What is the Knowledge Economy?

By Ron Rivers,

Labor and productivity play a foundational role in the human experience.  Through so much of our shared past and present the work that we do becomes a defining part of who we are and how we interact with the world around us.  History teaches us that while the nature of productive efforts changes, there is always more to be done and numerous methods establishing how to do it. While change is a proven constant, the precursor of awakening to new approaches and ideas is often a crisis.  In this first article of a series we explore what the new Knowledge Economy is and is not. Arguing throughout the essays that a proactive approach towards scaled implementation of the Knowledge Economy must be central to the Progressive narrative.

Society in the United States seems to go through peaks and valleys when it comes to active participation in the arrangement of society.     When a crisis arises, we see an increase in activity to shape the direction of how we address the circumstances generated.  A modern example is the surge of political activism and action stemming from the 2016 elections. Genuine transformation for good demands that we extend our expanding understanding of consciousness into our institutional arrangements, creating a structure that enables every person to choose between routine work and creative innovation at their discretion.   This is why a deep understanding of the latent potential of the Knowledge Economy is vital to the future of so many people.

Structure and Form

The Knowledge Economy is an economic system where the most advanced form of production requires highly skilled labor that is easily transferable between organizations. Our modern example being Silicon Valley. This type of work has already displaced manufacturing for the title of the most advanced form of production.   In many cases, most advanced will be defined as the most significant returns for input, but not necessarily in all. Knowledge Economy organiziations are the ones that reach the forefront of productive power and, more importantly, demonstrate the ability to stay at the forefront for the foreseeable future.

Central to the Knowledge Economy is the ability to create a high degree of customization of labor and output without requiring standardization.  You can imagine it as a blend of innovative experimentation and productivity, creating a form of employment that draws from humanity’s highest potential, our imagination.   Historically scientific advancements helped to drive advances in productive activity. Today we can observe how within the Knowledge Economy production becomes a vehicle for scientific progress.   

An example would be new products and services that utilize machine learning.  Each innovation builds upon advances in information technology while simultaneously pushing the envelope for what is possible with every new iteration.   Another example would be the increasing efficiency of 3-D Printing which is now allowing people to go directly from ideation to creation of products, saving significant time and resources for prototyping and developing material goods through third parties.  Both scenarios describe processes where the work of production and scientific discovery become intertwined, fundamentally redefining the nature of the labor involved. This reimagination of work, the blending of experimental innovation and creation, has profound consequences for humanity.  

Compare the shifting nature of work in a Knowledge Economy to many of the blue and white collar jobs of today.  For many people being productive in the world is limited to repetitive and machine-like tasks. A blue-collar example would be manual factory labor, taking part in an assembly line, fulfilling a single or set of repetitive tasks each day.     A white-collar case is being a fashion designer in New York City.  On the surface, it sounds like an appealing line of work but after better understanding the process it is apparent that it offers little more creativity than a traditional assembly line worker.  Designing is limited to repetitive and narrow sets of constraints provided through a top-down hierarchy with the primary value being quantities of output. Both examples highlight the needs addressed by the Knowledge Economy, the automation of the repetitive tasks people are forced to endure to live.

The blending of imagination, discovery, and labor offered by the Knowledge Economy creates an opportunity for radical transformation, the complete automation of repetitive tasks within society.   The rise of artificial intelligence as proactive problem-solving machines transcends the capabilities of historical practice. If a task is repeatable, then it is possible to express the action in a formula.  Formulas allow us to encode that action into a machine, freeing us from having to play the role of an imperfect tool in our labors. Humanity is finally at a point in time where we can begin to reconceptualize the entirety of how we work, freeing ourselves from mindless repetition and allowing us to maximize our primary resource, time.  By expanding the horizons of possible directions for our creative potential, we create structures that better support and enhance our freedoms and potential.

To better understand the concept it is important to discuss what the Knowledge Economy is not.  Applying high technology to a hierarchical organization that uses human labor for repetitive work does not constitute a Knowledge Economy organization.  We could use the conglomerate Walmart for example. Walmart has the capital to invest heavily in new practice and procedure, but no amount of technological innovation can act as a substitute for a business model that views employees as cheap, disposable widgets[1].  Walmart lacks the structure to maximize the creative potential of the majority of its staff, instead relying on historical modes of thinking about the organization of labor and tasks within their labor arrangements. Knowledge Economy organizations break from stagnant models of work by combining advanced technologies, education, and procedures to create an environment of practice that pushes the boundaries of what the firm could be.  

