Digital Capitalism

A bit later, more critical understandings of digital capitalism were developed. Schiller (1999) published the first book that contained the term “digital capitalism” in its title: Digital Capitalism. Networking the Global Market System. He sees the Internet as a means of the globalisation of capitalism:

Networks are directly generalizing the social and cultural range of the capitalist economy as never before. That is why I refer to this new epoch as one of digital capitalism. The arrival of digital capitalism has involved radical social, as well as technological, changes. […] As it comes under the sway of an expansionary market logic, the Internet is catalyzing an epochal politicaleconomic transition toward what I call digital capitalism – and toward changes that, for much of the population, are unpropitious. (Schiller 1999, xiv, xvii)

A variety of publications analysing digital capitalism has been published (see, e.g., Betancourt 2015, Daum 2017, Meier 2019, Pace 2018, Sadowski 2020, Seidl 2021, Staab 2019, Staab and Nachtwey 2016, Wajcman 2015).

Many of such works understand digital capitalism as an economic order. Here are some examples.

Betancourt (2015, 75) understands digital capitalism as “a new type of automated, immaterial production”. Daum (2017) characterises digital capitalism as “a new accumulation model”. For Pace (2018), digital capitalism is an “economic system” (p. 259) and economic “mode of production” (p. 259) consisting of the digital mediation of particular forms of property, markets, production styles, accumulation styles, and management styles (p. 260). Seidl (2021, 14) understands digital capitalism as “data-driven, and artificial-intelligence-powered business models”. Staab (2019) characterises digital capitalism as privatised mercantilism, a specific “praxis of economic action”.

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In this respect, many works on digital capitalism stand more in the tradition of Sombart, Schumpeter and Weber than Marx because they just like these three authors define capitalism and digital capitalism as an economic system. In contrast, for Marx capitalism is a Gesellschaftsformation (formation of society, societal formation) and for the present author digital capitalism is a dimension of the capitalist formation of society that emerged in the 20th century and has ever since shaped society. Digital capitalism is not a new totality, not a new formation of society. It is not a new society, but rather a novel feature and dimension of the capitalist formation of society.

Sabine Pfeiffer (2021) understands digital capitalism as a phase of capitalism that she characterises as capitalism of distribution (Distributivkapitalismus, 191). She characterises advertising, marketing, transport, storage, planning, and forecasting as distributive forces.

I define all technological and organisational measures and activities associated with (securing) the realisation of surplus-value as distributive forces. Distributive forces thus aim at value realisation – the successful act of selling – and the optimisation of the associated processes that aim to shorten the time between production and sale and minimise the risk for a sale. (Pfeiffer 2021, 159)¹

According to Pfeiffer, digitalisation has advanced the development of the distributive forces so that capitalism where the distributive forces play a key role has emerged (191). For Pfeiffer, digital capitalism is a capitalism of distribution. Pfeiffer uses the term digital capitalism in a specific economic sense, namely as limited to the economic system and with a focus on the distribution and consumption of commodities. But digitalisation also plays an important role in contemporary capitalism as means of production of surplus-value. Think for example of software such as Microsoft Word and Adobe Photoshop that writers use for creating electronic books and digital images that are sold as commodities. Adobe and Microsoft sell software licences, which is not an aspect of the distribution of commodities but the production and sale of digital commodities in order to accumulate capital. In 2020, Microsoft was with annual profits of US\$ 46.3 billion the world’s 13th largest transnational corporation and Adobe with annual profits of US\$ 21.2 billion the 418th largest one.² What Pfeiffer terms the distributive forces are an important aspect of capitalism, but not the only realm where digitalisation shapes capitalist society. Rudi Schmiede (2006, 2015) therefore speaks in the context of digitalisation and capitalism of the informatisation of the economy and society, whereby he understands “the process nature of the penetration of all social dimensions by new contents, forms, and techniques of information” (Schmiede 2006, 352–353).

Chapter One | Introduction: What is Digital Capitalism?

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What is Digital Capitalism?

1 Translated from German: „Alle mit der Mehrwertrealisierung verbundenen, technologischen und organisatorischen Maßnahmen und Aktivitäten (zur Sicherung) der Wertrealisierung fasse ich als Distributivkräfte. […] Die Distributivkräfte zielen also auf die Wertrealisierung – den gelungenen Verkaufsakt – und die Optimierung der damit einhergehenden Prozesse, mit denen die Zeit zwischen der Produktion und dem Verkauf verkürzt und das Risiko für einen Verkauf minimiert werden soll” (Pfeiffer 2021, 159).

