Media and New Capitalism in the Digital Age The Spirit of Networks

Thus, that the nodes comprising the network—be it computer chips, workers in a company, companies in the economy, or individuals in the marketplace—are dumb, unreflexive, and short sighted relative to the network as a whole is a cornerstone of both the digital and neoliberal worldviews. In the digital discourse, it is premised on a techno-scientific discovery of the operation of nodes in information networks. In neoliberalism, it is premised on the socioscientific assumption regarding the limited capacity of individuals: individuals are “partially and perpetually ignorant” about markets (Sally 1998, 19). The crucial difference between the digital discourse and neoliberal theory is the depth in which the foundations on their respective arguments lie: while in neoliberal thought these are anchored in abstract, theoretical constructs such as “the market,” or “constitutional ignorance” (i.e., in knowledge), in the digital discourse these arguments are welded into the “materiality” of network technology, such as dumb chips and network architecture (i.e., in practice or reality).

Both in the digital discourse and neoliberal theory, the constitution of the individual as the central and sole unit of social operation is paramount. Both place premiums on the independence of each node in the network (or liberty of each individual in the market). But there is also an interesting variance between them, a variance that might be conceived in terms of an “evolution” in the analysis of the interrelation between individual liberty and spontaneous order from classical liberalism, through neoliberalism, and finally to the digital discourse. In the classical liberalism of Adam Smith, John Stuart Mill, and David Hume, individual liberty in the marketplace is seen as a natural, unconditional right, hence the term “natural liberty”; it is assumed to be a virtue on its own merit (Greenwald 1994; Ashford and Davies 1991, 170–73). This constitutes a normative legitimation for the free market.

In contrast to these scholars of the Scottish Enlightenment, neoliberal theory withers away with the normative and metaphysical component of “natural liberty” as a basis for liberalism. Neoliberalism turns the argument on its head, seeing individual liberty as a prerequisite for the successful operation of the market. For spontaneous order (i.e., the market) to occur, individual liberty must prevail. For Hayek, the argument for liberalism is based on a social theory rather than on a moral premise. His advocacy for individual liberty stems from the “epistemic problem” discussed previously (Petsoulas 2001, 2, 16): “Given that knowledge is dispersed, tacit and temporary, it is most efficiently utilised in an environment of decentralised decision-making in which individuals arefree to pursue their goals by using the information available to them” (16, emphasis mine). This constitutes a scientific legitimation for the free market. As

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Hayek comments in a related matter, liberalism “derives from the discovery of a self-generating or spontaneous order in social affairs” (Hayek 1967, 162, cited in Kley 1994, 1, emphasis mine); that is, it is grounded in science and facts.

This claim for the liberty of individuals has also been articulated in Hayek’s social theory around the concept of “methodological individualism,” which suggests that “all actions are performed by individuals; therefore analysis of social reality must start from individuals.” Moreover, it suggests that “a social collective has no existence and no reality beyond the actions of its individual members” (Gamble 1996, 53). This atomized conception of society, where society is “nothing more than a collection of individuals” (Rapley 2004, 77), has also been popularized by a slogan coined by Margaret Thatcher—a central protagonist in putting neoliberal theory into practice—who famously announced that there was “no such thing as society, only individual men and women” (cited in Harvey 2005, 23).

The digital discourse follows much of the neoliberal, scientific legitimation, especially in arguing that spontaneous order is a predominant phenomenon in nature. But it also transforms the argument for individual liberty into a technologistic legitimation. To the extent that individuals are reconceived as nodes within a technological network, and to the extent that these nodes must be atomized, flexible, and adaptable to network fluctuations, individuals must be free in order for spontaneous order to occur. Hence, the argument for the liberty of individuals in the context of free markets is asserted thrice: first, on normative grounds, second, as a scientific discovery, and, finally, as a technological necessity.