Image Credit: ScooNews.com

The Power of the Knowledge Economy

One of the most significant reasons that the United States should encourage the development and spread of the Knowledge Economy is the possibility to transcend the limits of diminishing returns.  Diminishing returns means that after a certain point within a production process adding more resources to a vertical within the process begins to produce lower returns per resource unit. To illustrate this point we can imagine adding more workers to an assembly line in a factory setting.  Eventually, companies reach a point where demand is stable, productive capacity reaches full utilization, and every new employee added produces less than the person before them.    Taken to the extreme, we could imagine an example where adding new employees becomes actively detrimental, causing undue stress and complications on the established processes.  A rigid arrangement of a structure with a company will always subject its productivity to diminishing returns.

Organizations embracing Knowledge Economy technologies and techniques draw from every person’s mental capacities in exploring new and undeveloped ideas.  Whereas in the past productive innovation relied heavily on external sources that were irregular in their timing and relevance, today change can integrate with the process of standard operation.    This structure empowers each worker to experiment and create both within existing arrangements as is tradition, and outside of them, challenging the structure of the firm to be better.   Implementing flexible models of structure allows firms to embrace automation of the repetitive tasks, perpetually pushing the boundaries of what is possible within their organization.

Drawing again from Silicon Valley we could take the example of a start-up development firm.  When employees develop successful automation for a task, it disseminates within the organization, forever freeing people from having to do the repetitive work once associated with the function.  Each innovation builds upon the previous while simultaneously drawing inspiration from the not yet known. The totality of their potential limited only by their imagination of the possible.

These examples provide us with a view of the true scope of power the future Knowledge Economy presents us.  A world where collective efforts towards automation of the repetitive are shared across industries to ensure that humanity is never subject to do the work that a machine can do.  It represents a pivotal point in human history that will not only redefine our definition of work, but also our understanding of who we are. Humans are context driven beings; the historical experiences we share in our cultural, political, and economic arrangements shape our perception of the world.  By embracing a world where labor can be radically fulfilling we write a new chapter in the human experience.

[1] The Fight Against Walmart’s Labor Practices Goes Global by Michelle Chen The Nation https://www.thenation.com/article/the-fight-against-walmarts-labor-practices-goes-global/


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A Progressive Rejection of Universal Basic Income

By Ron Rivers,

Universal Basic Income (UBI) is gaining popularity in America as the next logical economic step in a post-automation world. Touted as a way to save America’s Capitalism, it ensures that people have enough money to keep consuming while raising the quality of life for our most impoverished. UBI boasts some attractive benefits for the majority of Americans, but is it worth the cost? I argue that given the present ideologies driving UBI implementing the policy will do more harm than good.

Scratching the surface

Universal Basic Income is a form of social protection that provides an amount of money to every citizen within a population.  Money transfers occur periodically and without condition. The premise is that this method of wealth redistribution will alleviate many of the economic burdens facing so many American families.

There have been numerous studies on the impacts of cash-transfer programs that have shown positive results.  A 2007 program by New York City’s Center for Economic Opportunity [1] demonstrated that small cash stipends reduced poverty and material hardship for recipients but saw those impacts decrease once the money was rescinded.   The World Bank reports [2] that it’s a myth that our poorest squander wealth transfers on wasteful activities such as increased alcohol and cigarette consumption. These studies and more [3] are pushing UBI from a fantastical idea to a legitimate policy discussion.

Visionaries like Martin Luther King Jr., Bernie Sanders, Barack Obama, and Elon Musk all have vocalized support for  UBI given the trending automation that will redefine labor as we know it. Presidential Candidate Andrew Yang is making UBI a significant focus of his campaign, saying “UBI is necessary for the continuation of capitalism through the automation wave and displacement of workers.”  

How do we even begin to structure an argument against a program that demonstrates positive, data-driven results and is supported by some of the greatest minds of past and present?   It all starts with why.

