The Ten Ninety Nihilists
Monday, 30 September 2013 11:38
By Kevin Carhart.
Ever since the advent of the New Deal institutions in the 1930s, a coalition of businessmen and ideologues have fought tooth and nail to diminish, and ultimately to annihilate, these institutions. They resented the encroachment of regulation and the advent of state backing for labor unions and what this meant for their freedom to operate as they wished.
"In the boom of the second half of the 1920s," said economist James Crotty, "there was little regulation of business, very low taxes on business and rich households, a crippled union movement, a powerful financial sector that rained money on the wealthy, and a political system dominated by economic elites. From 1923 to 1929, 70% of the growth in income went to the richest 1% and only 15% went to the bottom 90% of the income distribution. This was a right-wing dream world."1
The turning back of Roosevelt's new programs, said historian Kim Phillips-Fein, "was a question not only of the bottom line, but of the deepest social principles."2
Many espoused a sort of social Darwinism: the high station of the captains of industry, and their ability to act with impunity, was a manifestation of the survival of the fittest. They resented government's interference in what they were entitled to do.
"They believed that the free market was equivalent to freedom itself," Phillips-Fein said.3
In their long and varied efforts for deregulation, unionbusting, privatization and tax cuts, the thinkers and writers within the coalition have evolved the underlying rationales that they present to the public, according to pragmatism or what will sell. As anti-communism and social issues became less effective underlying stories in the 1990s, the Internet and dotcom hype became a new pretext for the drive towards laissez-faire.
Today, it is not the Long Boom but the Great Recession that is being used as a pretext. Sequestration, and the current bipartisan consensus for austerity "is a major victory for the coalition," Crotty said, "... because it will sustain their onslaught against domestic government spending."4
For business conservatives such as the Koch brothers, Crotty said, "or from a long-term perspective of a lot of these really rich people, this is an opportunity for them, essentially, to defeat the forces that created the social welfare system ... this may be an important historic moment."5
In recent years, components of the coalition such as the Koch brothers and the broadly reviled Goldman Sachs have received well-deserved scrutiny from Jane Mayer, Matt Taibbi and many others. One additional piece of the coalition that may be underscrutinized, though, is the pervasive libertarian, tech-utopian and Randian sentiment among the business conservatives of Silicon Valley startup and venture-capitalist culture. As Phillips-Fein described, wealthy businessmen in the coalition have long been keen to spend their money to promote free-market ideas through a wide variety of vehicles: think tanks, dedicated TV and radio series, media appearances and punditry, lobbyists, position papers and amicus briefs, among other creative approaches. Silicon Valley brings something new to the table: the ideological startup. A tech-savvy investor or CEO - with Peter Thiel as a prominent example - can endow an Internet startup company which has ideological assumptions baked into the cake of its relationship with a population of users. Thiel, who also gave two million dollars to the far-right Club for Growth PAC during the 2012 electoral cycle, has been involved with two major ideological startups: Paypal and Taskrabbit.
When Thiel co-founded Paypal in 1999, his goal was not merely to create a profitable company, but to drive radical deregulation. Thiel wanted to "lessen the control of government over money" by building an audience for an alternate, privatized currency.6 Thiel, said former Paypal Marketing VP Eric Jackson in his memoir, "was pledging to turn the company into nothing less than an initiator of the 'creative destruction' that Joseph Schumpeter described sixty years earlier. He genuinely seemed to believe that this little startup had the ability to upend the world's financial systems by giving consumers unparalleled power over their own finances."7
Thiel has been candid and consistent in his support for laissez-faire. Jacob Weisberg described Thiel's belief system as "a mixture of unapologetic selfishness and economic Darwinism."8
"I think we are going to see some sort of a return to the classic economic thinking of the 19th and 20th centuries," Thiel said on the website Big Think. "I knew Milton Friedman, so that's probably the one I'm personally the most biased towards."9
In summer 2012, Thiel's venture-capital group Founders Fund became a key investor in the new ideological startup Taskrabbit. While it nominally exists to turn a profit, Taskrabbit is an ingenious vehicle for social engineering which aims to lessen the control of government not over money, but work. By exploiting high unemployment as an opportunity to diminish workers' rights, Taskrabbit aims to create an alternate, privatized set of norms based on the labor paradigm of the 1920s: "liberty of contract."
"In Roosevelt's day," wrote labor-history professor Jefferson Cowie, "the courts found most wages and hours legislation unconstitutional based on the doctrine of 'liberty of contract.' The idea was as simple as it was pernicious: wages and hours legislation violated an individual's freedom to make an independent (read: worse) deal with his employer."
"We can't afford to drift further back to the bad old days of liberty of contract," Cowie said.10
What this means in practical terms is that as "independent contractors" (also known as "1099,") Taskrabbit workers are not guaranteed a minimum wage, do not qualify for unemployment insurance, and are ineligible for Worker's Compensation or Federal Medical Leave Act protection, to name but a few distinctions.
Kelly and Kellyism
George Gilder "first came to prominence as one of the Reagan administration's house intellectuals."11 Critics and supporters alike "called his book Wealth and Poverty 'the bible of the Reagan revolution.'"12 By the late nineties, Gilder was "fully transformed ... from griping backlasher into 'radical technotheorist.'"13 He became a fixture, and a cover star, in Kevin Kelly's Wired magazine.
