Acquisition or Access?

In your own language

Eduardo del Buey
Photo: Afp
La Jornada Maya

Tuesday, October 29, 2019

Last week over breakfast in Mexico City, my son Sebastian and I discussed how the new digital economy is impacting our lives. He observed that my generation, the so-called baby boomers, was raised on the principle of acquisition, while his generation, the so-called millennials, is focused more on access.

The concept intrigued me, and led me to ask if this insight would have any social, economic, or political implications.

My generation was raised on the post-World War II dream of many: own a home, own a car, have a stable job with a pension at the end, and, basically, acquire things.

This is somewhat at odds with today’s society where the younger generation is not as focused on acquiring things but, rather, accessing them. Indeed, many lack the capital to easily acquire large-scale items such as homes, and few if any have a stable job with a pension at the end of the road. Consequently, the idea of permanence that my generation enjoyed is increasingly lacking in today’s changing economy.

I have a large collection of CDs and DVDs that I no longer use. Instead, I now access music through my Apple Home-Pod that seeks my request in cyberspace and plays it nanoseconds later. I use Netflix and watch whatever my curiosity desires. Instead of owning a second car in Mexico City, I access private chauffer driven transportation through Uber a service that is challenging the traditional taxi industry by utilizing special applications that make using this service much easier than using traditional modes of transportation, and offer users better security in many high-crime markets. As we transition towards a cashless economy, Uber’s payment system makes greater sense than carrying cash – still a requisite for taking taxis in many economies.

All for usually less than I would pay for using traditional products and all without the need for ownership or being tied down to material possessions.

This tectonic shift in consumer behavior may be having a significant impact on society.

Former Blockbuster (remember them?) employees and many other former employees of now-defunct brick and mortar stores have lost their jobs to the alternatives available in cyberspace. Hotels, with their billions in assets and millions of employees, face stiff competition from your and my spare bedroom. And cab drivers many whose retirement relies on the value of their licenses are challenged by people who no longer keep their cars garaged for ten hours a day but, rather, put them to work as UBERs to provide a welcome service.

As is often noted, Uber doesn´t own any cars, and Airbnb doesn’t own any hotels. Yet they are major players in the new economy.

These access industries have opened up many job opportunities for people seeking to be their own bosses. Utilizing their technological assets, they employ their hitherto non-productive property in productive ways.

In this sense, the access economy is as positive a factor in the lives of some as it is a negative factor in the lives of others.

Like all challenges throughout history, it offers both dangers and opportunities.

Most governments have moved slowly in the face of these rapid technological changes that will affect large swaths of society profoundly. Their ability to craft thoughtful, visionary policies is hampered by legislators who cannot keep up, along with bureaucracy and lobby groups representing business and social interests that further complicate gaining consensus. In the meantime, many are forced to reinvent their business models or themselves, in a bit of a vacuum, in order to survive these changes.

Further complicating things, many of these services pay few or no taxes outside of the home country where they are located while at the same time, corporate access to robotics is also depriving governments of potentially billions of dollars in tax revenues as machines that replace people do not pay payroll taxes. In the end, governments may well be left with less tax money with which to provide services and to retrain displaced workers thereby possibly reducing them to having to accept lower paying jobs as a result.

In addition, a number of the jobs being created in the new economy are being offered in places far from where traditional brick and mortar businesses have closed. Amazon is not located on the same street or even the same city where book stores have closed. More people than ever will have to get used to going to where the jobs are rather than setting roots in a community.

Finally, how will this affect our political and social structures based on an acquisition-based economy and on the principle of private property?

In his book The West and the Rest, Niall Ferguson opines that the root of successful democratic institutions in the United Kingdom, Canada, and the United States lies in the concept of private property. The fact that “a man´s home is his castle” contributes to an inherent feeling of independence and freedom absent in feudal or communist societies. Indeed, he quotes John Locke saying that in the 18th century Carolinas it would be landowners who held political power.

As land ownership grew, citizens believed that they had a stake in the political, economic, and social system to which they belonged.

All this to say that democracy as we know it is rooted in many ways in the possession of private property and society´s belief in and respect and support for that right.

What happens in a society in which private property might become too expensive for many to own outright and people transition from acquisition to access?

The transition from an acquisition-based economy to an access-based economy provides many opportunities and poses many challenges to consumers and governments alike.

Governments must find intelligent and effective ways to manage change, sometimes jointly across traditional country boundaries without it costing their citizens opportunities to start businesses and create new jobs in the new economy. They must find faster ways to predict and understand how the new technologies will affect the economy and their citizens, and also how they should operate and plan ahead to steer their activities in such a way that new opportunities aren´t stifled simply because they do not fit into traditional parameters.

Legislators must develop a deep understanding of the workings and implications of how digital technology is impacting economic and social development. This likely means that a new generation of mostly younger legislators must work together with more experienced colleagues who lack the required technical expertise to craft laws to govern the new economy.

We as individuals must also find ways to cope with these changes that pose significant challenges to the way that they live and the way that they earn their living. While governments may well have to provide transitional support, they must also find ways to stimulate citizens to take responsibility to reinvent themselves and become relevant in the new economy.

No doubt, the private sector will adapt as it always does. However, given the transnational nature of many businesses leading the digital revolution, locally focused businesses will require strong transnational legislation in order to ensure a reasonably level playing field.

Taken as a whole, multi-lateral organizations, national and regional governments, the private sector, and civil society must work together to address this phenomenon.

As is the case with many of the challenges facing us today, international cooperation and coordination are crucial to address the fallout of these tectonic shifts in economic activity and their impact on social and political stability. This requirement calls for leveraging organizations such as the United Nations, the World Trade Organization, and others to start the dialogue necessary to determine how we will manage this new economy by way of developing effective and coordinated policies that governments can introduce into national legislation in order to assure an orderly and successful economic transition while minimizing social or political unrest.

We all have a stake in economic growth and political and social stability, and it is up to all of us to make this an issue of discussion, electoral policy and planning in order to take control of our destinies and address these challenges successfully.

Mérida, Yucatán
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