The ‘Gig Economy’, Technology and Piece-Wages

According to Marx, a “capitalist working with improved but not yet generally adopted methods of production sells well below the market price, but above his (sic) individual rice of production: his rate of profit rises until competition levels it out”. (Capital Vol. 3: 231) But this in itself is not enough to explain the rise of platform technology (‘gig work’) corporations. These corporations also rely upon cutting labour costs as a key mechanism for achieving competitive prices, and they do this by redefining time-wages as piece-wages. Here Marx is relevant as “piece-wage is the form of wages most in harmony with the capitalist mode of production.” (Capital Vol 1:797). The piece-work employer initially sells the product below market price in the hope they can do so until they have a monopoly. Shifts in the power of capital and labour have created opportunities for capitalists to shape labour markets with high rates of casualisation, insecure labour and contract work, and developments in digital technology have produced a vehicle that enables these opportunities to be exploited. Thus the piece-rate model of platform firms is viable in modern labour markets. However, the cutting of rates creates resistance not only from workers but also from the state (and even finance capital, whose patience is not infinite). Thus the sustainability of many platform firms depends on the outcomes of this resistance.