Digital Capitalism

In the age of digital media, there has been a resurgence of interest in Smythe’s works. My contribution has in this respect been the linking of the notions of audience labour and the audience commodity to targeted online advertising (Fuchs 2012). How does Smythe’s work matter for understanding social media? On social media, we are partly audiences watching, reading, and listening and partly producing consumers (prosumers) creating content ourselves. So for example on YouTube, most of us tend to predominantly watch videos. Many of these videos have in-video advertisements. So we not just consume the free content, but also provide attention to advertisements. And Google sells this attention to advertisers as a commodity. One difference to television is that on YouTube, users can produce and publish videos. So some users upload their own videos from time to time. And a smaller group of professional YouTubers tries to earn a living from creating YouTube content. By browsing videos on YouTube, searching on Google, and visiting websites, we produce a lot of meta-data that reveals a lot about our personal interests and tastes.

Google stores all of this data on its servers and identifies it with the IP address with which we access the Internet. Google also gains access to various other online data sources and thereby builds personal profiles of interests. Therefore, we do not simply find an audience commodity on social media, but also a big data commodity. In order to find out more about consumers’ tastes and interests, advertisers and media organisations no longer need to conduct consumer surveys. The constant real-time surveillance of online behaviour and long-time storage of personal data allow for targeting advertisements based on individual profiles. The big data commodity allows an advertiser to, for example, target an ad for a soft drink to all users in London in the age group 16–30 years who have, at some point in time, googled the soft drink’s name. The creation of big data commodity is a sophisticated form of surveillance and exploitation of user labour.

8.2.2 Karl Marx: The Fetishism of the Commodity and its Secret

The Fetishism of the Commodity and its Secret forms the fourth section of the first chapter in Karl Marx’s main work Capital Volume I (Marx 1867, 163–177). In Capital Volume I’s first chapter, Marx shows that in capitalism both economic and ideological dimensions play an important role: a commodity has an economic dimension because it is produced by labour within class relations. The section on the commodity fetishism adds to the analysis that a commodity also has an ideological and aesthetic dimension that tries to deceive and manipulate humans. Marx here returns to the analysis of ideology that he advanced in an earlier work, The German Ideology, where he defined ideology as a camera obscura that makes humans and their social relations “appear upside-down” (Marx and Engels 1845, 42).

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The social relations between workers’ labour appear not “as direct social relations between persons in their work, but rather as material relations between persons and social relations between things” (Marx 1867, 166). Marx calls this phenomenon “the fetishism which attaches itself to the products of labour as soon as they are produced as commodities” (p. 165). He summarises the causes of the commodity’s fetish character in the following words:

Objects of utility become commodities only because they are the products of the labour of private individuals who work independently of each other. […] Since the producers do not come into social contact until they exchange the products of their labour, the specific social characteristics of their private labours appear only within this exchange. (p. 165)

The notion of commodity fetishism points out that phenomena such as commodities and money are ubiquitous in our everyday lives in capitalist society. Given their thinglike status, we cannot directly see where they are coming from and how they have been produced. Therefore capitalism, commodity exchange, and money appear to be natural forms of the organisation of society, to which no alternatives exist. Fetishism de-historicises society. Fetishism is on the one hand a particular aesthetic of the commodity. On the other hand, all ideology is fetishistic in character as it attempts to legitimate, naturalise, and justify specific forms of domination and exploitation.

The most influential theoretical take-up of Marx’s notion of commodity fetishism can be found in Georg Lukács’ (1971) book History and Class Consciousness. Commodity logic conceals “every trace of its fundamental nature: the relation between people” so that “a relation between people takes on the character of a thing and thus acquires a ‘phantom objectivity’’’ (Lukács 1971, 83). Lukács coined the notion of reification. Generally speaking, reification (another term for it is alienation) means conditions under which humans are not able to control and determine the structures that shape their lives. Reification therefore can exist in all realms of life (Fuchs 2016, chapter 5).