"All across the land wingers changed their plumage," Thomas Frank wrote about the 1990s. "These people all seemed to change, but their essential political views did not. For Gilder as well as [Dinesh] D'Souza and [Newt] Gingrich, liberalism was evil while private enterprise carried within it the spark of the divine. Their superficial changeability reveals a truth about American conservatism generally: The interests of business are central and defining, while every other aspect or strategy of the movement is mutable and disposable."14
The New Economy and the breathless promotion of Internet companies was a helpful new pretext for conservatives to enact the deregulation, unionbusting and the liberty-of-contract labor regime that business conservatives had wanted all along.
"The Internet is an exciting kind of metaphor for spontaneous order," Gilder told Kevin Kelly in a Wired interview15, and if this was your starting point, regulation would only be a hindrance.
Kelly took the analogy further in his 1994 book Out of Control. "According to [Kelly]," said Richard Barbrook, "the Net is the iconic example of the creation of the unregulated 'free market' through the fusion of nature and technology. Invoking Adam Smith, Kelly claims that the Net '... is the mystery of the Invisible Hand - control without authority.'"16
Kelly's radical ideas have proven resilient as a pretext in a bad economy as well as a good one. Almost two decades after Out of Control, Taskrabbit's marketing department wrote an unabashedly ideological blog post rhapsodizing over networked mobile devices as an exciting kind of metaphor for spontaneous order.
"'Great is the almighty "invisible hand of the market"'," they wrote. "Basically Smith is saying that governments should simply provide an unrestricted market system for people to easily exchange goods and services, and then get the heck out of the way! Market forces will take care of the rest. Yep, we totally agree!
Not our problem
The fervor of Taskrabbit's market-fundamentalism manifests itself in how they treat their workers.
"A lot of people are exploited," said Carol, a middle-aged Taskrabbit worker I interviewed. (Workers' names have been changed, often because the worker feared reprisals from Taskrabbit if they are identified.)
She said Taskrabbit workers "would like to have a job and they can't get one. I think they're worth more. I think they're great people or they wouldn't be asked back. I've seen what they do to get this money and you would think they would be properly compensated for what they do."
"I feel really bad for them," Carol said. "People are making less than minimum wage for everything."18
Taskrabbit's CEO, Leah Busque, shrugs off assertions that Taskrabbit violates the norms of worker treatment, always invoking liberty of contract.
"I've read complaints by those who say they were offered below minimum wage for a service," said reporter Connie Loizos in an interview with Busque.
An anonymous Taskrabbit worker spoke to reporter Alyson Shontell, and reiterated complaints about low pay. "No one is obligated to pay minimum wage," the source said. "and that happens again and again and again."
Shontell also ran Busque's response in her story. "Taskrabbits take on only jobs they want to complete," she said. "Taskrabbit is an open marketplace. As such, Taskrabbits are free to bid on jobs they find attractive ... It is not up to us but rather the Taskrabbits themselves to decide which tasks to bid on."20
Not even the spectre of racial discrimination can dissuade Busque from her adamant disclamations:
The particular narrative that violations of employment standards are "not our problem" and "not up to us", when it coincides with an unapologetic libertarian framing, is something that rings a bell with Catherine Ruckelshaus, Legal Co-Director of National Employment Law Project.
"That's the narrative that employers who misclassify their workers as independent contractors use," Ruckelshaus said. "They say even to a day laborer, a strawberry picker, 'it's up to you, you can come or go.' And they don't set the price and they don't set the hours. They try to cloak it as an independent, free exchange, which it's not."22
Hearts and minds
In a 2010 editorial, former Labor Secretary Robert Reich coined the term, "involuntary entrepreneurs."
The sequester cuts may lead to 700,000 jobs lost24, to say nothing of the fact that future rounds of debt-ceiling blackmail may lead to future versions of the sequester. For Taskrabbit, layoffs are the fuel for their engine. The game begins as they pitch their online platform to the latest wave of involuntary entrepreneurs, as a source of jobs and of fast cash. If you accept the Faustian bargain, there are strings attached. As part of creating an account, a new Taskrabbit worker must opt in to the liberty-of-contract framework. Taskrabbit then consolidates that assent and points to it, building it into all their communications as a foregone conclusion - as though it was something that the workers were clamoring for.
"I just know that in times of economic turmoil and downturns, we see entrepreneurs emerge," said Taskrabbit CEO Leah Busque in a Huffington Post column. "It's happening now more than ever."25
New workers are obliged to review the Taskrabbit Handbook. Decorated with cartoon faces, it aims to take liberty of contract and give it that patina of forced, corporate cheer.
"At Taskrabbit, our mission is to connect busy people with entrepreneurs like you who can help them get things done," reads the guide. "In the process, we're bringing back that old time neighborhood spirit."26
In a May post entitled "Cheat Sheet for Taskrabbit Success," the writer from Taskrabbit Support subtly pushed workers to "Enjoy being a Taskrabbit! Remember, this is your personal task business."27
As Phillips-Fein laid out in detail, one component of the coalition's fight has always been on a psychological battlefield - an effort to win hearts and minds over to free-market beliefs. She describes General Electric's "extensive campaign of political reeducation"28 towards its own employees in the 1950s. Historian Rick Perlstein refers to the GE program as "inculcation."29 Decades later, William Baroody of the American Enterprise Institute described a "war for the minds of men."30 The Public Information Committee of the Business Roundtable "suggested finding new ways to educate the public about economics ... perhaps even a 'Sesame Street' for young and middle-aged adults ... to accomplish the kind of re-orientation of attitudes which preservation of the free enterprise system demands."31
In the 1970s, the Roundtable underwrote a series of paid essays in Reader's Digest. One piece defended "the very principle of profit," and another "offered responses to criticisms that the 'free enterprise system makes us selfish and materialistic' and that 'free enterprise concentrates wealth and power in the hands of a few.'"32 And in the early 1980s, the Chamber of Commerce "started with children, selling an education kit entitled 'Economics for Young Americans' to its members, who were then supposed to 'persuade' teachers, principals and school boards to get the kits into classes in public schools."33
Naomi Klein identifies an additional example which has a resonance with the entrepreneurship rhetoric that spews forth from Taskrabbit.
