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# Digital Capitalism

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Foxconn (section 3.3), play labour at Google (section 3.4), precarious platform workers (section 3.5), and Facebook labour (section 3.6).

2.3.1 Technology and Society

Some observers, such as McLellan (1993, xviii) argue that the underlying Engels approach in CWCE is “a technological determinism that was to remain with Engels all his life”. There are indeed some formulations in CWCE that can create such an impression: The “industrial revolution […] altered the whole civil society” (CWCE, 15); the “proletariat was called into existence by the introduction of machinery” (CWCE, 29)

But Engels leaves no doubt that capitalist relations of production, that is private property relations, the class relation between capital and labour and the profit imperative, shape the development and application of machinery. He says that capitalism is the cause of misery: The “great central fact” is “that the cause of the miserable condition of the working class is to be sought […] in the capitalistic system itself” (CWCE, 314). When discussing machinery, Engels points out that the social conditions under which technology exist are the factors that have a decisive influence on technology’s impacts on society: “The consequences of improvement in machinery under our present social conditions are, for the working man, solely injurious, and often in the highest degree oppressive” (CWCE, 149).

In CWCE, Engels often describes class relations as competition and makes clear that not machines, but the transformation of class relations created the proletariat. Competition – “the battle of all against all” – “created and extended the proletariat” (CWCE, 87). Capitalist competition means a class conflict between capital and labour but also competition between capitalists that results in the centralisation of capital and competition between workers, such as between the “power-loom weaver” and “the hand-loom weaver” (CWCE, 87).

Engels (1848b, 482) inserted a note to the 1888 edition of the Manifesto, saying that by

bourgeoisie is meant the class of modern Capitalists, owners of the means of social production and employers of wage-labour. By proletariat, the class of modern wage-labourers who, having no means of production of their own, are reduced to selling their labour-power in order to live.

Capital means “the direct or indirect control of the means of subsistence and production” as “the weapon with which this social warfare is carried on” (CWCE, 37–38).

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The bourgeoisie is the class of property-holders (CWCE, 281). The bourgeoise measures “[a]ll the conditions of life […] by money” (CWCE, 282). The decisive aspect of technology in capitalism is that capitalists own technologies as private property that is a means of production used for accumulating capital and the production of surplus value and commodities.

Also in Outlines of a Critique of Political Economy, a foundational text of Marx’s and Engels’s approach, young Engels (1843, 442–443) stresses that science and technology are instruments in the hands of the bourgeoisie:

In the struggle of capital and land against labour, the first two elements enjoy yet another special advantage over labour – the assistance of science; for in present conditions science, too, is directed against labour. Almost all mechanical inventions, for instance, have been occasioned by the lack of labour-power; in particular Hargreaves’, Crompton’s and Arkwright’s cotton-spinning machines. There has never been an intense demand for labour which did not result in an invention that increased labour productivity considerably, thus diverting demand away from human labour. The history of England from 1770 until now is a continuous demonstration of this. The last great invention in cotton-spinning, the self-acting mule, was occasioned solely by the demand for labour, and rising wages. It doubled machine-labour, and thereby cut down hand-labour by half; it threw half the workers out of employment, and thereby reduced the wages of the others by half; it crushed a plot of the workers against the factory owners, and destroyed the last vestige of strength with which labour had still held out in the unequal struggle against capital.

Marx (1859, 264) characterised the Outlines as a “brilliant essay on the critique of economic categories” and directly referred to it several times in Capital Volume I (Marx 1867, 168 [footnote 30], 253 [footnote 5], 266–267 [footnote 20], 788 [footnote 15]). In the Outlines, Engels points out that “the mental element of invention, of thought” (Engels 1843, 427), as in the form of science, is part of human labour and the “human, subjective side, labour” (p. 427) of production. In work, the human being is “active physically and mentally” (p. 428). Engels here, on the one hand, points out the dialectic of mental and physical activity in work and on the other hand identified mental work, or what today is often called knowledge or information work, as an important aspect of production.

The assumption that Engels was a technological determinist cannot be sustained. He analysed technology in capitalism as embedded into class relations so that there is capitalist ownership of technology as private property that is utilised as means for the production of surplus value, commodities, and profit.

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2.3.2 Digital Technology and Relative Surplus-Value Production

In the Grundrisse, Marx (1857 [1858]) introduced the notion of surplus-value, by which he means that during a portion of the work, workers produce unpaid labour that capitalists appropriate and turn into monetary profit. Marx (1867, 645) distinguishes two methods of surplus-value production: “The production of absolute surplus-value turns exclusively on the length of the working day, whereas the production of relative surplus-value completely revolutionises the technical processes of labour and the groupings into which society is divided”. Absolute surplus-value production means the lengthening of the unpaid part of the working day. Relative surplus-value production is the increase of productivity so that more value is produced during a certain time period than before. Engels anticipated both concepts in CWCE.