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Lukács was particularly interested in economic and cultural reification. “Reification requires that a society should learn to satisfy all its needs in terms of commodity exchange” (Lukács 1971, 91), which includes “the separation of the producer from his means of production” (Lukács 1971, 91). Lukács added another important dimension to the theory of commodity fetishism: His notion of reified consciousness stressed the subjective dimension of ideology and fetishism. Ideology and fetishism are not just objective structures and strategies, they are also experienced and lived. Ideology aims at influencing human consciousness. Lukács’ works have had major influence on Marxist ideology critique, including the approach of the Frankfurt School.

We can learn from Chapter 1 of Marx’s Capital that when analysing capitalist phenomena such as advertising and targeted advertising on social media, there are always an economic and a cultural dimensions, as well as aspects of labour and ideology. Dallas Smythe’s notions of audience labour stresses advertising’s labour dimension. Given that, as Marx shows, any commodity also has a fetishistic and ideological dimension, one also needs to look at the ideological dimension of the audience commodity. The works of Sut Jhally and Raymond Williams can help us better understand commodity fetishism in the context of advertising.

8.2.3 Sut Jhally’s “Advertising as Religion” and Raymond Williams’s “Advertising: The Magic System”

Sut Jhally’s (2006) essay Advertising as Religion: The Dialectic of Technology and Magic analyses advertising’s fetishistic and ideological structure. Jhally points out that in capitalism, the division of labour ensures that people only work on one part of a product. As a result of the division between mental and physical labours, and the fact that goods come to us through markets, we do not understand their origins. “The social relations of production embedded in goods are systematically hidden from our eyes. The real meaning of goods, in fact, is emptied out in capitalist production and consumption” (Jhally 2006, 88). Advertising taps into this void: commodity fetishism empties commodities of human meaning. We cannot understand the meanings of life and experiences of commodity producers, as these are all removed from the equation. In an artificial way, advertising creates ideological meanings that it bestows on commodities. “Into the void left by the transition from traditional to industrial society comes advertising […] The function of advertising is to refill the emptied commodity with meaning. […] Production empties. Advertising fills. The real is hidden by the imaginary” (Jhally 2006, 88–89). He adds that the “most important functions that advertising performs is to provide meaning for the world of goods in a context in which true meaning has been stolen” (Jhally 2006, 93).

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Advertising is tremendously powerful because it tells stories and provides meanings about goods and the economy that are not presented in other forms. It uses various strategies for doing so, for example the strategy of black magic (Jhally 2006, 91): Humans suddenly transform in supernatural ways through commodity use. Advertising is a secular form of religion. Advertising is a system of commodity fetishism: It promises satisfaction and happiness through the consumption of things (Jhally 2006, 102). For Jhally, advertising is propaganda that promotes the ideology of human happiness through the consumption of commodities. By analysing advertising as ideological commodity propaganda and commodity consumption ideology, Jhally defies positivist definitions of advertising that describe it as useful information for consumers that helps them navigate commercial options in complex markets. A typical example of such an uncritical definition of advertising defines it as “a channel of information from manufacturers to Consumers” that merely “tells where to find what you want” (Kaptan 2002, 28).

In his essay Advertising: The Magic System, Raymond Williams (2000) analyses the history of advertising. He shows that in the early stages of capitalism, advertising was seen as harmful and was therefore limited by an advertising tax. The emergence of advertising, as we know it today, can be traced back to the emergence of monopoly capitalism in the late 19th century.

Advertising was developed to sell goods, in a particular kind of economy. Publicity has been developed to sell persons, in a particular kind of culture. The methods are often basically similar: the arranged incident, the ‘mention’, the advice on branding, packaging and a good “selling line”. (Williams 2000, 183)

Comparable to Jhally, who sees advertising as capitalism’s secular religion, Williams analyses advertising as capitalism’s commodity magic: advertising is capitalism’s system of “organized magic” (Williams 2000, 186) and “organized fantasy” (p. 193).

You do not only buy an object: you buy social respect, admiration, health, beauty, success, power to control your environment. The magic obscures the real sources of general satisfaction because their discovery would involve radical change in the whole common way of life. (p. 189)

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Jhally and Williams’s analyses of advertising as capitalism’s religion and magic system correspond to Marx’s analysis of commodity fetishism in general. Marx (1867) argued that a commodity is a peculiar thing; it is “strange” (p. 163), “metaphysical” (p. 163), ‘“mystical’” (p. 164), and ‘“mysterious’” (p. 164). As a consequence, the commodity “stands on its head”, and “grotesque ideas” (p. 163) about the commodity’s nature emerge.