Like George W. Bush's "Ownership Society," Margaret Thatcher's privatization of council estate housing in the 1980s was in part a psychological strategy to make the new homeowners conceive of themselves as owners. "In a bold move, Thatcher offered strong incentives to residents to buy their council estate flats at reduced rates," Klein said. "Those who could afford it became homeowners while those who couldn't faced rents almost twice as high as before, leading to an explosion of homelessness. ... As a political strategy, it worked: the renters continued to oppose Thatcher, but polls showed that more than half of the newly minted owners did indeed switch their party affiliation to the Tories. The key was a psychological shift: they now thought like owners, and owners tend to vote Tory."34
If Taskrabbit can train workers to think like business owners, they not only legitimate the use of a liberty-of-contract arrangement with those workers, they may build the political constituency for a future Reagan at the same time.
The work itself
The work on Taskrabbit comes from posters, which is any company or any individual who creates an account, pre-pays funds into Taskrabbit's escrow, and posts a work request on Taskrabbit's web and mobile-device platform.
The work itself runs the gamut - it is basically everything. Companies are using independent contractors from Taskrabbit for a significant amount of staffing, for the whole spectrum of types of work that people do as direct employees or through the more traditional form of staffing agency. This includes assembly, manufacturing, garment production, order fulfillment in warehouses, reception and other office work, as well as delivery, moving jobs, manual labor, landscaping and others. Some of the work is completed for households, but an increasing amount is done for businesses.
Taskrabbit euphemistically calls all of this work "tasks," and they trade on the diminuitive aura that the label conveys.
The way a worker gets work on Taskrabbit is by "naming your price" for a particular posting and placing a bid in Taskrabbit's competitive-bidding software on the site. Posters have an advantage over workers: they can review all the bids with no commitment, and then accept their favorite. By forcing workers to give assent to a given dollar amount in a discrete, on-or-off digital environment, Taskrabbit can then point to that assent in claiming the worker condoned the liberty-of-contract system, and in claiming that they liked it.
Being forced to use this system trains the user to think like a business, as workers are obliged to digest it, take it under their skin and get good at it or risk losing out to a different candidate.
An Austin, Texas-based knitwear company called The Knitting Mill posted a job in January under the title "Ironing/Pressing Scarves" along with a requested price.
Writing online in a discussion thread for hashing out the details, a Taskrabbit worker named Jim exclaimed, "that's not even minimum wage!!!!"
"Dear Sir," replied the poster from the Knitting Mill, "as far as I can see, the minimum wage in Texas is $7.25. Of course I may be mistaken."35
Taskrabbit makes it simple for a poster to simply cast their fishing net and test whether or not they can attract someone willing to work on particular terms. If challenged, they can feign ignorance on a "just in time" basis. For workers, the bidding system militates against complaints. While Taskrabbit provides the communication tool for workers to have conversations with posters, a poster can simply reroute around a candidate who raises an objection, and wait for a more docile yes.
Once the workers' assent is locked in and the propaganda is flowing, Taskrabbit turns around and pitches its pool of new "micro-entrepreneurs" to opportunistic businesses as a money-saver. The reason why using a 1099 worker from Taskrabbit would be such a bargain, and a tempting proposition for a budget-conscious business, is precisely because of substantial costs and risks that are shifted from employer to worker. This is why the focus upon the workers' frame of mind is so critical - because it creates a plausible alternative hypothesis that the worker was comfortable in the context of a business dealing with another business, as equals.
By giving a nod and a wink towards the worker's status, by either not knowing or pretending not to know, Taskrabbit's business clients can shirk responsibility for paying in to federal and state social-insurance programs as well as significant amounts of payroll tax. These costs instead come out of the worker's pocket, or they are borne by the taxpaying public. The way Taskrabbit makes money - other than through rich underwriters - is by taking a cut of everything arranged on their platform.
When the mechanics of finding work are skewed towards competition and individualized bargaining, the notion of worker solidarity becomes a moot point both at a psychological and practical level.
Workers are atomized. "That's part of the strategy of Taskrabbit - to keep us apart from one another," said Shontell's source. "We can't message each other on the website ... they don't want us fixing the process. They don't want us unionizing."36
But, she said, "I think Taskrabbit could really benefit from a union. They could really benefit from some organization because we really are out there. We could face any number of uncertainties or dangers, or hazardous conditions, and we have no recourse."37
"The obstacles faced by contingent workers who want to join a union are significant," said a policy statement document from California Labor Federation. "Misclassified workers are legally banned from organizing because as 'independent contractors' it is deemed an anti-trust violation. This trend toward a contingent economy is directly connected to the decline in union density and the vanishing middle class."38
Dolores is a friend of Carol's. Also middle-aged, she works through Taskrabbit in and around San Francisco. In an example of the hazardous conditions that Shontell's source mentions, Dolores described being injured on the job and having no recourse. Some details of the accident have been left vague at Dolores' request, for fear of reprisals.
