Is The Digital Economy Harming Society?

Digital technology is disrupting jobs and reshaping industries in its frantic drive for efficiency in the workplace. The shift to a digital economy is creating a winner-takes-all attitude and hardship for those on the wrong side of the clash.

The downside of the rush to technology is leading to lower taxes, fewer jobs, less individual choice and the concentration of power in the hands of fewer organisations.

The digital economy encourages the growth of big businesses with big market shares and the generation of enormous profits for relatively few companies.

Free market capitalism should work for everyone but the digital version is working to the advantage of those in control of markets and technology.

In previous times, big businesses created enormous profits too but they employed thousands of people, invested in the economy and to a large degree paid their share of tax.

Today’s big business in the guise of Apple, Facebook, Google and countless others make huge profits, employ relatively few people and minimise the amount of tax paid.

As leading edge technology companies they collect the private details of millions of people, extract huge quantities of cash from the economy, and pile it in tax shelters.

To criticise the digitally driven sharing economy is to be branded a luddite and dismissed as being out of touch with reality and living in the past.

It is, nevertheless, worth raising a note of caution as the economy moves towards the control of the digital conquerors and away from the grasp of people and governments.

Policy-makers and regulators are unable to keep up with the speed of digital change or influence the new rules that are being fashioned in corporate boardrooms.

Entire industries through the guise of the sharing economy are being dismantled, as traditional employees are decoupled from employers and transferred to self-employed contracts.

Competition too is stifled as the winner-takes-all approach is encouraged to the detriment of thousands of small businesses employing millions of people.

Free markets foster competition and competition naturally brings disruption but it should happen in a way that encourages new enterprise and benefits society.

Not in a way that damages the majority of businesses and stifles initiative while creating monopolies for the owners of technology and gatekeepers of the prevailing markets.

A free market should reward investment and allow new entrants to compete with incumbents, regardless of their size or profitability or ownership of the levers of power.

A free market should create and distribute wealth to ensure fairness while protecting against the spread of market monopolies.

A free market should protect the interest of people above the interest of business and the interest of society above the interest of those who hold power.

SO, the digital revolution is to be welcomed for the good it does but it must be managed and properly regulated to ensure it benefits society.