Wednesday, August 5, 2015

Consider the "Third Option"

How to rethink employment options? Are some aspects of the sharing economy proving difficult to maintain? In "Why Startups Are Making The Expensive Switch to Traditional Employment", Katy Steinmetz closes with thoughts from Luxe CEO Curtis Lee, and some of her own:
"There are two old paradigms that were created long ago in a different world," he says. "There really needs, eventually, at some point, to be maybe like a third classification." The great unknown is what, even if there was the political will to create such a thing, that third category would look like.
What kind of social contract could work best for employer and employee? Is it possible to achieve those mutual wants and needs, through working business relationships which are sustainable for everyone concerned? Once again, work of a temporary nature is becoming an accepted part of life. However, societies need to structure so that flexible schedules can be embraced, yet still provide means for individuals and groups to move ahead and prepare for the future. And doing so is not merely a matter of assigning what were "normal" twentieth century benefits, to 21st century efforts.

While some remain enthused about the potential of sharing economies, others see this growing segment of the marketplace as further rationale that capitalism has "seen better days". Even though most free market proponents remain optimistic regarding economic prospects, it's hard to ignore the fact that growth continues to slow around the world. Some progressives consequently reason that capitalism is entering a less vital phase.

For this blogger, the idea that capitalism has seen "better days" is unsettling, and I believe such arguments would be unnecessary if more free market promoters were actively working to preserve long term growth potential. For one thing, it is unreasonable to attribute recent failures to the immense organizational capacity of tradables sectors, which continue to ease poverty around the world. Unfortunately, many individuals are forgetting where economic gains have been realized, and those gains need to be preserved and strengthened, not berated.

Policy makers and others need to take a closer look, at the non tradable sectors which continue to undermine both economic stability and the ideal of free markets. Time based services could - in some instances - gain the kinds of organizational capacity which would put them on a par with the wealth of traditional manufacture. Likewise, asset formation needs the option of being locally and incrementally held, in order to promote well being for populations as a whole. There should be no need for capitalism to lose its vitality, but it could in fact happen, if policy makers remain too complacent about the need for production reform in non tradable sectors.

Hence there is a "third option", for a new corporate commitment to make the most of local wealth capacity. This form of social contract could ultimately provide more economic stability, than what government spending has been able to accomplish of late. The local corporate contract would generate a wide variety of opportunities for citizens to remain connected to one another, through services, production and asset formation. Given the fact that temporary projects and tasks are once again becoming mainstream, local support in this regard could make all the difference.

Local consumption options would also diminish the importance of wage levels, because income would go much further in environments which benefit from ongoing innovation. Participants would contribute as both producers and consumers of ideas, knowledge use and time use commitments. Because locals would be involved in the definitions of consumption, work patterns would respond to ongoing changes in resource availability. Through greater flexibility and commitment to local skills capacity, the local corporate contract could provide new hope for citizens in the 21st century.

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