Is Democratization the Solution to the Problems of the Digital Economy?

It’s been suggested by many that an increase in democratic control, either at the workplace level, or the level of the economy as a whole (or some combination of the two), could contribute greatly to addressing some of the most significant objectionable features of contemporary economic life, such as poor pay and working conditions for employees, lack of meaningful work, and objectionable domination by managers. In this paper, we suggest that some important trends in the new digital economy present challenges to the claim that familiar arguments for democratization are especially compelling, and to the claim that the implementation of democratization proposals would significantly contribute to addressing many of the problems that we have most reason to be concerned about. For example, many arguments for workplace democracy rely on the firm/state analogy, according to which firms ought to be structured democratically because managers exercise coercive authority over employees that is analogous, in relevant ways, to the authority that state officials exercise over citizens. New forms of work that have emerged in the digital economy, such as various kinds of gig work, however, raise difficult questions about whether, and if so how, workers are subjected to coercive authority by the relevant firms, as well as about how we should understand the structure and boundaries of these firms. At the very least, these questions need to be answered by anyone who aims to argue that democratizing these firms would help address issues of concern raised by gig work and related developments. Perhaps more importantly, a number of the most concerning developments in the new digital economy have to do with the effects of digital products and services on those who use them, and on our collective social and political life more broadly. For example, smartphone and social media addiction, or merely overuse, is driven largely by sophisticated design features that are intended to keep users engaged for as long as possible. In many cases, this allows firms to provide users access to their platforms and services for free, and to generate revenue via advertising. If we think that there’s a serious problem here, it’s not clear whether democratization, at either the firm level or the level of the broader economy, might help us address it. This would depend on how those empowered to participate in the democratic processes would vote on key issues. If we think the biggest problems are primarily substantive rather than procedural, then arguments for democratization will depend on empirical claims that are not obviously compelling.