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Economics

Economics for the Common Good

It’s sometimes called the “dismal science,” but the weird and wonderful world of economics is anything but drab. As a clear-eyed observer of the world, Nobel Prize-winning French economist Jean Tirole can draw upon decades of economic expertise to illuminate common features of the world in a surprising, and often downright counterintuitive, light.

Tirole takes a look at the big topics that shape our present and will determine our future. How can the state and free markets best be brought together to guarantee growth, innovation and the common good? What makes the tragedy of the commons so tragic and what economists can learn from the humanities.

Our understanding of how the economy works is shaped by confirmation biases.

The way we see the world is shaped by our beliefs. We emphasize facts that confirm ideas we already hold, which is why we read newspapers that echo our own political views and seek out like-minded friends. Economics is no different; our preexisting beliefs mold our attitudes toward the facts.

This means we often don’t make the wisest economic decisions. Instead of looking at the evidence and making decisions accordingly, we look for simple rules that we can apply to every new situation. This approach can lead us astray because economics can be deeply counterintuitive.

This doesn’t mean that economics is purely about cold rationality. Think of a market. At its simplest, it’s just a mechanism to allocate scarce resources; buyers and sellers meet in the marketplace to consensually exchange goods and services.

But markets aren’t the infallible mechanisms they’re sometimes perceived to be. Not every good can be bought and sold freely, and some things, need to be more strictly regulated than others. Imagine, for example, a market in which babies could be traded for cash by parents (the sellers) and adopters (the buyers). It’s easy enough to envisage both parties reaching a mutually beneficial agreement.

But here, economists would raise an objection. From their point of view, this exchange fails because it neglects the interests of a third party, namely the baby. This kind of market failure is the result of what economists call an externality – the cost of an exchange borne by a third party who can’t consent to the exchange.

And that’s where regulation comes in. It’s an attempt to safeguard the interests of all parties to an exchange, whether they’re those of babies, elephants or the environment.

Economists try to make the world a better place by providing insights for policymakers.

What exactly is it that economists do? Lots of things in fact, but two roles stand out. Because they’re often ensconced in the ivory towers of academia, one of economists’ most important tasks is contributing to our knowledge of the world. But they also have another, less theoretical, role: economists try to make the world a better place by providing insights that policymakers can act upon.

That means economists often play an important part in public debates. Because knowing about budgets is pretty much in economists’ job description, they’re ideally placed to help us figure out the most efficient – and least costly – way of allocating resources. So how do economists go about tackling problems? They rely on models to analyze actors’ behavior. Two theories are particularly suited to this purpose.

The first is game theory. This is essentially a way of modelling the behavior and strategies of self-interested actors who are also interdependent and affected by each other’s actions. A famous example is the “prisoner’s dilemma,” a thought experiment that looks at how two prisoners will behave without knowing what the other is doing – will they betray each other in search of a more lenient sentence or keep quiet?

Game theory asks two questions about this kind of situation: First, what’s the best decision for the individual? And second, what’s the best decision for multiple parties collectively? Another helpful tool is information theory, which centers on the way individuals make use of private information.

Analyzing private information lets economists make informed predictions about individual behavior. And knowing what people are likely to do in certain situations is a great basis for making policy recommendations.

Economics has a lot to learn from the social sciences and humanities.

Economic theory begins with a fairy tale. Once upon a time, it says, there was the homo economicus. This fabled character from economics 101 textbooks is the self-interested and rationally calculating decision maker. But as anyone who’s ever felt the lure of unhealthy junk food knows all too well, humans just aren’t perfectly rational creatures.

What else drives us then? One place economists can look for answers is in the social and human sciences. From philosophy to law, history to psychology or sociology to political science, all these disciplines have one thing in common: they’re all concerned with what makes people, groups and organizations tick. Their attempts to get at the heart of the human condition have introduced us to a whole raft of characters to complement homo economicus.

Take psychology’s homo psychologicus. He’s far from rational, and psychologists are largely interested in exploring the hidden drives that lead him to make decisions that sacrifice his long-term interests for short-term pleasures. Why, for example, does he spend all his money today rather than putting a portion of it away for a rainy day or his retirement? Psychology is also useful if you want to understand behavior that isn’t self-interested. What makes us empathetic and capable of giving without expecting anything in return?

Sociology adds another character to our expanding cast – homo socialis. What can an economist learn from this figure? Well, economies are social systems that depend on values like trust. Because we don’t always have access to all the information we need to make informed decisions, we often buy things because we trust the seller or a recommendation from someone else.

But it’s not just trust that underpins economies. If you want to understand why someone obeys the rules and pays their taxes (or doesn’t), it’s useful to get a handle on another character, homo juridicus, since behavior is shaped both by legal and social norms.

Neither the state nor the market is perfect and they both need each other to function properly.

The market and the state are frequently depicted as belonging to entirely separate spheres. But contrary to what is often said about them, they don’t compete with each other; in fact, each needs the other to work properly.

That’s because they do different things. Take markets. Without them, there’d be little competition or innovation. Yet without the state and the rule of law, markets would descend into anarchy. After all, businesses need protecting and contracts have to be enforced for a market to work at all. And, as we’ve seen, it’s the state that provides a regulatory oversight that protects the common good when markets fail.

But it’s not just markets that occasionally fail – states can too. Consider politicians. What they want above all else is to be elected or reelected, which is logical enough since they’d be unable to do anything if they didn’t have power. But that search for approval at the ballot box can also distort their decision making. This is a common theme on the campaign trail, when politicians exploit voters prejudices or ignorance rather than try to change people’s minds.

A more dangerous practice is pandering to special interest groups. Promising groups of voters what they want is a great way of getting them to turn out come election day, but it’s not necessarily a brilliant way of crafting economic policy. Promises are easy to make and hard to deliver on.

That’s especially true in the case of spending commitments, because their true cost can be difficult to calculate. Investing in creaky public transport infrastructure might sound like a no-brainer during a stump speech, but what if the state needs to borrow money to fix the transit system? The final bill can easily exceed the rough-and-ready arithmetic of politicians casting around for votes!

Businesses face a similar quandary when it comes to decision making. Who gets to make the decisions and why? Every business has multiple stakeholders – groups affected by how a business operates. Balancing the interests of different stakeholders can be a tricky matter.

Take two stakeholders found in virtually every business: investors and employees. If the former dictate policy, they might be tempted to ignore the interests of the company’s workers and end up slashing jobs in search of bigger profit margins. Conversely, if employees get the upper hand, they might also let short-term gains get in the way of long-term strategies and simply raise their own wages while leaving too little for reinvestments.

Therefore, both the state and businesses can fail when they don’t make informed choices that take into account the interests of all stakeholders.

