Digital Capitalism

For Bukharin, imperialism is necessarily a form of a state capitalism, which is difficult to apply in the context of a neoliberal form of imperialism based on worldwide corporate domination. He saw countries as “state capitalist trusts” that stand in a “worldwide struggle”, resulting in a world war (Bukharin 1917, 158). “Countries are state capitalist trusts that engage in world wars for centralizing and concentrating capital in their hands” (Bukharin 1917, 120–121). Imperialism is “the expression of competition between state capitalist trusts” (Bukharin 1917, 185) and a form of “state capitalism” (Bukharin and Preobrazhensky 1920 [2007], 127). Lenin (1917, 269) in contrast wrote that “an essential feature of imperialism is the rivalry between several great powers in the striving for hegemony, i.e. for the conquest of territory, not so much directly for themselves as to weaken the adversary and undermine his hegemony”. The formulation of a competition between “great powers” is more careful than Bukharin’s concept of state capitalist trusts because it encompasses both companies and states.

For Rosa Luxemburg, imperialism is the violent geographical and geo-political expansion of the accumulation of capital:

Imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains still open of the non- capitalist environment. […] With the high development of the capitalist countries and their increasingly severe competition in acquiring non-capitalist areas, imperialism grows in lawlessness and violence, both in aggression against the non-capitalist world and in ever more serious conflicts among the competing capitalist countries. But the more violently, ruthlessly and thoroughly imperialism brings about the decline of non-capitalist civilisations, the more rapidly it cuts the very ground from under the feet of capitalist accumulation. (Luxemburg 1913, 426–427)

Luxemburg argues that capital wants to globally extend capital exploitation, it wants to “mobilise world labour power without restriction in order to utilise all productive forces of the globe” (p. 343).

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Formulations such as the one that imperialism is “the final phase of capitalism” (Luxemburg 1913, 427), “decaying capitalism” (Lenin 1917, 300), and that in it the “ruin of the bourgeoisie is inevitable” (Bukharin and Preobrazhensky 1920 [2007], 143) not just show a certain political optimism of the revolutionaries of the time, but also a certain for the time common structuralism that assumes an inevitable breakdown of capitalism. Around 100 years later, capitalism can still be characterised as imperialism and continues to experience major outbreaks of its inherent crisis tendencies, although it has taken on new qualities, which allow characterising it as a new imperialism (cp. Foster and McChesney 2012; Harvey 2003; Wood 2003). Classical concepts of imperialism also can be used for analysing that in the new imperialism the information industries form one of the highest concentrated economic sectors, that hyperindustrialism, finance and informationalism belong together, that transnational informational corporations are grounded in nation states, but operate globally, capitalism dominates the information sector globally, and information technology plays a role as a means of war (for detailed analyses, see: Fuchs 2012, 2010a, 2010b, 2010c).

11.2 Imperialism and the Division of Labour

Lenin (1917, 221–222) uses the notion of the division of labour as meaning a division between industries, on which certain banks focus their investment activities. He sees the export of capital in contrast to the export of goods as a crucial feature of imperialism:

As long as capitalism remains what it is, surplus capital will be utilised not for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists, but for the purpose of increasing profits by exporting capital abroad to the backward countries. In these backward countries profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap. (Lenin 1917, 241)

Bukharin (1917, 18 and 21) argued based on Marx that a social division of labour between town and country, enterprises, branches, economic subdivisions, and countries is a feature of capitalism. He calls the latter the international division of labour (Bukharin 1917, 18). It would partly have natural causes – “Cocoa can be produced only in tropical countries” (p. 19) – and partly social causes: “the unequal development of productive forces creates different economic types and different production spheres, thus increasing the scope of international social division of labour” (p. 20).

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The “labour of every individual country becomes part of that world social labour through the exchange that takes place on an international scale” (p. 22). “[W]orld division of labour and international exchange presuppose the existence of a world market and world prices” (p. 23). Given a world market and unequal productivity, less productive countries have to sell commodities at prices below their values in order to compete, which results in unequal exchange.

Rosa Luxemburg (1913, 432) focused in her concept of imperialism on the “relations between capitalism and the non-capitalist modes of production which start making their appearance on the international stage”.