Engels gives many concrete examples of the increase of productivity through the introduction of new technologies. In the cotton industry, the invention of the jenny “made it possible to deliver more yarn than heretofore” (CWCE, 18). The introduction of the powerloom further increased the productivity of the English cotton industry: “In the years 1771–1775, there were annually imported into England rather less than 5,000,000 pounds of raw cotton; in the year 1841 there were imported 528,000,000 pounds, and the import for 1844 will reach at least 600,000,000 pounds” (CWCE, 21). Similar productivity increases could be observed in other industries, for example, the manufacturing of wool: “In 1738 there were 75,000 pieces of woollen cloth produced in the West Riding of Yorkshire; in 1817 there were 490,000 pieces, and so rapid was the extension of the industry that in 1854, 450,000 more pieces were produced than in 1825. In 1801, 101,000,000 pounds of wool (7,000,000 pounds of. it imported) were worked up; in 1855, 180,000,000 pounds were worked up, of which 42,000,000 pounds were imported” (CWCE, 22–23).

Engels describes the phenomenon of relative surplus-value production but did not have a theoretical concept naming this process. Marx later introduced based on Engels the concepts of surplus-value and the methods of surplus-value production.

Since the middle of the 20th century, the capitalist invention and the capitalist application of digital production technologies has led to significant increases in productivity. Just like Engels observed the impacts of technologies such as the steam engine and the power loom, today we can observe the effects of the digitalisation of production that has increased productivity.

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Table 2.1 shows productivity growth data for the G7-economies. It uses labour productivity growth as a measure of productivity. Labour productivity is a statistical measure of the gross value added (measured in constant US\$) produced per hour worked in a particular industry. It calculates labour productivity by diving the total value added in the industry during one year by the total amount of working hours in that industry. The data in Table 2.1 shows the ten-year growth rate of labour productivity. Not all data was available, so some fields have been left undefined. In advanced capitalist countries, labour productivity has more than doubled over a time period of forty years (1970–2010). In the analysed national economies, it takes on average between 26 and 44 years to double the productivity of manufacturing. This was also the time when computing was introduced in manufacturing as a production technology. Capitalist digitalisation has resulted in large productivity growth in manufacturing and other industries.

Industry 4.0 is about technologies that combine the Internet of Things, Big Data, social media, cloud computing, sensors, artificial intelligence and robotics in the production, distribution and use of physical goods. The bourgeoisie has declared the fourth industrial revolution to try to automate the production, distribution, handling, repair, and disposal of industrial goods such as cars (Fuchs 2018c). It hopes to increase the profit rate of the manufacturing industry.

Engels pointed out that the capitalist shaping and use of industrial technologies turned workers into “machines pure and simple” (CWCE, 17). The capitalist shaping, development, design, and use of digital technologies has contributed to forms of alienation such as the enslavement of mineworkers who extract the physical resources out of which digital hardware is manufactured, long working hours in the assemblage of hardware and in the software and creative industry, an always-on-work-culture mediated by laptops, phones and tablets as means of production, precarious freelancing in the digital industries, etc.

2.3.3 Absolute Surplus-Value Production at Foxconn

Engels gives a picture of the terrible conditions that members of the working faced in England in the 1840s. One of his examples is the dress-makers in London:

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They employ a mass of young girls – there are said to be 15,000 of them in all – who sleep and eat on the premises, come usually from the country, and are therefore absolutely the slaves of their employers. During the fashionable season, which lasts some four months, working-hours, even in the best establishments, are fifteen, and, in very pressing cases, eighteen a day; but in most shops work goes on at these times without any set regulation, so that the girls never have more than six, often not more than three or four, sometimes, indeed, not more than two hours in the twenty-four, for rest and sleep, working nineteen to twenty-two hours, if not the whole night through, as frequently happens! The only limit set to their work is the absolute physical inability to hold the needle another minute. (CWCE, 217)

Here’s another example of long working hours that Engels describes:

Other manufacturers were yet more barbarous, requiring many heads to work thirty to forty hours at a stretch, several times a week, letting them get a couple of hours of sleep only, because the night-shift was not complete, but calculated to replace a part of the operatives only. […] The consequences of these cruelties became evident quickly enough. The Commissioners mention a crowd of cripples who appeared before them, who clearly owed their distortion to the long working hours. This distortion usually consists of a curving of the spinal column and legs. (CWCE, 161–162)

What Engels analyses here is the method of absolute surplus-value production. Capitalists have the interest to make workers produce commodities for as many hours per day and per week as possible for as little wage as possible. Long hours and small wages promise high profits.