In winter 2012, Dolores was injured during a moving job at a residence. "I was doing the task without another Taskrabbit," she said. "And the person who wanted the task done was assisting in it. And he not being an experienced mover, actually didn't coordinate the movement."
Something slipped, something gave way, and Dolores felt an incredible pain. "I immediately went to a doctor to see if it was serious," Dolores said. "That was pretty awful."39
The injury put a halt to her being able to earn money from moving jobs for three months.
("Remember," chirps the Taskrabbit Handbook, "that you operate as an independent contractor and liability rests with you, so play it safe."40)
Ineligible, purportedly, for worker's compensation or unemployment insurance, Dolores bore the burden of paying all her medical bills and the cost of physical therapy.
Carol added that Dolores had other jobs scheduled through Taskrabbit at the time of the injury, and it was with economic need hanging over her head that she didn't want to make waves. "Where was she to go?" Carol asked. "It took the longest time to heal, and she got it from Taskrabbit. That can happen again."
"This is why people take jobs like this who are on the poverty line," Carol said. "It is out of desperation ... There is no one to complain to. There are no rights. It is easy money, with all the negatives that come from not being protected by labor laws."41
Dolores questioned the other job prospects for women in her own situation: "educated, nowhere near ready to retire, who aren't able to find gainful employment."
"No gun is being held to one's head to work there," she said, "but the work alternatives may be welfare, dope selling, gambling, robbery..."42
"Jobs for middle-aged women are hard to come by," Carol said.43
"We are manufacturing and packaging a product and we need some extra help," reads a coy job description posted on Taskrabbit in late 2012 under the name "Josh P.," and completed a couple of days later. The job is simple assembly work with no specialized skills required. It includes "counting small screws and bolts, putting them in bags, folding boxes, gluing parts and cutting felt."
"Nothing is difficult and I will show you how to do everything," Josh P. says. "You have to be able to accurately count small parts repetitively."44
Josh P. posted his request under his own name with no particular indication that the work was to be done for a business. Yet as Josh P. described, the work was to take place in "my facility," a sort of light-industrial space in the Bay Area suburb of Santa Clara. Another of Josh P.'s posts is for someone to pick up and deliver a yellow-metal "flammable liquid storage cabinet" from a biological-supply surplus company.45 If the workers gluing parts and cutting felt in Josh P.'s facility happen to be at risk for accidents, their independent-contractor status means they will not be covered by worker's compensation insurance.
One of the ways that Taskrabbit has spun liberty of contract is by using whimsy as a cover. The company has tailored its spotlight to focus on the light-hearted jobs between individuals: deliver some cupcakes, or "help me write a love letter." Business-oriented outlets such as Techcrunch, Forbes and Fortune, as well as stories in outlets such as CNN and the New York Times perpetuate the tone that Taskrabbit wants, by referring to workers as gofers running errands, doing chores and making a bit of extra cash.
There has been virtually no press coverage of the heavier and more dangerous work being done for businesses in light industry and in the supply chain and logistics. Some of the industries now using Taskrabbit are notorious for circumventing the employment relationship with every possible trick. If Taskrabbit provides them with a story that the rules have changed and liberty of contract has become more permissible, many are happy to get on board and save money. Some examples:
> "Need someone to pick and pack packages for a drop shipment," reads a January posting by Bamko Inc. "Requires a bit of heavy lifting."46
> "Warehouse handler help, 30 hours per week," reads a request from New York City. "The job will be to assist in our warehouse with sorting items, scanning them, helping to unload trucks, etc. You will be a jack of all trades for the warehouse team. You need to be able to lift up to 70 lbs and you need to be comfortable working in a fast paced environment." Although she mentions a warehouse, the post appears under the name Christie S. E., not a business.48
I asked Patricia Ortiz, from the Public Information office of California's Department of Industrial Relations, her reaction to one of Taskrabbit's promotional blurbs for its prospective customers.
"Discover high-quality people while avoiding high temp-agency costs," reads the pitch. "No more wishing you had an extra hand around the office to file documents, clean the office dishes, help organize office supplies or a storage closet."49
Ortiz said the language reminds her of "situations with temp agencies who hire warehouse workers year after year to help an employer avoid classifying them as an employee."
Taskrabbit also uses the duration of jobs as a cover. The perception they take advantage of is that errands and odd jobs are so short and so informal that trying to judge them according to labor standards is a moot point. However, businesses are taking advantage of the casual ethos, then turning around and using Taskrabbit workers for extended periods after all.
Touch of Modern is a San Francisco home-decor products company. In late October 2012, Touch of Modern co-founder Steven Ou put a posting on Taskrabbit as "Steven O."
"We're an e-commerce company with an unusual amount of orders that need to be packed and shipped Friday," reads the request.51
The unusual became usual, as Ou proceeded to bring workers in for the same ongoing packing and shipping work, most every weekday from October 2012 until March 2013. Ou took what was enough work for a job, carved it up into small pieces of 5 or 6 hours each, then posted the requests in succession on Taskrabbit as "tasks."
