The Politics of the Gig Economy: Entrepreneurship,

Technological Innovation, and Politics

Giorgi Areshidze (Spring 2017)

T and TR, 115-2:30, in Roberts North 105

Office Hours: T and TR 5:30 7:00
Catalog Description:

Short Description: This course introduces students to ongoing

technological, political and economic transformations unleashed by the Gig
Economy that are redefining the meaning of work, prosperity, innovation
and entrepreneurship in post-Industrial capitalist economies. The course
covers: foundational texts of political economy (Locke, Marx, Hayek,
Keynes, Friedman, Schumpeter); theoretical debates about capitalism, the
profit motive, private property, inequality, and the social responsibility of
business; case studies of entrepreneurship, technological innovation, and
government regulation (especially, AirBnB and Uber, as well as other
politically and economically disruptive technologies); and domestic and
international public policy debates.

Long Description: This course introduces students to ongoing

technological, political and economic transformations that are redefining
the meaning of work, prosperity, innovation and entrepreneurship in post-
industrial capitalist economies. It is subdivided into three sections.
Section 1 focuses on Political Economy: Foundations and Theory,
and introduces students to the foundational texts and theories of political
economy, including John Locke, John Stuart Mill, Adam Smith, Karl Marx,
Joseph Schumpeter, and Friedrich Hayek. The goal is to familiarize
students with the key theoretical debates about capitalism, profit, property,
inequality, and the enduring alternatives presented by Marxism and
Socialism. Section 2 focuses on Entrepreneurship, Technology
Innovation and Liberal Education, and pairs case studies of
technological innovations and recent startups (Uber, AirBnB) with readings
from entrepreneurs and innovators (Peter Theil, Jeff Bezos, etc.). This
section of the course will also feature several guest speakers from the
business/technology sector who have reflected on the role of liberal
education as a foundation for innovative economic thinking and leadership.
Section 3 Inequality, the Future of Work and the Welfare State in a
Globalized World returns us to more concrete public policy debates in
America and in Europe, but also in India and China. Here we tackle broad
implications of the Gig Economy for inequality and equality, economic
regulation, competitiveness and the welfare state.
Learning Goals: make students competent in the key theoretical debates in
political economy; make students competent in connecting these theoretical
debates to questions of technological innovation and entrepreneurship in
the contemporary tech and business sector; make students aware of the
mutual interaction and impact of politics, public policy, and economic and
technological outcomes; make students capable of assessing (on the basis of
a standard of economic and moral justice) the value and the goodness, as
well as the unintended and disruptive consequences, of the era of
technological revolution that we are experiencing. (These learning goals
will be assessed through the assignments that I detail below under
Grading Policy).

Books to Buy:

Required:
Joseph Schumpeter, Capitalism, Socialism and Democracy (Third
Edition), https://www.amazon.com/Capitalism-Socialism-Democracy-
Joseph-Schumpeter/dp/0061561614/ [Note: This required text was
not included in the Email I sent you over Break!]
John Locke, Two Treatise Of Government (Cambridge), 0521357306,
https://www.amazon.com/Two-Treatises-Government-John-Locke
Milton Friedman, Capitalism and Freedom (40th Anniversary Edition),
0226264211, http://www.amazon.com/Capitalism-Freedom-Anniversary-Milton-
Friedman/dp/0226264211/

Recommended (and on Reserve at the Library) (available for

purchase on January 31):

Brad Stone, The Upstarts: How Uber, Airbnb, and the Killer
Companies of the New Silicon Valley Are Changing the World (Jan 31,
2017), https://www.amazon.com/Upstarts-Airbnb-Companies-Silicon-
Changing/dp/0316388394

Blogs:

The Brookings Institute Economy Page:

https://www.brookings.edu/topic/u-s-economy/
Robert Reich: http://robertreich.org/
Paul Krugrmans Conscience of a Liberal:
http://krugman.blogs.nytimes.com/
Caf Hayek: http://cafehayek.com/
EconTalk: http://www.econtalk.org
Mises Institute: https://mises.org/
REQUIREMENTS :

Careful reading (and class engagement and participation based on careful

reading) is the most important requirement. The reading assignments in
this course are not long, but they are quite difficult; make sure you read
them slowly and take notes while you read. You should try to come to every
class with questions, comments, and interpretations and ready to
participate.

ATTENDANCE AND CLASS POLICY:

Intelligent participation in the class discussion is an absolute must!

Come to class prepared to engage.
Roll will be taken at the beginning of each class, and attendance will be
considered in determining your final grade. After two unexcused
absences, your grade for Attendance and Participation will drop for
each unexcused absence.

