Adam Smith often lauded as the father of the modern day capitalism. There exist three things that underlie his conception of capitalism that would be relevant to a discussion on the emergence of on-demand economies. First is the “invisible hand” concept. This theory suggests that people in the society can always get what they want. Suppliers of goods and services will always be compelled to offer what is demanded by the market. For instance if people today demanded organic food products, they would get exactly that because they would simply go out and buy organic foods and ignore GMOs. Producers and suppliers would consequently be constrained to supply only organic food products. The second notion is that the best thing that can happen to a society is that if individuals advanced their self-interest. He claims that the quest for self-interest is beneficial for the society because of the motivation for personal gain. Each would work hard, and the society would benefit more with more jobs, stiffer competition, and higher quality products. Lastly, he argued that the government should simply stay out of the market and reduce their role to policing it.
These three concepts go hand in hand with the theory of division of labor and specialization. The theory of division of labor makes a case for the specialization of individuals top perform certain different tasks in a single production process. The performance of single tasks eliminated the need to equip unskilled workers with special skills to perform the whole job process. Division of labor further eliminates the need to pay skilled workers higher wages as they can be substituted for the unskilled ones.
First the independent worker who controls what he/she produces is a clear illustration of the “invisible hand” concept. Workers no longer fancy being bogged down in offices and have their schedule determined by some other person since that person is simply rich (a capitalist). Being able to work as and when it is convenient for you is likely to be a motivating factor and further likely to yield better results for the economy.
Secondly on the development of specialization, the division labor theory is still seen to have a play in that. As people get more engaged with their work, they are likely to need more specialist services to help them perform small tasks such as house cleaning, laundry, and others. Specializing in the provision of a particular service is likely to create an opportunity for enterprise.
Thirdly, Smith’s theory can also be exhibited on the expansion of the market to bring about the division of labor. The on-demand economy has been explained by the articles to be on the rise. New technology has witnessed the emergence of jobs that match the skills available in the market particularly for the young Turks. For instance, Topcoder started out as a company offering cloud services but it currently specializes in the provision of services of freelance coders owing to the increased demand for freelancers.
On the universal opulence that follows from the expansion of the division of labor, Smith’s theory can still be said to have an influence. According to Smith, the advancement of self-interest eventually benefits the economy. From the Article by Derek Bacon in the Economist, we are told of a situation where routine jobs done by Pfizer’s cleverest workers being now outsourced to save the costs for the company and at the same time create employment elsewhere. This benefits the entire economy in the long run as jobs are created for even the semi-skilled and unskilled workers.
Karl Marx theory on the relations of productions simply explains of the interrelation between the bourgeoisie and proletariats. According to the Marxism, as these two aspects of the divide interact, the mode of production increasingly moves towards the achievement of full productive capacity, and this is what causes antagonism between them. This can be illustrated by Uber’s case. As the relationship between Uber and its workers gets more cordial and things moving towards efficiency production, the workers begin to demand more rights and conflicts arise as the case between the company and Ann Berwick determined by a California court.
The forces of production in the Marxist theories include labor, subjects of labor and the instruments of labor. The most important factor is labor since all the others revolve around it. The on-demand economy depicts a labor force that has realized its value and is seeking for autonomy from the bourgeoisie so as gain maximally. This quest for autonomy is depicted by the increasing number of people that are opting to be free-lancers.
Class struggles are brought about by the relations of production as well as the interaction of the forces of production. The possibility of class struggle is increasingly being witnessed in the American Society. The upsurge of the on-demand economy is a depiction of individuals not willing to be subjected to the will of an individual (bourgeoisie) in terms of working hours when to take holidays, permission to attend family events. More and more workers desire autonomy from the capitalist. The example where Colgate-Palmolive offered $17, 000 to an individual who could make a 30-second video is a depiction of the benefits of the struggle. The person who won the completion could never have made such amounts of money had he been working on someone’s firm. Instead, that profit would have been paid to another capitalist who would have directed him to make the video.
The rise of the on-demand economy can be said to depict the potentiality of communism. The working and middle-class of the American society have realized that they are being exploited by the bourgeoisie (industrialists). They are now more class-conscious and are organizing themselves to take over the resources previously used by the capitalists to produce themselves. The role of capitalists is increasingly being reduced, and communism is taking root in the economy.