Absolute surplus-value production is also an important method of surplus-value production in 21st-century digital capitalism. In the period from 1992 until 2019, the number of agricultural workers in China decreased from 350 million to 120 million, the number of manufacturing workers increased from 180 million to 200 million, and the number of service workers went from 120 million to 440 million<sup>1</sup>. Unlike economic development in Western capitalism, where the rise of the service and information industries was accompanied by the shrinking of agriculture and manufacturing, China’s capitalism with Chinese characteristics (Harvey 2005, chapter 5) combines industrialisation and informatisation as simultaneous processes.

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1 Data source: ILO World Employment and Social Outlook, http://www.ilo.org/wesodata

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Western transnational digital corporations such as Apple, Dell, HP, and AsusTek make use of Chinese large and comparatively cheap labour force in order to export capital so that digital hardware is assembled in China by workers contracted by suppliers such as Foxconn, Pegatron, Compal Electronics, or Wistron. The goal is to increase profits by minimising labour costs.

Students & Scholars Against Corporate Misbehaviour (SACOM) (2011) reported that workers at the Chinese factories at Foxconn, where iPhones and other hardware is assembled, faced conditions such as military drill, forced and unpaid overtime, fines such as the non-payment of wages, crowded accommodations, low wages, compulsory internships, toxic workplaces, etc. In 2010/2011, 19 young Foxconn workers aged between 17 and 28 attempted to commit suicide by jumping from Foxconn buildings. Most of them died. They could no longer stand the terrible working conditions.

China Labor Watch (2017, 1 & 3) conducted research in order to find out how the working conditions look like in the factories of the Apple suppliers Compal, Foxconn, Green Point, and Pegatron:

In all of the four factories, weekly working hours surpassed 60 hours and monthly overtime hours surpassed 90 hours, with most overtime amounting to of 136 hours over a month. […] Workers were required to sign an agreement to voluntarily do overtime, opt out of paying for social insurance and opt out of housing funds. These acts are blatant attempts to evade responsibilities and are clear violations against China’s Labor Law. […] Workers at Pegatron and Green Point were continuously working overtime without compensation. […] Both excessive working hours and tremendous pressure are severe problems at Foxconn. Since 2010, there have been more than 10 suicides, indicative of the terrible working conditions and rigid management. In September 2016, [a] CLW [China Labour Watch] investigator launched another undercover investigation at Foxconn. […] Most workers there had accumulated 122 hours of overtime each month […], far exceeding the legal limit of 36 hours per month as per China’s labor laws.

Just like the dress-makers whose labour Engels analysed in the 1840s, 21st-century digital hardware assemblage workers at Foxconn, Pegatron and other suppliers are a largely young and female workforce that is highly exploited. Capitalist hardware corporations try to make workers conduct a high number of weekly working hours for low pay and with unpaid overtime in order to minimise production costs so that these transnational corporations profits can be maximised. The Chinese manufacturing industry is part of a global capitalist system, in which transnational corporations outsource labour to Asia in order to accumulate capital by making use of the method of absolute surplus-value production. China’s large working class, whose members often leave rural areas in order to find work in urban manufacturing centres, is transnational corporations’ source of cheap and highly exploited labour.

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2.3.4 Play Labour at Google

Engels describes a faction of the working class that was relatively privileged. These were workers whose “state of misery and insecurity in which they live now is as low as ever” (CWCE, 321). He terms these workers the labour aristocracy, “an aristocracy among the working-class” (engineers, carpenters, joiners, bricklayers) that has “succeeded in enforcing for themselves a relatively comfortable position” (CWCE, 321). Lenin (1920, 194) uses the notion of the labour aristocracy for “workers-turnedbourgeois”, “who are quite philistine in their mode of life, in the size of their earnings and in their entire outlook”. “They are the real agents of the bourgeoisie in the working-class movement, the labour lieutenants of the capitalist class”.

Software engineers are a digital labour aristocracy. They tend to earn very high wages, which gives them a privileged position. The demand for their labour-power is very high. Although many software engineers are relatively rich money-wise, they are socially poor. They often lack social relations friendships, outside of the office. They spend most of their time in offices such as the Googleplex, where they work long hours. Many software companies want to keep them in the office by providing facilities for sports, entertainment, relaxation, etc. The Googleplex more looks like a playground than an office. In the life of software engineers, labour and play converge. Google workers are playworkers, workers for whom labour feels like play.

