Wednesday, August 06, 2014

Press the Accelerator: is turning Metro employees into entrepreneurs a good idea?

The business of business has nothing to do with "addressing inequality". The business of business is to maximize profits, even if it means supporting or generating inequality. In the 1950s, businesses had to be forced to acknowledge the civil rights of African Americans. It was not a benevolent free market that incorporated respect for human rights. It was a combination of government coercion and popular and political movements that forced businesses to comply.

As I learn that Mayor Karl Dean through his Office of Innovation is "innovating" Metro employees to become entrepreneurial by means of a "City Accelerator", I am concerned, not excited:
Through the Entrepreneur Center, we help really smart Metro employees learn about these tools, and turn them into quasi-entrepreneurs ... inside of Metro government so that they can make their ideas real businesses and real solutions for our city .... During the accelerator two more cohorts of innovation fellows will create new innovations for Metro government

The problem with this is it sounds exactly like the Republicans' decades old saw that "government should be run like a business," which has been tried and failed so many times in recent history. Disruption and innovation are the latest fad jargon for what is going on in the tech industry, which moves like gang busters in Nashville. But when stripped of the hype, the ideas amount to warmed-over conservative shut-down of public goods guaranteed by a democratically elected government.

Innovators invariably look for a different set of rules outside of government regulations by which to be "free" and to operate on their own. Then again, so do many Republicans.

Entrepreneurs by definition are people who risk their own money in order to start a business or profit-making enterprise. (Never mind that Nashville's Entrepreneur Center is heavily subsidized). Governments in democracies focus on providing access to broadly shared goods, like clean water, public safety, preserved undeveloped green space, transportation options and right to assembly. At times those purposes are complimentary, at times they are not.

For example, privatizing public education invests venture capital dollars heavily subsidized by the Obama Administration so that investors can experience a return in the education marketplace while selecting and keeping the students the corporations want rather than providing equal education opportunities for every student (the very purpose of the idea of government-provided education). Regardless of student development and welfare the bottom line is to avoid risk and maximize financial benefits.

A problem with turning government workers into entrepreneurs is that they will logically act to maximize profit-making enterprise regardless of whether it meets the test of universal accessibility. When they come up against regulations, even ones designed to protect consumers from an indifferent and arbitrary marketplace, they might look for ways around them (as if savvy government bureaucrats have never done that before).

Worse than trying to do something more disruptive than the regs allow is insisting, as Director of Financial Empowerment Erik Cole does in the video, that innovation can work "within the context of poverty" to solve inequality. Look at companies with reputation for greatest innovation before you buy his logic. Two start-up ride-sharing companies--attempting to disrupt cab companies and the government rules that regulate them--do not seem to be doing much to end inequality in our lifetime (are they even disrupting it?)

But it can be too easy to forget that people make “instant” happen. And, generally, these people are not a traditionally stable workforce. They are instead a flexible and scalable network of workers — “fractional employees” — that tap in and tap out as needed, and as suits them.

It’s estimated that more than 100,000 of these jobs have been created, especially due to the largest on-demand mobile services: The ride-sharing companies Uber and Lyft, whose drivers provide alternatives to taxis and other forms of transportation.

The Uber-style model works when a company can turn that kind of disparate workforce into a reliable branded service. It’s not quantum computing, but after you click “buy now,” it falls to someone to do the hard and sensitive work of moving physical stuff around in the real world.

Uber says it is creating 20,000 U.S. jobs per month by allowing drivers to tap into its ride-hailing service in their local cities by renting a phone from the company (it used to be free).

And so, at its core, you might think of the instant gratification economy as a story about jobs — new kinds of jobs. Here’s how it works: People like to get stuff when they want it. And, because of smartphones and smart logistics software, deliveries can happen much more cheaply and quickly, especially in cities.

So, the availability of on-demand services generates more demand. To meet it, companies bring on more workers. And ultimately, finding one of these jobs — or often, more than one of them — can create living wages for people who might otherwise be out of work.

But it’s not all shiny happy job creation. It’s not terribly uplifting to think that the future of labor is delivering stuff to rich people.

That does not sound promising at all for low wage workers and homeless people. The expectation is not that workers achieve stability in the fluid "sharing economy" (or is that "service economy"?). The inflexible mantra is "stay flexible and scalable".  The goals of democratic government and the sharing economy work at cross purposes if the goals are equality, social justice and labor stability. If a few people actually achieve a living wage, it will like charter schools offering a way out of poverty to college for a small number of high school students, while the charter school corporations get rich.

I do not have a problem with innovating in government. One of the biggest innovators in U.S. history was Franklin Roosevelt's New Deal. I do have a problem with dismantling government programs and precautionary regulations under the banner of absolute freedom for private enterprise, especially the absolute freedom to evangelize government workers and turn them into drones who support business innovators more than they advocate for ordinary Nashvillians.

UPDATE: Beyond how business innovation actually changes income inequality is the specific question of Karl Dean's practices dealing with homelessness before the City Accelerator was a prospect. Last year, local pastor Jay Voorhees observed that the Mayor's Office has a poor track record on helping the homeless:

...outside of some basic lip service, Mayor Dean has not seemed particularly interested in the social safety net side of governmental services, and certainly not the challenges of the homeless community. In the days after the 2010 floods the mayor’s office was noticeably missing in trying to address the needs of the former tent city residents, leaving the question of how to deal with this population to a set of dedicated volunteers and clergy. The Metro Homelessness Commission has languished during the Dean administration, some of which can be attributed to its members, but part of which is reflective of a mayor who is more concerned with creating new business opportunities than assisting those who are down and out.

It is worth noting that Erik Cole, who appears in the video and makes comments supporting the use of business-oriented innovations to help the homeless, was appointed by Mayor Dean to chair the Metro Homelessness Commission (2008-2012). As council member, Mr. Cole always voted with the Mayor when it came down to spending that favored business interests.

Neither the Office of Innovation nor the Mr. Cole's Office of Financial Empowerment look like improvements on Karl Dean's general disinterest in policies of social uplift. It is hard for me to believe as the video claims that the Mayor has actually lost sleep over the problem of income equality given his past lip service without tangible actions. We cannot expect the City Accelerator to do anything more than help the involved business interests and the Entrepreneur Center.

UPDATE: mayoral candidate Megan Barry loves her some disruptive innovation. Her supportive comment on Nashville's bid on the city accelerator website:

Like Erik Cole, Council Member Megan Barry never bucked Karl Dean on policies that served business interests first. Her campaign for mayor seems to angle now towards a kinder and gentler mock-up of Karl Dean. She may actually lose sleep over income inequality. However, her campaign for council once promised to be a voice for everyone in Metro government and we see how that populist tone failed to materialize in real policy. I doubt a Mayor Barry would do much beyond lip service to the intention of leaving no one behind. I have never witnessed her hard-nosed enough to challenge the powers that be that leave people behind in the first place.

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