The state is at the heart of economic life, but it’s the market that drives innovation.

We’ve already seen how the state and the market are like the yin and yang of economic life, two interdependent and complementary forces in a larger system.  So let’s take a closer look at their relationship. Paradoxical as it may seem, the state is the at the heart of economic life in every market economy, because it plays three distinctive and important roles within the market.

The first role is one of public procurement. Here, the state becomes a buyer of goods and services for everything from the construction of public buildings, roads and railways to the running of hospitals. This has the beneficial knock-on effect of boosting competition among suppliers.

But the state isn’t only part of the market – it’s also above the market. As a legislative and executive power, it sets the parameters of the market economy by issuing permits and licenses for things like taxi firms, supermarkets and even airline landing rights.

In that role, the state is also a referee of markets. The state is an observer of the play of economic forces, intervening to make sure the rules of the game are upheld and dominant players don’t abuse their power. So what’s the market’s role then? Open competition in free markets provides several goods that the state on its own can’t.

Take affordability. Monopolies can charge whatever they want for their services because customers can’t go anywhere else. Unsurprisingly, prices are often sky high. Competition means that suppliers have to convince customers to buy their services rather than someone else’s, and lowering their prices is often the most convincing argument of all!

But if you’re a supplier and you want to lower your prices, you’ll also have to find a way to lower your costs. Innovation and efficiency are the side effects of suppliers’ bid to offer competitive prices.

Digitalization brings new opportunities and poses new problems.

We’re already living in the digital economy. We shop and bank online, catch up on news and gossip on our smartphones and stay in touch with friends on Facebook. What the platforms of the new digital economy all have in common is that they’re examples of two-sided markets, markets in which buyers and sellers interact via an intermediary.

Globalization has made the world a smaller place, which means that buyers and sellers from every corner of the earth can exchange goods and services. But as the world has gotten smaller, the global economy has gotten a lot bigger. So how do we decide who to do business with?

Two-sided markets like Amazon make this a lot easier. By providing a digital marketplace, they bring buyers and sellers together wherever they are. But unlike traditional marketplaces, these platforms also act as regulators to ensure that transactions are fair and smooth.

But there’s a catch. Digital platforms only work when we trust them not to misuse our personal data. How can you tell which websites are safe? The answer, troublingly, is that you often can’t. Even large companies have been subject to massive credit card theft in recent years.

Add to the mix the often dubious terms of use that many websites make users sign and there’s plenty of cause for concern. So how can trust be reestablished? One solution is legislation that protects users against one-sided clauses. We don’t need to look far to see what that might look like in practice, since we already have laws of this kind in the offline world.

Intellectual property rights are a necessary evil in the struggle for greater innovation.

Innovation is the motor that keeps the economy humming and the wheels of economic growth spinning. But safeguarding innovation requires intellectual property rights. That might seem like a paradox. Surely it’d be better if innovations were free for all to use and improve upon, right?

Actually, no. The problem is one we’ve encountered before: free-riding. If every innovation were publically available for all to make use of, there would be little incentive for anyone to devote resources to the research and development that underpins all innovation.

That’s why it’s important to protect the income of innovators. By guaranteeing that they’ll profit from their work, tomorrow’s innovators are given an incentive to continue their often difficult and time-consuming work today. That’s where intellectual property rights come in.

When the state enforces intellectual property rights, it’s effectively granting the creator of an innovation an exclusive license to market and profit from a given product. So, intellectual property rights and innovation go hand in hand. But this isn’t the only way of boosting innovation; various governments have experimented with alternative models.

In the seventeenth and eighteenth centuries, for example, both Britain and France granted prizes to innovators in public competitions. Once the winner had collected his award, the innovation was made accessible to everyone. While this was a great incentive for innovators to compete amongst themselves, there was also a downside. Innovation is usually unpredictable – no one knows what tomorrow’s technology will look like.

But if you want to give someone a prize, you have to know what criteria you’ll be using to judge his submission; this condition, in turn, narrows the field of innovation. Companies have also experimented with novel approaches. One idea is patent pools, an agreement among competing firms in the same industry to jointly control patents that they can all use. That is known as coopetition, a portmanteau of the words “cooperation” and “competition,” and has been used to try to lower the price of innovations.

The science of economics is, like the world it attempts to describe, complex. There are rarely clear-cut rules that can be applied to all situations; instead, there are trade-offs between different and equally valuable goods. Failure is often a result of not striking the right balance, whether it’s in the sphere of the state or markets. Getting it right requires an understanding of economics, a discipline that can help us achieve the common good when it comes to the most urgent issues of the day, like climate change and the transition to a digital economy.

The How, What and Why – Economics Proponents Of Free Markets and Advocates of State Regulation

It’s sometimes called the “dismal science”, but the weird and wonderful world of economics is anything but dreary in my opinion. As well as that of a clear-eyed observer of the world, Nobel Prize-winning French economist Jean Tirole, who can draw upon decades of economic expertise to illustrate common features of the world in a surprising, and often very counter-intuitive light.

Jean Tirole’s Economics for the Common Good (2017) is a wide-ranging look at the contemporary economy, packed with plenty of insights into the theory and practice of modern-day economics. Deconstructing the supposed opposition of state and market, Tirole explores their many interconnections in fields ranging from climate change to property rights and the new digital economy.

Between demonstrating why an anti-poaching NGO should sell confiscated ivory tusks rather than destroy them and explaining the debt crisis in southern Europe, Tirole takes a look at the big topics that shape our present and determine our future. Why do we need finance markets even after speculators demonstrated their recklessness in the 2008 financial crash? What stops us from tackling the looming threat of drastic climate change, despite the repeated warnings of scientists? And how can the state and free markets best be brought together to guarantee growth, innovation and the common good? 

Our understanding of how the economy works is shaped by confirmation biases.

The way we see the world is shaped by our beliefs. We emphasize facts that confirm ideas we already hold, which is why we read newspapers that echo our own political views and seek out like-minded friends.Economics is no different; our preexisting beliefs mold our attitudes toward the facts.

This means we often don’t make the wisest economic decisions. Instead of looking at the evidence and making decisions accordingly, we look for simple rules that we can apply to every new situation. This approach can lead us astray because economics can be deeply counter-intuitive. Imagine an environmental NGO that campaigns against poaching. It’s just managed to intercept a consignment of ivory tusks being shipped by a group of poachers who kill endangered elephants. What should it do with the confiscated ivory?

Moral intuition tells us that the trade in illegal ivory is reprehensible, which means we should destroy it, right? No! Economic reasoning suggests that the best option would be to do what the poachers were attempting to and sell the ivory.