Marx’s notion of the commodity fetishism and Jhally and Williams’s applications of this concept to the critical analysis of advertising also matter in respect to social media; firstly, in the context of social media advertisement’s general structure, and secondly, in respect to social media’s inverse commodity fetishism. McDonald’s is one of the biggest advertisers on Facebook. One example posting shows a “Mexican burger” and says: “Get in the mood for Mexico with spicy Habanero chilli mayo in this week’s #GreatTastesoftheWorld: the Mexican Stack!”

The ad presents a particular image of a burger as being tasty, multicultural, international, spicy, etc. McDonald’s presents itself as fostering an international lifestyle and eating culture by adopting culinary influences from all over the world. This image is, however, fetishistic, illusionary, magic, and religious. It is a belief system that may not correspond to the actual reality of the production of the burger that is advertised. The consumer does not know where the meat and ingredients come from and under which conditions they are produced. The advertisement distracts attention from common criticisms of McDonald’s relating to working conditions, possible health, and environmental impacts, the McDonaldisation of the world, etc. The advert is fetishistic because it tries to create a brand image that only presents the burger and the company in a positive light and disregards the actual social conditions of production. What is specific for commodity fetishism on social media? Advertising’s commodity fetishism in print publications and broadcast media (radio, television) is standardised and unified, every consumer of these media receives the same advertising messages. In contrast, we find personalised and targeted commodity fetishism on social media. Advertisers like McDonald’s can target its ads at users who, based on their previous online activity, for example appear to be fond of fast food.

Targeted commodity fetishism is a first feature of advertising on social media. A second feature is what I in various publications have termed the inverse commodity fetishism (Fuchs 2014, chapter 11; Fuchs 2015, chapter 5). In conventional commodity fetishism, one cannot experience the social context of commodity production but is directly confronted with the logic of money and the commodity. On Facebook and other targeted-advertising-based social media platforms, the commodity fetishism is inverted: because access to the platform is free and the sale of the big data commodity is hidden, one does not experience monetary exchange or commodity purchase on Facebook. Instead, the social dimension of communication, sharing, and community is what is foregrounded and experienced. As an effect, the commodity form is hidden behind the social form so that commodity fetishism tends to take on an inverted form. For Facebook users, it is not directly experienceable that users produce a commodity for Facebook, that they actually work for Facebook, and they are the ones generating the company’s profits. The inverse commodity fetishism makes it more difficult for users to perceive themselves as workers who are creating value and are being exploited.

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The ideological effects of commodity fetishism are an immanent manipulative feature of online advertising. Social media also enable an algorithmically engineered form of manipulation, namely the manipulation of emotions and attention. This became evident when researchers from Princeton University conducted a large-scale experiment on Facebook (Kramer et al. 2014): The emotional tone of postings shown on the News feed of 689,003 users was manipulated. “Two parallel experiments were conducted for positive and negative emotion: One in which exposure to friends’ positive emotional content in their News Feed was reduced, and one in which exposure to negative emotional content in their News Feed was reduced” (Kramer et al. 2014, 8788). The

results suggest that the emotions expressed by friends, via online social networks, influence our own moods, constituting, to our knowledge, the first experimental evidence for massive-scale emotional contagion via social networks […], and providing support for previously contested claims that emotions spread via contagion through a network. (Kramer et al. 2014, 8789)

Such research has implications for advertising and marketing: if negative messages are kept from the News feed, then users are more likely to positively engage with content, including advertisements and the company’s postings. The experiment that was supported by Facebook also shows that technically it is easy to manipulate what is seen and not seen on the News feed. It is just a small step from research about manipulating emotions to practically conducting such manipulation. The effect would be that social media platforms would become purely positivist, suppressing attention to critical content, possibly also including the critique of politics and corporations. Facebook is a targeted advertising machine and one of the world’s largest advertising corporations. Manipulation for the sake of keeping users and advertising clients happy can easily result in the filtering out of critical postings. The result is then a platform that is an instrument of capitalist interests and censors everything that does not adhere to the logic of commodities.