Speaking of digital capitalism is not a Marxist theory equivalent to analyses of the post-industrial society (Daniel Bell) or the network society (Manuel Castells). The way I conceptualise digital capitalism does not imply that digitalisation is the main feature of contemporary societies. The core characteristic of contemporary societies is that they are capitalist societies. Capitalist society is based on dialectics of many capitalisms, that is of many dimensions of capitalism that develop over time and through restructurations that are implemented as specific responses to crises of capitalist society. Digital capitalism has been a particular dimension of capitalist society in the 20th and 21st centuries.

In the mid-1970s, capitalism experienced a profound multidimensional crisis that resulted in the rise of neoliberal capitalism, a new round of political-economic globalisation, and the advancement of new digital technologies as means of production and communication (Fuchs 2008). The rise of capitalism’s digital technological paradigm was a response to the crisis of capitalist society.

Digital capitalism is the dimension of capitalist society where processes of the accumulation of capital, decision-power and reputation are mediated by and organised with the help of digital technologies and where economic, political and cultural processes result in digital goods and digital structures. Digital labour, digital capital, political online communication, digital aspects of protests and social struggles, ideology online, and influencer-dominated digital culture are some of the features of digital capitalism. In digital capitalism, digital technologies mediate the accumulation of capital and power.

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Introduction

2 Data source: Forbes 2000 List of the World’s Largest Public Companies, year 2020, https://www.forbes.com/ global2000/#1439081f335d, accessed on 2 May 2021.

One characteristic of networked computing is that it supports the transcendence of boundaries and helps to produce and reproduce relations. For example, the World Wide Web is a network of interlinked texts, sites, and platforms. At the level of social systems and society, digitalisation enables the production and reproduction of relations between objects and human subjects, between structures and human practices. Digital capitalism as a societal formation neither operates just as a practice nor just as a structure. Digital capitalism is not just a digital practice and not just a digital structure, it is the totality of the dialectics of digital practices and digital structures that take place in capitalist society. For example, Facebook’s and Google’s server farms are technological structures that store massive amounts of big personal data. Google and Facebook are only social and meaningful through the human practices of searching, clicking, liking, commenting, uploading, etc. These practices produce and reproduce data structures that condition – enable and constrain – further digital practices. Google’s and Facebook’s profits are based on the valorisation of this dialectic of digital structures and practices so that they exploit their users’ digital labour (see Fuchs 2021b, especially chapters 4, 5, 6). Digitalisation affects both the productive forces and the relations of production and the dialectic of forces and relations.

Table 1.3 shows the role of capitalist accumulation in digital capitalism’s economic, political and cultural realms.

Accumulation in digital capitalism results in particular forms of the social antagonisms characteristic of capitalism. Table 1.4 gives an overview and examples of these antagonisms. Digital capitalism is an antagonistic society, which means it is a digital class society and a digital form of domination.

Let us have a look at an example from the capitalist economy that shows that digital capitalism is just one dimension of capitalism and that capitalism consists of many interacting capitalisms that form a totality. Table 1.5 shows the share of specific

Chapter One | Introduction: What is Digital Capitalism?

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What is Digital Capitalism?

capitalist industries’ in the world’s 2,000 largest transnational corporations’ total sales, profits, and capital assets.

The classification of industries used in Table 1.5 is based on the primary products that corporations produce. For example, corporations that are part of the culture and digital industry primarily produce culture, digital goods, or digital services. The culture and digital industry were conceived of consisting of the following sub-industries for which data was available: advertising, broadcasting & cable, business supplies, casinos & gaming, communications equipment, computer & electronics retail, computer hardware, computer services, computer storage devices, consumer electronics, diversified media, electronics, Internet retail, publishing & printing, recreational products, semiconductors, software & programming, and telecommunications services.

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In the data presented in Table 1.5, the culture and digital industry account for 17.7% of the world’s largest 2000 corporations’ profits. Finance capital controls 33.7% of profits, manufacturing and construction capital 13.1%, and mobility and transport capital 9.4%. These data indicate that the capitalist economy is finance capitalism, digital capitalism, industrial capitalism, mobility capitalism, etc. simultaneously. The dimensions of capitalism are not separate but interact. For example, finance capital in the form of venture capital often supports the “start-up” of digital corporations and thereby gains influence on ownership, management, and governance in the digital industry. And if digital companies become large enough, they often become listed on stock markets and thereby part of finance capital. The example shows how finance capitalism and digital capitalism interact in a dialectical manner.