Understanding Intention

The purpose of all proposals of Universal Basic Income is to increase the access and agency of every individual operating within a capitalist system.  The core argument is that as the nature of work continues to change so will the necessity for higher levels of economic distribution, typically funded by new taxation models such as a Value-Added Tax.  UBI is in many respects a recognition of a new human right. A fundamental requirement for every individual to function within our world today.

Here we identify the first problem with UBI as it exists presently.  Is Universal Basic Income a human right or is it an attempt to attenuate the inequalities created by capitalism?  

If we believe UBI is a human right, then we should be approaching the implementation in the form of Constitutional Arrangements, not economic policy.  We would want to ensure that a standard of living is codified into our most sacred laws, preventing present and future politicians from meddling with the ideal.  Funding could occur from a variety of sources, but each solution would ensure that decisions regarding the implementation and collection of those funds would be in the hands of society.   Universal Basic Income as a human right would lend itself to the restructuring of present arrangements. This is not what is being suggested by most proponents today.

If Universal Basic Income is a means to address inequity created by current structure than it does nothing to create agency for its recipients, a UBI funded by tax and transfer would calcify poverty and class structure within the U.S. even more than the present arrangements.  Accepting that the solution to the hyper-concentration of wealth is a small stipend for the masses is a choice to perpetuate class structure and division. Remember that Universal Basic Income is being proposed as a solution to the future impact automation will have on labor.  It does nothing to address the ownership of said automation, only focusing on ensuring that the vast majority receive a minor kick-back.

A Universal Basic Income focused on economics is a system that appeases the individual by providing just enough to survive while denying them the opportunity to transform their situation in a meaningful way.

Image by Mike Ramsey

Belittlement or Bigness?

When we think about the transformation of individual agency through a suite of social protections, we must ask ourselves if our actions are complimenting structural change or merely substituting one inferior arrangement for another.   Exploring implementing an entitlement like Universal Basic Income must begin with the question of what direction is this leading us?

We understand that most popular and dominant ideas in society today do more to reinforce existing arrangements than they do to support institutional reformation.  When we frame UBI as the savior to our present form of single-market Capitalism we unwittingly submit to the past’s dominance of the present. If UBI is not accompanied by structural alternatives to codify the raising of the human condition, then we must see it for what it is, more of the same under a different name.

As someone who supports a suite of vital protections for every person, it seems counter-intuitive to argue against a wealth redistribution model that would generate immediate benefits for so many.  But, if our shared objective is the raising of the human condition, then we cannot settle for economic policies that would appease the burden of a structure that places 99% of the wealth and power in the hands of 1% of the population.
Together we must reject belittlement under the guise of support, focusing instead on the rearranging of institutions that generate the very inequities we seek to address.

[1] Conditional Cash Transfers in New York City by  James A. Riccio, Nadine Dechausay, Cynthia Miller, Stephen Nuñez, Nandita Verma, Edith Yang MDRC.org https://www.mdrc.org/publication/conditional-cash-transfers-new-york-city

[2] Do the Poor Waste Transfers on Booze and Cigarettes? No  by David Evans & Anna Popova http://blogs.worldbank.org/impactevaluations/do-poor-waste-transfers-booze-and-cigarettes-no

[3] Basic Income Earth Network https://basicincome.org/research/

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Three Solutions to fix New Jersey’s Minimum Wage Bill

By Ron Rivers,

On Thursday, December 6th, 2018 New Jersey Assembly Speaker Coughlin introduced a bill to increase the minimum wage in New Jersey to $15 per hour by 2024. The bill includes exemptions for small businesses operating with less than ten employees, farm workers, teenagers, and seasonal workers, delaying the increase in minimum wage until 2029. The bill has come under fire from people both for and against a minimum wage increase. We know the data supports a minimum wage increase and while the bill is a step in the right direction, it offers no genuine solution. It teaches us that our legislators are approaching solving the minimum wage challenge from a limited perspective. I argue that with a bit of creativity we can have $15 minimum wage increase by 2023, free from carve-outs, and help small businesses at the same time.