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Engineering and manipulating emotions and sociality on social media can easily result in one-dimensional social media. The Princeton researchers and Facebook were criticised for not obtaining the users’ informed consent for the online experiment they participated in. Facebook apologised to its users³. The Electronic Privacy Information Centre demanded that Facebook makes its News feed algorithm public because the secrecy of algorithms enables and supports possible manipulation.

8.3 Current Key Areas of Research

This section focuses on two key areas of current critical research about social media: digital labour and digital alienation.

8.3.1 Digital Labour

The notion of digital labour emerged in the context of the 2009 conference The Internet as Playground and Factory organised by Trebor Scholz at The New School in New York (see http://digitallabor.org). Later, also a collected volume of some of the presented contributions was published (Scholz 2013). The basic idea is that user activity on commercial digital media is unpaid labour that creates value and a digital commodity. Therefore social media companies such as Facebook and Google exploit users. My own contribution to the digital labour literature has been the combination of the digital labour concept with critical and Marxist theory (see Fuchs 2010, 2012, 2014, 2015).

If one wants to understand a particular aspect of capitalism, then one needs to look at how commodity production is organised. Marx has provided a framework for such an analysis (see Fuchs 2010):

$$
\mathsf { M } - \mathsf { C } \left( \mathsf { c } , \mathsf { v } \right) . . \mathsf { P } _ { . . } \mathsf { C } ^ { \prime } - \mathsf { M } ^ { \prime }
$$

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3 https://www.theguardian.com/technology/2014/jul/02/facebook-apologises-psychological-experiments-onusers

4 https://www.theguardian.com/technology/2014/jul/04/privacy-watchdog-files-complaint-over-facebookemotion-experiment

A capitalist corporation invests monetary capital M for purchasing specific commodities C as means of production. This includes labour-power (variable capital v) as well as resources and instruments (constant capital c). Labour-power is the subjective dimension of the means of production. Resources and instruments form the means of production’s objective dimension. In the production process P workers transform the objects in order to create a new commodity $\complement ^ { \prime }$ , in which labour-time and a surplusproduct are objectified. The new product is more than the sum of its elements. When the commodity $\complement ^ { \prime }$ is successfully sold then an increased capital sum $\mathsf { M } ^ { \prime }$ is created. A part of $\complement ^ { \prime }$ is reinvested so that a new cycle of accumulation starts, while other parts are paid out as interest, dividends, bonuses, and rent. The point of capitalism is the accumulation of capital, production with a monetary profit. The commodity $\complement ^ { \prime }$ is sold at a price that is higher than the investment costs. The commodity $\complement ^ { \prime }$ and its value are created by labour. But the workers do not own the products they create. They are only remunerated for part of their work in the form of wages. The surplus-value and surplusproduct they create remain unremunerated. The key aspect of capitalism is that capital accumulation can only work by exploiting workers, which means that part of their labour is unpaid and that capitalists own the products that workers create.

The question that arises in the context of social media is how Marx’s framework can be used. The access to Facebook, Google, YouTube, Twitter, etc. is not a commodity. This also implies that these companies’ paid employees do not create a commodity, but rather a gift. But all of these companies are for profit. So there must be a different commodity and a different kind of value-generating activity. Marx’s framework can be modified for social media capitalism as follows (Fuchs 2010, 2012, 2014 [chapter 11], 2015 [chapter 5]):

$$
\mathsf { M } - \mathsf { C } \left( \mathsf { c } , \mathsf { v } \mathsf { 1 } \right) . . \mathsf { P 1 } \left( \mathsf { s o c i a l \ m e d i a \ p l a t f o r m } \right) , \mathsf { v } 2 . . \mathsf { P 2 } . . \mathsf { C } ^ { \prime } - \mathsf { M } ^ { \prime }
$$

v1 is the paid employees who create and maintain the social media platform. Access to the platform is a gift, a “free lunch” for the users, who form the unpaid labour force v2. Their online activities create in the second production process P2 the big data commodity $\complement ^ { \prime }$ that is sold to advertisers so that an increased sum of monetary capital M’ can be accumulated. All labour-producing commodities for capitalists involve unpaid labour that creates surplus-value.

