By Robert E. Wright, Nef Family Chair of Political Economy and Historians Against Slavery Treasurer
Today, tens of millions of people worldwide remain enslaved but many scholars choose to ignore their plight and instead wring their hands about the rise of the so-called “gig economy” ruled by Uber driving and other forms of temporary work. Antislavery activists need to pay attention to their work because if their dire warnings come true, many more people, across America and the world, will become more vulnerable to economic displacement and hence enslavement.
While official unemployment figures, currently at historic lows, do not accurately capture recent changes in the nature of work, “making a living” has always been, and hopefully always will be, about much more than formal employment. Those who would help people struggling economically would do well to consider the evolution and interplay of all four ways of making a living: employment; proprietorship; investment; and subsistence. (Unilateral transfers [gifts from family and friends, charity from NGOs, ‘welfare’ from governments] are better described as a means of “getting by” rather than “making a living” because they do not directly increase economic output, though arguably they keep it from decreasing.)
Labor historian Louis Hyman recently (18 August 2018) told readers of the Sunday opinion page in the New York Times that some undefined thing he calls “capitalism,” not some other undefined thing he calls “technology,” renders the economic lives of millions of poor Americans more precarious than in the past. Some unspecified set of “new norms, institutions and policies,” however, can save them because “the important thing to remember is that we do have a choice.” Apparently, Hyman believes that policymakers can will whatever outcome they desire, while simultaneously admitting that “we can’t turn back the clock” to the good old days after World War II, or the even older and gooder old days prior to the twentieth century when most people owned and operated their own businesses (farms and shops and whatnot).
In “Employment in a Just Economy” (Real-World Economics Review, Issue No. 83), labor economist John Komlos renews calls for the creation of a new federal economic agency, akin to the Federal Reserve, to act as an “employer of last resort” by offering “guaranteed public employment at the minimum wage to those who seek it.” What work people employed by the new government entity would actually do remains unclear, however, as does the source of their wages, at least some of which must come from new taxes, borrowing, or the issuance of money, or the private sector would have employed them instead.
Unfortunately, neither scholar seems to understand that formal employment is only one way, and historically not the most important way, of making a living. In fact, most people, most of the time, engage to some degree or another in all four ways of making a living: working for others (employment), working on their own account (proprietorship), investment (supplying capital to employers, proprietors, governments, and consumers), and subsistence (growing and making one’s own food, clothes, shelter, and so forth).
Consider, for example, me, today. I:
- fish, hunt, gather, and garden and personally consume the spoils (subsistence).
- sock money away in the bank and a retirement account (investment).
- consult on my own account, including for the Modern Day Slavery Project at Tougaloo College (proprietorship).
- teach at a university (employment).
I would wager that most readers have a similarly diverse portfolio of ways of making a living, though the details of course vary tremendously from person to person.
The contributions of each method of making a living is important, of course, and varies idiosyncratically, over space, over life cycle, and over time. Some people simply prefer being their own boss to working for another, while others gladly sacrifice relative freedom for the relative security of a regular paycheck. For many Alaskans, Siberians, and rural folk throughout the world, subsistence remains relatively more important than employment, but the reverse is true in more urbanized areas. For many young people, proprietorship (e.g. driving for Uber, playing in a musical band, selling their art, etc.) has traditionally been a significant means of making a living. Many older folks, by contrast, live entirely off the proceeds of investments acquired earlier in life.
Historically, subsistence gave way to proprietorship, which in turn lost its dominance to employment in the twentieth century. Of late, proprietorship has roared back, though in ways only superficially different from earlier periods. Back in the perhaps not-so-good old days, farmers and shopkeepers suffered the vicissitudes of the economics of commodity markets as much as Uber drivers, freelancing journalists, and independent contractors in the software business do today. Competition renders economic life fraught and it cannot simply be legislated, regulated, or op-ed-ed away. Competition inheres in reality due to the ubiquity of scarcity; policymakers can only change the rules by which people compete for scarce resources. Economies produce most efficiently (have the most goods to distribute) when policies encourage competition on price and quality rather than on, say, party or religious affiliation or a system of Kompromat.
Rather than forcing people into formal employment, as Hyman, Komlos, and others advocate, policymakers ought to ensure that everyone has access to all of the major means of making a living and allow individuals to decide which mix makes the most sense for them given their age, locale, personal preferences, and the state of their environment and economy. That means not placing unnecessary restrictions on proprietorship (e.g., occupational licensing) or the home production of food (supporting locavorism); establishing economically and environmentally sustainable fish, game, and foraging regulations; and encouraging, or at least not discouraging, financial literacy. And, yes, policies to bolster employment should be considered, too, but people and policymakers need not despair if the forces of competition render formal employment less important than in the past because other means of making a living persist, and even thrive, and in the process render people less vulnerable to the socioeconomic, and all-too-often biological, death associated with modern forms of enslavement.