The central problem surrounding the minimum wage bill is the conflict between protecting small businesses and empowering our fellow community members who need a minimum wage increase to better their lives. We are approaching the problem under the assumption that these two challenges are a balancing act. By doing one, we diminish the other.

Image Credit: File Photo/CNN

The bill as written falls short of achieving the desired results of giving more people the ability to improve their lives. According to Brandon McKoy from New Jersey Policy Perspective “Assuming an annual inflation rate of 3 percent per year, a $15 minimum wage in 2029 will only be worth $10.73 in 2018-dollars. ” This bill would raise the real purchasing power of people receiving minimum wage approximately 19.4 cents per year for eleven years. Hardly an effort worth celebrating.

We should also consider the larger picture of how the carve-outs could impact our small business economy. The bill creates a scenario where firms with more than ten employees are required to pay more than those with less. The intention may have been to penalize large corporations, but I struggle with the logic behind choosing ten employees as the baseline. It ignores professional firms that could make millions with a handful of employees while hurting businesses like restaurants and grocery stores which operate on razor-thin margins. More importantly, it creates a scenario where generic Mega-Corp is paying $15 per hour, and the neighborhood Pizza shop is only paying $10 per hour. Basic economic theory would lead us to believe that Mega-Corp will attract better talent because they are paying 33% more. The intangible impact of this bill will be to create an economic culture where the idea of working at a small business becomes an option of last resort. This exclusion creates the real possibility of significant talent drain. If this occurs, the resulting shift in how people view working at a small business won’t be fixed by a bill.

Understanding that this bill fails to meet the needs of both New Jersey residents and purposes genuine long-term threat to small businesses we must consider alternatives. Critics and supporters of the bill share a common theme, we all understand the value small businesses provide to our communities and want them to succeed. We must recognize that the nature of work is changing in the United States and small businesses may require assistance to rethink their strategies on how to prosper. I suggest that we consider the option of deeper government cooperation with small business owners to help with this transition.

#1 – Cooperative Competition

Our administration could work with small businesses owners in New Jersey to implement a more cooperative form of competition. We could facilitate regional purchasing cooperatives for similar industries. The state could provide the tools in the way of information resources, logistical resources, and a digital platform to help coordinate orders for small business owners in specific regions. If we use a Pizza shop as an example, collaborative purchasing would drive down resource costs such as flour, sauce, and cheese for the shop and increase their profitability per slice. This way small businesses can better focus on the things they do best, offering real and personal value in the experience.

#2 – Purchasing Reform

New Jersey could also implement policies and procedures to ensure that our significant spending power is directly locally. According to the Democracy Collaborative[1], implementing local purchasing projects such as the one implemented in Preston, England generate benefits such as growing local business revenues, reducing transportation costs and carbon emissions, reduces transit times allowing for more just-in-time inventory management (to further reduce small business overhead), and removes some of the burden from our national transportation infrastructure.

The first step to realize this plan would be to create clear purchasing goals that are shared with the public. Administratively we would either incentivize or require decision makers to buy locally. The state and our large non-profit institutions such as hospitals and schools would deepen cooperation with municipalities to conduct outreach to the firms with the intention of better understanding and supporting the capacity of our small businesses. Particular emphasis should be placed on outreach to small business owners who suffer from a systemic socioeconomic disadvantage.

#3 – Extend Access

The State could also extend credit in the form of access to advanced technologies and practice directly to small and emerging businesses. We could establish procedures to identify best practices within specific industries and then give them away to all companies within those industries. If we want to encourage start-up growth in our state, we could consider reorganizing corporate law to give innovative firms access to the most advanced forms of technology. Imagine a medical start-up working towards a creative, low-cost disease cure having access to the best technologies and techniques that our pharmaceutical conglomerates have to offer in opening ourselves up to new ways of approaching these problems we increase the probability of success for all involved. Depending on how we want to structure the arrangements the public could share in the benefits of success developed through this new program.

These solutions require reimagining the way we as New Jerseyans support small businesses. Each idea shares the common theme of creating revenue gains that, when recognized, would exceed the costs associated with an increased minimum wage. Let us never forget that the state is an extension of our collective population. Our ability to improve the lives of our fellow community members and create economic progress is limited only by our ideas.