Do not text on cell phones during class, or use the computer for browsing
the internet or shopping!

GRADING POLICY:

Your grade will be calculated based on the following breakdown. Plus/minus

grades will be used in the final grades.

Attendance & Class Participation: 15%;

Attendance will be taken daily and will count for 10% of your final grade.
You will begin with a perfect grade: after two unexcused absences each
subsequent unexcused absence will drop your grade by one point. This
means that twelve unexcused absences will result in a grade of zero out of
ten. Participation will be assessed through your contribution to the class
discussions, through the questions you raise in class, as well as your
performance on in-class quizzes.

Quizzes: 5%

Quizzes will be given randomly, and will involve a question based on the
reading from that day.

Option 1: 1 Analytical Paper: 20%

You will have three opportunities to write two 5-6 page take home papers in
this class, and these opportunities will correspond to the three Sections of
the Course (outlined below under Course Plan). At the end of each
Section of the Course, I will hand out paper topics from which you will
choose one take-home essay option. You will no less than 2 weeks to
complete the essay from the time when the paper topics are handed out.

Option 2: 2 Analytical Papers: 10% each (same as Option 1, you just

write 2 out of 3 papers)
You will have three opportunities to write two 5-6 page take home papers in
this class, and these opportunities will correspond to the three Sections of
the Course (outlined below under Course Plan). At the end of each
Section of the Course, I will hand out paper topics from which you will
choose one take-home essay option. Thus, you may choose to write your
two take home papers on sections 1 and 2 of the course, or on sections 2 or
3 (or on sections 1 and 3). You will no less than 2 weeks to complete the
essay from the time when the paper topics are handed out.

In-Class Midterm: 20%

The in class mid-term will take place after we finish Section 1 of the course,
and will cover only the material from Section 1. The mid-term exam will
have 2 parts: the first part will consist of identifications (keywords and
quotations from the text, to which you will respond in paragraph form); the
second section will consist of essay options, from which you will be asked to
choose one essay option to respond to (the essay options on the mid-term
exam will be based on the Section 1 Take Home Paper Options, but will not
be as complicated as the take-home options).

In-Class Final Exam: 25%

The in-class final exam will be comprehensive and will cover material from
all three sections of the course. The in-class Final Exam will follow the
format of the mid-term exam (two parts: ID/Quotations and Essay Options),
but on the Final you will be asked to answer two essay questions from all of
the options instead of only answering one essay.

In-Class Presentation & Written Case Study: 15%

Each student will be required to lead a 5-10 minute in-class presentation (in
Section 2) and then a 10-15 minute presentation (in Section 3) as part of the
class meeting. I will pass out a sign-up sheet ahead of time. The
presentation will be either (1) a case study of a disruptive and innovative
start-up or technology that is transforming an existing economic sector or
industry, and the relationship of that transformation to political regulation
and politics; (2) or about a theoretical topic about political economy that we
have studied in the reading (in section 1) and how that applies to ongoing
economic and technological innovations. In addition to the in-class
presentation, you will be required to turn in a written report of your
research and presentation (approximately 5-8 pages long). [As part of this
requirement as well as the Class Participation requirement, I may
sometimes ask a specific student to research a particular question,
company, or issue for our class and report on it briefly in the next
meeting].

Grading policies

Plus and minus grades will be used in the final grades. No extensions will be
granted on written work except with good cause. You yourself may purchase
an extension at a cost of 3 percent plus 2 percent per calendar day. This
penalty will attach to all late papers unaccompanied by a doctor's note. No
further late papers will be accepted once your classmates papers have been
returned to them. If you fail to turn in your final exam before the grade
deadline you will receive a grade of zero on the final. In the case of medical
emergency or personal tragedy contact me as soon as possible.

The course is subdivided into 3 sections:

SECTION I: POLITICAL ECONOMY FOUNDATIONS AND THEORY

We begin with an immersion in classical works of political economy,

exploring the theoretical foundations of capitalism and the role of private
property, free markets, the profit motive, the invisible hand and the division
of labor in the thought of John Locke, John Stuart Mill, and Adam Smith.
Then we turn to Karl Marxs revolutionary communist critique of the
bourgeois capitalist system, and his vision of an egalitarian classless society.
We finish this section with broad selections from Joseph Schumpeters
Capitalism, Socialism and Democracy, focusing especially on his
understanding of creative destruction as the driver of entrepreneurial
innovation in a capitalist economy, and his comparative case for expert
economic regulation and the egalitarian virtues of socialism. The readings
from Schumpeter will be paired with and contrasted with selections from
Friedrich Hayeks writings on competition, regulation, knowledge in the
economy, and price, profit and loss.