The difference between regular wage labour and unpaid digital labour is that in the latter case there is no wage, which means that all labour-time is surplus labour-time. This circumstance is a feature that social media’s digital labour shares with housework (Fuchs 2010, 2018). Kylie Jarrett (2016) uses the notion of the digital housewife for pointing out parallels between unpaid online labour and houseworkers’ domestic, reproductive labour. “Consumer labour is akin to domestic labour […] because it is a site of social reproduction: a site for the making and re-making of the social, affective, ideological and psychological states of being that (may) accord with appropriate capitalist subjectivities” (Jarrett, 2016, 71).

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The implication of the notion of digital labour is that Google, Facebook, Twitter, and other online corporations that use the targeted-advertising capital accumulation model exploit users, usage of these platforms is labour-time, digital workers are part of the contemporary proletariat, value-production is not limited to factories and offices, and activities that might feel pleasurable and personal can nonetheless be forms of economic exploitation.

The Marxist notion of digital labour results in a theoretical discussion (see, e.g. Fisher and Fuchs 2015; Proffitt, Ekbia and McDowell 2015). The main criticisms can be summarised in the following ideal-type arguments:

1. “Marx is a 19th-century theorist. A 19th-century theory is not fit for explaining 21st-century phenomena. Marx’s theory is outdated”;

1. “Only wage workers are productive workers who are exploited by capital. Facebook users do not work and are not exploited because they do not earn a wage”;

1. “Facebook users are not producers, but media consumers. Consumption does not create any value”;

1. “Social media is part of the advertising economy that is situated in capitalism’s sphere of circulation, in which commodities are not produced, but sold. Circulation labour is not productive, but rather unproductive. Facebook therefore is a rent-seeking corporation that consumes the profits and value created by wage workers in other parts of the economy”;

1. “The focus on the exploitation of users as unpaid trivialises much worse forms of exploitation, such as Taylorist labour and slave work”.

Such arguments tend to imply that there is no problem with Facebook and Google. Their logic is: “They do not exploit us and therefore nothing needs to be done against them”. Counter-arguments can be summarised as follows (for a detailed discussion see Fuchs 2015, chapter 5; see also Fuchs 2018):

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1. The 2008 crisis of capitalism and its consequences show that Marx was right and remains important. Marx was a historical and dialectical thinker. Just like capitalism remains the same by constantly changing, also the categories used for analysing capitalism undergo a dialectic of continuity and change. The transformation of the Marxian formula of capital accumulation from M – C (c, v).. P.. C’ – M’ into M – C (c, v1).. P1, v2.. P2.. C’ – M’ on social media shows that the online targeted-advertising economy is based on such a dialectic of continuity and change;

1. If you assume that only wage workers are exploited in capitalism and that only a wage worker can be a productive worker, then the implication is that house workers, who are still predominantly female, and the world’s estimated 30 million slaves are also not exploited. Your assumption is politically problematic. Marx saw productive labour as value-generating labour. One can produce value for capital without being paid;

1. There is in general a dialectic of production and consumption. Production involves the consumption of the means of production. Consumption produces meanings, effects, and the need for more production. Social media is different from traditional communication technologies. On social media, there is not a clear differentiation between producers and consumers of content or between production, circulation, and consumption technologies. The computer is a convergence technology. Consumption on social media is better termed “usage”. And usage is also the production of data, meta-data, and often user-generated content. Social media users are prosumers;

1. The reason why a commodity produced by a brand company is much more expensive than a standard commodity has to do with the fact that branding involves advertising and marketing labour. In the contemporary economy, advertising forms an important industry in itself. It is therefore unrealistic to dismiss this part of the economy as unproductive. One can charge rent on a persistent product that was only created once but does not need constant labour input for being re-produced. But the big data commodity is frequently updated and renewed, so there is an actual labour input and a renewal of the commodity. It is therefore not feasible to argue that Facebook is a rentier. A rentier is a monopolist who controls a specific resource (usually land or real estate) and charges money to tenants, users, or leasers. Marx argued that transport labour is a form of productive circulation labour. Transport labour is the labour that is needed for transporting a commodity from the place where it is produced to the places where it is sold and consumed. Audience labour and social media users’ digital labour is ideological transport labour that helps transporting advertisements that are commodity ideologies and product propaganda to users;

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