Mainstream economists tend to pride themselves on the discipline’s resemblance to science. But growing concerns about the reproducibility of economic research are undermining that source of legitimacy. These concerns have fueled renewed interest in another aspect of economic thought: its narrative nature. When presenting or framing their work, neoliberal economists tend to tell stories about supply and demand, unintended consequences, and transaction costs in order to justify certain policy positions. These stories often make sense, and warn policymakers against simplistic solutionism. For example, in the case of platform capitalism, a neoliberal economic account tends to praise firms like Uber, Airbnb, TaskRabbit, and Postmates for promoting labor competition and improving quality, by telling a simple narrative about the incentives created by reducing transactions costs and creating more opportunities for individuals and firms to compete to provide services. This account also emphasizes how easily efforts to regulate the terms of such employment may be captured by incumbents—an “unintended consequences” story.
However, as Simon Stern warns, the “satisfaction created by a fitting conclusion can beguile us into crediting a story, leading us to accept too readily that it has achieved its explanatory aims.” For decades after Russell Hardin crafted a narrative about the “tragedy of the commons,” economists cited it as a rationale for imposing private property rights. But empirical research revealed “commons” arrangements that did not end tragically. Legal scholar Carol Rose countered Hardin with a “comedy of the commons,” telling a very different story about opportunities for mutual aid and sustainable use of shared resources.
One may challenge the narratives of conventional, neoliberal economics by contesting the empirical validity of the factual foundations of its narratives. Such an empirical approach is one way of pursuing a fruitful hermeneutics of suspicion. But it is not sufficient to dislodge conventional narratives from the heuristics so often resorted to by policymakers. Rather, just as it “takes a theory to beat a theory,” a plausible counternarrative is far more likely to displace a conventional narrative than isolated empirical challenges to the conventional narrative’s factual foundations. This essay develops a counternarrative to dominant approaches to platform capitalism, schematically presented below.
Frank Pasquale is Professor of Law at the University of Maryland. He has served on the National Science Foundation-sponsored Council on Big Data, Ethics, and Society, and presently serves on the program committees of the Workshop on Data and Algorithmic Transparency and the Neural Information Processing Systems’ Symposium on Machine Learning and the Law.