WEEK 1:

Tuesday, Jan 17: Introduction

Thursday, Jan 19:

Readings: The Profit Motive vs Social Responsibility and the

Foundations of Private Property
 Milton Friedman, The Social Responsibility of Business is to Increase
Profits (on Sakai)
Food Fighter: Does the Whole Foods CEO Know Whats Best for
You? in the New Yorker:
http://www.newyorker.com/magazine/2010/01/04/food-fighter;
Milton Friedman, John Mackey & T.J. Rodgers, Rethinking Social
Responsibility, a Reason.com debate:
http://reason.com/archives/2005/10/01/rethinking-the-social-
responsi/print;
John Friedman, "Milton Friedman Was Wrong About Corporate Social
Responsibility," in the Huffington Post:
http://www.huffingtonpost.com/john-friedman/milton-friedman-was-
wrong_b_3417866.html;
John Locke, Chapters 1-5, Second Treatise of Government

WEEK 2:

Tuesday, Jan 24:

Readings: The Great Debate: Hayek vs. Keynes

[John Locke, Chapter 5 of Second Treatise, continued from previous
class]
Hayek, The Use of Knowledge in Society (on Sakai) and The
Pretense of Knowledge (1974) (on Sakai)
Keynes, End of Laissez Faire (1926) (on Sakai)
Adam Davidson, Prime Time for Paul Ryans Guru (the One Whos
Not Ayn Rand), in The New York Times Magazine, Aug. 2012:
http://www.nytimes.com/2012/08/26/magazine/prime-time-for-paul-
ryans-guru-the-one-thats-not-ayn-rand.html
Adam Davidson, Obama Gives Keynes His First Real-World Test,
http://www.npr.org/templates/story/story.php?storyId=100018973

Thursday, Jan 26: Marxism and Socialism vs Capitalism 1

Readings: Marxist and Aristotelian Critiques of Capitalism

Marx and Engels, Communist Manifesto and other selections from
Marx (posted on Sakai)
Aristotle Politics, Book I (on money-making) (posted on Sakai)
Andrzej Rapaczynski, The Moral Significance of Economic Life, in
Capitalism and Society, Vol. 8, Issue 2 (on Sakai)
Michael Sandel, Market Reasoning as Moral Reasoning: Why
Economists Should Re-engage with Political Philosophy, Journal of
 Economic Perspectives, Vol. 27, No. 4, Fall 2013 (on Sakai)
[Recommended]

WEEK 3:

Tuesday, Jan 30: The Case For and Against Socialism?

Readings: Critique of Socialism and Central Planning

Hayek, The Road to Serfdom (Abridged version) (on Sakai)
Hand out: Paper Topics #1

Thursday, Feb 2: The Case for Socialism?

Hayek, The Road to Serfdom (Abridged version) continued
Schumpeter, Capitalism, Socialism and Democracy, Reading #1

WEEK 4:

Tuesday, Feb 7:

Readings:
Schumpeter: Reading #2
Selections from Hayek

Thursday, Feb 9:
Readings: Schumpeter: Reading #3

SECTION II: ENTREPRENEURSHIP, TECHNOLOGY INNOVATION AND

LIBERAL EDUCATION IN THE GIG ECONOMY

Recommended Books for this Section (A copy of each of these texts will
be on Reserve at the library, but I recommend that your own copy if you
can):

Brad Stone, The Upstarts: How Uber, Airbnb, and the Killer
Companies of the New Silicon Valley Are Changing the World (Jan 31,
2017), https://www.amazon.com/Upstarts-Airbnb-Companies-Silicon-
Changing/dp/0316388394
Arun Sundararajan, The Sharing Economy: The End of Employment
and the Rise of Crowd-Based Capitalism (MIT Press),
https://www.amazon.com/Sharing-Economy-Employment-Crowd-
Based-Capitalism/dp/0262034573/
In the second section of the course, we flash forward to study what has
come to be called The Gig Economy, or the new sharing economy fueled
by technological startups, mobile applications and peer-to-peer services that
have been reshaping the work and service landscape and reinventing
established industries (such as car rentals, travel and hotel, and sales) in
America and Europe. Our primary focus will be the interaction between the
Gig Economy with its political and regulatory environment, and how
politics explicitly and implicitly shapes the decisions of new technological
entrepreneurs. Our secondary focus will be on how liberal education and
higher education more generally play a role in this process of economic
revolution by training future innovators who can think outside of the box
in a global economy. This section of the class will also feature several
guest speakers who are leaders in the world of technological innovation and
business enterprise.

