Temps, Consultants, and the Rise of the Precarious Economy | Hacker News Reader

Temps, Consultants, and the Rise of the Precarious Economy

iasc-culture.org

82 pointsDowwie25 comments

The private planning of corporations, whose budgets were sometimes bigger than those of governments, defined postwar American capitalism, not markets.

There may not be a practical difference between centrally planned economies by governments and by corporations, but there's definitely a moral one.

Governments can coerce their people into participating in their plans, but corporations cannot. They have to convince employees, customers, and other stakeholders that dealing with them is in their best interest.

The difference is analogous to seduction and rape. The end result may be the same, but there's a very clear moral difference between the two.

Or, alternately, everyone gets a vote in the planned economy of the government. It is transparent, observable, and democratic. Only a tiny elite group of capitalists get to vote on the planned economy of corporations, which are as you say often bigger than governments.

Corporations need not convince people to participate; the impact of their plans and decisions have effects on the entire society, and they need not ask anyone their opinion first. The power structure in a corporation is a tyranny: disagree with the guy on top and you're forcibly removed. Toe the line, suck up, and maybe you'll move higher in the pyramid.

I don't need to make an analogy: there's two distinct methods for decision making here; tyranny and democracy, and I know which one I'd choose. There's a very clear moral difference between the two.

The idea that the American economy was centrally planned in 1967 or any time after that, is laughable. The government has made policies and enforced them, but no one is telling IBM how much R&D to allocate to chip research, except IBM's stake holders. And the reference that US corporations sometimes have budgets larger than country budgets is unimportant in the context of the overall US GDP. Apple's economy is dwarfed by the US's, and their ascendance to massive wealth proves the point that the US economy is built on the disruption of established markets.

I can think of no actual centrally planned economies that pay more than lip service to democracy, nor any that have compared favorably with free-er market economies in improving the lives of the average person. Humans tend towards corruption, and free markets are the best tool we have for managing that. Want to see brutal, selfish, horrifying corruption, just look at your local centrally planned economy where the greed represented by a McDonalds happy meal campaign is instead implemented by the local police force.

Voting makes people feel powerful in the same way that playing the lotto makes them feel rich.

The issue with voting, or any exercise of voice, is that it is a positional good; i.e. "winner-take-all" [1]. Even if everyone has one and only one vote, power will tend to accumulate in the hands of a few "influencers". It is easy for influencers and rulers to serve each others interests, directly or indirectly, while by-passing the rest of the population.

If we are doing an apples-to-apples comparison - government centrally planned economies vs. corporate centrally planned economies - then yes, the ability to exercise voice is a point in favor for economies that are planned by governments. However, I find it to be a rather weak point. That corporations are limited in what they can do to individuals (they can't imprison, kill, rob, etc.) and that they are subject to tort and criminal law, is much more essential to liberty, justice, and self-governance for the general population.

[1]https://www.youtube.com/watch?v=f8aRaWnf6ps&feature=youtu.be

Governments have employees. They also have customers in the form of the populace and stakeholders in the form of voters and lobbyists. I'm not sure I see the difference.

Yes and no.

Governments have to convince employees, citizens, and other governments, agencies and organizations that doing the coercion is in their best interest.

Corporations can coerce people through unemployment, professional ruin (in the case of small professional networks), propaganda and other forms of information control...

Large, powerful organizations that dominate local economic and social landscapes are large, powerful organizations that dominate local economic and social landscapes; and it's not like people in one situation are somehow fundamentally different from people in the other.

If losing your job - or worse, keeping your job - restricts your choices as much as prison, does the moral difference matter? How close does the restriction of options due to un/employment have to get to prison for it to be a Problem?

Yes, there's a difference, and yes, there's a moral difference, and yes, governments have access to forms of coercion that corporations do not... but. Everything is still made of people, and if you can't leave - through actuality or perception - then it doesn't really matter.

governments have access to forms of coercion that corporations do not

This is the crux of my point. To me, it makes all the difference.

But thank you for the added nuance.

You're welcome! I find the nuance really important, particularly when dealing with ever-larger corporations.

> Though postwar American politicians juxtaposed US free markets to the centrally planned economies of the Soviet bloc, Galbraith recognized that the two were more similar than one might have thought.

Whenever I try to explain this to anyone, people look at me as if I'm crazy.

Having witnessed the consolidated reporting and planning processes for a good sized successful multinational the irony of "central planning" did strike me more than once.

Capitalism: an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

The United States is not a Capitalist society when those private owners of industry and trade also own the state, and then use the states funds to bail themselves out whenever their business plan fails (i.e. 2008).

This is what increasingly centralized economic planning looks like:

http://i.telegraph.co.uk/multimedia/archive/03573/big-bank-t...

Doesn't the timeline coincide with women entering the workforce (increasingly after WW2) and massive immigration to the US (after the Immigration and Nationality Act of 1965)? Basically, a large influx of (at least potential) workers increased the supply and lowered the price (in wages and benefits employees could demand) of labour.

