18 August 2015

A Market for Cherries

Last night someone asked a really great question in response to the fuse labs post I wrote about the worker-centric market that I’m working on. The question (again, see the link earlier) was this:

Do you guys worry that by making it worker-centric you could scare some Requesters away?

The short answer I gave was that I think higher quality workers will generally enrich the market, and make it appealing for requesters to do business there. This totally glossed over a number of assumptions and unstated ideas, so I want to take a minute to back up that argument based on some literature and the preliminary findings I’ve made from (some limited) fieldwork and interviews. That’s actually the format this post will take: first the literature, then the fieldwork (fair warning: I can’t report much on the fieldwork side in part because I’m still processing stuff, so that’ll be a short section, light on details).

This work will hopefully end up in a published paper, in which case I’ll write a post/tweet a tweet/instagram an… instagram about it, but for now this will serve as a tentative “background” to the rationale behind my thinking that a worker-centric market is good for everyone.

What the literature says

A great body of research on markets and economies makes observations of capitalist labor markets that might yield insights to this subject. Marx makes major contributions in the space of labor markets, identifying what’s holistically referred to as worker alienation (Karl Marx’s Economic and Philosophic Manuscripts of 1844). Marx discusses several types of alienation that occur, but for our purposes the two most salient are:

  • alienation from labor (the work being done)
  • alienation from other workers

We see that workers are alienated from labor when they’re not involved in the design of the product or service. Marx argues that this alienation is inherent to capitalist markets because workers necessarily trade their labor for money, rendering it a commodity. The problem Marx identifies is that rendering a worker’s labor as a commodity facilitates exploitation in part because work is reduced to emotionally empty tasks. More central to this argument is that workers don’t benefit wholly from the value of the work that’s done (there are depths to this argument that I just can’t get into, and if you’re interested in Marx’s argument on this subject there are excellent texts on the topic that do more justice than I can).

This form of alienation is orders of magnitude more salient through the lens of gigs and micro-task markets, wherein workers have only a small piece of the whole picture and consequently lack the scope necessary to appreciate the contribution that their work represents, let alone contextualize themselves (and thus accurately assess their value) in the market.

With the emergence of micro-tasks and the gig economy, the temptation to abstract workers has become incredibly tempting. On Amazon Mechanical Turk, workers (known predominantly among one another as “Turkers”) are represented by an alphanumeric string like “A2XJMS2J2FMVXK” (disclosure: that’s mine). On gig economy markets, worker identities seem like an afterthought; workers can’t develop a client base, nor can consumers learn about or prefer workers or establish a rapport. All parties interact transiently by design.

Cynically, one might argue that participants in the market are not being exploited if they engage in trade with full knowledge of said market. Ignoring cases of coercive leverage employed on workers, the reality of the markets we see in the gig economy with that many workers - and indeed consumers - is that market information is in fact asymmetric.

Akerlof has written extensively on information asymmetry, in particular writing on the “market for lemons” that severe information asymmetry lends itself to creating (“The Market for Lemons: Quality Uncertainty and the Market Mechanism”). This is, to me, the big problem that even cynics can’t easily argue around: even if a brutally profit-minded capitalist wanted to wring as much value as possible out of a market, the emergence of a market for lemons means a decline in the value of the market as a whole because sensible parties, fearful of being cheated in some way, avoid the market entirely. Akerlof argues that this risk holds regardless of the nature of the market.

This is all getting a little off topic; the point is twofold:

  1. Workers get abstracted from their work and others, making them less invested and potentially cheapening the market
  2. Cheapening of the market, and information asymmetry, precipitates a bad market state that good participants avoid

What the fieldwork says

There are various proposed solutions to the problems I mentioned above, but fundamentally they advocate increasing the amount of information both parties have and making workers more invested in the work.

On increasing the amount of information, on Airbnb you can see reviews for both parties, just enough information about the “product” being offered (e.g. the cross-street of the location), and if there are any social connections between two parties you get some insight into that too. Yelp and other review sites offer insight not only from the crowd, but especially surfaces reviews from relatively vetted sources (friends).

On the investment side, prevalent examples are somewhat rarer (or I’m just blanking). If anyone can think of really great examples of competitive markets that foster investment on both sides, I’d be really keen to hear about it.

With all this being said and based on the observations I’ve made from fieldwork including interviews with people from numerous industries, I’ll argue that the quality of the market is probably more dependent on the workers than system designers have originally given credit.

Let’s return to the two problems we stated. Summarized:

  1. workers feeling cheapened
  2. resultant markets for lemons

From numerous interviews with members of unions and worker cooperatives, I’ve found time and time again that markets driven by workers (like worker cooperatives) engender a greater sense of collective ownership and responsibility from the participants. In one case, a group of workers collectively reflects on consumer reviews; workers reportedly feel a sense of accomplishment when anonymized reviews praise the work that was done, and feel personally worse when a review criticizes a worker. In worker cooperatives, workers share not just economic victories and failures, but emotional victories and failures as well.

The result is a phone dispatch system that, while I was there, managed to assign every worker in the work group within a few short hours of opening. This cohort of workers knows that the group’s success or failure rests on the sum of their work as individuals, and consumers know that.

So this is my hypothesis: that if we can make labor markets that focus on workers and empower them, they’ll produce markets that are worth participating in, and pull us out of the rut of cheap gigs and into good work.

I’m glossing over a number of factors here, like the fact that this is very hard to do from a community-organizing perspective, but the goal is to make something that helps scaffold that “emotional labor” in such a way that non-experts in collective/community organizing can do it and thus offer the kinds relatively frictionless transactions that bigger operations offer.

If you have something to say about this, contact me