But, you may ask, wouldn’t that just put the NGO in the same shoes as the poachers? Not quite. Selling the ivory would raise the needed funds that would allow the organization to continue its work in the future. Not only that, releasing the ivory onto the market would depress the value of elephant tusks by making them less scarce thus reducing the incentive of poachers to kill other elephants.

As you can see, taking a long-term perspective of the kind offered by economics changes the moral calculus involved in all sorts of decisions. This doesn’t mean that economics is purely about cold rationality. Think of a market. At its simplest, it’s just a mechanism to allocate scarce resources; buyers and sellers meet in the marketplace to con-sensually exchange goods and services.

But markets aren’t the infallible mechanisms they’re sometimes perceived to be. Not every good can be bought and sold freely, and some things, like ivory, need to be more strictly regulated than others. Imagine, for example, a market in which babies could be traded for cash by parents (the sellers) and adopters (the buyers). It’s easy enough to envisage both parties reaching a mutually beneficial agreement.

Here, economists would raise an objection. From their point of view, this exchange fails because it neglects the interests of a third party, namely the baby. This kind of market failure is the result of what economists call an externality – the cost of an exchange borne by a third party who can’t consent to the exchange. And that’s where regulation comes in. It’s an attempt to safeguard the interests of all parties to an exchange, whether they’re those of babies, elephants or the environment.

Economists try to make the world a better place by providing insights for policymakers.

What exactly is it that economists do? Lots of things in fact, but two roles stand out. Because they’re often ensconced in the ivory towers of academia, one of economists’ most important tasks is contributing to our knowledge of the world. But they also have another, less theoretical, role: economists try to make the world a better place by providing insights that policymakers can act upon.

That means economists often play an important part in public debates. Take climate change, for example. Scientists tell us that the best way to prevent catastrophic global warming is to stay within our allocated annual “carbon budget” and cut the amount of greenhouse gases we emit each year. Because knowing about budgets is pretty much in economists’ job description, they’re ideally placed to help us figure out the most efficient – and least costly – way of allocating our carbon budget.

So how do economists go about tackling problems like this? They rely on models to analyze actors’ behavior. Two theories are particularly suited to this purpose. The first is game theory. This is essentially a way of modelling the behavior and strategies of self-interested actors who are also interdependent and affected by each other’s actions.

A famous example is the “prisoner’s dilemma,” a thought experiment that looks at how two prisoners will behave without knowing what the other is doing – will they betray each other in search of a more lenient sentence or keep quiet? Game theory asks two questions about this kind of situation: First, what’s the best decision for the individual? And second, what’s the best decision for multiple parties collectively?

Another helpful tool is information theory, which centers on the way individuals make use of private information. To get an idea of how this works, imagine a tenant farmer and a landlord. The owner of the land has private information – something that only he knows – about the fertility of a parcel of land that he wants to lease to a farmer. When the time comes to draw up the contract with his new tenant, he might well propose a profit-sharing model rather than renting the land for a fixed sum. After all, he knows how fertile the land is and is confident that it will generate large returns.

Analyzing private information lets economists make informed predictions about individual behavior. And knowing what people are likely to do in certain situations is a great basis for making policy recommendations.

Economics has a lot to learn from the social sciences and humanities.

Economic theory begins with a fairy tale. Once upon a time, it says, there was the homo economicus. This fabled character from economics 101 textbooks is the self-interested and rationally calculating decision maker. But as anyone who’s ever felt the lure of unhealthy junk food knows all too well, humans just aren’t perfectly rational creatures.

What else drives us then? One place economists can look for answers is in the social and human sciences.

From philosophy to law, history to psychology or sociology to political science, all these disciplines have one thing in common: they’re all concerned with what makes people, groups and organizations tick. Their attempts to get at the heart of the human condition have introduced us to a whole raft of characters to complement homo economicus.

Take psychology’s homo psychologicus. He’s far from rational, and psychologists are largely interested in exploring the hidden drives that lead him to make decisions that sacrifice his long-term interests for short-term pleasures. Why, for example, does he spend all his money today rather than putting a portion of it away for a rainy day or his retirement?

Psychology is also useful if you want to understand behavior that isn’t self-interested. What makes us empathetic and capable of giving without expecting anything in return?

Sociology adds another character to our expanding cast – homo socialis. What can an economist learn from this figure? Well, economies are social systems that depend on values like trust. Because we don’t always have access to all the information we need to make informed decisions, we often buy things because we trust the seller or a recommendation from someone else.

But it’s not just trust that underpins economies. If you want to understand why someone obeys the rules and pays their taxes (or doesn’t), it’s useful to get a handle on another character, homo juridicus, since behavior is shaped both by legal and social norms.

Neither the state nor the market is perfect and they both need each other to function properly.

The market and the state are frequently depicted as belonging to entirely separate spheres. But contrary to what is often said about them, they don’t compete with each other; in fact, each needs the other to work properly.

That’s because they do different things. Take markets. Without them, there’d be little competition or innovation. Yet without the state and the rule of law, markets would descend into anarchy. After all, businesses need protecting and contracts have to be enforced for a market to work at all. And, as we’ve seen, it’s the state that provides a regulatory oversight that protects the common good when markets fail.

But it’s not just markets that occasionally fail – states can too. Consider politicians. What they want above all else is to be elected or reelected, which is logical enough since they’d be unable to do anything if they didn’t have power. But that search for approval at the ballot box can also distort their decision making.

This is a common theme on the campaign trail, when politicians exploit voters prejudices or ignorance rather than try to change people’s minds. A more dangerous practice is pandering to special interest groups. Promising groups of voters what they want is a great way of getting them to turn out come election day, but it’s not necessarily a brilliant way of crafting economic policy. Promises are easy to make and hard to deliver on.

That’s especially true in the case of spending commitments, because their true cost can be difficult to calculate. Investing in creaky public transport infrastructure might sound like a no-brainer during a stump speech, but what if the state needs to borrow money to fix the transit system? The final bill can easily exceed the rough-and-ready arithmetic of politicians casting around for votes!

Businesses face a similar quandary when it comes to decision making. Who gets to make the decisions and why? Every business has multiple stakeholders – groups affected by how a business operates. Balancing the interests of different stakeholders can be a tricky matter.

Take two stakeholders found in virtually every business: investors and employees. If the former dictate policy, they might be tempted to ignore the interests of the company’s workers and end up slashing jobs in search of bigger profit margins. Conversely, if employees get the upper hand, they might also let short-term gains get in the way of long-term strategies and simply raise their own wages while leaving too little for reinvestments.

Therefore, both the state and businesses can fail when they don’t make informed choices that take into account the interests of all stakeholders.

Climate change looks like an intractable problem, but economists have already devised potential solutions.