Like the digital discourse, neoliberal theory, too, is concerned with explaining how market rationality emerges from what might be seen as haphazard, disorganized, individualistic, ungoverned, and even conflicting actions. In neoliberal theory, spontaneous order mediates individual “micromotives” into “macrobehavior” (Sally 1998, 1) and “private vices” into “public benefits,” in Mandeville’s terms (see Petsoulas 2001, chap. 3). Spontaneous order accounts for what might seem an unbridgeable gap between irrationality and rationality, between multiple particularities and universality. According to Hayek, spontaneous order does the trick by providing the best tool for the allocation of knowledge; it is the best solution for individuals’ epistemic limitation. Sally explains, “The genius of the market economy is that it allows individuals to use freely what partial knowledge they have in everyday activities of production and consumption. The competitive market is by a long shot the best available device to coordinate existing (fragmented, dispersed and tacit) knowledge, as well as to create new knowledge, in order to cater for material wants” (Sally 1998, 19).

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In a famous passage from The Wealth ofNations, Adam Smith, too, grapples with the quantum leap from unreflexive, or dumb micromotives to a rational, beneficent macrobehavior:

Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By referring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is, in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. (Smith 1776, 32)

“Spontaneous order” and the “invisible hand” are metaphors for a coordinating mechanism of the activities of individuals who, apart from their own production ability and consumption needs, know very little of the wider economy and who only have the satisfaction of their own interests in mind (Sally 1998, 19). As does the digital discourse, so neoliberalism posits the transformation of dumbness and selfishness into smartness and social benevolence. And both the digital discourse and neoliberal thought are able to conceive of a society, which is nevertheless reducible to its individual units: a network of nodes and a market of individuals.

CHAOS

So far I have compared the digital discourse and neoliberal theory in their respective discussions of networks and markets, especially through the notion of spontaneous order, central to both these worldviews. I have already presented the digital discourse’s discussion of the chaotic nature of network economy, as well as the delimitation of social action mostly to adaptation and flexibility on the part of individuals and laissezfaire policies on the part of society as a whole. The resemblance of this digitalistic representation of the economy to neoliberal theory is again uncanny.

The notion of chaos is also central to neoliberal understanding of markets. Here, again, it is worthwhile noting the transformation from (neoclassical) liberal thought, through neoliberal discourse, and finally to the digital discourse in terms of accounting for the realities of markets. A crucial distinction between Adam Smith’s notion of the invisible hand and Hayek’s notion of spontaneous order is their teleology. For Smith, the invisible hand brings harmony and homeostasis; markets incline toward equilibrium. In contrast, for Hayek, the natural state of the economy is disharmony. The market is not seen as a mechanism designed to attain homeostasis through equilibrium of supply and demand. Instead, the market “is a dynamic process of endogenous change and growth in which means, wants and technology are constantly transformed and in which individual activity is exploratory and experimental. To Hayek, competition is less about equilibrium and more about a ‘discovery procedure,’ an ongoing, open-ended process that coordinates and generates knowledge in a decentralised manner to adapt to uncertainty and environmental flux” (20).

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Hence, Hayek’s theory is a critique of the neoclassical equilibrium theory. Markets are “always in disequilibrium” (Ashford and Davies 1991, 170–73) and in “flux” (Sally 1998, 20), fostering “restless individuals” to engage in a perpetual “discovery procedure” (Ashford and Davies 1991, 170–73). Both the digital discourse and neoliberal theory expect spontaneous order to be in perpetual flux and both recommend the same recipes to cope with that: for the individual—adaptation through flexibility; for states—laissez faire policies and withdrawal from the market (and, by proxy, from society).

There is a straight line going from the digital discourse’s ideas about the chaos of markets and the connection between chaos and technological innovation and progress to the ideas of another prominent figure in the school of Austrian economics (11–14) and a contemporary of Hayek.⁶ For Joseph Schumpeter, too, capitalism is inherently and benevolently marked by a state of disequilibrium. Schumpeter assigns a prime role in a capitalist market to technological innovations. These innovations bring about a state of “creative destruction”: they create new wants and products and, at the same time, render older wants, commodities, and jobs obsolete. Therefore, “creative destruction” is a prime motor of economic growth, but, at the same time, it makes capitalist markets unpredictable, combining “long-term growth with boom-and-bust cycles” (Fuller 1999). Periods of great economic turbulence are therefore seen as an indication that the market is in the midst of a (benevolent, positive, and progressive) process of creative destruction. The state is advised not to interfere in the market in such times and not to mitigate these great disruptions.

