Does Technology Render the Traditional Concept of Property Obsolete?

11 May 2017 7:18 PM | Mike Lillich (Administrator)

By Orin Levin-Waldman


*First published online in the Yonkers Tribune


As increasingly more jobs are lost to technology and wage rates fall, the answer offered by many is that government needs to offer social supports that make up the difference. This, however begs a fundamental question: in effectively redefining the nature of work, does it also render the concept of property as we have known it obsolete?


A free market economy requires a system of private property because one cannot sell what one does not own. This would be true of one’s labor. The worker is selling what s/he has control over: his/her labor power. Property in turn is protected by a legal system revolving around contracts. The worker selling his/her labor power is said to have freedom of contract — the ability to freely negotiate the working conditions that will be worked under and wages that will be received.


Meanwhile, the employer is said to have property rights in his/her firm and can therefore establish the working conditions as an extension of those property rights. When the state regulates a firm in any way, it is effectively interfering with the employer’s property rights because the employer can no longer freely dispose of that property as s/he sees fit.


And yet, the nature of the modern economy is such that as there is greater interdependence and also dislocation from creative destruction, more regulation is needed. In other words, the modern capitalist economy needs to be regulated if it is to survive. The more regulation, the more infringement of property rights.


The modern employer can no longer freely dispose of his/her property as s/he sees fit because there are too many externalities. That is, too many people can now be adversely affected by the actions one takes in disposing of one’s property. Of course, the same logic applies to employers paying their workers too little.


Arguably a low wage employer seeking to pay his/her workers as little as possible is within his/her rights to do so because these workers are working on his/her property and s/he can dispose of that property as s/he sees fit. A mandated wage floor, i.e., minimum wage, effectively interferes with that employer’s property rights. But as technology creates an oversupply of low-skilled workers in the otherwise low-wage labor market, more government involvement is needed; not less.


At a minimum, a higher minimum wage is needed. But even that may not be enough and these low wage workers will be in need of more subsidies from the state. In other words, the externalities arising from a low wage economy are more dependence on the state. There is no longer any room in the low wage labor market for personal independence because work for wages alone is insufficient to support one’s self.


Even if we could define a worker’s labor in terms of a property right, that property right is being abridged through the worker’s greater dependence on the state. The worker, after all, receiving social supports is often subject to regulations attached to the receipt of those subsidies. The low-wage worker does not have a hope that s/he can be independent.


At the same time, we are told that to raise wages too much through mandatory wage floors only risks more substitution of technology for workers. Therefore, workers should get training so they can command higher wages. But too many people going to college could create an oversupply of wages at the top thereby forcing down wages at the top. Or it could lower the bar and force more “college” educated workers into low-wage service employment, in which case low-skilled workers may permanently be frozen out of the market.


Does this mean that low-wage/low skilled workers are doomed to be part of a permanent underclass? Or does it require that we as a society redefine the meaning of work and ultimately property rights? Could we be heading towards an era of post-employment? If so, wouldn’t that require more assistance as even fewer people would be working? Would that not require that government ensure that all have a guaranteed minimum income, or universal basic income (UBI) as it is sometimes called?


But if all are to receive a UBI, and one sufficient to live above poverty, then greater redistribution will be needed to pay for it. That will only entail abridging the property rights of owners some more. To the extent that technology may be leading us in this direction, it then has to follow that it is leading to the obsolescence of property as we have known it.


Of course, this tale might not be that different from the one that Marx told when he said that capitalists’ have systems were doomed to implode on their own. After all, technology created the mass production factory system which drove down wages — the low wages that low-skilled workers were now getting because their jobs as skilled artisans that paid more were gone. To compete, employers would seek to lower wages even more. They would in fact engage in a race to the bottom. And yet, as they would do this, nobody would have the wherewithal to demand goods and services in the aggregate. The system would ultimately implode.


Private property would give way to collective property ownership whereby the workers would own the means of production. Of course, until the revolution was complete, a strong state would be needed. Once completed the state apparatus would wither away and everybody would be completely free. We all know that never happened.


Still, there are eerie parallels between Marx’s diagnosis and the global economy we are living in whereby more technology will ultimately result in the end of employment, greater dependence on the state and the obsolescence of private property. Though we aren’t experiencing a 1917 style communist revolution, we are seeing revolutions of sorts with more right-wing nationalist parties around the world campaigning on platforms of protectionism in the name of forgotten workers.


It may well be that we cannot ever avoid redefining the meaning of property. And we may not be able to avoid state involvement, in which case we will need to rethink what it means to live an autonomous life. Even strengthening labor market institutions assumes a positive role for government. But in a democratic society it does mean that we will need to have a public discussion of what type of society we want to live in. The free marketplace can no longer be assumed to be the solution. To the extent this is true, earlier conceptions of property rights are rendered meaningless.

Read the review of the just published “Wage Policy, Income Distribution, and Democratic Policy” By Oren M. Levin-Waldman.

# # #

Oren M. Levin-Waldman, Ph.D., Professor at the Graduate School for Public Affairs and Administration at Metropolitan College of New York, Research Scholar at the Binzagr Institute for Sustainable Prosperity, as well as faculty member in the Milano School for International Affairs, Management, and Urban Policy at the New School. Direct email to: olevin-waldman@mcny.edu

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Hezi ArisDoes Technology Render the Traditional Concept of Property Obsolete?
By OREN M. LEVIN-WALDMAN, Ph.D.
05.08.2017

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