From rising sea levels to extreme weather events and more frequent droughts, the effects of global climate change are likely to be catastrophic unless we take action soon. But policies like reducing greenhouse gas emissions that would help to counteract global warming are extremely difficult to implement – and economists can help us understand why.

Failure to take action on climate change is an example of what economists call the tragedy of the commons, which essentially refers to a conflict of interest between individuals and the common good. Imagine what would happen if greenhouse gas emissions were reduced globally. Everyone would benefit, right? The problem is that this could only be brought about by individual countries implementing the right policies. But because the switch to cleaner energy sources and lowering emissions is costly, there’s a strong disincentive to put those policies in place at the national level.

That’s compounded by the fact that each country represents only a small fraction of the total population of the earth. At the national level, the benefits of environmentally friendly policies would be relatively small. So there’s a strong incentive to free ride. Countries that fail to change their individual behavior and continue polluting the atmosphere can still stand to benefit from difficult changes made by others.

The tragedy of the commons is the result of widespread free riding. Everyone needs to adopt policies that counteract the effects of climate change, but no one has an incentive to implement them individually. It’s because of this situation that voluntary measures to fight climate change have failed.

The 1997 Kyoto Protocol is a good example. Although a large number of countries signed up to an agreement to reduce their greenhouse gas emissions, there was plenty of free riding, notably by countries like the United States, which never ratified the protocol. Economists have come up with two policy proposals that they think might be able to cut through this Gordian knot. The first is a global carbon tax. Polluters would be charged a fixed price per ton of emitted carbon dioxide, wherever they were in the world, by the responsible state authority.

The second option proposed by economists is a system of tradable emission permits. This would require setting a global ceiling for the amount of greenhouse gases that can be emitted each year. Governments would then issue permits to emit a certain tonnage of carbon dioxide, which could be freely traded by companies.

Southern European countries have problems with the labor market, competitiveness and debt.

Millions of Europeans are worried about their economic future – and it’s no wonder. The continent’s economy faces a number of serious challenges, especially in southern European countries. Unemployment in countries like Greece, Spain and France is sky-high when compared to the countries of northern Europe, the United States and Canada. It’s especially bad for two distinct age groups: young people aged between 15 and 24 at the start of their careers, and older people between 55 and 65 at the end of their careers. Worse still, many of these people are experiencing long-term unemployment.

The labor market itself is a daunting prospect for job-seekers. Many jobs are short-term, unfulfilling and insecure, while better-paid jobs require extensive training, the cost of which is a burden mostly borne by taxpayers. Southern Europe has other problems, too.

The introduction of the euro as a common currency in 1999 was designed to increase European integration and hasten economic development, but it has come at a high cost. Since 1999, many countries in southern Europe have seen salaries rise faster than productivity. That has made their economies much less competitive than they need to be in today’s global economy. Before the euro, they could devalue their individual currencies to boost competitiveness, but that option has been off the table since the introduction of a common currency controlled by a European central bank.

Both private and public debt has been piling up over the same period. High debt means high interest rates, especially once banks start to worry about whether countries are capable of servicing their debt at all. That has added to the pressure on southern European treasuries. So what’s to be done? One ambitious proposal is to move toward a federal European state in which risks are shared equally by all member countries.

Financial speculation has its uses – but it can also be dangerous.

Few topics in economics are as fiercely and emotionally contested as finance. That’s partly a legacy of the financial crisis of 2008, and the resulting widespread view of bankers as reckless speculators who crashed the global economy. But finance is one of those things we just can’t do without – if we could, we’d have already gotten rid of it and spared ourselves the expensive and tricky public bailouts of recent years!

So what is finance?

Basically, it’s a service for borrowers. Consider a mortgage; the bank provides borrowers with credit to acquire something they couldn’t otherwise. It’s not just households that borrow money though – businesses and governments also need ready access to credit to keep the show on the road. It’s hard to imagine an economy functioning without borrowing and lending.

The finance sector also provides insurance against risk. Without that safety net, borrowers could easily end up in trouble. A good example of this is the aircraft manufacturer Airbus. Most of the company’s earnings are in dollars, while its expenses are paid in euros. That means it’s vulnerable to sudden fluctuations in the dollar-euro exchange rate – if the dollar dropped sharply, the company would have trouble paying its bills. Insurance against fluctuations of this nature is a vital safety mechanism for Airbus.

But as the financial crisis demonstrated, financial speculation can also destabilize the economy. This happens when otherwise useful financial products turn toxic, and a major cause of that is securitization, the financial practice of pooling different kinds of debt and selling it to a third party. Let’s return to our example of a mortgage on a house. Once the bank has lent you the money, it can either decide to keep the loan on its books and collect the repayments over the next 30 or 40 years, or it can sell the loan to another bank.

There’s nothing wrong with trading in loans in principle – in fact, it’s essential if a bank wants to diversify its portfolio or reinvest its assets. So what’s the catch? Well, if a bank knows it can always flip a mortgage, and get someone else to bear the risks, it’s likely that it’ll become less scrupulous in deciding who’s eligible for a loan.

That’s precisely what happened in 2008. Once people started to notice that a huge number of mortgages had been given to people who couldn’t repay the debt, the whole financial system collapsed like a house of cards. People realized that they were holding assets that weren’t worth the paper they were written on and scrambled to get rid of them, bankrupting many banks in the process.

The state is at the heart of economic life, but it’s the market that drives innovation.

We’ve already seen how the state and the market are like the yin and yang of economic life, two interdependent and complementary forces in a larger system. In this blink, we’ll take a closer look at their relationship. Paradoxical as it may seem, the state is the at the heart of economic life in every market economy, because it plays three distinctive and important roles within the market.

The first role is one of public procurement. Here, the state becomes a buyer of goods and services for everything from the construction of public buildings, roads and railways to the running of hospitals. This has the beneficial knock-on effect of boosting competition among suppliers. But the state isn’t only part of the market – it’s also above the market. As a legislative and executive power, it sets the parameters of the market economy by issuing permits and licenses for things like taxi firms, supermarkets and even airline landing rights.

In that role, the state is also a referee of markets. The state is an observer of the play of economic forces, intervening to make sure the rules of the game are upheld and dominant players don’t abuse their power. So what’s the market’s role then? Open competition in free markets provides several goods that the state on its own can’t.

Take affordability. Monopolies can charge whatever they want for their services because customers can’t go anywhere else. Unsurprisingly, prices are often sky high. Competition means that suppliers have to convince customers to buy their services rather than someone else’s, and lowering their prices is often the most convincing argument of all!

But if you’re a supplier and you want to lower your prices, you’ll also have to find a way to lower your costs. Innovation and efficiency are the side effects of suppliers’ bid to offer competitive prices.

Digitalization brings new opportunities and poses new problems.

