Big Tech is Like the Sharecropping System

After the American Civil War, former slaves and poor white farmers in the South farmed land they did not own under a system called sharecropping. Contracts that gave the landowner a percentage of the harvest, required them to buy supplies on credit from the landowner’s store at prices the landowner set, and prohibited them from selling to anyone other than the landowner. The debt was structured so that a bad harvest (or even a good one, depending on how the accounts were kept) left the farmer owing more at year’s end than at the beginning. The system was legal, entered into “voluntarily” (by people with no other options), and reproduced the economic relations of slavery without the formal institution.

Historians and economists have found systematic underweighting of harvests and overcharging of credit accounts. The system was designed to perpetuate indebtedness, not resolve it. To make a bad situation worse, the merchant providing supplies was often the same person as the landowner; if not, they usually operated as a tied supplier. The farmer could not buy supplies from a competing merchant because the crop lien pledged the entire harvest to the furnishing merchant as collateral for the advance. “On credit” prices at the furnishing merchant’s store were set at a markup over cash prices that could run from thirty to sixty percent.

By pledging next year’s crop to cover this year’s debt, the farmer legally committed future labor before that labor was performed. This is the structure of platform lock-in: time and effort are committed to a platform before the platform’s terms are known for the following year. A sharecropper who improved the land was more trapped, not less, because the accumulated investment had nowhere else to go. The same is true of a creator who has built a hundred thousand subscribers on a platform that then changes its revenue-sharing terms.

Peonage was the name for debt arrangements that crossed from exploitative into criminal. It refers to holding a worker in involuntary servitude through debt while using threats or actual violence to prevent them from leaving. Federal peonage statutes were enacted after Reconstruction, and some prosecutions did occur in the early twentieth century after investigative journalism and advocacy exposed conditions in the turpentine camps and cotton plantations of the Deep South. These prosecutions targeted individual employers; they did not address the systemic accounting fraud or the market structure that produced mass indebtedness.

The platform equivalent of this operates through percentage fees, arbitrary algorithmic changes, and paid promotion requirements. When YouTube changed its monetization criteria in 2018 to require one thousand subscribers and four thousand watch hours before a channel could earn advertising revenue, channels that had not yet crossed those thresholds were cut off from income they had been building toward. When organic reach on Facebook declined sharply for business pages after 2012, businesses that had invested in building Facebook audiences were told they could pay for promotion to reach the audiences they had already acquired. The audience is the crop; the algorithm change is the landlord raising the rent after the harvest is in.

A related but distinct mechanism appears in gig economy work, which parallels the putting-out system of early modern textile production. Merchants in eighteenth and nineteenth century Britain supplied raw materials to rural householders, who processed them at home using their own equipment. The merchants then collected the finished goods at prices they set. The household owned its tools; the merchant owned the raw material, the finished product, and the customer relationship. If demand fell, the merchant stopped delivering material and the household had to absorb the income shock. The merchant’s flexibility was the household’s precarity, by design.

Gig economy platforms reproduce this structure. The delivery worker owns the car or bicycle. The platform owns the customer relationship, the pricing mechanism, and access to the market. A worker who attempts to find customers outside the platform risks deactivation, which functions as accusations of theft or embezzlement did in the putting-out system: because formal ownership of the customer relationship belongs to the platform, any attempt to access that relationship independently constitutes a violation of the terms of service that governs continued access to work.

E.P. Thompson’s account of the transition from putting-out to factory production made a point that factories were initially not more efficient at producing cloth: they were more effective at eliminating worker autonomy. Before industrialization, workers controlled their own time and pace, could share work across household members, and could resist disadvantageous terms through slow work, variable quality, and informal coordination. The factory closed off these responses: workers arrived at fixed times, worked at a supervised pace, and until labor unions emerged, had no practical means of collective withdrawal. The shift to app-based platform work is doing the same thing today. The app is not merely a more convenient interface. It is supervisory infrastructure that monitors pace and completion rates and eliminates the degrees of freedom that less tightly managed arrangement permitted.

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Blackmon2008

Douglas A. Blackmon: Slavery by Another Name: The Re-Enslavement of Black Americans from the Civil War to World War II. Doubleday, 2008, 978-0385722704.

Daniel1972

Pete Daniel: The Shadow of Slavery: Peonage in the South, 1901-1969. University of Illinois Press, 1972, 978-0252061462.

DeVries2008

Jan de Vries: The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present. Cambridge University Press, 2008, 978-0521719254.

Thompson1963

E.P. Thompson: The Making of the English Working Class. Knopf, 1966, 978-0394703220.