This last point by Schumpeter brings us to the final parallel between the digital discourse and neoliberal theory: a strong advocacy for the insulation of the market from the democratic political process. As we have seen above, in the digital discourse it is information networks that render the operation of markets more rational. More precisely, the rationality predicated on the spontaneous order that emerges from the decentralized coordination of disparate nodes materializes and reaches its full potential with the digitization of these procedures. The rationality of network markets is suggested to be, in the digital discourse, universal and apolitical.

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Not necessarily for the same underlying reasons, neoliberal theory, too, makes a case for the insulation of markets from political interference (Rapley 2004, 76). The insulation of markets from politics is premised on two arguments: that planned order is inferior to spontaneous order and that political intervention hurts the mechanism of self-regulation. Let us take a closer look at each of them. According to neoliberal theory, spontaneous order (or “cosmos,” in Hayek’s terminology) is superior to made order (taxis) on two accounts:

• Complexity: Given the limitations of the human mind, made order is bound to be simple, Cosmos, however, can be much more complex, involving many more variables. The inability of individuals “to grasp the complexity of social order and understand the forces that shape it, set ‘limits to the extent to which conscious direction can improve upon the results of unconscious social processes’” (Petsoulas 2001, 4).

• Purpose: Made orders are constructed to satisfy the purpose of their makers. Spontaneous orders do not serve any particular interest. They have a function, rather than a purpose, which suggests awareness and interests (Petsoulas 2001, 13–14).

Thus, according to neoliberal theory, spontaneous order, specifically the market, is inherently apolitical in two distinct meanings of the term. First, given the complexity of variables and knowledge entailed in the construction of markets, it cannot be subjected to political processes; its complexity is so immense as to make the realm of politics ill suited to handle it. And second, markets are apolitical because their spontaneous emergence renders them cleansed of particularistic interests. They are seen as neutral tools that perform a disinterested function.

This is the crux of neoliberal conservatism, a conservatism that is not merely disguised but outright denied by the digital discourse. Rationality is already embedded in social institutions (those that are the result of spontaneous order). As Hayek puts it, “Our social existence is the product of evolutionary forces that are beyond any individual’s capacity to comprehend fully. Traditional (evolved) practices and institutions embody the cumulative knowledge of past generations” (Petsoulas 2001, 4). Institutions and morals, such as private property, private law, money, and competition are “the result of human action, but not the execution of any human design”; they are “unintended by-products . . . of human action” (Sally 1998, 22). If we try to introduce planned order we soon find out that, compared to the merits of competitive markets, “central planning, and even ad hoc measures of government intervention, are much inferior in allocating goods and services. Governments lack access to and control of requisite information in order to plan or guide markets, and what little information they marshal is coordinated in a centralised and cumbersome, not to say ham-fisted, manner” (19–20).

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Hayek, therefore, advises us that “as individuals we should bow to forces and obey principles which we cannot hope fully to understand, yet on which the advance and even the preservation of civilization depend” (Hayek 1979, 162, cited in Petsoulas 2001, 4). The social, thus, is not and should not be a product of conscious and purposeful—that is, political—construction. Society and culture do change, but this change should be left to internal, self-regulated, evolutionary processes and not be led by conscious, rational, and deliberate attempts. “We cannot redesign,” Hayek says, “but only further evolve what we do not fully comprehend” (Hayek 1981, 167, cited in Petsoulas 2001, 4–5). Hence, all that humans can do is act in the most immediate, bottom-up, unreflexive, untheoretical fashion as atomized nodes in the network.

Neoliberalism strongly opposes any type of supposedly external regulation, one that has not organically and spontaneously spawned from the rationale and workings of the market. This refers not only to the state but also to organizations in civil society, such as labor unions. The only role appropriate for governments is to foster an environment that allows markets to function properly. That is, governments should protect lives, define property rights, and enforce private contracts; in other words, governments should act as enforcers and protectors of markets (Greenwald 1994).

