Might the gig economy include a positive "endgame" for many of us in the years to come? There's at least one problem, for anyone who gains employment on these terms. Today's gig economies don't provide the forms of economic continuity, that are capable of assisting individuals with their personal responsibilities and aspirations over time.
Yet government dialogue to date regarding gig economy "shortfalls", doesn't quite capture this thorny issue. Tim Harford was supportive of a government approach in a recent post, but the "essential" government benefits he highlighted, aren't the same as the economic connections which matter for citizens in a knowledge centered economy. Plus, should governments take a benefits oriented approach (to address what employers can't provide), more imbalance would result, in terms of what I recently described as equilibrium flows. We need a new institutional approach which contributes to the total stock of equilibrium, instead of making ever more demands on the circulating revenue we still have.
Equilibrium stock growth is particularly needed, to address the looming problem of government debt. Without a proactive response in the near future, as Timothy Taylor stressed, "Pretty much everyone agrees that the US fiscal outlook for the long run--a few decades into the future--looks grim unless changes are made."
Fortunately, a better utilization of human capital, would address the ongoing budget dilemmas of the present. No one can expect taxation to redistribute wealth to everyone, when only the skill sets of a relative few are even being tapped on economic terms. Even now, the wealth of human capital potential, is still being subtracted from the total equation. A better approach is needed, which can ultimately return human capital to the total wealth equation.
Today's non tradable sectors have limited both production and consumption, through a process that can be described of as making the "perfect" the "enemy of the good". One needs highly regulated "perfect" homes and skill sets, increasingly, just to live a normal life. Alas, this "perfect as the enemy of the good" scenario, is the very definition of economic stagnation.
Budgetary entitlement costs, for instance, are being squandered on time centered services markets which were never designed for full inclusion to begin with. Yet by the time many individuals realize the underlying problems for these markets, they are already well past the age when one might normally choose a career path, to focus on structural solutions for these areas.
Hence there is a complete lack of market design that would allow older individuals to negotiate for simpler time based market options, instead of the high cost default positions of the present (such as ambulances, life flights, hospitals, and nursing homes). These default scenarios can hardly be considered markets in the true sense of the word. And since there's little formal economic definition for simple assistance, people often "go without" until their situations become dire. I found myself wishing that Noah Smith could be put into a time machine, when he recently argued that we didn't need more markets, How would he feel if he grew old, with no family or friends nearby, and had insufficient formal economic means by which to feel comfortable in negotiating with neighbors for assistance?
This is what happens in too many local communities, in which citizens are inexplicably expected to run to the nearest city (or further), every time a problem arises. We would all benefit from simpler market patterns close to home: casual, but still formal economic arrangements, by which we could negotiate for the simple desires and needs that make a life. We live in a world where our family and friends either live elsewhere, or have the kinds of obligations that make it difficult to provide such measures. Yet without a marketplace for mutual assistance, people needlessly go without, so as not to unduly "impose" on others.
The lack of a local marketplace for services diversity, means problems which go well beyond what people such as myself experience as we age. These are the local economic options that could benefit young people, in the years when they are preparing resource capacity for adulthood responsibilities. Yet these are also the local economic options people need, when they wish to spend their prime working years in the communities where they can maintain close ties with family and friends.
Not everyone can chase after the desired jobs of the cities, as centralized productive agglomeration drives up the costs of economic access. When societies don't remain proactive to economic circumstance as they (inevitably) change, informal economies spring up in their place, such as has unfortunately occurred in Mexico. And not every informal economic activity is conducive to civility and progress. Lest anyone think informal economic devolution couldn't occur here, it's still an eventual likelihood for economies that are too taken for granted, as if the golden goose will never cease to lay its golden eggs. It may be that the process of devolution begins with illegibility.
Adaptation in the present, would include a thorough reexamination, as to how a safety net might strengthen and maintain our stamina to remain economically and socially engaged. Among the most important qualifications of any safety net, is that it gives individuals a reasonable chance to maintain constancy in their routines and organizational patterns. Any time in life we end up with little choice but to set aside the economic patterns we rely upon, often the skills sets we are working on in these time periods may be temporarily set aside, if not completely abandoned. One of the most important functions an equilibrium corporation could provide, would be communities which serve as platforms for economic constancy, through the mutual employment of broad services diversity.
Without economic consistency in our lifetime efforts, many of us experience episodes when it proves difficult to maintain logic and consistency - either for ourselves or for others. In spite of what each of us endures, what others remember most, is how we react to unfortunate circumstance. In other words, it doesn't matter what life throws our way, others will remember how our response impacts them. Indeed, I've been trying to move my blog towards a more positive stance, in part to compensate for the negative impressions I inadvertently left on others over the years. Without a strong economic foundation, it only becomes more difficult for people to keep the promises which are so important for personal integrity. Perhaps we can build a new institutional economic foundation, which could make the preservation of a logical and rational society, a more realistic possibility.