Its predominant methods are colonial policy, an international loan system – a policy of spheres of interest – and war. Force, fraud, oppression, looting are openly displayed without any attempt at concealment, and it requires an effort to discover within this tangle of political violence and contests of power the stern laws of the economic process. (p. 432)

For Luxemburg, the international relations of imperialism have to do with robbery and the exploitation of labour: “Capital needs the means of production and the labour power of the whole globe for untrammelled accumulation; it cannot manage without the natural resources and the labour power of all territories” (pp. 345–346). “‘Sweating blood and filth with every pore from head to toe’ characterises not only the birth of capital but also its progress in the world at every step” (p. 433).

Although there were political differences in questions about imperialism between Lenin, Bukharin, and Luxemburg, especially concerning the role of the national and international level in class struggles and liberation, the question of national self-determination, the causes of crises, organisation and spontaneity in class struggles and revolutions, and the role of foreign markets in capitalism (cp. Mattick 1935), the discussion shows that in all three concepts of imperialism, the periphery is not just a source of resources and a market for selling commodities, but is also embedded into an international division of labour, as part of which workers in the periphery produce relatively cheaply in such a manner that their exploitation results in the export of surplus-value and the appropriation of this value by large companies.

11.3 The International Division of Digital Labour

International communications in the form of the telegraph and international news agencies already played a role in the imperialism of the time of World War I. They helped organising and co-ordinating trade, investment, accumulation, exploitation, and war at the international level. Around 100 years later, qualitatively different means of information and communication, such as the computer, the laptop, tablets, the Internet, mobile phones, and social media, have emerged. The production of information and information technology is embedded into an international division of information labour. There are new technologies, but capitalism, imperialism, class, and exploitation continue to form the heart of society and international relations and shape the modes of information production, distribution, and consumption that have become so important in the 21st century.

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All work is a dialectic of subject and object, in which human subjects use objects (resources, technologies) to produce a new subject-object, a product of work (Fuchs 2014). Work is organised in specific social relations that determine the mode of ownership, organisation of work, the mode of allocation and distribution, and forms of consumption. Classical slavery, serfdom, and wage-labour are three important historical forms of class relations that are at the heart of specific modes of production (Engels 1884). Table 11.1 provides a classification of modes of production based on the dominant forms of ownership and class relations (self-control, partly self-control and partly alien control, full alien control).

Capitalism as the dominant mode of production has not brought older modes to an end, but has rather subsumed them. Slavery and patriarchy continue to exist and to be modes of organisation for the super-exploitation of labour. In 2014, 35.8 million people lived in modern forms of slavery (Global Slavery Index 2014). Modern slavery includes slavery, debt bondage, forced marriage, sale and exploitation of children, forced labour, and human trafficking (ibid.). Slaves in the Democratic Republic of Congo (DRC) mine a specific portion of the minerals (such as cobalt, coltan, and tin) needed for creating electronics and computing equipment (Fuchs 2014, chapter 6). In 2014, the DRC was ranked 186 out of 187 countries in human development, 87.8% lived in extreme poverty on less than US\$ 1.25 per day, and 38.8% of the population aged 15 years or older were illiterate.¹ War and neo-imperialist exploitation of labour and the country’s resources that does not benefit local people, but primarily Western companies, have created the paradox typical for capitalism that one of world’s countries that is richest in natural resources is socially the world’s poorest country. Also in 2014 the political situation in the DRC saw continued fights involving government forces, rebels, and fighters from Uganda and Rwanda. The country’s inhabitants experienced war crimes, crimes against humanity, forced recruitment of children as soldiers, mass rapes, and the killing, mutilation and torture of civilians.² According to estimations, more than 760,000 people in the DRC were slaves in 2014.³ Following Nigeria, it is the country of the world with the second largest absolute number of slaves.

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Critical scholars introduced the notion of the new international division of labour (NIDL) in the 1980s in order to stress that developing countries had become cheap sources of manufacturing labour and the rise of transnational corporations (TNCs) (Fröbel, Heinrichs and Kreye 1981). Foster and McChesney (2012) situate the rise TNCSs in capital’s attempt to overcome long-term economic stagnation. They see transnationalisation as an attempt of capital to attain global monopoly profits. TNCs aim to drive down the wage share globally in order to try to increase their profits by installing a system of global competition between workers. The consequence is a worldwide increase of the rate of exploitation (Foster and McChesney 2012, 114–115 and 119) that based on Stephen Hymer Foster and McChesney terms TNC’s “strategy of divide and rule” (pp. 119 and 126).