I live in San Francisco, so in early 2013 I stopped by Touch of Modern's facility in a side street in the South of Market neighborhood, to ask "why?" For these warehouse workers that Touch of Modern is using day after day, why exactly are they independent contractors?
"We have no comment," said the Touch of Modern fellow I spoke to. "No comment and no attribution."52
Busque and other Taskrabbit representatives frequently refer to workers' wages with an oddly wooden turn of phrase: workers "name how much they want to earn" and "specify how much they want to get paid."
"We're at a point where people are starting to rethink and redefine what work means to them, and the typical 9-to-5 job that you work at for 40 hours a week and retire from after 30 years is an old way of thinking," Busque told the Huffington Post. "This concept of micro-entrepreneurship is to get people the tools and resources to be their own bosses, and decide how much they want to work, how much they want to get paid and what skills they want to share."53
The references to "want," especially in light of a whole slew of complaints about minimum wage and safety, bear a suspicious resemblance to the exploitative, metaphysical self-help of the Prosperity Gospel or works like Napoleon Hill's Think and Grow Rich.
"Learning how to use the Universal Law of Attraction to attract more of what I want is simply learning how to tap into the UNLIMITED supply of the Universe," reads one Law of Attraction website that would be more than happy to peddle you their 43 hours of instructional audio. ("Make one single payment of $799 US and save $200 ... "54)
"Positive thinking," writes Barbara Ehrenreich in her book Bright-Sided, "has made itself useful as an apology for the crueler aspects of the market economy. If optimism is the key to material success ... then there is no excuse for failure. The flip side of positivity is thus a harsh insistence on personal responsibility: if your business fails or your job is eliminated, it must be because you didn't try hard enough, didn't believe firmly enough in the inevitability of your success."55
Some Taskrabbit workers are buying in to a new Horatio Alger mythology, especially if they do not have many previous work experiences to compare it to.
"You're the only one who's able to kick yourself in the face if you don't get paid that much, because you are the one saying 'I will do it for this amount of money,'" said Maggie, a recent college graduate and new Taskrabbit worker in Chicago.
Maggie is not hostile to unions, but is ambivalent about them. "I think I have a very skewed opinion," she said. "My father is part of the union in New York for a company, and yet he's a Republican. So I don't know how I feel about it. I can understand its importance for earlier generations, or of wanting that backbone especially when the American Dream was very possible and that was how you got it, but I feel like the American Dream is forming into something different. It isn't about owning a home, having a family, a full-time job and benefits. So while I can understand unions as a positive attribute to older generations, I don't necessarily think it speaks truth for my generation and the ones coming up."56
Another form of smokescreen comes from the fact that experienced, genuine independent contractors also join the site and find new clients. Among the workers who were willing to speak to me, many of the positive remarks came from people who indeed already had their own businesses prior to joining Taskrabbit.
"They're not just some company out there that is fly-by-night," said Anita, who works on Taskrabbit in New York. "The owner of the company is really trying to reinvent how employment works or how people can get a source of income."57
Anita specifically highlighted the fact that Taskrabbit provides a valuable escrow service for workers. Job posters deposit funds in advance, which means workers do not have to wonder whether or not they will get paid, or face the time-consuming and stressful process of billing and following up on invoices. This service would stand out to workers who are already immersed in small businesshood, but this is a different tale from that of an involuntary entrepreneur who is obliged to deal with chasing down bits of payment without any great desire to do so.
Another Taskrabbit worker with a pre-existing small business was Del, from Austin. When I spoke with him on the phone, I raised the minimum-wage question. He shrugged this off with a rationale familiar to anyone who is an old hand at providing fixed quotes on projects: it's up to you to estimate with care, and minimum wage is a moot point. If you estimate too low, you are obliged to "eat the time" and finish the job as part of being a responsible small business.58
Since there are genuine independent contractors like Anita and Del on the site and they are not differentiated in any way from someone doing entry-level assembly or grueling "pack-and-pack" work, Taskrabbit always has anecdotes to point to when they want to advocate for entrepreneurship. They can pick and choose solely those stories that work with the picture they want to paint, highlighting people who were already comfortable and experienced at working within liberty of contract. They can rebut the concept of duress by pointing to someone who wasn't under duress. The rest of the time, they have plausible deniability and legal indemnity to fall back upon.
A cyclical game
In July 2012, Peter Thiel and his venture-capital firm Founders Fund led a 13 million-dollar funding round for Taskrabbit.59 Thiel also earned a spot in Vermont senator Bernie Sanders' report, "America for Sale: A Report on Billionaires Buying the 2012 Election."
"Peter Thiel is worth $1.5 billion," Sanders said. "He has donated $6.7 million to Super PACs this year."60
According to Open Secrets, Thiel gave 2.6 million dollars to an independent PAC supporting Ron Paul for president, and 2 million dollars to the Club for Growth's Super PAC, Club for Growth Action.61
"Club for Growth is a right-wing political group established in 1999 by Stephen Moore that endorses and raises money for candidates," said Sourcewatch. "According to a February 22, 2011 article by John Nichols in The Nation, the Washington D.C. based Club for Growth is 'an organization funded by extremely wealthy conservatives to carry out their budget-stripping goals,' and that 'has been a key player in Republican Governor Scott Walker's move to take out the state's organized workers.' Nichols writes that the Club for Growth is part of a 'national strategy' to get 'newly elected Republican governors' to destroy labor and unions."62
In 2010, the Club endorsed or funded most of the best-known Tea Party Republicans running for Congress, including Sharron Angle, Joe Miller, Ron Johnson and Rand Paul.63
Thiel plays both sides of austerity with these two kinds of investments. It is a cyclical game. The Club for Growth aims to put in the politicians who will relentlessly and nihilistically cut spending, riding on the bipartisan consensus. When the cuts come and people lose their jobs, Taskrabbit is there, poised to scoop up the new unemployed and gradually make liberty of contract into a de facto standard.