Case Studies/Themes/Speakers: Uber, AirBnB, Starbucks, Amazon;

Perspectives from Steve Jobs and others on Engineer vs. Liberal Arts?;
Guest Speakers with experience in the Start-Up and Technology world who
can share their perspectives on entrepreneurship and innovation, and their
relationship to education and politics.

WEEK 5: The Gig Economy and its Effects on Work and

Entrepreneurship

Tuesday, Feb 14: Entrepreneurship

Readings:
Schumpeter, Chapter 7, The Process of Creative Destruction,
Video: Marcoux on Schumpeter, Knight and Kirzner on
Entrepreneurship: https://www.youtube.com/watch?v=Oqgzjt-
0qZY&feature=plcp
Obama vs. Romney: Champion of the People vs. Vulture Capitalist

Thursday, Feb 16: What is the Gig Economy?

Readings:
David Crook and Brian McGill, Whos Working in the Gig Economy,
in the Wall Street Journal, Nov. 23, 2016 (on Sakai)
Eli Lehler, The Future of Work, National Affairs, Summer 2016:
http://www.rstreet.org/wp-
content/uploads/2016/06/20160616_Lehrer_Indiv.pdf
Niam Yaraghi and Shamika Ravi, The Current and Future State of the
Sharing Economy, The Brookings Institute (December, 2016):
https://www.brookings.edu/research/the-current-and-future-state-of-
the-sharing-economy/
 Sharing Economy: Sizing the Revenue Opportunity,
PriceWaterHouseCoopers Global Analysis:
http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/th
e-sharing-economy-sizing-the-revenue-opportunity.html

WEEK 6:

Tuesday, Feb 21: The Political Landscape: The Left and the Right on
the Gig Economy

Readings:
Elizabeth Warren, Strengthening the Basic Bargain for Workers in
the Modern Economy New America Annual Conference May 19, 2016
(on Sakai)
Marco Rubio: Stop Trying to Regulate Tech Giants Like Uber,
http://observer.com/2015/10/marco-rubio-stop-trying-to-regulate-tech-
giants-like-uber/
Walter Russel Mead, Who Will Be The Party of Uber?,
http://www.the-american-interest.com/2015/08/06/who-will-be-the-
party-of-uber/
Hand out: Paper Topics #2

Thursday, Feb 23: Regulation, and Regulatory Capture, and

Employment Rights and Law

Readings #1:
Stiegler, A Theory of Economic Regulation
Anne Krueger, The Political Economy of the Rent-Seeking Society , The American
Economic Review, Vol. 64, No. 3 (1974), 291-303.
Steve Hill, The California Challenge: How (not) to Regulate
Disruptive Business Models, 2012 (on Sakai)
Friedman, Capitalism and Freedom, Chapter 9, Occupational
Licensure

Readings #2: Current Regulatory Fights in the News:

New York City Moves to Slow Growth of Popular Green-Cab Fleet by

Michael M. Gynbaum and Matt Flegenheimer, The New York Times,
MAY 15, 2014, http://www.nytimes.com/2014/05/16/nyregion/new-
york-city-moves-to-slow-growth-of-popular-green-cab-fleet.html
All Hail the "Sharing Economy!" A Mushy Phrase Gives Liberals
Cover to Join the Fight Against Big Government by Jim Epstein,
 Reason, May. 13, 2014, http://reason.com/archives/2014/05/13/all-hail-
the-sharing-economy-a-mushy-phr
The Airbnb Economy in New York: Lucrative but Often Illegal by
Elizabeth A. Harris, The New York Times, November 4, 2013,
http://www.nytimes.com/2013/11/05/nyregion/the-airbnb-economy-in-
new-york-lucrative-but-often-unlawful.html
Uber Picks David Plouff to Wage Regulatory Fight by Mike Isaac,
The New York Times, August 20, 2014,
http://www.nytimes.com/2014/08/20/technology/uber-picks-a-political-
insider-to-wage-its-regulatory-battles.html?ref=business

WEEK 7:

Tuesday, Feb. 28: Employment Rights and Law in the Gig Economy

Readings:
Keith Cunninham-Parmeter, From Amazon to Uber: Defining Employment in the Modern Economy,
Boston University Law Review, Vol. 96 (on Sakai)
Joseph V. Kennedy, Three Paths to Update Labor Law for the Gig
Economy, Information Technology and Innovation Foundation, April
2016, http://www2.itif.org/2016-labor-law-gig-economy.pdf?
_ga=1.201121006.1596274050.1484785412
Seth D. Harris and Alan B. Krueger, Modernizing Labor Laws for 21 st
Century Work: The Independent Worker, The Hamilton Project at
The Brookings Institute (December 2015):
https://www.brookings.edu/wp-
content/uploads/2016/07/modernizing_labor_laws_for_twenty_first_ce
ntury_work_krueger_harris.pdf
The Freelance Isnt Free Act - NY Legislature