Table 11.2 shows comparative data for the world’s 2000 largest TNCs in the years 2004 and 2014. These companies’ revenues accounted for more than 50% of the worldwide gross domestic product, which shows that TNCs operate at the global level for trying to obtain monopoly status. In both years almost three quarters of the capital assets of these companies were located in the FIRE sector (finance, insurance, real estate), which confirms Foster and McChesney’s (2012) assumption that we can speak of global monopoly-finance capitalism. There are however also significant shares of the mobility industries (transportation, oil and gas, vehicles), the manufacturing industry, and the information industries (telecommunication, hardware, software, semiconductors, advertising, Internet, publishing, and broadcasting), which indicate that to specific degrees global capitalism is, besides finance capitalism, also a global monopoly mobility capitalism, a global monopoly hyperindustrial capitalism, and a global monopoly information capitalism (Fuchs 2014, chapter 5). Furthermore, these capitalisms in an interconnected manner form one overall global capitalist whole, a capitalist world system.

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1 Data source: Human Development Indicators, http://hdr.undp.org/, accessed on 26 October 2014.

2 Source: Human Rights Watch 2014 Report: Democratic Republic of Congo: http://www.hrw.org/world-report/2 014/country-chapters/democratic-republic-congo, accessed on 22 December 2014. 3 Ibid.

A significant change within these ten years was that Chinese TNCs increased their shares of assets, revenues, and profits. European and North American TNCs now no longer control around three quarters, but two-thirds of global capital, which means that they continue to be dominant. That Chinese TNCs play a more important role does not signify a fundamental break, but is rather an indication that China imitates Westernstyle capitalism so that a capitalism with Chinese characteristics has emerged.

The NIDL is at the heart of the information and digital economy that produces information and information and communication technologies (ICTs). Specific forms of physical work produce information technologies that are then used by workers in the media and cultural industries for creating informational content (music, movies, data, statistics, multimedia, images, videos, animations, texts, articles, etc.) in digital form. Informational content is produced, disseminated, and consumed with the help of information technologies. Technology and content are dialectically interconnected so that the information economy is both physical and non-physical at the same time. The information economy is neither a superstructure nor immaterial, but rather a specific form of the organisation of the productive forces that cuts across the base/superstructure divide and makes information and information technology an immediate productive force.

Figure 11.1 shows a model of the major production processes that are involved in the international division of digital labour. Each production step/labour process involves human subjects (S) using technologies/instruments of labour (T) on objects of labour (O) so that a new product emerges. The very foundation of digital labour is an agricultural labour cycle in which miners extract minerals. These minerals enter the next production process as objects so that processors based on them in physical labour processes create ICT components. These components enter the next labour cycle as objects: assemblage workers build digital media technologies and take ICT components as inputs. Processors and assemblers are industrial workers involved in digital production. The outcome of such labour are digital media technologies that enter various forms of information work as tools for the production, distribution, circulation, prosumption, and consumption of diverse types of information.

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“Digital labour” is not a term that only describes the production of digital content. It is a category that rather encompasses the whole mode of digital production that contains a network of agricultural, industrial, and informational forms of work that enables the existence and usage of digital media. The subjects involved in the digital mode of production (S) – miners, processors, assemblers, information workers, and related workers – stand in specific relations of production that are either class relations or non-class relations. So what is designated as S in Figure 11.1 is actually a relationship $\mathsf { S } _ { 1 } { - } \mathsf { S } _ { 2 }$ between different subjects or subject groups. In contemporary capitalist society, most of these digital relations of production tend to be shaped by wage-labour, slave labour, unpaid, precarious, and freelance labours.

The international division of digital labour is a complex network that involves global interconnected processes of exploitation, such as the exploitation of Congolese slaveminers who extract minerals that are used as the physical foundation for ICT components that are manufactured by millions of highly exploited Fordist wage-workers in factories such as Foxconn, low-paid software engineers in India, highly paid and highly stressed software engineers at Google and other Western software and Internet corporations, or precarious freelancers in the world’s global cities who are using digital technologies to create and disseminate culture, poisoned eWaste workers who disassemble ICTs and thereby come in touch with toxic materials, etc. (Fuchs 2014, 2015).

