Why Does the Media Pit Labor Against Capital?

The Evolving Definition of “Worker” in the Modern Economy

The recent revision of lyrics by Dolly Parton for a Squarespace Super Bowl advertisement sparked discussion regarding a fundamental shift in the understanding of employment. The alteration highlighted a challenge within the English language itself: the traditional concept of a “worker” is undergoing redefinition.

Celebrating Entrepreneurship

As Parton’s updated lyrics celebrated the spirit of entrepreneurs, some voiced criticism. They argued it promoted an “empty promise” inherent in capitalist systems, suggesting those pursuing business ownership were still fundamentally “workers” deserving of protection from large corporations. However, others recognized a growing complexity within our economic structure, acknowledging Parton’s insight.

Indeed, these revised lyrics reflect a change in the relationship between capital and labor over the past four decades. The notion that advancement is solely “a rich man’s game” and dependent on accumulating wealth is fading. Today’s workforce possesses different opportunities than those available in 1980 when the original song was released.

Beyond the Capital-Labor Divide

While abusive corporate practices exist and a robust social safety net remains crucial, a more nuanced reality is often overlooked. The traditional division between capital and labor appears increasingly outdated, a relic of a simpler era. Despite this, media outlets frequently reinforce this dichotomy, perpetuating the idea of labor and capital as opposing forces. This tendency may be inherent in human nature.

Alternatively, it could be driven by the desire to generate engagement – more newspapers are sold, and more clicks are garnered through conflict, whether genuine or manufactured. The human inclination to categorize and simplify, combined with this media dynamic, contributes to the continued framing of the economy as a battle between opposing sides.

The Rise of the Entrepreneurial Spirit

The reality of the economy, like most things, resides in the gray areas – in the fluidity and movement between different groups. The U.S. economy has historically been entrepreneurial, from its earliest explorations to its governmental formation, expansion, and eventual industrialization. Entrepreneurs have consistently been at the forefront of progress.

Currently, approximately 60 million individuals engage in entrepreneurial activities in some capacity. The majority operate on the front lines of the economy, functioning as freelancers or pursuing side businesses. Many supplement their income through platforms like Uber, GrubHub, and Etsy, becoming their own bosses and forging independent livelihoods.

Access to entrepreneurial opportunities has never been greater. Technology empowers individuals, allowing a single person with a kitchen table to innovate and compete with established corporations, a feat unimaginable four decades ago.

Challenging the False Narrative

Victor Hwang, CEO of Right to Start and former vice president of entrepreneurship for the Kauffman Foundation, identifies the capital-versus-labor debate as “the biggest false narrative.” He argues it’s an artificially constructed conflict – employer versus employee, large versus small, corporation versus worker – that fosters a misleading perception of opposing forces within the economy.

However, economic and governmental discussions are often framed around the dichotomy of capitalism versus socialism, or corporations versus workers. This increasingly divisive rhetoric bears the hallmarks of deliberate polarization, similar to debates surrounding climate change or gun control. Certain political factions have successfully divided the country to obstruct governmental action.

The Cost of Division

Consequently, progress on vital issues like universal healthcare, parental leave, and infrastructure improvements is stalled. We remain preoccupied with fighting over ideological battles instead of addressing practical needs that would, incidentally, stimulate entrepreneurship and small business growth.

The Need for New Language

The persistence of this conflict stems, in part, from a lack of appropriate language to describe the current economic landscape. “These debates should be viewed as part of a larger discussion,” Hwang suggests. “We should be striving to encourage highly innovative people and companies. What new classifications do we need to develop to accurately define roles within the economy?”

A system that empowers more individuals to become producers and entrepreneurs is essential. We need to foster an environment that encourages problem-solving and the creation of opportunities within communities. Instead, the current system favors established entities, perpetuates the status quo, and stifles innovation through divisive tactics.

A Shift in Perspective

This tension arises from a neoliberal worldview that gained prominence in the late 20th and early 21st centuries. Beyond simply advocating for free markets and open trade, this perspective prioritized the growth of large corporations, often at the expense of smaller businesses. The value of these smaller, in-between entities was often overlooked, and their impact remains inadequately measured.

When assessing the “economy’s” health, attention typically focuses on the performance of the largest publicly traded companies, such as those in the S&P 500 or the Dow Jones Industrial Average. This explains why Main Street business owners struggle to reconcile positive economic reports with their own experiences of closures and challenges.

Redefining Economic Actors

In their book, “The New Builders,” the authors propose the term “builders” to describe entrepreneurs. This word, rooted in Old English, signifies “to be, exist, grow.” In an era defined by constant change, builders retain ownership of their labor, fostering independence and ultimately, capital accumulation.

It’s often forgotten that the majority of these builders – small business owners – create opportunities with limited resources. The Kauffman Foundation reports that 83% of businesses are launched without bank financing or venture capital. Yet, small businesses contribute nearly 40% of U.S. GDP and almost half of all employment. As David Smick noted in his book, “The Great Equalizer,” they represent a powerful force for economic opportunity.

Embracing Fluidity and Ownership

Technology has fundamentally altered the business landscape, offering the potential to revitalize the small business economy. Rather than forcing a choice between labor and capital, we should encourage fluidity between the two. Expanding capital ownership – through savings, investment, and broader access to investment opportunities – will drive wealth creation and foster economic activity for future generations.

A version of this article originally appeared in the Summer 2021 edition of The International Economy Magazine.