We’re already living in the digital economy. We shop and bank online, catch up on news and gossip on our smartphones and stay in touch with friends on Facebook. What the platforms of the new digital economy all have in common is that they’re examples of two-sided markets, markets in which buyers and sellers interact via an intermediary.

Globalization has made the world a smaller place, which means that buyers and sellers from every corner of the earth can exchange goods and services. But as the world has gotten smaller, the global economy has gotten a lot bigger. So how do we decide who to do business with?

Two-sided markets like Amazon make this a lot easier. By providing a digital marketplace, they bring buyers and sellers together wherever they are. But unlike traditional marketplaces, these platforms also act as regulators to ensure that transactions are fair and smooth. In some cases, they even regulate prices – think of Apple’s iTunes, which limits the charge for downloads to $0.99 per song.

But there’s a catch. Digital platforms only work when we trust them not to misuse our personal data. How can you tell which websites are safe? The answer, troublingly, is that you often can’t. Even large companies have been subject to massive credit card theft in recent years. Forty million customers of Target had their details hacked in 2013, while another 56 million Home Depot customers had theirs stolen the following year and 80 million customers of the health insurance company Anthem had theirs ripped off in 2015.

Add to the mix the often dubious terms of use that many websites make users sign and there’s plenty of cause for concern. So how can trust be reestablished? One solution is legislation that protects users against one-sided clauses. We don’t need to look far to see what that might look like in practice, since we already have laws of this kind in the offline world.

Think of a parking lot. If you leave your car there, you accept the property owner’s terms of use. But these terms are strictly limited – they can’t include a clause that says it’s fine for the parking lot owner to take off in your car!

Intellectual property rights are a necessary evil in the struggle for greater innovation.

Innovation is the motor that keeps the economy humming and the wheels of economic growth spinning. But safeguarding innovation requires intellectual property rights. That might seem like a paradox. Surely it’d be better if innovations were free for all to use and improve upon, right?

Actually, no. The problem is one we’ve encountered before: free-riding. If every innovation were publically available for all to make use of, there would be little incentive for anyone to devote resources to the research and development that underpins all innovation.That’s why it’s important to protect the income of innovators. By guaranteeing that they’ll profit from their work, tomorrow’s innovators are given an incentive to continue their often difficult and time-consuming work today.

That’s where intellectual property rights come in.When the state enforces intellectual property rights, it’s effectively granting the creator of an innovation an exclusive license to market and profit from a given product. So, intellectual property rights and innovation go hand in hand.

But this isn’t the only way of boosting innovation; various governments have experimented with alternative models. In the seventeenth and eighteenth centuries, for example, both Britain and France granted prizes to innovators in public competitions. Once the winner had collected his award, the innovation was made accessible to everyone.

While this was a great incentive for innovators to compete amongst themselves, there was also a downside. Innovation is usually unpredictable – no one knows what tomorrow’s technology will look like. But if you want to give someone a prize, you have to know what criteria you’ll be using to judge his submission; this condition, in turn, narrows the field of innovation.

Companies have also experimented with novel approaches. One idea is patent pools, an agreement among competing firms in the same industry to jointly control patents that they can all use. That is known as coopetition, a portmanteau of the words “cooperation” and “competition,” and has been used to try to lower the price of innovations.

The science of economics is, like the world it attempts to describe, complex. There are rarely clear-cut rules that can be applied to all situations; instead, there are trade-offs between different and equally valuable goods. Failure is often a result of not striking the right balance, whether it’s in the sphere of the state or markets. Getting it right requires an understanding of economics, a discipline that can help us achieve the common good when it comes to the most urgent issues of the day, like climate change and the transition to a digital economy.

The Impacts of AI and The Information Revolution On Modern Labour

It’s clear that we’re moving toward the kind of artificial intelligence that will automate most of our jobs – but how do we plan to deal with this scenario? I will discuss here the challenges we’ll face and what we need to do to prepare ourselves for the inevitable. The Economic Singularity (2016) takes a long, hard look at what the future has in store for us based on the technological progress we’ve made so far.

For decades, human beings have been worried that machines might take over the world – and these worries are by no means unfounded. It’s entirely imaginable today that robots with all manner of human traits could be developed, capable of displaying empathy, speech cognition and a high level of intelligence. If the robots are compliant, this could be very practical, such as for the many single people in the world who need a steady and reliable partner to live with. But the robots could also decide to take over and make humans into slaves.

Leaving aside science fiction, technology and machines have thus far not wreaked havoc on Earth; on the contrary, mechanization has meant that human beings have to work less and less, leaving them to be creative, productive or just lazy. This tendency is bound to continue as technology progresses, so let’s consider the positive and negative aspects that this increase in AI has in store for us.

The Industrial Revolution set the stage for the Information Revolution.

When machines and factories began to appear in nineteenth-century Victorian England, many people were critical of this new development. Charles Dickens, in particular, worried about the effect machinery would have on England’s working-class laborers, and expressed these concerns in his books.

Even then, people were worried about losing their jobs to new technology. But as mass production took over during the Industrial Revolution, there was no stopping the progress made. Actually, it wasn’t the machines that brought about this change so much as the steam engines that were powering them.

People were already familiar with machines powered by wind and water, as these had been around since medieval times. What really fueled the Industrial Revolution was the fact that new machines along assembly lines were harnessing the power of Thomas Newcomen’s steam engine. Invented in 1712, the steam engine accelerated the onset of the industrial age and was far more powerful than any of the water- or air-powered contraptions that preceded it.

With machines taking over a large portion of the labor, a significant percentage of the population could now focus on other things – and it was this extra time that would lead to the Information Revolution. As time went on, machines became increasingly efficient and less manual work was needed on the assembly line. As a result, workers turned their attention to the service industry.

Prior to 1940, only half of America’s gross domestic product (GDP) came from the service industry, but by 1950, this industry was employing over half of the nation’s workforce. This shift, from industry and agriculture to service, marked the start of the Information Revolution, an era that would focus on producing knowledge and information rather than raw materials.

Since the Information Revolution is still ongoing, we can’t be certain of its overall consequences; in fact, it remains difficult to speculate as to what our workforce will look like in the future. But before looking ahead, let’s first take a closer look at how we got to where we are today.

History shows that machines increase the wealth of nations and do not threaten human employment.

Are you familiar with the term Luddite? You might be if you prefer to live a life free of technology. But do you know the origins of the name? As the story goes, in 1779, a textile worker by the name of Ned Ludd revolted after being whipped by his employer. For Ned, it was the final straw, and he smashed his new mechanical knitting machine in protest.

