In urban spaces throughout the country, app-based ridesharing platforms like Uber and Lyft have a greater impact on the economy than what meets the eye. For years, these services were rarely regulated, and there were minimal protections in place for individuals driving for the companies. In recent years, states such as New York and California have become vocal in their crusades to regulate the app-based economy, including California’s keystone statute Assembly Bill 5. In the previous episode of this two-part series, host Dennis Wisco introduced key policies at play and delved into the Classical Economic interpretation of the impact of California Assembly Bill 5 on the economy. Listen in as Dennis outlines key elements of Keynesian Economics, and how it applies to the regulation of the gig economy.
Keynesian economic theory is a school of thought developed by British economist John Maynard Keynes in the 1930s that supposes the totality of spending in the economy, and its impact on output and inflation. Essentially, Keynes argued that a healthy economy depends on the government to regulate, balance, and manage economic opportunity. In his 1936 book, The General Theory of Employment, Interest, and Money, Keynes discusses the idea of “perfect competition,” which exists in a close-to-ideal economic society. Under this model, the government is flooded with money in order to create economic opportunities. Therefore, the Keynesian model argues against the California App-Based Driver’s Regulation Initiative in order to keep AB-5 in effect and thus allow the government to continue to regulate the gig-based economy’s labor protections as they relate to app-based drivers.
Tune in to this episode to hear excerpts from Keynes’ book and how this theory applies to current policy. Dennis describes the line in the sand between the Classical and Keynesian perspectives as they relate to California Assembly Bill 5 and protections for app-based drivers. With key policies and initiatives persistently shaping business models for the mobility of people and goods, it is critical for us not only to exercise our right to vote but likewise for us to be informed, voters. Find the California App-Based Driver’s Regulation Initiative question on the California ballot this coming November.
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What Keynesian Economics Would Say About AB5