Yesterday, I outlined the ways in which the dominant “skills-biased technical change” and “winner-take-all economics” explanations of inequality share an idealized view of both markets and technology as natural and necessary. Today I’ll write about the most influential criticism of these dominant stories that have been developed by labor economists. These focus on the central role that institutional choices played in shaping bargaining power, and through it, the ability of the managerial class and shareholders to cause stagnating wages for the median worker and the great extraction by the 1%.

If we think that that platforms and robots, ubiquitous sensors and algorithms do exert a real influence on the pattern of social relations that make up the economy, but we doubt that technology causes inequality by a “natural” process driven by its own intrinsic affordances and constraints interacting with markets, then we owe ourselves a clearer story than we have given to this point. In today’s post, I’ll describe the limits of the mainstream economists’ answer, which lies at the foundation of “the robots will take all the jobs” and the legitimation of winner-take-all markets.