The story lingered in the public imagination, and when textile workers in nineteenth-century England faced further mechanization of their profession, they united in protest over the threat to their livelihood, calling themselves Luddites. And much like the Ned Ludd story, the workers smashed the new weaving machines in defiance.

But is technology really to blame? When we look at the evidence, we can see that machinery generally increases a nation’s wealth while the resilient job market adapts. Since machines don’t need to sleep and don’t require wages or benefits, they make production cheaper and faster. And with more products being made, a higher demand can be met, which results in more wealth and more jobs in the long run.

So it’s shortsighted to assume that automation automatically leads to unemployment. After all, there isn’t a fixed amount of jobs to be had or work to do. Thus far, the general rule has been that when societies and companies innovate and become more prosperous, new jobs are created.

Today, more machines than ever are being used. And at the same time, humans are working as much as we ever have, because machines allow us to be more productive and accomplish new and exciting tasks. In 2015, the financial consulting firm, Deloitte, studied employment trends dating back to 1871 and found that machines have indeed generated more jobs – primarily due to the automation of the agriculture industry and laundry-related professions.

Workers in these sectors were suddenly freed up to fill the jobs of the expanding service industry, including teachers and nurses. Between 1992 and 2014, the number of teaching and nursing jobs in the United States increased by six and nine percent, respectively.

Since machines are learning to make cognitive decisions, service industry jobs are now at risk.

So far, machines have done more good than harm to the job market, so you might think that improving machines through artificial intelligence (AI) would make things even better, right? Not so fast. As machines get smarter and smarter, in large part thanks to AI developments such as deep learning, it means they’ll eventually be able to replace the very jobs in the service sector that we’ve come to rely on.

Deep learning is a process wherein a machine is fed different data sets and uses algorithms to make predictions and draw future conclusions based on the results of those predictions. So, in a sense, the machine is learning. And the more data the machine is given, the more comparisons the machine can make and the more intelligent it becomes. This is how machines are learning to perfect a range of human skills like speech and image recognition.

In 2012, computer scientist and cognitive psychologist Geoff Hinton led a team to victory in an AI image recognition contest. Through deep learning, their computer recognized the most images, including clouds, cats and dogs. This is the kind of knowledge that will enable machines to make informed decisions and perform human tasks, making them much cheaper and efficient workers than humans. And some jobs in the service sector are already at risk of becoming automated.

The software program, Quill, is automating some of the more basic jobs in the journalism sector by writing Associated Press articles on sports and financial news. Developed in 2010 by Narrative Science, Quill can analyze data and pick out the most relevant details for an article. It can then quickly generate a structure for the article and use its language-generation software to compose the necessary sentences.

This shows us that even complex jobs requiring cognitive analysis can either be partly or completely performed by machines. And once one company starts using them, other companies will be forced to follow their lead or else fall behind their competition.

In the near future, intelligent machines and robots will make many service jobs obsolete.

Once a new technology becomes readily available, rapid change inevitably follows. Think back to how quickly people switched to digital cameras, or how typewriters became obsolete virtually overnight. With constant advancements being made in AI, we’re guaranteed to see more rapid change happen in the near future, such as the proliferation of self-driving cars.

A renowned competition for self-driving cars in the United States is the DARPA Grand Challenge, and in 2004, the winner was Sandstorm, a converted Humvee that only made it seven miles before getting stuck on a rock. But a lot has changed since then: the self-driving cars that Google has designed for Lexus and Chrysler have already logged over a million miles on California roads – and there hasn’t been a significant setback yet.

Experts are predicting that public roads will be taken over by self-driving cars by the year 2041. This means that driving tests will become obsolete, as will most chauffeur and commercial driving jobs. With fewer accidents on the road, there will be a drastically reduced demand for mechanics and hardly any need for car insurance. So when can you expect to get your first self-driving car? Chris Urmson, the head of Google’s automated driving project predicts that the general public should have the option of driving hands-free by 2020.

Another industry that’s especially vulnerable to automation is the healthcare sector. In fact, the first caregiving robot is already being used in Japan. Both the robot and its parent company are called PARO, and the robot itself looks like a small seal, complete with fur and big eyes.

Animal therapy has become quite popular recently, as patients exposed to cuddly creatures get some much-needed cheer to reduce stress and lower blood pressure. And PARO allows more patients to experience these benefits by reaching those who don’t have access to a real animal. By 2041, we’ll all have access to devices that will constantly monitor our vital statistics. As a result, we’ll see a dramatic decline in the demand for doctors and nurses, as their basic functions will be automated.

Technology will lead to economic contraction and may widen the divide between social classes.

There are going to be a number of challenges facing our society in the future, not the least of which will be the economic impact that will accompany a surge in joblessness.

When large numbers of people suddenly become unemployed, there will be a subsequent period of economic contraction that could bring society to a grinding halt. When we put the AI technology to use, productivity will increase and the prices of goods and services will drop so that people continue buying.

But the initial positive effect of these changes will eventually level off, and will be replaced by an economic contraction caused by so many unemployed people. We’ve seen this happen in Greece, where 46.5 percent of the country’s young people are unemployed.

While family members are able to provide a temporary safety net for relatives in situations like Greece’s, there’s no precedent for the sprawling unemployment that will happen in the future. It will cut across all ages, classes and demographics, so there’s no safety net big enough to prevent the economy from deteriorating under such stress.

Another issue is the disparity between classes, which could lead to some people not being able to afford access to certain technologies and getting left behind. While technology changes quickly, there’s still a lengthy period before new products become affordable to the general public.

So, let’s say implants emerge that allow wealthy people to enhance their bodies and minds far beyond what’s possible today. This could make the social divide even worse than it is today by making the lives of the wealthy so drastically different that their access to technology makes them “superior” beings. We’ll need to work together if we’re going to overcome future challenges.

Universal basic income could be the solution, although joblessness will come with psychological consequences as well.

How would you feel about making money and not having to work? It might sound like a dream, but it could soon be a reality for many of us. This concept is known as universal basic income and it will be a necessity in a future where most jobs can be automated.

After all, we’ll still need an income, even when sophisticated AI is taking care of the tasks that keep services functioning. A universal basic income allows a fixed amount to be distributed to all citizens, either unconditionally or through what’s known as a negative income tax, a method that works by providing a certain amount of money to help you reach a set figure.

This model of basic income welfare has already been tested in some areas, with the biggest experiment taking place during the 1970s, in the Canadian town of Dauphin. The Canadian government determined that every family would receive a minimum amount of money each year, with no strings attached. Adjusted for inflation, they decided this amount would be $16,000 Canadian. So if a family’s normal income dropped below that amount, the government would cover the difference.

Between 1974 and 1976, 10,000 citizens benefitted from the program, and despite worries that it would lead to voluntary unemployment, only mothers with newborns and teenagers quit working altogether. Universal basic income should allow for more artistic endeavors, but it could also lead to depression.