In debating a $15 per hour minimum wage increase, we must reject the notion our choice is limited to a battle between low-wage workers and small business owners. We should work towards the betterment of our lowest earning community members and ensure our small business communities thrive. Governor Murphy and his administration are right to push for a solution to this problem. We don’t lack the will, just the imagination.

[1] Stimulating Economic Growth through Local Purchasing Democracy Collaborative https://democracycollaborative.org/sites/clone.community-wealth.org/files/Policy%20Brief_Purchasing_final.pdf

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Neoliberalism Is Working Exactly As Intended

By Ron Rivers,

A common criticism of capitalism is that the neoliberal approach has failed to meet its intended goals.  We recognize this because we can observe that the United States is becoming increasingly more unequal every year.  Oxfam.org recently published a study stating that 82% of all the wealth created in 2017 went to the top 1% of economic earners.  [1] Even the International Monetary Fund (IMF), one of neoliberalism’s greatest cheerleaders, has published work that the concept has been oversold to the public. [2]  The truth is neoliberalism hasn’t failed. It’s working as intended.

Neoliberal philosophy is, and always has been, about increasing the wealth of the owners of capital.   It was never intended to bring global prosperity, which is why the criticism that it isn’t working is false.  Neoliberalism wants to allow those who control capital to access new ways of multiplying that capital. The idea is rooted in rewarding capital concentration.   It is a system that manipulates our culture to celebrate greed and predatory practices. For the uninitiated, it promises the possible. You too can be a billionaire if you work hard and stay focused!

The ideal bleeds into our education, communication, and interaction with one another in all works of life.  Only a global culture indoctrinated to neoliberalism would allow a production structure that allocates 45% of the worldwide wealth into the hands of 1% of the population. [3]  From the perspective of the architects, neoliberalism is a spectacular success!

Image Credit:  Matt Wuerker, Politico Magazine

Compounding this challenge is a political class that perpetuates the fantasy that there is something to be saved of the current regime.   This delusion has bled into our public consciousness as well. For example, we can observe vitriolic feedback against measures to raise the quality of life of our lowest earners such as a minimum wage increase.   The data-defying arguing is that this wage increase would hurt small businesses. Neoliberalism has convinced us to approach the problems of inequality under the assumption that creating systemic improvements to help the poor are a balancing act.  By doing one, we diminish the other.    I imagine that the political actors supporting this line of thinking don’t believe for a second that it will last forever, they’re just trying to take advantage of it for a few more years.

Language Matters

The argument being made against the choice of syntax surrounding neoliberalism may seem a bit trivial.  Why does it matter if we say it failed or it succeeded if we agree that economic alternatives need exploring?  It matters because language is the foundation of everything we know and do. By allowing concepts to be incorrectly classified we open ourselves up to further manipulation under the guise of good intentions.  We must reject critics who claim neoliberalism isn’t working as if there was some version of the economic theory that would ever do anything more than concentrate wealth upwards.

We know from the plentiful data available on wealth concentration that the architects of neoliberalism succeeded in their goals.  As our elected leaders push for solutions to attenuate these inequalities, we must insist that they communicate their intentions clearly and concisely.  It is no longer enough to merely humanize the impact of these economic policies; we need alternative visions of the future. Most importantly, armed with the knowledge that neoliberalism is working as intended, we must demand that the architects of alternatives focus on expanding every person’s access and agency to exist within the world and not cater solely to those with economic power in the present.   In rejecting the notion of well-intentioned economic policies gone awry, we take another step towards the progressive transformation of the world.

[1] Reward work, not wealth Oxfam International https://d1tn3vj7xz9fdh.cloudfront.net/s3fs-public/file_attachments/bp-reward-work-not-wealth-220118-en.pdf

[2] Neoliberalism: Oversold?  by Jonathan Ostry, Prakash Loungani, and Davide Furceri International Monetary Fund https://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm

[3] Global Inequality Facts Inequality.org https://inequality.org/facts/global-inequality/

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The most important lesson we haven’t learned from Marx.

