Gig Economies, Local Corporations and Social Contracts

Could gig economies contribute to long term growth patterns? It's important to note, that this form of digital coordination is mostly a business response at the margins of prosperous regions. These recent efforts - disruptive though they appear - are a logical extension for resource use in the complex economies of general equilibrium. Whereas insufficient diversity exists in less developed areas, for gig economies to sufficiently contribute to wealth formation.

Gig economies have also been associated with personal vulnerability, despite the fact (too) few recognize that earlier benefit patterns aren't sustainable in aggregate. Even so, requests for the usual worker protections (on emerging digital platforms), could short circuit what are still emerging patterns of organization. Laura Tyson and Lenny Mendonca are concerned about "Worker Protection in the Gig Economy" in a Project Syndicate article:

The trouble is that even as these sites provide new opportunities for workers and companies, they are bypassing the traditional channels through which the US and many countries deliver benefits and protections to their workforces. In the US in particular, the "social contract" has long relied on employers to deliver unemployment insurance, disability insurance, pensions and retirement plans, workers' compensation for job-related injuries, paid time off, and protections under the Fair Labor Standards Act. Although the Affordable Care Act has made it easier for workers to acquire health insurance on their own, most workers continue to receive health insurance through their employers.

For many small businesses - especially in less than prosperous areas - these requirements for hiring employees can be quite daunting. However - much as the perspective of the Project Syndicate authors - policy makers tend to legislate with mostly prosperous regions and businesses in mind. This common mindset only sets up even more difficult circumstance for business formation, overall. It's too easy to forget that when small businesses suffer, individuals just like the rest of us lose their personal means of support - and security - in the process.

A new form of corporate structure is needed, to assist workers and business owners alike who are willing to pursue new entrepreneurial strategies. While local corporations would protect owners, they would also provide mutual support systems for those who actively participate, both as consumers and producers. However, means of support would be internally based on local resources, rather than driven by expectations of external wealth which exists elsewhere.

Local business formation would be structured to take into account, that alternative equilibrium formation lacks access to international monetary flows. Those additional flows determine many of the patterns, by which physical and intellectual environments are shaped in general equilibrium. While local corporations would share some functions of today's gig economies, the digital and coordinating aspects of the latter nonetheless serve mostly as a starting point.

Consider these features for local corporate structure, which could approach social contracts more directly:

Ownership as a soft tangible asset. In other words, ownership is structured through simpler means - so as to foster the greatest degree of local economic diversity possible. Each community would define a simple but effective production/consumption base, which participants can fall back on whenever personal efforts fall short of success. Communities would generate a unique environment, through a set of base preferences which are determined by citizens at the outset. These are in turn backed with monetary and time based commitments. Participants would hold flexible ownership options in all phases of the resulting operation. Ownership would be a gradual and incremental process, so that loans (now difficult for lower income levels in the US) would not be necessary.

Services coordination as a memory creating system. Even though digital platforms can assist local coordination patterns for skills/time in an immediate sense, the system is also structured for medium and long term educational considerations in this regard. Knowledge use in alternative equilibrium would be applicable across time, based on both earlier contributions and that of society at large, in a commonly held pool. Even though common knowledge functionality exists in general equilibrium, much of it lies buried in institutional structures, which are not able to give many valuable options sufficient consideration. Without a marketplace for time value, there's not enough economic "room" to do so.

Services coordination as time backed social security. One reason that service obligations present such a financial burden for today's corporations, is the fact that these markets have been generated inefficiently. Internally generated services structures are at the heart of long term security needs, and knowledge use systems could eventually help to relieve some of the larger societal imbalance. Only consider how many of the requirements in the above mentioned "social contract", have hindered small business formation in general equilibrium. Small wonder that the gig economy first emerged without them.