A growing theme across the Internet is that technology is driving income inequality and creating a "neo-feudal" economy. This week alone there are two good examples of this point of view.
Normally the Sharing Economy is fawned over in the media, who treat it like it's a radical new approach to capitalism that's going to save the world.
The TechCrunch article points out that many of the sharing economy's firms require the availability of a low wage work force. Key quote:
"... let’s face it, “sharing economy” is mostly spin. It mostly consists of people who have excess disposable income hiring those who do not; it’s pretty rare to vacillate across that divide. Far more accurate to call it the “servant economy”"
New Geography's California's New Feudalism Benefits Few at the Expense of the Multitude greatly expands on the theme of a neo-feudalist economy, with a focus on California. They even have a full description of its members:
The Oligarchs: The swelling number of billionaires in the state, particularly in Silicon Valley, has enhanced power that is emerging into something like the old aristocratic French second estate.
The Clerisy: In the Middle Ages, this role was played largely by the church; in today’s hyper-secular America, the job of shaping the masses has fallen to the government apparat, the professoriat, and the media, which together constitute our new Clerisy.
The New Serfs: If current trends continue, the fastest growing class will be the permanently property-less. This group includes welfare recipients and other government dependents but also the far more numerous working poor.
The Yeomanry: In neo-feudalist California, the biggest losers tend to be the old private sector middle class. This includes largely small business owners, professionals, and skilled workers in traditional industries most targeted by regulatory shifts and higher taxes.
For those who want to dig deeper on this topic, noted economist Tyler Cowen recently released Average is Over, a book that also covers this theme.
Cowen suggests in the not to distant future America's economic structure will consist of 10%-15% of the population living exciting, wealthy lives while the rest live on beans. And yes, the future Cowen describes does kinda sound like it's taken from the movie Soylent Green, except the masses eat beans.
We're spending a lot of our time these days trying to understand what's going with the changing nature of work, income inequality and what all this means for independent workers and small businesses.
There's no way to look at the data behind these stories without being very concerned. It's clear we're entering a period where income inequality is likely going to continue to increase. Our hope is self-employment and the rise of a new artisan economy will create opportunities for more people to have economic success.