exchange for money.
- Workers as Partners: The enterprise and workers (which are one in the same) share control of the apparatus and the product.
- Workers as Clients: The enterprise controls the apparatus, the worker controls the product.
Note: I’m running on (and would like to challenge you with) the assumption that the course of societal progress depends greatly on the what the dominant (most popular) model is and it is thus the choices of enterprises in this area which drive much of history. If you wish to dispute this assumption I would be happy to have that conversation.
1: Workers as Products
The enterprise controls access to the systems and outputs of production , workers (Machines, domesticated organisms, slaves) are part of the systems of production.
Please note that the meaning I am using for the term “worker” may be different from your definition. To me (and for the sake of argument), a worker is an agent which converts energy and materials into intentional configurations.
The workers as products model is one in which the worker is owned by a third party and is bought and sold. In this case the seller is the one that is paid for the workers labor, and the price of that labor is determined by market forces and bargaining.
The transaction can either be once off, weekly, monthly or yearly.
This model would include chattel slavery (in the case of human beings). Today non-human organisms and semi-autonomous machines are regarded as products which do work.
2: Workers as Debtors
Labor is debt payment, the enterprise controls access to the systems and outputs of production
This is similar to workers as products because debt can be bought and sold, which then determines for whom the worker shall work. A worker may , for whatever reason, be indebted to the business owner, and instead of paying in the form of currency or goods, they must pay in the form of service.
This includes the various forms of debt bondage and indentured servitude.
3: Workers as Sellers
Labor is traded for money. The Enterprise controls access to the systems and outputs of production.
In this model a worker is seen as a seller to the enterprise.
The worker is functionally a separate business entity whose services are paid for (per day, week or month). The price of which is determined by market forces and bargaining.
Machines, individual workers and B2B businesses are interchangeable in the eyes of the enterprise. This is why outsourcing and automation can increase unemployment (and non-human organisms rarely do), because they are substitutes for the labor of individual human workers.
The conflict between buyers and sellers
There is an inherent conflict between the buyer and the seller of any good or service. The seller wants to sell the service for as high a price as possible (within their ethical framework) and the buyer wants to buy as low as possible (within their ethical framework). In cases where the buyer wants to resell, the buyer wants to buy as low as possible and sell as high as possible.
Usually this conflict is resolved through anticipation, negotiation and/or bargaining. However, there are a few things to consider.
- The relative bargaining power of either party (buyer or seller) depends on how much each party wants what they are trading for. If the buyer wants the product more than the seller wants the money, the seller has more relative bargaining power (the power to walk away). Likewise, if the seller wants money more than the buyer wants the product, then the buyer has the relative bargaining power.
- The relative bargaining power of either party (buyer or seller) also depends on how many alternatives there are for each party. If the buyer has many alternative sellers who are selling sufficiently similar products, then the buyer has more bargaining power. If the seller has many alternative buyers, then the seller has more relative bargaining power.
The labor market, also known as the job market, refers to the supply and demand for labor in which employees provide the supply and employers the demand. It is a major component of any economy and is intricately tied in with markets for capital, goods and services. -Investopedia
A buyer’s market is a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. -Also Investopedia
The labor market is a buyers market. For the job positions most healthy humans are qualified to occupy at any given time , there are most often far fewer buyers than there are sellers. This creates a massive disparity in bargaining power between the seller and the buyer.
The conflict also exists at the macro level, since full (or near full) employment increases wages which then puts pressure on organizations to automate, outsource or move their operations out of the country.
4: Workers as Partners
Workers and the enterprise are one in the same and thus both the worker and the enterprise control access to the systems and output of production
This is where the workers in a business are regarded as partners (or co- owners of the means of production), sharing both the risks and the profits. In this case the workers can own shares in the company. They can also use various collective decision making systems to determine what gets produced, how it is produce and who specifically produces it
Enterprises (despite the intentions of entrepreneurs) do not “want” to add more partners because this would increase the number of people who need to be convinced in order for a big decision to be made. Continuing to add more Co-owners may also continue to reduce the reward each member of the partnership can take.
This can make an enterprise built for using this model much slower (more careful) when it comes to hiring and firing , making them less responsive to increases in demand or economic downturns, giving the competitive advantage to enterprises that are more responsive. In order to avoid this problem it would then be strategic to hire labor sellers or purchase machine labor (use more than one model).
