Commons' Reasonable Value and the Gig Economy: Lessons for the Twenty-First Century

Abstract

The gig economy has opened a new set of institutional arrangements in modern capital and labor markets. New and ongoing attempts exist to structure the legal and informal institutional arrangements through which these new markets operate. One example on the global stage is a research initiative called Fairwork, which attempts to create a template for evaluating platforms and building fair relationships between workers and companies. The question remains as to whether we have the tools to evaluate these new institutional arrangements. This article specifically focuses on the political economy contributions of Original Institutional Economics scholar John R. Commons, as expressed in his theory of reasonable value. We define four key criteria that underlie Commons' theory of reasonable value. These criteria are then applied to the Fairwork project and its evaluative process to assess whether it meets the criteria of reasonable value and contributes to its establishment in solving the labor problems of the digital era. This will provide a potential pathway for considering other institutional arrangements in the new gig economy.