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Digital and Technological Revolutions: Coming Crises?

Paper Session

Sunday, Jan. 9, 2022 12:15 PM - 2:15 PM (EST)

Hosted By: Association for Evolutionary Economics
  • Chair: Alexis Stenfors, University of Portsmouth

Cryptocurrencies: An Innovation Shaking the Footstone of Modern Money Theory

Hao Cheng
Nanchang University


Cryptocurrencies, such as Bitcoin, Litecoin, etc. have attracted huge attention as well as tremendous investment these years. They are featured with decentralization in generation and circulation, based on new technology such as blockchain, often noted as medium of exchange in areas of laundry and terrorist finance; and remarkable surge and slump in their trading prices. This paper argue that cryptocurrency emerged as a new type of virtual money to meet with certain real needs of certain interests in the society, has made its way as an innovation of new tech and grows under the permissiveness of different cultures. However, denationalization, the core value inspiring such innovation, is challenging the value of the sovereign money, which is the footstone of Modern Monetary Theory. In light of old institutionalism, ceremonial dominance determines the ceremonial feasibility of the range of permissible behavior, and the knowledge fund, incorporated in the institutional structure of society, determines the instrumental feasibility of problem-solving activities. For many nations prevailing with nationalism and supporting sovereign monetary system, it is natural to find that strict regulations against the mining and trading of cryptocurrencies have been or to be imposed sooner or later. On the contrary, blockchain, the core tech of cryptocurrency, has been widely accepted and adapted to many appliances even in nations against cryptocurrencies. Whether central bank digital currencies (CBDC) shall be open to adaption of the tech is still under careful examination and hot debate in that the knowledge fund need to grow further as to make well informed decision

From the Rule of Thumb to the Rule of the Algorithms

Rodrigo Jeronimo
São Paulo State University
Eric Scorsone
Michigan State University
Sebastião Guedes
São Paulo State University


By using a Commonsian approach to the mechanisms of control present in the wealth-creating managerial transactions, we aim to investigate the command-and-control relationship between digital platforms of ride-hailing services and their drivers. Despite being commonly defined as technology companies acting as multisided markets, thus, intermediaries between its end-users, the on-demand ridesharing platforms also share the feature of controlling its labor force – usually working under self-employed statuses – through opaque and unilaterally defined working rules by its algorithms. We argue that, by recovering Commons’ idea of going concerns and their constitutive elements of going plants and going business, platforms can be seen as governance structures whose algorithmic mechanisms have systematized with high detailed capacity the working rules of its services (car rides), substituting the role played by workers’ experience and customs in establishing the methods of work.

Making use of the early Industrial Relations terminology of “labor problems” which encompasses elements of earnings, employment, law, and management, we argue that workers higher insecurity of expectations, when summed up to their vulnerability in labor markets in times of economic crisis, such as what is happening in Brazil, create a stage in which labor has no choice other than subjecting and staying in platform activities, despite the opaque mechanisms of control.

Third Way to Go: An Update of John R. Commons' Approach

Antoon Spithoven
Utrecht University


In Western economies, dualism between labor and capital artificially evolved into dualism between human data and capital: Internet firms extract data from users of social media, search apps, and digital economic transactions in exchange for access. Accompanying infringements of privacy and indecent wealth differentials require an update of Commons’ reasonableness approach. An updated Third Way seems to be the way to go.

Independent and Major Market and Commodity Returns around the Time of Hydraulic Fracking and Horizontal Drilling Revolution

Scott Carson
University of Texas-Permian Basin


Heterodox economics is yet to address the comparative benefits between Major and Independent returns with the fracking technological revolution. The oil and gas industry is classified into the Majors—large integrated producers, and Independents, smaller nimble startups. Hydraulic-fracking and unconventional drilling techniques have transformed the oil and gas industry, and which side of Independents and Majors benefited the most with the transition is yet to be considered. Independents had greater returns with greater risk than the Majors. However, the risk-return relationship between Independents and Majors varied with the fracking revolution. A novel finding with oil and gas return variation is that fracking and unconventional drilling technology increased the likelihood wells are successfully brought into operation. With lower risk in physical production, risk is reduced in financial markets, and across oil sectors, expected returns is reduced with fracking. Unconventional recovery techniques decreased the risk of success of well completion, which decreased financial market risk, and with it, decreased expected returns after technological innovations decreased oil field risks. The sources of pre and post-fracking return variation is partitioned across and within Independents and Majors. Implications from the analysis have implications for how rents accrue to large versus small producers when facing technological change.

How the Digital Economy Challenges the Neoliberal Agenda: Lessons from the Antitrust Policies

David Cayla
University of Angers


Conceived in the 1930s as a way to renew free market liberalism, neoliberal doctrines aim to institute a competitive order that would regulate the market as well as society. Instead of promoting a mere laissez-faire approache, neoliberals believe that the market needs minimal state regulation to ensure the permanence of competitive forces (Cayla 2021).

Yet, at the Lippmann Colloquium (1938), two neoliberal agendas were at odds. For the Austrian economists Von Mises and Hayek, the main danger to competition lies in overregulation, while for the ordoliberal economists Röpke and Rüstow, the competitive order needs a “strong state” to reduce the economic power of monopolies by dismantling beforehand those firms that would be in a position of market dominance (Reinhoudt and Audier 2018).

These interpretations of how competition should be enforced have varied throughout history. The European Union, with its ordoliberal origins, tends to take an interventionist approach, while in the United States, where the Chicago School has gained influence, courts tend to avoid punishing dominant firms, fearing that such intervention would deprive consumers of the gains from economies of scale (Bradford et al. 2019).

In recent years, however, competition policies have faced a new challenge: the transformation of economies under the pressure of the digital revolution. First, economies of scale have increased as marginal costs have fallen to near zero; second, the platform economy has generated a new type of monopoly that uses the power of networks to become the sole intermediary between producers and consumers; and third, the rise of intangible assets has given dominant firms the ability to easily evade taxes.

Faced with these challenges, competition authorities initially reduced their interventionism in order to gain from economies of scale. But with the rise of the GAFAMs, they are now trying to adopt a new strategy that tends to go beyond preserving competition, aware that the digital economy raises not only economic and efficiency issues, but also democratic matters and can alter the autonomy of individuals (Zuboff 2019). As Cédric Durand (2020) suggests, the digital economy is based on a new economic and social model that is a feudal relationship.

In this new model, the neoliberal vision, based on the implementation of a fair and efficient market, is no longer accurate. As it works, the platform economy is not an alternative way to manage the market, but an alternative to the market itself. In other words, the main issue raised by the digital economy is neither market concentration nor the ability to implement fair competition and reduce the market power of GAFAMs: it is the issue of regulating an economy where markets are disappearing and where prices are no longer the product of decentralized negotiations but are created by private algorithms that function like black boxes. To face these challenges, a completely new conception of public regulation is needed.

The dynamics of encapsulation: Innovation, annihilation, and contradiction in practice

Manuel Ramon Souza Luz
Federal University of ABC
Magda Ribeiro
Federal University of Minas Gerais


This paper proposes an institutionalist analytical framework designed to understand
the contradictory relationship between innovation and annihilation within modern capitalism.
Following OIE’s perspectives on technology, encapsulation, corporate hegemony, and the
potential mismatch between institutions and social provisioning, we present an analytical
framework devised to understand contemporary innovative and annihilative processes. In this
sense, we selected two different phenomena to demonstrate our perspective. The first concerns
the contradictory relationship between biotechnology, genetic engineering, and
biodiversity. The second concerns the problematic relationship between heterodox and
mainstream economics in the beginning of 21st century.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • O0 - General