Hiring more owners may be acceptable for founders who are willing to give up creative authority (or the chance to become wealthy) in order to reduce personal financial risk and have a steady job.
5: Workers as Clientele
Access to the systems of production is sold for money. The Enterprise controls access to the systems of production. Workers control access to the output. Workers pay for access to the systems of production.
The workers as clients model is one in which workers are seen as buyers or subscribers to a system that the founder has built. This system is designed to facilitate the personal and collective productivity of those within it.
Consider universities, vocational institutions and internship/apprenticeship programs, why do we pay for them or seek them out? I would contend that the 4 main value propositions of such institutions are :
- Access to systems and technologies which facilitate the productivity of students(clients) within their chosen field. These can include labs, libraries, tutors, lecturers, advisors, reward/punishment systems (grades), facilitated study groups. study rooms, computer rooms, paid access to journals, supercomputers and workshops.
- Networking opportunities. Universities (and other types of vocational schools) are where other people who will be working in the clients field congregate, creating more networking opportunities to improve the client’s chances of working in that field.
- The capacity to obtain proof of capabilities and trusted referrals. Universities most often give certificates and degrees, some newer institutions (in software or Design) tend to offer the client opportunities to build a portfolio.
Granted, universities are often only good at consistently delivering only one or two of these value propositions. It is also true that you can obtain these valuable services and resources in other ways, for example, by attending networking events, contributing to projects, subscribing to journals with your own money and completing online courses. However, the substitutes (despite the recent mooc revolution) are not yet capable of providing the full value that universities promise.
The point is that the workers as clients model is envisioned as one in which enterprises offer these value propositions (and more) to workers in exchange for fees. The agreement being that the enterprise is only successfully delivering their services if the workers profits exceed their expenses (which include the fees they have to pay to the enterprise).
The enterprise may offer some other perks such as food, accommodation, a system for setting ones own salary (with input from the group you are working in) and non-hierarchic decision making processes, such as in holacratic or sociocractic systems. Overall, this model seems like a fair compromise between the worker and the enterprise in light of the development of artificial intelligence.
Some of the benefits of this model
- The enterprise’s revenue comes directly from the worker client, and the worker clients labor can be fed back to make the organization as whole (and thus individual worker clients) more productive and sustainable. Of course, this would depend on how worker clients are organized.
- In times of economic contraction, the worker clients do not get laid off as a cost cutting measure, because they are a source of revenue.
- Under the workers as clients model the business wants to create jobs because creating jobs (and selling them) is the way it makes money.
- It may also be the case that the productivity industry (the industry which profits by selling productivity enhancements) would be more resistance to recessions.
- Finally, robots and semi- autonomous machines could just be another value proposition used to attract worker clients. There is little to no competition between worker clients and machines. In all of the other models, the worker is vulnerable to competition from immigrants, offshore companies and machines.
Possible Normative Claims
There are 4 general normative claims one may make regarding these 5 models
- Society would be better if some of these models were outlawed (for whatever reason).
- Society would be better if a specific model other than the current one was dominant.
- It would be more realistic to hope for a plurality of models within one society, thus giving workers a choice. The most popular model will be the most widely adopted and thus the most dominant.
- The assumption of “one company, one model” is unnecessary. It would probably be prudent for a company to adopt multiple models , some workers (like robots) would be products, others would be sellers and contractors, some would be partners and others (most of them) would likely be worker clients. They (enterprises) may have one or two dominant models, or they may maintain a balance between models.
We can argue for any of these normative prescriptions in the comments section. I personally subscribe to number 3 and 4 .
The way forward (Conclusion)
Invardin (Invention, Garden, Ingenuity) is envisioned as a garden (so to speak) in which we grow organizations (or pieces of potential organizations). Here you and I may “search the space” of possible organizations, specifically those which only use the workers as clientele model. It’s worth testing. It may just save the world.
There exist online work platforms such as upwork, toptal, no sweat and creative marketplace. These appear to function (at least partially) according to the workers as clientele model. However, as far as treating workers as clients, they do not seem to be complete.
Ask yourself what value you gain from working within an organization (rather than as a freelancer).
- You get to take advantage of economies of scale brought on by collective production and specialization.
- Predictable schedules, reward systems and other productivity aids
- Paid leave
- Sick pay
- Employee Assistance Programs (EAP)
There is potential for platforms to be more holistic and offer all of these advantages.