There are other effects, like specialization, which make consultants much more effective at certain tasks with which regular employees don't have a chance to build experience. However, like lowered transaction costs, I don't think this is crucial.

Massive immigration to the US far predates 1965. Read eg. Upton Sinclair's The Jungle (1906) for a glimpse into how new immigrants were treated around the turn of the century.

Yes but in the 1920s strict limits on immigration were enacted. Only after that did these large companies arise. Then the limits were basically lifted in 1968, right before the beginning of the trend article describes.

On demand staffing infrastructure is tooling up (and not just for taxis). If you (fellow worker) think dealing with HR is unreasonable now, wait until you are dealing with the Google help desk equivalent.

Guilds are a non-ideological alternative to unions. Specially for software development, such collective organizations would have been very useful even now, but in the future will be critically required.

Could you expand on the difference between a guild and a labor union?

For one, the leaders of guilds are active master practitioners. Guilds should be collectively owned for-profit organizations. No fees, rather sweat equity. Guilds would set the industry best practices.

My working model is the Knights Templar. But I advise steering clear of King and Church if you want to avoid a future Friday the 13th event ;)

[edited to expand]

Very nice article, I was introduced to a lot of concepts under a historical perspective. However, it does not cover emerging patterns (startup culture) or what would be the most plausible alternative future trends. Can someone suggest some good reads?

VCs becoming more risk-averse, startups moving slower:

https://blog.ycombinator.com/fundraising-advice-for-yc-compa...

http://heidiroizen.tumblr.com/post/139377970205/dear-startup...

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Great paper that compares and contrasts the 3 industrial revolutions: 1) steam/railroads, 2) electricity/internal combustion engine/running water/chemicals/petroleum, 3) computers/phones/internet. Author reflects on likely future challenges and what we can do to get back to growth.

http://www.nber.org/papers/w18315.pdf

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Required reading for thoughts on the state of US industry, life, liberty, GEICO insurance, etc. (mostly outside of tech): http://www.berkshirehathaway.com/letters/2015ltr.pdf

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My thoughts, in response to an article about the end of Moore's Law, and the need to design more efficient software as advances in hardware slow down:

I think we're going to see this phenomenon - wringing efficiency out of what we have now - across a lot of different fields and industries in the coming years.

One example is the whole IoT movement. Most of the real (industrial, medical, automotive) applications are efficiency/cost-savings focused. The central theme is connecting devices that we have now to better monitor, analyze, and utilize what we've already built.

Another example that is a bit further removed from computers is the whole Uber/car sharing trend. At any given time 95% of the cars in the world are parked somewhere, not in use. Even if we could only bring that down by 5%, we would be utilizing billions of dollars in capital more efficiently.

I also strongly believe that we will see this reflected in living situations with growing urban cores/hubs of activity and jobs. Suburbs are no longer economically viable at the scale at which we built and inhabited them post WWII, and as the infrastructure begins to decay and inequality increases, more and more people will move to the city to take advantage of the economies of scale of living a dense, vertical lifestlye.

Thanks for all this info and your thoughts :) I have some reading to do now.

The author of that NBER paper recently published a book that goes into the same topic in more depth[0]. It's definitely worth reading.

0: http://www.amazon.com/The-Rise-Fall-American-Growth/dp/06911...

Nit - taxi services utilize the capital of the vehicle more efficiently, but are far less efficient at roadway/energy utilization (As a taxi/uber has to travel to pick up its passenger.)

It's a private gain, at a public loss. If we really wanted efficient travel, we'd be investing into mass transit.

How is it a private gain? The cost to travel to pick up a passenger is built into the price of the trip. Efficiently routing these fairs could be far cheaper than owning a vehicle that's idle most of the time, while also far more convenient than hoping your route criscrosses enough with public transit not to be inconvenient.

I personally believe the future consists of transport networks that allow you to enter your expected trip, either the present moment or planned in the future, and an autonomous system will translate your request into transit based on the price you're willing to pay (and desired level of predictable reliability). So if you travel to work around the same time every day, you can probably achieve a fairly low price with high reliability. Uber is the beginning of such a network, and if self-driving cars existed, the model would take off to a whole new level. Imagine if the vehicles were capable enough to deliver freight and packages between businesses and residences overnight while not in use (or less in use) for passengers.

I'm not an economist but it always drives me crazy when the US economy of the 1950's and 60's is seen as some sort of reasonable benchmark for how our economy should grow. The world was still coming out of the great depression, two world wars that massively disrupted the infrastructure of Europe and large parts of Asia AND an astounding rise in international trade.

The US economy should have been booming, right?!

I'm sure it happens in actual scholarship but in articles like this there seems to be little to no correcting for the factors above.

People need widgets. People are willing to work to make widgets in order to get widgets. No one has come up with a perfect solution to this problem.

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