Thursday, Mar. 2: Emerging and Future Political Battles: Workers

Benefits, Consumer Protection, and Income Volatility

Growing Voices Say Gig Workers Need Protections, Benefits,

http://www.sfgate.com/business/article/Growing-voices-say-gig-
workers-need-protections-6079992.php
JP Morgan Chase Report, Paychecks, Paydays, and the Online
Economy: Big Data and Income Volatility,
https://www.jpmorganchase.com/corporate/institute/report-paychecks-
paydays-and-the-online-platform-economy.htm

SECTION III: INEQUALITY, THE FUTURE OF WORK AND THE WELFARE

STATE IN A GLOBALIZED WORLD
The third section of the class applies the lessons from the previous two
sections to broad public policy debates in advanced post-industrial
economies, with a particular focus on case studies from the US and Western
Europe, but also from beyond the West (India and China will be comparative
cases). Questions explored in this section include: Does the Gig Economy,
and technological innovation more broadly, benefit society at large? Does it
empower individuals, by allowing them to monetize their time through
contract-based employment (by driving for Uber, by renting out their
apartments), or does it exacerbate existing economic inequalities? Should
states and political actors respond to technological innovation and change
with greater regulatory oversight aimed at protecting existing industries
and established economies, or should they incentivize change even when it
comes at the cost of existing industries? Why has America become the hub
of start-up innovation, and what are the comparative advantages and
disadvantages of the European economic model? How should local
communities, cities and states deal with the NIMBY (Not In My Backyard)
Problem? How should growing urban areas and technological hubs (such as
San Francisco and Austin) deal with growing housing crises that makes
living in those areas unaffordable even for highly paid employees of tech
firms? More broadly, what are the relative merits of the Blue Social-
Economic model (which emphasizes a strong welfare state, higher
regulation, and a social and economic safety net) versus the Red Social-
Economic model (which emphasizes lower taxes, lower barriers to entry in
the market, and economic competitiveness) in this new technological and
economic landscape? Readings will include: Public Policy Papers and
Analyses on Housing, Healthcare, Inequality, Tax Policy, and the Regulatory
State.

WEEK 8:

Competing Models of Welfare State and Effects on Innovation and

Start Ups

Readings:
Mats Benner. 2003. The Scandinavian Challenge: The Future of the
Advanced Welfare States in the Knowledge Economy. Acta
Sociologica 46:2 (June)
Alan Gleeson, Why Europe Lags the US in Technology Start Ups,
http://www.alangleeson.com/portfolio/why-europe-lags-the-us-in-
technology-startups/
Minh Ha Doung, 3 Key Differences Between European vs US
Startups, https://www.startupgrind.com/blog/the-3-key-differences-
between-european-vs-us-startups/
 Report of the European Parliament, The Cost of Non-Europe in the
Sharing Economy: Economic, Social, and Legal Challenges and
Opportunities, esp. pp. 1-33.

WEEK 9: March 13-17 (Spring Break)

WEEK 10:

The Debate about Economic Inequality

Readings:
Thomas Pickety (selections from Capital in the 21st Century), etc. (on
Sakai)
Wehner and Beschel, How to Think About Inequality, in the National
Affairs, Spring 2012 (link posted on Sakai)
Timothy Noah, The Mobility Myth, in the New Republic, February 8,
2012 (link posted on Sakai)
John Hudson, "Inequality and the Knowledge Economy: Running to
Stand Still?," Social Policy and Society, Vol. 5, Issue 2, April 2006
Milton Friedman, Capitalism and Freedom, Chapter 10 The
Distribution of Income and Chapter 12 Alleviation of Poverty (on
Sakai)
Hand out: Paper Topics #3

WEEK 11 and 12

2008 Financial Crisis, Too Big to Fail, and Regulation

o David Moss, An Ounce of Prevention: Financial Regulation,
Moral Hazard, and the End of Too Big to Fail, Harvard
Magazine (2009): 25-29
The Red and the Blue Social and Economic Models
o William Voegeli on the California Welfare Model:
http://www.city-journal.org/2009/19_4_california.html;
o Jonathan Rothwell, Regional Inequality and The New
Geography of Jobs in The New Republic, August 7, 2012;
Education and School Choice
Housing Policy

WEEK 13: Student Presentations