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Let us look at an example form of digital labour. Apple has according to the Forbes’ 2000 list of the largest transnational companies been the world’s 15th largest company in 2014.⁴ Its profits were US\$ 37.0 billion in 2013 and US\$ 39.5 billion in 2014.⁵ In 2014, iPhones accounted for 56% of Apple’s net sales, iPads for 17%, Macs for 13%, iTunes, software and services for 10%.⁶ According to calculations, the Chinese labour involved in manufacturing an iPhone makes up only 1.8% of the iPhone’s price, Apple’s profits 58.5% (Chan, Pun and Selden 2013, 107) and Apple’s suppliers, such as the Taiwanese company Hon Hai Precision that is also known as Foxconn, 14.3%. So the iPhone 6 Plus does not cost US\$ 299 because of labour costs, but rather because Apple on average earns US\$ 175 profits, Foxconn US\$ 43 profits, and the workers assembling the phone in a Foxconn factory in total US\$ 5. The high costs are a consequence of a high profit rate and a high rate of exploitation that are achieved by organising digital labour within an international division. China is “the world assembly hub” (p. 170) in a system of “global labor arbitrage and […] superexploitation” (Foster and McChesney 2012, 172).

According to the CNN Global 500 2012 list,⁷ Foxconn is the fifth largest corporate employer in the world. In 2011, Foxconn had enlarged its Chinese workforce to a million, a majority being young migrant workers coming from the countryside (Students & Scholars Against Corporate Misbehaviour, 2011). Foxconn assembles, for example the iPad, iMac, iPhone, the Amazon Kindle, and various consoles (by Sony, Nintendo, Microsoft). When 17 Foxconn workers attempted to commit suicide between January and August 2010 (most of them succeeded), the topic of bad working conditions in the Chinese ICT assemblage industry became widely known. This circumstance was followed up with a number of academic works that show that workers’ everyday reality at Foxconn includes low wages, working long hours, frequent work shift changes, regular working time of over ten hours per day, a lack of breaks, monotonous work, physical harm caused by chemicals such as benzene or solder paste, lack of protective gear and equipment, forced use of students from vocational schools as interns (in agreement with the school boards) that conduct regular assembly work that does not help their studies, prison-like accommodations with 6–22 workers per room, yellow unions that are managed by company officials and whom the workers do not trust, harsh management methods, a lack of breaks, prohibitions that workers move, talk, or stretch their bodies, workers that had to stand during production, punishments, beatings, and harassments by security guards, and disgusting food (Chan 2013; Chan, Pun and Selden 2013; Foster and McChesney 2012, 119–120, 139–140, 173; Fuchs 2014, chapter 7; Pun and Chan 2012; Qiu 2012; Sandoval 2013).

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4 http://www.forbes.com/global2000/list, accessed on 22 December 2014.

5 Apple SEC-Filings, Form 10-K, 2014.

6 Ibid.

7 http://money.cnn.com/magazines/fortune/global500/2012/full\_list/, accessed on 29 October 2013.

Apple claims in its Supplier Responsibility 2014 Progress Report that it drove its “suppliers to achieve an average of 95 percent compliance with our maximum 60-hour work week”.⁸ The International Labour Organization’s Convention C030 – Hours of Work recommends that the working week should not last longer than 48 hours. That Apple defines itself a standard of 60 hours for labour in its supply chain and prides itself for this fact shows that imperialism’s international division of labour is not just exploitative, but also racist in character: Apple assumes that for people in China 60 hours is an appropriate standard of working time.

Apple says that for its 2014 report it audited the working conditions of more than 1 million workers. It is however a fact that these audits are not conducted independently and that the results are also not reported independently. Apple does not rely on independent corporate watchdog organisations such as Students & Scholars Against Corporate Misbehaviour (SACOM), but rather conducts studies that one can only consider to be biased. Workers who are studied by their own employers will certainly not report what they think is wrong because they are afraid to lose their job. Apple’s report is written in a style and language that conveys the impression that suppliers and local agencies that behave immorally are the problem: “Our suppliers are required to uphold the rigorous standards of Apple’s Supplier Code of Conduct, and every year we raise the bar on what we expect. […] We audit all final assembly suppliers every year”. That such behaviour is however driven by TNCs’ demand to produce cheaply and quickly is never mentioned. Apple uses the ideological strategy that it emphasises positive things about itself and negative things about suppliers in order to distort attention from its own responsibility for the exploitation of Chinese workers.

SACOM published in autumn 2014 a new report on working conditions at Apple’s supplier Pegatron in Jinagsu,⁹ where tens of millions of the iPhone 6 have been manufactured. Undercover scholars conducted the research.

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8 https://www.apple.com/supplier-responsibility/pdf/Apple\_SR\_2014\_Progress\_Report.pdf, accessed on 22 December 2014.

9 See also the 2013 investigation by China Labor Watch: http://www.chinalaborwatch.org/report/68. A comparable case is the iPhone 6 assemblage at Jabi in Wuxi: http://www.chinalaborwatch.org/report/103