A job is what gives meaning to many people’s lives, and we can safely predict that around ten percent of the population will suffer psychologically from being unemployed. They’ll either sink into a depression or escape into the world of virtual reality entertainment. But the majority of the population will find healthy endeavors to bring joy to their lives, such as writing, playing sports or discovering other creative and artistic pursuits.

If we’re going to make this happen, we’ll need to be prepared, with strategies and structures in place to allow for a smooth economic transition and to avoid some of the biggest dangers we’re sure to face.

Unlike previous changes in society, the information revolution will end up having a major impact on employment, making many of the jobs we perform today largely unnecessary. In order to prevent a major catastrophe, we need to plan ahead for this inevitability and find a way to organize a successful society that will continue to function in the absence of work as we know it today.

The Software Society: Labour And The Cognitive Economy

Exploring what it means to work in the digital age, identifying the social issues around labour and what the meaning of labour is in a broader sociocultural and socioeconomic perspective. The traditional ideas of work are dissolving and in its place is a new cognitive and intellectual labour. Initially focusing on what labour is traditionally, how this has been criticized and the proposed resolution for these concerns. Continuing to focus on what the current work life involves, again addressing the issues around labour in the digital age and what it means going forward.

Initially it holds importance to have an understanding of what labour is traditionally and how this has developed into what it is defined as now. The ideas and theories of labour in the context of the humanities is articulated by Karl Marx as “The mode of production of material life conditions is the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.” How we live, how society as a whole operates and what our part is in that society is everything. It’s the very foundation for what it means to live. The material conditions of your life dictate the life in which you live, they are crucial in every way.

Material conditions in an anglicised westernized sense typically allude towards capitalism. It is the dominant global economic model. It is based on the production of commodities for profit and wage labour which is the value placed on our time. Commodity being  “in the first place an object outside us, a thing that by its properties satisfies human wants of some sort or other” We’re surrounded by things we want, however, these things are now intangible. Data alongside human attention and affection are some of the most expensive commodities in our economy.

Capitalism drives towards having lots of wage labour, which at the same time enriches those that own the capital and the cycle becomes ever more extreme. As we continue to contribute to dominating organizations ie Google we become increasingly distinct from their power, widening the gap between the classes. Thus we get the two classes forming the bourgeoisie who control means of productions the proletariat who are the labouring class workers These classes form as a consequence of this dynamic, the former exploiting the latter. As these corporations follow the markets, our labour begins to adapt as we move rapidly towards cognitive industries.

This new dominating form of labour though is argued to be separating us from ourselves, as it has removed our autonomy, our creativity and our freedom. When you work you’re estranged from who you are as a person, there’s not a direct expression of oneself, as much as these large corporations lead you to believe. People as individual people have no association with the objects they create but they still occupy the entirety of their time with the production of whatever it is they produce.

Species being describes the human capacity to think, to plan and create. Marx argues that as one feeds into this type of economy “the poorer his inner world becomes” He draws parallels with animals, explaining how they are fixed to predetermined needs, basic functionalities which in themselves serve the extent of their purpose. In contrast, he explains the difference is that humans as self-conscious beings have the opportunity to think, to plan, to create a surplus that allows us to build houses, societies, create art and culture. As humans, we have the capacity for awareness and to think through what we do.

What a person does is of their own design, we are not constrained by animalistic characteristics Humans can separate themselves from what they are meant to do, they can choose to do things, to engage in free activity rather than life activity. Capitalism he argues would reverse this, we don’t choose anymore, we do things because we have to them to be a part of life as it is defined in a capitalist society. There is a social necessity for us to do them as our world becomes dependant on technology for example, we are gently forced into having to have these types of products in order to be able to live in our society in what’s considered a normal way.

However, it’s important to understand that these were idealistic ideas which were before the rise of the knowledge about failures in rationalism and economic models are based on idealistic assumptions of human behaviour which have since been found to be unreliable at best. People do not behave according to these assumptions, even though they would be the most logical and reasonable. Marx held a huge amount of faith in humanity, he was an idealist and was in an age in which romanticism and humanism were dominant ideas, there was a real belief that humans had some sort of inner malevolent force and empowering creativity.

His answer was communism, bearing in mind that this predates the substantial historical events which saw the extreme destruction of this idealistic structure for society. He proposed that there would be balance “In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow” allowing people to separate their labour and free time to be able to express their full potential outside their duties giving people a space for individual creativity.

How these historical ideas have transcended into the digital age. Although in the contemporary situation, while we can draw parallels with facticities and learn a lot from the analysis of the difference, the fact is that technology has had such an extensive impact on labour that these comparisons are limited. The provision of service as a commodity, tangible items and predominantly information, which recently has become a significant and powerful commodity.

In the contemporary context, there has been a critical shift in the post-industrial economy changing what it means to work. “Work is not restricted to a particular place and time or pattern.” It’s such a huge change that it hasn’t fully come into fruition yet but we are beginning to see the rise of network cultures. The idea that people work at a specific desk, in a specific place at a specific time as a paradigm is starting to dissipate. The means of production are changing from factories to “geographically distributed value networks.” thus enabling people to share their cognitive effort. Explaining why some of the most powerful entities in our society don’t physically produce because their production is cognitive – the new most valuable commodity.

When the new information industries are also creative industries that rely on the resources and creativity of those working in them, the value added then comes from innovation, not grinding alienation and sheer time spent working. This suggests a possible liberation from alienated work. The rise of cognitive work alludes towards possible alienation. Marx suggestion that we alienate ourselves from ourselves spending so much of our time doing things we don’t want to do. If the expression of our creativity is now considered labour, then surely this would create a space for people to be operating at the highest possible version of themselves.

There is an abundance of choice now available in terms of areas of what it is that we do for work. This could be considered a liberation from the ideas Marx has on labour. If our identity is constantly being expressed because we align our work with an expression of ourselves. Constantly engaging with what we are mentally stimulated by would surely cause us to have a life-changing level of satisfaction in our daily lives. Creativity and innovative thought has become so valuable that we could potentially create a space for us to work but still be free by engaging with all of the sensibilities that Marx has said were previously denied to us.

The economy adapts to such changes flawlessly, as much immaterial work is still a low skill, alienating and brutal and the reality of most information labour is that it take place in, “unequal virtual spaces…stratified by power and status, privilege and varying competencies.” On one hand, there is a consideration to who owns the future and everything that we do, while we are more engaged in it, we are only engaged in it because while we think we’re operating on technology, technology is in actual fact operating on us. We are completely and utterly consumed by our work with no physical or mental boundaries anymore.