A third step in the cycle comes from the conservative strategy of "starving the beast." According to Change to Win, "3-4 billion [dollars] each year in federal income and employment tax revenue is lost due to misclassification [of employees as independent contractors] ... states also cumulatively lose billions of dollars a year."64 Thiel has spoken favorably of "weakening the nation-state"65 - the less tax revenue a government brings in, the better. Revenue shortfalls create an atmosphere of crisis and a sense that further austerity is a foregone conclusion. And the cycle begins again.
Independent contractors tend to have more complicated tax returns - employees usually only have a W2 form to deal with - so they tend to be the audience for tax-preparation services and accountants who offer them deductions, expenses, and ways to save money through paying less tax. If liberty of contract gains legitimacy, governments will increasingly lose out on tax revenue which is earmarked for safety net programs. As an example, governments receive less in FICA tax - for social-insurance contributions - and FUTA tax - for unemployment insurance. Liberty of contract is another way of starving the beast over time.
Starving the beast also hurts individuals. Ben was a longtime independent-contractor truck driver- an "owner-operator." Now just shy of 70 years old and retired, he says he regrets following tax preparers' advice to take deductions. He paid in as little as possible, and now that he relies on Social Security to live on, his check sometimes doesn't last the month.
When workers are living paycheck to paycheck, Ben said, they are more likely to take any short-term savings that the tax preparer offers them.66
The plight of longtime 1099 workers like Ben could be an important precedent for many of today's involuntary entrepreneurs. The worker enjoys a quick hit of cash for bills, while the hidden costs will take a while to show up.
"What we're really doing," Busque told Inc. Magazine in 2012, "is disrupting a global labor market."67
Disruption is a strategy taught in business schools and popularized by Clayton Christensen. The traditional form of disruption is the ongoing churn of businesses destroying other businesses. When a small, limber business wrests a market away from a powerful, established business, often through lower prices or cutting out a middleman in some way, that's disruption. So the advent of cheap digital cameras disrupts film photography and, several years later, Kodak files for Chapter 11 bankruptcy. In the movie-rental business, Netflix disrupts Blockbuster and forces Blockbuster to accomodate them, buy them, or die.
Disruption is sometimes seen as heroic, especially when the entrenched business has received special favors from government or has exploited its status to engage in anti-competitive practices. "Many regulations are created by incumbents to protect their market position," writes venture capitalist Chris Dixon. "To try new things, entrepreneurs need to find a back door. And when they succeed, it will all look obvious in retrospect. Today's regulatory hack is tomorrow's mainstream industry."68
But technology writer Paul Carr sees a troubling amorality in the latest round of disruptive startup founders, who aim to disrupt not only the behemoth companies of their field, but whatever real-world laws and regulations are in their way.69
"In the same way that me stealing your dog is Disrupting the idea of pet ownership," quipped Carr in a late 2012 article.
In Silicon Valley's startup culture, Carr sees the fingerprints of Ayn Rand, and he isn't the first to point it out. Adam Curtis traces the pervasiveness of Rand on Silicon Valley in his film All Watched Over by Machines of Loving Grace. Michael Gross, in an article in 2000 on new dotcom millionaires, called Rand's philosophy their "secular religion."70 According to April Dembosky and Tim Bradshaw, Peter Thiel is another devotee of Rand, "whose political philosophy is shared by other Valley entrepreneurs."71
Carr calls Rand's philosophy "the creepy, dangerous ideology behind Silicon Valley's Cult of Disruption."
"To proponents of Disruption," said Carr, "the free market is king, and regulation is always the enemy ... The pro-Disruption argument goes like this: In a digitally connected age, there's absolutely no need for public carriage laws (or hotel laws, or food safety laws, or... or ...) because the market will quickly move to drive out bad actors."
Paypal was a disruption project. By attaining a critical mass of day-to-day users, they shoved themselves on to the radar of banks and governments. Taskrabbit is a disruption project too. They drive a wedge into how employment is done, by providing a lower price for their clients at the worker's expense. And they "disintermediate," or cut out a middleman, namely labor law and the layers of workers' protections that impede markets from being "truly free."
"What Silicon Valley still calls 'Disruption' has evolved into something very sinister indeed," Carr said.73
When an organization sees itself as heroic and gives itself permission to rationalize breaking laws as simply finding a regulatory hack, it's likely to lead to shoddy ethics in how the company conducts itself internally. Having rich benefactors probably augments the climate of impunity.
In July 2012, Taskrabbit's then-Director of Online Marketing Brian Rothenberg74 posted a glowing five-star review of Taskrabbit on the prominent consumer-reviews website Yelp.
Yelp functions like a local Consumer Reports for ostensibly unbiased information about restaurants and local businesses within a geographic area.
