Exponential: Order and Chaos in an Age of Accelerating Technology

by Azeem Azhar

The cause of the decline of labour’s share of the economic pie is multifaceted. But it is closely related to the shift to the exponential economy. Four key causes stand out. Globalisation, which drove down wages in the West as companies offshored jobs to cheaper locations across the world. The decline of unions, which meant workers lacked the bargaining power to stop economic rewards going to the owners of capital (we’ll return to this in a moment). The rise of the intangible economy, which reduced the relative value-add of the average worker – more value was being created by know-how, software and data, stewarded by smaller numbers of highly specialist workers, than by the human sweat of the larger parts of the workforce. And superstarification – as markets consolidated around ever-fewer superstar firms, there was less competition for labour and so workers had less leverage.77 These are all hallmarks of the rise of exponential technologies – the emergence of a global, high-tech, intangible economy, dominated by a handful of big firms. According to one study, more than two-thirds of the loss to workers results from the transition to intangibles and the growth of superstar firms.