By Ron Rivers,

Karl Marx is one of the most prolific economists the world has ever known.  His work awakened millions to a deeper understanding of the relationship between labor and capital.  It’s difficult to understate Marx’s influence on present-day left-leaning ideologies, liberals, socialists, and other progressive thinkers draw inspiration from his ideas of the possible.   The embracing of Marxism is fueling the rise of a transformative new political effort here in the United States, while simultaneously limiting our shared imagination of the future. This unintended consequence can be overcome if we begin to think beyond traditional dogmas. If we observe Marx’s works from an alternative perspective, we can open ourselves up to the most important lesson he can teach us.


Structural Vision

Marx explained that societies operate under specific modes of production that define their social, economic, and political institutions.    Each one of these fixed regimes has specific arrangements and challenges unique to its structure.

Observing the present, we find ourselves entrenched in Marx’s warning about the failures of a capitalist mode of production.  Increasing social tensions rooted in economic inequalities between the bourgeoisie (the rich) and the proletariat (working class poor) fuel a growing call for a replacement of capitalism with a socialist model.  Our present Executive branch is staffed with a tiny number of robber baron capitalists pursuing costly policy initiatives that defund public services and balloon our national deficit to provide tax cuts for our nation’s wealthiest members.  What was once a silent bourgeoisie agenda to concentrate wealth is now a deafening war cry.

This collapse is, as Marx predicted, driving people to align with supporting a socialist structure for our production model.  What I am arguing is that if Marx were alive today, he would never endorse Socialism as the next logical path forward. That’s because the premise of Marxism is based on an economic model where manufacturing as the most dominant form of production.   This is no longer be true as the Knowledge Economy holds that mantle. Socialism was not designed for the present and no amount of creative syntax will change the fact that we can do better.

Critics of that statement would claim that a socialist revolution is the majority theme, but from a programmatic standpoint, a wholesale and immediate regime change is both politically unfeasible and potentially dangerous.  The Democratic Socialists of America are doing some great work at the local community level, and I want to be clear that this is not an argument against their efforts, members, or leadership.  Policy-wise we see Socialists taking up the banner of the modern Progressives, Universal Healthcare, a $15 minimum wage, immigration reform, etc. These policies are significant steps in the right direction and deserve recognition, but do nothing to address the structural problems of society.  Instead, they serve to humanize the efforts of the present day conservative movement funded by our oligarchal class. A lack of real structural vision for the transformation and dogmatic adherence to a wholesale socialist substitution is an unintended byproduct of Marxism as it is written and ignores the larger lesson of Marxism.


Mindful recognition

Marx’s brilliance does not relinquish him from the shared burden we all bear.  Our imaginations of systemic alternatives can extend only so far given our orientation in the world today.  All ideas for innovative social change begin at the floor of the established present. Marx framed history as a closed list of alternative modes of production, slavery, feudalism, capitalism, and socialism.   Societies progress from one to another, often in a revolutionary format. The push for Socialism here in the United States draws from this same theory; Capitalism hasn’t worked, Socialism is next.

The most prolific aspect of Marx’s work is that the texts are an imaginative expression of how Societies are organized.  In writing Capital, he demonstrated an ability to think beyond the present to share a new vision of how the future might unfold.  His efforts show that there are no closed lists of potential regimes in history if, and only if, we have the foresight to imagine alternatives.  Transformation is subject to no laws and only adheres to the restrictions that we choose to embrace.

Taken literally, the historical texts we draw inspiration from do not provide a way of thinking about structural change today.  Academic, social sciences and policy discussions naturalize our existing arrangements. In imagining alternatives, we turn to Marxist theories which, while historically revolutionary, no longer serve as a viable option for the future.  We abandon the promotion of socialism as the answer while simultaneously applying the best aspects to new alternatives.

In choosing to refuse the potential for greater goods than history provides us we discard one version of structure worship for another.  We choose to rely on the past for salvation instead of our creative capabilities in the present. If we are to manifest a genuine transformation of society and humanity, it falls upon us to abandon dogma and open our minds to the possibility of what we could create given modern technology, information, and resources.

Socialism and the Progressive project align in their vision of demanding a deeply socialized suite of vital protections for all individuals codified into constitutional law.  I believe our destiny is a shared one, but to achieve our vision, we must transcend history’s claim on the future. By recognizing the limitations of our historical influences, we unleash our full potential for transformation in the world.

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