Rothenberg did not run a disclosure of the fact that he had worked at Taskrabbit for six months at the time of the review, and he gave the false impression that he was a typical Taskrabbit worker expressing heartfelt praise.
In January, I asked Taskrabbit's Marketing and Communications Manager Johnny Brackett whether this review was ethical.
"I hope you know we take these issues seriously," Brackett said, "and we are looking into either editing or removing the review entirely to ensure transparency."76
Brackett declined to comment on Rothenberg's reasons for leaving the review, which was up for several months. I reached Rothenberg by phone at his current job and asked him why he left the review without disclosing his interest. Rothenberg declined to comment and referred me back to Brackett.
One reason a director of online marketing might have wanted to post a fake five-star review to run at the top of a list would be to draw attention away from the one- and two-star Taskrabbit reviews towards the bottom of the web page. One such review, from late 2011, described Taskrabbit this way: "There is no way this is possibly legal. All the makings of a temp agency, but charging [sic] rabbits sub-minimum wages. This is recession exploitation."77
Around the same time that Rothenberg left his review, Taskrabbit's longtime Community Manager, Kevin Cruz, left a comparable, five-star review. He, too, did not disclose his long affiliation with Taskrabbit, posing as a disinterested poster.
"I've tried pretty much all of the service oriented websites and Taskrabbit is my favorite," reads Cruz's bogus review. "Why? The trust factor."78
Cruz no longer works at Taskrabbit. In January, I reached Cruz by phone at his new position, and asked him the same question: why did you leave a five-star review for your own company without mentioning that you had a vested interest in their success?
Cruz declined to elaborate. Both reviews have since been removed.
Kevin Carhart is a freelance writer in San Francisco. He can be contacted at firstname.lastname@example.org
1. James Crotty, "The Austerians Attack!", In These Times magazine, February 2012
2. Kim Phillips-Fein, Invisible Hands: The Businessmen's Crusade Against the New Deal, Norton, 2010, p. 322 and also cited by Crotty
4. James Crotty, "The Right Wing Assault On America is Working", Triple Crisis, March 4, 2013. http://triplecrisis.com/the-right-wing-assault-on-america-is-working/
5. Interview of Crotty by Paul Jay, "Austerity Road to 19th Century", Real News Network, November 13,2010. http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=5857
6. Interview of Thiel by Ronald Bailey, "Technology is at the Center", Reason magazine, May 2008. http://reason.com/archives/2008/05/01/technology-is-at-the-center
7. Eric M. Jackson, The Paypal Wars, World Ahead, 2006, p. 20
8. Jacob Weisberg, "High-Tech Hogwash", Newsweek magazine, October 18, 2010. http://www.thedailybeast.com/newsweek/2010/10/18/what-s-wrong-with-silicon-valley-libertarianism.html
9. Peter Thiel, Big Think website, November 21, 2010. http://bigthink.com/videos/keynesian-economics-will-be-dead
10. Jefferson Cowie, The Future of Fair Labor, New York Times, June 24, 2013. http://www.nytimes.com/2013/06/25/opinion/the-future-of-fair-labor.html
11. Thomas Frank, One Market Under God, Doubleday, p. 34.
12. Fred Turner, From Counterculture to Cyberculture, p. 223. Turner is citing Po Bronson's interview with Gilder in Wired magazine, March 1996.
13. Frank, p. 345.
14. Thomas Frank, The Wrecking Crew, pp. 100-101.
15. Turner, p. 224.
16. Richard Barbrook, Pinnochio Theory, review of Kevin Kelly's Out of Control. http://www.imaginaryfutures.net/2007/04/08/pinnochio-theory-by-richard-barbrook/
17. Blog post on taskrabbit.com, June 2011. https://www.taskrabbit.com/blog/entrepreneurship/a-history-and-economics-lesson-in-service-networking/
18. Author's phone interview and email correspondence with Carol, 2012-13.
19. Interview of Busque by Connie Loizos, "TaskRabbit's Leah Busque on Mobile, the Minimum Wage, and other Economic Indicators", pehub.com website, March 2012. http://www.pehub.com/2012/03/19/taskrabbits-leah-busque-on-mobile-the-minimum-wage-and-other-economic-indicators/
20. Alyson Shontell, "My Nightmare Experience as a Taskrabbit Drone", December 8, 2011. http://www.businessinsider.com/confessions-of-a-task-rabbit-2011-12
21. Anand Giridharadas, "Is Technology Fostering a Race to the Bottom?", New York Times, June 1, 2012. http://www.nytimes.com/2012/06/02/us/02iht-currents02.html
22. Author's phone interview with Catherine Ruckelshaus, Fall 2012
23. Robert Reich, "Entrepreneur or Unemployed?", New York Times, June 1, 2012. http://www.nytimes.com/2010/06/02/opinion/02reich.html
24. Paul Krugman, "Sequester of Fools," New York Times, February 21, 2013. http://www.nytimes.com/2013/02/22/opinion/krugman-sequester-of-fools.html
25. Janean Chun, "Leah Busque of Taskrabbit on why Micro-Entrepreneurship May Be the Key to Job Creation", Huffington Post, July 10, 2012. http://www.huffingtonpost.com/2012/07/10/leah-busque-taskrabbit_n_1651880.html
26. Runner manual
28. Kim Phillips-Fein, Invisible Hands, p. 87
29. Rick Perlstein, "Boulwarism", New Republic magazine, April 1, 2007. Not archived at newrepublic.com but available at http://www.ocnus.net/cgi-bin/exec/view.cgi?archive=107&num=27377
30. Phillips-Fein, p. 166
31. Ibid, 193
33. Ibid, 204
34. Naomi Klein, "Disowned by the Ownership Society", January 31,2008. http://www.naomiklein.org/articles/2008/01/disowned-ownership-society
35. https://www.taskrabbit.com/tasks/ironing-pressing-scarves/see_activity. Accessed August 2013.
