How Politics Created the Freelancing Grey Zone

To the average freelancer, plugging away at their laptop on a borrowed wireless internet connection, their situation may seem to be the accidental confluence of technological advances and a shifting, uncertain employment market. From this perspective the growth of freelancing seems to have been inevitable. Yet today’s website for freelancers should understand that they exist in their current state because of a series of political decisions made over the past few decades that created a grey zone of flexible employment. Within this grey zone, hard-won employment protections can be undone, social security allowances abolished, and minimum wage claims ignored.
None of this was accidental. It occurred under an ideological wave known as neoliberalism, which swept across the world in the late 1970s, and remains the dominant paradigm governing the majority of economic and political activities today.

Until the late 1970s freelancing was rare, not just because it was technically difficult, but because stringent regulations protected permanent employees and armed them with a set of rights and entitlements. Such conditions had been put in place over many decades through political concessions won by strong trade unions, which had amassed power and authority.

The beginning of the end of employment security and regulation can be traced back to the 1979 electoral victory of Margaret Thatcher’s Conservative Party in United Kingdom, and the Republican Ronald Reagan in the United States in 1981. Both Thatcher and Reagan set about implementing theories promoted since the 1950s by economists such as Friedrich Hayek and Milton Friedman, who advocated the retreat of government from regulation of the economy, to be replaced by unfettered markets. Employment laws and labour markets were central to this deregulatory agenda.

Underlying Thatcher and Reagan’s economic changes was a philosophy of individualism. Each person was responsible for their situation, independent of society. Answering a magazine interviewer’s question in 1987, Thatcher famously declared “there is no such thing as society. There are individual men and women, and there are families.” With society done away with, government policies could be reshaped to place the burden of personal well-being on the shoulders of the individual.

The squeezing of employment protections continues today. The most recent assaults on working conditions come under the banner of increasing “labour market flexibility”. The Global Financial Crisis which started in 2007 gave governments fresh ammunition to pressure for increased flexibility. Despite the crisis being caused by banking failures, risky investments and stock market speculation, the blame has been apportioned to the working populations of European countries. This is particularly evident in Europe, where the financial crisis has been used as an excuse to introduce new deregulations that make it easier for companies to fire employees.

The other ideological project that has created the freelancing community workforce is globalization, or the elimination of tariffs and trade barriers across much of the developed world. Major free trade agreements – signed under the auspices of the World Trade Organization, or through other bilateral and multilateral arrangements – have put workers in rich countries in direct competition with those in poor countries. Companies are able to shift their operations around the world to find the cheapest source of any input, especially labour.  Yet labour has not been given the same freedom. National borders and immigration barriers prevent people from moving around the world to find better sources of income.

In a world with free movement of capital without free movement of labour, it is to be expected that wages will be squeezed down to the lowest possible price. Economist Joseph E. Stiglitz invites us to imagine a world where the situation was reversed; where labour could move freely, but capital was restricted by high taxes and transaction controls. “Countries would compete to attract workers… They would promise good schools and a good environment, as well as low taxes on workers,” Stiglitz wrote (The Price of Inequality, 2012).

Freelancers experience the impact of globalized wages more directly than most workers. Those who undertake task work and source jobs via online portals find themselves in competition with workers around the world. They must adjust their wage bids to match those in developing countries.

Today’s open, flexible working world has come about through a series of political decisions, driven by agendas such as neoliberalism, individualism and globalization. Just as the current situation is not accidental, nor will the future shape and direction of work to be determined by the wind. The conditions in which we work – both as freelancers and employed staff – will be shaped by political decisions. Governments, acting under the influence of the strongest actors within the political system, will write the rules by which employers must play – or, as the case has been, will tear up the rule book and leave each member of society to their own fate.

Technological determinism and a lack of knowledge of political history leads freelancers to believe their working conditions came about inevitably. This lack of perspective would also allow them to cede control of their future employment situation. An improved working environment can only be achieved by recognizing the path by which we have arrived here today, and reaching for the levers of power to set a different course forward.