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Speaker: Ben Gallant

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Ben is an ESRC funded PhD candidate at the University of Surrey. He is part of the Centre for Sustainable Prosperities working on their system dynamics theme. His research exploring the impacts of structural changes in labour markets on equity and environment.

Technology, Plutocracy and Care: Baumol’s Cost Disease in a Post-Growth Economy

Ben Gallant, Tim Jackson, Simon Mair

The future and purpose of work are vital concerns in the consideration of the post-growth economy. An economy of care, craft and creativity (Prosperity without Growth, 2nd ed, Jackson 2017) may have much to offer in terms of sustainable, good quality employment and greater material efficiency. But such a proposal cannot ignore the fundamental economic forces that are already shaping the future of work in the 21st Century. One such force is the rise of automation. The development of machine learning is currently extending the scope of automation into previously ‘safe’ occupations reinforcing the need to address questions about the intrinsic value of different forms of work. Another such ‘fundamental’ relates to the relative productivity of different sectors of the economy.
The economist William Baumol pointed out that industries with below average labour productivity growth (such as care, craft and creativity) will experience above average cost inflation, because wages will increase in proportion to average labour productivity growth across the economy. Hence, the very sectors that offer the most potential for sustainable, good quality work are liable to suffer from what Baumol called a ‘cost disease’ and find themselves either squeezed out of the market, struggling for finance or dominating an increasing proportion of the household budget. While the cost disease has been extensively studied from both theoretical and empirical perspectives, little consideration has been given to these dynamics as the economy moves into a post-growth phase.
The goal of this paper is to redress this imbalance. Specifically, we explore the relevance of the Baumol hypothesis for a post-growth economy. We discuss the future of employment, the quality of work, the provision of care, and the fiscal survivability of public services as technological development shapes the economy and determines the allocation of power. We review the existing literature in order to gain insight into the specific challenges and opportunities that Baumol’s cost disease raises for post-growth economies. Illustrating this conceptual review with reference to specific case studies, we discuss the nature and value of work in post-growth economies. By situating the Baumol hypothesis alongside socialist, anarchist and philosophical literatures on technology and work, we are able to highlight particular tensions between desirable future visions of work and the economic forces that will shape them in post-growth economies.

Key Words: Technology; Care; Sustainability; Power; Public Sector; Cost inflation; Work
Relevant Conference Topics: Degrowth: culture, power and change; Public sector (e.g. transport, healthcare, education); Technology in a degrowth society; Care, gender and feminisms