A deep crisis is paralyzing the societies of the West. The outsourcing of low skilled manufacturing to emerging economies has created a ‘precariat’ excluded from economic, social and political life. The middle classes, already under pressure from stagnating real wages, are afraid of suffering the same fate in the digital economy. More and more people are asking if democracy in its current form still gives them any say, or is in fact one of the drivers of disenfranchisement.
Little has been done to rein in casino capitalism. Under the pressure of financial markets, the seminal project of European unification is about to collapse because of an economic policy driven by European institutions that narrowly focuses on austerity measures in already weak economies. They have undermined that European project’s social contract. And, still, the disciples of market radicalism continue to sing the gospel of supply side economics, willfully ignoring the fact that it is the very lack of aggregate demand that lies at the root of the crisis. Our fears and obsessions seem to contradict the rational Homo Oeconomicus of economic textbooks. Did we build the pillars of the modern order – the state, the market and democracy – upon unrealistic assumptions about our very nature? The old certainties start to crumble.
Digitalization, robotization, and Artificial Intelligence will change the way we work and live. Genetic engineering and nano technology are changing what it means to be a human being. The revolution of information technologies has shown how quickly disruptive innovations can turn over entire industries. The next industrial revolution will once again come from the garage. Digital tools like 3D printers allow us to manufacture everything from a cup of coffee to vital organs with the click of a mouse. The household of tomorrow will be a micro factory and a micro power plant the same way social media turned it into a micro broadcaster. The developers and makers, sellers and buyers are now connected worldwide through the Internet of Things.
The Political Economy Of The Digital TransformationThis is a really seminal post. There were three great historical epochs based on the basic socio-economic structure — hunting-gathering, agriculture, and industrialism, based respectively on tribalism, feudalism, and capitalism. The world is now poised at the cusp of another momentous transformation into the digital age.
...whoever gets to frame the narrative of digital transformation will have the power to define the trajectory of policy making for years....
The practical utopia of a ‘Good Society with full capabilities for all’ needs to be further elaborated to work as a progressive counter-narrative to the brave new world pushed by libertarian or neoliberal capitalists. But even in its nascent form, it allows for building discursive bridges between the various progressive tribes, and can help to mobilize diverse social groups. Most important, the new frame enables one to reopen the debate over policy paradigms as the necessary first step to preparing the ground for the struggle over the concrete policy shifts which need to follow....
What is needed, therefore, is nothing less than a new progressive project for the digital age. It is high time for progressives of all tribes to rediscover political economy and practical utopia, join forces, and prepare for the struggle over the shape of the digital transformation. This struggle will define the world of tomorrow.
In the end, the only way to overcome a transformation conflict is by concluding a social contract based on inclusive compromises between all classes. Building a broad societal coalition for change to meet the struggle, and seeking the inclusive comprises to overcome it: this is the task of social democracy in the digital age. What these inclusive compromises at the heart of the new social contract will look like will define the Good Society.
Social Europe Journal
Shaping The Great Digital TransformationMarc Saxer | Director of the Friedrich-Ebert-Stiftung India office
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