36. Alyson Shontell, "My Nightmare Experience as a Taskrabbit Drone", December 8, 2011. http://www.businessinsider.com/confessions-of-a-task-rabbit-2011-12
38. California Labor Federation, "Policy Statements", http://www.calaborfed.org/userfiles/doc/2012/POLICYSTATEMENTS_2012_Release2.pdf
39. Author's phone interview and email correspondence with Dolores, 2012-13.
40. Runner manual
41. Author's phone interview and email correspondence with Carol, 2012-13.
42. Author's phone interview and email correspondence with Dolores, 2012-13.
43. Author's phone interview and email correspondence with Carol, 2012-13.
50. Author's phone interview and email correspondence with Patricia Ortiz, Fall 2012.
52. Author's interview with a manager at Touch of Modern, January 2013.
53. Janean Chun, "Leah Busque of Taskrabbit on why Micro-Entrepreneurship May Be the Key to Job Creation", Huffington Post, July 10, 2012. http://www.huffingtonpost.com/2012/07/10/leah-busque-taskrabbit_n_1651880.html
54. See http://www.lawofattractiontrainingcenter.com/articles/more.html and http://lawofattractiontrainingcenter.com/certified-loa-practitioner.html.
55. Barbara Ehrenreich, Bright-Sided, Macmillan, 2009, p. 8
56. Author's phone interview and email correspondence with Maggie, Fall 2012.
57. Author's phone interview and email correspondence with Anita, Fall 2012.
58. Author's phone interview and email correspondence with Del, Fall 2012.
59. Alexia Tsotsis, "Taskrabbit gets $13M from Founders Fund and Others to 'Revolutionize the World's Labor Force'",Techcrunch, July 23, 2012. http://techcrunch.com/2012/07/23/taskrabbit-gets-13m-from-founders-fund-and-others-to-revolutionize-the-worlds-labor-force/
60. Senator Bernie Sanders, America For Sale: A Report on Billionaires Buying the 2012 Election. http://www.sanders.senate.gov/imo/media/doc/072412Billionaires11.pdf
61. From opensecrets.org search results, based on Federal Elections Commission data. The search result is not available as a standalone URL, but can be accessed via the Open Secrets advanced donor search.
62. Sourcewatch editors, "Club for Growth," sourcewatch.org. http://www.sourcewatch.org/index.php/Club_for_Growth
63. Ibid, and for Miller, "Murkowski concedes GOP Senate race in Alaska," CNN, September 1, 2010. http://www.cnn.com/2010/POLITICS/08/31/alaska.murkowski/
64. Change to Win, "Backgrounder: Worker Misclassification Cheats Everyone", http://www.nelp.org/page/-/UI/UI%20Conference/Chalife.Misclassification%20Backgrounder%20.pdf
65. Interview of Thiel by Ronald Bailey, "Technology is at the Center", Reason magazine, May 2008. http://reason.com/archives/2008/05/01/technology-is-at-the-center
66. Author's interview and email correspondence with Ben, fall 2012
67. Nicole Carter and Tim Rice, "Taskrabbit: From Start-up to Global Web Market for Odd Jobs", Inc. magazine, May 3, 2012. http://www.inc.com/nicole-carter-and-tim-rice/task-rabbit-leah-busque-start-up-to-global-web-marketplace-jobs.html
68. Chris Dixon, "Regulatory hacks", cdixon.org blog post, October 10, 2012. http://cdixon.org/2012/10/10/regulatory-hacks/
69. Paul Carr, "Travis Shrugged: The creepy, dangerous ideology behind Silicon Valley's Cult of Disruption, Pando Daily, October 24, 2012. http://pandodaily.com/2012/10/24/travis-shrugged/
70. Michael Gross, "War of the Worlds", Talk magazine, December 2000-January 2001. http://mgross.com/wp-content/uploads/2012/06/altSociety.pdf
71. April Dembosky and Tim Bradshaw, "The Facebook investor out to cheat death," Financial Times, August 24, 2012. http://www.ft.com/intl/cms/s/0/7cf1b502-ec6e-11e1-8e4a-00144feab49a.html
72. Paul Carr, "Travis Shrugged"
74. Alexia Tsotsis, "Taskrabbit Acquires Service Provider Skillslate", Techcrunch, January 9, 2012. http://techcrunch.com/2012/01/09/taskrabbit-acquires-service-provider-directory-skillslate
75. Brian Rothenberg, review on yelp.com, 7/22/2012. This has since been taken down, but a screen capture is available at http://carhart.net/~kevin/rothenberg.png
76. Author's email correspondence with Johnny Brackett, January 2013.
77. Ben C., review on yelp.com, 9/30/2011. http://www.yelp.com/biz/taskrabbit-san-francisco
78. Kevin Cruz, review on yelp.com, 7/12/2012. This has since been taken down, but a screen capture is available at http://carhart.net/~kevin/cruz.png