This isn’t a liberation but an extension of that domination, an extension to the power we surrender to as the labouring class. There is no finality to the connection we now hold to work. The distinction between personal and professional lives is dissolving. Domination simply follows us in the form of iPhones and brings an expansion of work into all times and places. Thus an inherent tension/contradiction in modern forms of capitalism.

We have been conditioned to believe that large corporations are invested in caring for us as a labour force, however, consider the idea that these are in actual fact bourgeoisie disguised. Giving empty promises of fulfilment and self-actualisation. We remain alienated but are becoming less and less conscious of it. We’ve been blinded by the desire to have this type of work. The driving force behind modern day capitalism is that we have bought into the ideas that these corporations want us to believe. That your individual identity, idea generation and personal inputs are valued. Appraisal for your cognitive and intellectual abilities.

If our work is going to be immaterial, what do people who don’t have the desirable skills do? The people who don’t have natural abilities to be able to handle the digitally dependent nature of the current labour force. They still live in a capitalist society, and if you embrace the change of the rules within that society then what happens to the people who are unable to conform to the new normalities of it. It could arguably be next to impossible to know how this type of labour will affect us in the long term as cognitive strains cannot be recognised the same as physical ones. The rise in mental health issues throughout society cannot be denied as being directly associated with the cognitive society we are now engaged in.

The expectation of lifetime employment with a single organisation has disappeared. People don’t seem to care about having that protection or job security anymore. Or perhaps it just isn’t there. Basically what we have now is a lot of occupational economical insecurity. You have to continually prove your value in the labour market, so one of the challenges with this new cognitive form of labour, is that it changes all the time. The pace of the developments of software and technology meaning the requirements in versatility, multitasking and good self presentation among other things are all relative dynamics now, where they weren’t even a consideration before.

This causing extensive mental effects which we haven’t even begun to be able to understand. “We renew our affection for work because economic survival becomes more difficult and daily life becomes lonely and tedious: metropolitan life becomes so sad that we might as well sell it for money.” Adams addresses how there’s no motivation to contend this type of labour as there is no incentive to pursue an alternative.

These new media technologies could eventually make our skillset meaningless As new creative labourers it’s becoming evident that we are an expendable commodity due to the systems we engage in are designed to be intuitive. If one’s expertise has become redundant then you are no longer of use because anyone is able to do what you do. People are now striving to have some sort of creative expression through their work. We want to engage in labour that stimulates our creative and cognitive functions. The issue arises when we are living in the post-industrial economy, meaning these personal aspirations are being articulated and synthesised alongside comercial agendas. As we are part of this new creative class, will there come a point at which will all become replaceable. If so, are people solely engaging in these cognitive industries because of commercial motivations rather than acting upon their own intuition.

Taking this idea and thinking of it the same way we thought about the different stages of capitalism. Creative in the context of human expertise, critical thinking not just expressive. Not necessarily that we create ourselves expressively but we have a cognitive perspective that’s valuable, interesting solutions, problem solving and unique insights. Contemporary normalites on freelancing, self-employment and networking are all things which as seen as typical in the modern workforce are not necessarily natural to us all. People might not strice in this type of work, some might like the idea of physical labour. There is a comfort surrounding knowing what you’re doing and feeling competent as your labour does not hold the same constant change that cognitive labour typically does. There is an undeniable lack of clarity and structure when we are exposed to having to act on one’s own creativity.

The consequences of working in the digital age, is this now the new cycle of struggle, the struggle for the soul, the fact that we have allowed labour to become embedded in our soul. Franco Berardi draws on these notions of immaterial and affective labour to capture that we are now subsumed by work constantly and are becoming effected down to our very soul. He argues that as work has shifted from something mechanical and repetitive and thus ‘alienating’ to something cognitive and ‘creative’ that we are invested in as people.

The value we now associate with labour, as ourselves, we have removed the distance between who we are and what we do – coupled with the fact we live in an interconnected, always on, digital age we get this new struggle for our soul. The is no boundary to work life, we’re constantly on call, wired to our mobile phone, in a state of perceptual cognitive electrocution because we want to work as it gives us a certain level of stimulation and satisfaction, and we are able to work, at any time in any place. The worker almost lost their power because you can’t withhold your labour in a labour market that everyone is able to do what you do. You become powerless to the system and either conform or become useless.

In the globalized age, things that historically were outside the sphere of working life are now part of the process of production. All spheres of life become commodified, but capital is utterly relient on the social and everyday. What autonomous Marxism argues that this is how we need to look at capitalism, it’s the cycle of struggles and struggles at present is the fact that the rich people want to be richer and the workers have found a space to be able to help the rich get richer but by doing things that they’re actually interested in so it almost becomes a symbiotic relationship as there is a certain amount of fulfillment for both. Capital is a synthesis between those two perspectives, the argument being that post-industrial capitalism is based on the fact that there is still the borgausee/por but it has shifted to the point where the thing that we value, the commodity, the means of production, is actually of interest to the proditarian.

There is no denying that there has been a tremendous transformation in the meaning on labour as we enter this digitally saturated world. How we live depends on how society operates and material conditions undeniably dictate our experience. As humans, we have the capacity for awareness and to think through what we do, and what we do now is largely cognitive, mentally straining and never ending. The provision of service as a commodity, tangible items and predominantly information, which recently has become a significant and powerful commodity. We are now constantly working, in industries which are built on the foundation of digitization and technology. Without boundaries separating this from our personal life and even at that, the data we accumulate in this free time feeds into the agendas of these corporations we offer our labour to.

Works Cited

Adams, Tristam Vivian. The Psychopath Factory How Capitalism Organises Empathy. Repeater Books, 2016.

Berardi, Franco. “Integrated World Capitalism.” Félix Guattari, 2008, pp. 16–21.

“The Economic and Philosophical Manuscripts of 1844 (1844).” The Bloomsbury Companion to Marx,

Marx, Karl, et al. The German Ideology: Part One, with Selections from Parts Two and Three, Together with Marx’s “Introduction to a Critique of Political Economy.” Edited, and with Introd., by C.J. Arthur. International Publishers, 1970.

Marx, Karl, et al. The German Ideology. International Publishers, 1976.

McRobbie, Angela. Postmodernism and Popular Culture. Routledge, 2005.

“Preface ToA Contribution to the Critique of Political Economy (1859).” Marx and Modernity

Shields, Rob. The Virtual. Routledge, 2003.Wilson, Helen. “Review & Booknote: City of Bits: Space, Place and the InfobahnMitchellWilliam J, City of Bits: Space, Place and the Infobahn, MIT Press, Cambridge Mass, 1995. ISBN 0 262 13309 1, 225pp.” Media International Australia, vol. 80, no. 1, 1996