Google workers in comparison to ICT manufacturers have much higher wages and privileges, which also means that they are more unlikely to resist, which is, as Engels describes, typical for the labour aristocracy: “they are very nice people indeed nowadays to deal with, for any sensible capitalist in particular and for the whole capitalist class in general” (CWCE, 321).

This passage from Friedrich Engels’s book The Condition of the Working Class in England in 1844 describes typical working conditions in the phase of the industrialisation of capitalism: work in factories was mentally and physically highly exhausting, had negative health impacts, and was highly controlled by factory owners and security forces.

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The manufacturing labour that Engels analysed in the 1840s was physically highly exhausting. Programming does not require engineers to burn lots of energy. Whereas manufacturing labour feels like toil, Google labour tends to feel like play.

Like at the time of Engels engineers, carpenters, joiners, bricklayers, in digital capitalism software engineers hold qualifications and produce goods that are in high demand and allow achieving relatively high wages and income. The poor workers who Engels portrays in CWCE as toiling in industries such as cotton and wool manufacturing, dress-making, etc. were compelled to work long hours by poverty wages and the “silent compulsion of economic relations” (Marx 1867, 899) of the labour market that makes them starve if they don’t sell their labour-power. Poverty wages were used as a means of coercion, as a method of absolute surplus-value production. The contemporary digital labour aristocracy also faces the silent compulsion of having to sell their wages. But these wages are very high because they work in a highly productive industry that produces a key commodity – software – that plays an influential role in almost all parts of 21st-century society. Digitalisation transforms all aspects of society, which is why software is in high demand and allows achieving high profits and commodity prices. Those who possess the key skill of knowing how to code software can therefore in turn achieve high wages. Absolute surplus-value production takes on a new form in this industry: software engineers often sign all-inclusive contracts that fix a certain wage-sum per month without extra pay for overtime. In the USA, the Fair US Labor Standards Act (Section 13 [a] 17) enables software corporations such as Google not to pay overtime if there is an hourly wage of at least US\$ 27.63. This law legally enacts absolute surplus-value production in the US software industry.

In addition, new management methods that try to blur the distinction between labourtime/spare-time and between workspace/private spaces are often used in software corporations in order to keep the workers in the company for long hours, which makes them work overtime and to experience the long hours they spend in their employers premises not as alienation, but as play and fun. The result is that they work longer hours that are unpaid. Absolute surplus-value production in key sectors of 21st-century digital capitalism such as the software industry takes on the form of play labour.

The first, second, and third editions of my book Social Media: A Critical Introduction contains a chapter about the critique of the political economy of Google (Fuchs 2014, chapter 6; Fuchs 2017b, chapter 6; Fuchs 2021, chapter 5). For this chapter, I analysed online forums, where Google workers report on their working conditions. I updated this analysis for each edition (2014, 2017, 2021). The working conditions at Google stayed constant during this time: Google employees enjoy the content of their job, the perks such as free food and working for a high-reputation brand, but complain about the lack of work-life balance. When asked about working conditions at Google, the typical Google software engineer says that “work/life balance is nearly non-existent” and one must be prepared to “work all day and night long” (Fuchs 2021, chapter 5).

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Google employees enjoy the idea of working in a high-reputation company, tend to find their work tasks interesting, like the perks such as free food, but tend to complain about the long working hours, a lot of overtime, and the lack of work-life balance. Lack of work-life balance at companies such as Google makes a playful work environment that turns spare-time into unpaid labour-time.

Luc Boltanski and Ève Chiapello (2005) speak in this context of the “new spirit of capitalism”. The new spirit of capitalism is a management method and management ideology. It promises labour that is characterised by

autonomy, spontaneity, rhizomorphous capacity, multitasking (in contrast to the narrow specialization of the old division of labour), conviviality, openness to others and novelty, availability, creativity, visionary intuition, sensitivity to differences, listening to lived experience and receptiveness to a whole range of experiences, being attracted to informality and the search for interpersonal contacts. (Boltanski and Chiapello 2005, 97).

Such promises “are taken directly from the repertoire of May 1968” (Boltanski and Chiapello 2005, 97). The new spirit of capitalism is a work culture of creativity, play, and fun that capital uses as a new, sophisticated method of absolute surplus-value production that blurs establish distinctions and demarcations of space and time in the economy. Inspired by Boltanski and Chiapello, Eran Fisher summarises these changes in the following way:

It is therefore best understood in terms of the eradication of the distinctions between these components: between companies and the network, producers and consumers, producers and users, labor and fun, forces of production and the production process, and so forth. These established industrial demarcations (and more specifically, part and parcel of the Fordist phase of capitalism) are now overturned with the emergence of network production. (Fisher 2010, 140)

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