the democratic advantage

Three billion people around the world are now connected with ubiquitous digital technologies that keep improving. They also keep getting cheaper. History shows  that technology can be an enabler of democracy. Distributed communications subvert gatekeepers. John Gilmore said that, “The Net interprets censorship as damage and routes around it.” As networks become the new companies, we may be moving toward a more democratic future of work, with authority distributed throughout the network. One significant counter to this trend is the emergence of platform capitalism.

The robber barons of the 21st-century are the platform owners. They have combined the power of network effects with a 20th-century corporate capitalist, winner takes all approach. Amazon is choking the book publishing industry, Google is dominating advertising, and telecommunications companies are using their control of the pipes to directly compete with service providers. Über is going after the taxi and car rental industries, getting to be larger than established rental car brands, with none of the overhead. These companies do not distribute wealth but hoard it at the top. All of these companies provide initially good services to customers. But over time their monopolistic tendencies may kill competition and the entire ecosystem of innovation. Business practices like platform capitalism may also destroy workplace democracy.

Democracy is messy and has redundancies, which is why it is perfect for a complex society and economy. Gwynne Dyer says that, “Modern democracy first appeared in the West only because the West was the first part of the world to develop mass communications.” With global access to new digital technologies, workplace democracy can appear anywhere.

Will workplace democracy start in countries that dominate the current economic environment or in nations that have a more social culture to begin with? If the globally-connected can work anywhere, people may vote with their electronic feet and join more open workplaces. The platform capitalists may get what is left over. The tables can turn quickly in a connected economy.

If networks have an advantage in constantly changing economic environments, then democratic companies may be the future of work. But if we do not enable this new type of work, through legislation and practice, then economically advanced countries may see their advantage slip very quickly. Looking at the example of Canada’s resource sector, we see little democratic control of oil extraction, with most profits going to the extractor. This year, Norway had one trillion dollars in its oil fund, while Alberta had 17 billion dollars, which is not being added to. Democratization of wealth can ensure resilience in volatile economic times. Are we ready for such a shift in business attitudes? Are some countries doomed to become the next rust-belts as they cling to old economic and business models, no longer viable in the network era?

abandoned factory

Will we become the next rust-belt?

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