When Everyone Is Independent, Spending Becomes Cautious

What Happens to Spending When Everyone Is “Independent”

A country where everyone is a business owner or an independent contractor sounds, at first glance, like the dream: maximum freedom, maximum hustle, minimum bureaucracy. But it also implies something counterintuitive.

If everyone’s income is volatile, the whole country starts behaving like a nation of CFOs.

Not because people become morally superior. Because uncertainty changes the default setting of the human brain: you stop spending like a salaried person and start spending like someone protecting runway.

Why contractors spend differently

A salaried employee experiences money as a stream. A contractor experiences money as a set of lumps that may or may not arrive on time.

That alone changes everything:

• Income volatility creates precaution. When the next month isn’t guaranteed, your “normal” becomes caution. You build buffers. You delay upgrades. You treat large purchases like decisions, not rewards.
• Every expense competes with reinvestment. Salaried logic is: “After rent and bills, this is disposable.” Business logic is: “This could fund growth, tools, marketing, inventory, learning, or simply survival.”
• Fixed commitments feel dangerous. EMIs, long leases, subscriptions, lifestyle inflation—these look fine when income is predictable. When it isn’t, fixed costs become a trap.
• Status signalling shifts. Employees often signal through visible consumption because their status is externally legible: title, company, salary band. Entrepreneurs and contractors signal through less visible things: cash position, optionality, resilience, time, ownership.

So yes, in aggregate, a fully independent society likely spends less impulsively and more selectively. People don’t become stingy; they become allocation-minded.

Spending doesn’t disappear. It mutates.

If you remove stable payrolls from an economy, you don’t get a nation of monks. You get different spending priorities.

What tends to fall:

• impulse discretionary shopping
• “reward myself” purchases
• high fixed-cost lifestyles
• consumption used as emotional regulation
• conspicuous upgrades that don’t improve capability

What tends to rise:

• tools, software, and equipment
• skill-building and education
• health and risk protection (when available)
• time-saving services (outsourcing chores to buy back focus)
• network-related spending (events, mobility, relationship maintenance)
• experiences over objects (because objects feel like locked capital)

The surface-level economy may look “poorer” because less money is wasted performatively. Underneath, the society might be building stronger balance sheets.

Why Governments Love “Jobs” (Even When They Praise Entrepreneurship)

This is the part people don’t like saying out loud: jobs are also demand engines.

A salaried job does three macro-level things at once:

1. Stabilizes income
2. Encourages commitments (rent, loans, subscriptions, schooling)
3. Makes people psychologically safe to spend

When people feel safe, money moves. When money moves, businesses can forecast demand. When demand is forecastable, hiring becomes less risky. That cycle is politically sacred because stability is governable.

The darkly practical truth is: governments don’t only want citizens to be productive. They want them to be confident enough to consume on schedule.

What happens if production rises but spending doesn’t

A society can get very good at producing things—more efficiently, with fewer workers, with more automation—while demand stays weak because people don’t feel secure.

When demand is weak, you can get:

• price pressure downward
• inventory pile-ups
• business failures
• layoffs (which weaken demand further)

Image credit: Wikimedia Commons

This is one reason policymakers obsess over “consumer confidence” like it’s a national resource. In a consumption-driven model, it basically is.

India’s Tension: Encourage Business, Still Need Jobs

On paper, this looks contradictory: India talks up entrepreneurship, startups, and “ease of doing business,” while also worrying about employment.

But it’s not hypocrisy. It’s triage.

India’s scale makes a purely formal-job-first strategy hard to execute quickly. Large companies do not hire in proportion to output the way they used to. Even when GDP grows, the hiring intensity can be low. Meanwhile, a massive number of people need livelihoods—immediately, not in some future industrial wave that may or may not arrive.

So small business formation becomes the pressure-release valve. Not because it’s perfect, but because it absorbs people faster than waiting for ideal formal employment to materialize.

That includes:

• tiny retail
• delivery and logistics work
• informal services
• micro-manufacturing
• freelance work
• and, increasingly, platform-mediated gig work

In that sense, the Indian state’s posture often looks like: build growth capacity and absorb livelihoods however possible, then use welfare/subsidies/public hiring to patch the instability.

It’s an uneasy balancing act: you want the dynamism of entrepreneurship, but you also want the smooth consumption curve that stable salaries create.

The Gig Economy: India’s Life Raft That Everyone Wants to Punch

This is where the argument gets emotionally loaded, and where it’s possible for Deepinder Goyal and a bunch of “armchair communists” to be right at the same time.

India is uniquely suited to gig platforms because the model fits three realities:

• there is massive labour supply
• entry barriers can be low (a phone + a vehicle can become income)
• urban demand is fragmented (food, rides, errands, last-mile delivery)

In much of the West, gig work is often framed as a downgrade: precarious work replacing stable employment. In India, gig work frequently replaces something worse: no work, or work that is even more informal, even more exploitative, and completely invisible.

So opposition can feel “undeserved” when it sounds like people are trying to destroy one of the few scalable livelihood machines in the country.

Where the platform CEOs are right

Stripped of tone and Twitter theatrics, the pro-platform argument is straightforward:

• Gig work is flexible and often chosen for that flexibility.
• Forcing employment-style benefits raises platform costs.
• Higher costs raise prices and reduce demand.
• Reduced demand means fewer gigs, fewer payouts, fewer livelihoods.

In a price-sensitive market, that chain is not theoretical. A small increase in costs can break the unit economics at the margin, and the margin is where a lot of real people live.

So yes: naive “just make them employees” moralizing can backfire.

Where the critics are also right

The best critique isn’t “jobs good, gigs bad.” It’s that gig work often carries an asymmetry of power that the word “independent” conveniently hides.

Many gig workers:

• carry the downside risk (accidents, illness, income shocks)
• are managed by algorithms (ratings, incentives, penalties)
• cannot truly negotiate pricing
• can be deactivated with limited recourse
• may struggle to build portability across platforms

That’s not the romantic freelancer model. That’s closer to outsourced employment risk, packaged as flexibility.

So yes: criticizing the current shape of gig work is not inherently anti-worker or anti-progress. Wanting basic protections isn’t communism. It’s realism about risk.

The Real Disagreement: Where Should the Safety Net Live?

This is the core point the debate keeps dodging.

There are two broad options:

• Load the safety net onto platforms. Mandate benefits through employer-like classification. Outcome: higher costs, potentially lower scale, fewer gigs.
• Build a portable, external safety net. Decouple protection from employment classification. Outcome: preserve flexibility and scale while improving worker security.

For India, the second path seems more aligned with reality. Not because platforms are saints, but because forcing a Western employment framework onto a labour market that already runs on informality can accidentally shrink one of the few functioning absorption mechanisms.

You don’t improve worker dignity by deleting worker income. You improve it by reducing risk without killing demand.

Conclusion

A country full of contractors would likely spend less impulsively, not because people hate consumption, but because instability forces intentionality. That’s why governments keep romanticizing entrepreneurship while still chasing formal job growth: jobs make demand predictable, and predictability makes economies easier to steer. India’s gig economy sits right inside this contradiction—valuable as a livelihood engine, flawed in how risk is distributed. The argument isn’t whether gig work should exist; it’s whether a modern safety net can exist without strangling the very system currently feeding millions.