Also, Ulrich Dolata (2019) warns that one should not characterise digital capitalism as a radically new type of economy or capitalism. He argues that the Internet and digitalisation do

not constitute a new demarcated economic sector—they are much too heterogeneous for that – but offer services that can be economically assigned to traditional sectors and markets such as commerce, advertising, and various service sectors. […] The technical and socio-economic transformations that have been apparent for some years now do not mark, historically speaking, a starting point or a radical new beginning – as is insinuated with the use of somewhat grandiose-sounding concepts such as digital capitalism, platform capitalism, or digital economics – but rather a new phase within the framework of a socio-technical paradigm shift. (Dolata 2019, 185–186, 194–195)

Companies such as Google (advertising), Facebook (advertising), Amazon (commerce), Netflix and Spotify (entertainment) or Uber (transportation) do not constitute novel sectors of the economy but transform existing ones. One should add that the software business where software licences are sold as commodities is relatively new. The world’s largest software companies are Microsoft, Oracle, SAP, VMware, Adobe, and Salesforce. In 2020, they were the world’s 13th (Microsoft), 94th (Oracle), 150th (SAP), 403rd (VMWare), 418th (Adobe), and 578th (Salesforce) largest transnational companies. The software industry did not exist before computing became commercially viable. These large software companies were created in 1975 (Microsoft), 1977 (Oracle), 1972 (SAP), 1998 (VMWare), 1982 (Adobe), and 1999 (Salesforce). In the long history of capitalism that according to Immanuel Wallerstein goes back to the 16th century when “our modern world-system came into existence as a capitalist world-economy” (Wallerstein 2004, x) and according to Braudel (1980) had its origins in the longue durée (long duration) of commercial capitalism that started in the 12th century in places such as the city-states of Venice, Florence, and Genoa (on the discussion of the history of commercial capitalism, see Banaji 2020 & Melants 2007 & Wood 2002), such companies are relatively novel.

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What is Digital Capitalism?

Advertising and entertainment that have been transformed by digital platforms have started to boom in the 20th century as part of Fordist mass production and mass consumption. These industries are a bit older than the software industry, but the culture industry, which Horkheimer and Adorno (1947/2002, 94–136) characterise as the capitalist transformation of culture into exchange-value and ideology, is in the long history of capitalism also still relatively new. What Dolata hints at is that the hype of radical economic novelty that comes along with the rise of digital companies is often ideological in character. It serves as a marketing strategy of large corporations that promise to create a radically new and better society in order to make humans buy their commodities. In reality, digitalisation is based on dialectics of continuity and change in the economy and society.

Shoshana Zuboff (2019, 7) characterises contemporary societies as “surveillance capitalism”, a term whereby she understands a “new economic order that claims human experience as free raw material for hidden commercial practices of extraction, prediction, and sales” and a “parasitic economic logic in which the production of goods and services is subordinated to a new global architecture of behavioral modification”.

Economic surveillance is certainly an important aspect of the capital accumulation model of many transnational digital corporations such as Facebook. Surveillance scandals such as Edward Snowden’s revelations and the Cambridge Analytica scandal have shown how surveillance is an important aspect of the interaction of the power of capitalist corporations that belong to the digital industry and state power. But surveillance is not the only and not the primary feature of capitalism and digital capitalism. There

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are also other important information-based processes that are key features of contemporary capitalism:

• exploitation of information-producing and digital labour in the realm of class;

• the governance of information in the realm of political power;

• the creation of false consciousness in the realm of ideology.

Digital/informational/communicative capitalism is a more suited term than surveillance capitalism. Surveillance is one of the means to advance exploitation, control/domination, and manipulation/ideology in capitalism. (Fuchs 2021b, 168)

The notion of digital capitalism better characterises what is going on in contemporary society than the category of surveillance capitalism. Digital capitalism is a still relatively novel dimension of capitalism and capitalist accumulation processes. It is an important topic of research that requires an interdisciplinary critical approach to social research. The book at hand is a contribution to the foundations of the critical analyses of digital capitalism.

References

Chapter One | Introduction: What is Digital Capitalism?

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Chapter One | Introduction: What is Digital Capitalism?

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