Intervention of states in the market in fact hurts the mechanisms of self-regulation: “The plethora of ad hoc interventions by governments in the process of resource allocation . . . abrades and even destroys the self-generating and self-organising properties of the spontaneous market order” (Sally 1998, 23). “Political considerations” are therefore said to “typically interfere with economic logic” (Rapley 2004, 76). Indeed, somewhat euphemistically, market failures—such as phases of depression or high rates of unemployment—are commonly referred to as “government failure” (Yergin and Stanislaw 1998). As Ashford and Davies put it, in neoliberal theory, “The existence of ‘market failure’ can frequently be located in the creation of obstacles by government” (1991).

Conclusion: From Safety Net to the Internet

This chapter analyzed the digital discourse concerning the interweaving of network technology with the market. According to the digital discourse, network technology transforms markets in two fundamental ways. At all levels, from organizations, through industries, to the global economy, markets have become decentralized, dehierarchized, and flexible. The reconstitution of markets in accordance with the architecture of networks has rendered them more conducive to spontaneous order. Market order no longer has to be planned a priori by conscious decision and implemented top down; instead this organization is shown to increasingly emerge bottom up from the spontaneous actions of dumb nodes. Likewise, spontaneous order does away with the need for most forms of regulation and planning. Moreover, while network markets require less planning, intervention, and governing coordination, they nevertheless yield more rational results. Spontaneous order is predicated on, and in turn furthers, a new balance of power between individuals and society: a network market empowers individuals at the expense of social regulation through the state.

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But top-down management—of the private company or national economy—becomes not only unnecessary but also virtually unfeasible because network markets are also more chaotic. This is the second fundamental transformation entailed by the rise of the network market. Market rationality does not simply increase quantitatively, but rather it changes qualitatively, featuring more flux, unpredictability, acceleration, change, and perpetual instability. This new economic reality requires individual actors, or nodes in the network, to react to the ever-changing market environment with flexibility and adaptability.

The digital discourse on the network market represents a fundamental shift in the political culture of contemporary capitalist societies from social democracy to neoliberalism or from embedded markets to market fundamentalism (Somers and Block 2005). It is against this background that the digital discourse should be understood. It is part of the new spirit of capitalism that sees the contemporary phase of capitalist society as an overcoming of the pitfalls of Fordist society and as the embodiment of the humanist critique of capitalism (Boltanski and Chiapello 2005)—specifically, regarding the central planning and organization of the economy by society and the state. Marketization and disorganization are seen in the digital discourse as stemming from network technology, as benevolent, and as a transcendence of the shortcomings of the Keynesian welfare state. As this book argues, as it promises the increased rationality of the economic system as a whole and more individual empowerment, the digital discourse also links these benefits to the precariousness and risks associated with the dynamics of a self-regulating market, such as flux and flexibility. It thereby works ideologically by depoliticizing, naturalizing, and neutralizing these social transformations.

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MARKETS AND TECHNO_LOGY LEGITIMIZATION

The rhetorical affinity of neoliberalism as a market ideology with contemporary discourse on technology has been well documented before (see, for example, Frank 2000; Barbrook and Cameron 1996; Best and Kellner 2000; Gere 2002; Borsook 2000; Turner 2006; Aune 2001; Mosco 2004; Wajcman 2004; Harvey 2005; Dean 2002). In One Nation Under God, Thomas Frank (2000) identifies the discourse on information technology as one of the key factors in popularizing market ideology. Books such as Walter Wriston’s The Twilight of Sovereignty and George Gilder’s Microcosm made the argument that information technology made the restrained form of capitalism (social democracy) obsolete and a return to nineteenth century-style laissezfaire inevitable (Frank 2000, 54–55). Information technology came to be “the most powerful symbolic weapon in the arsenal of market populism” (57). Frank concludes, “Since the moment the Internet was noticed by the mainstream media in 1995, it has filled a single and exclusive position in political economy: a sort of cosmic affirmation of the principles of market populism” (79). As another author puts it, the discourse on information technology played a decisive role in Selling the Free Market (see Aune 2001, chap. 7) during the 1980s and 1990s. Moreover, Frank points out the transposition of market enthusiasm into a technological language. No longer was this enthusiasm bluntly ideological but it became technical: “Now the ideology seemed to emerge as a natural consequence of the technology being discussed rather than from the random floating anger of betrayed patriots” (Frank 2000, 79–80).

In the same vein, Barbrook and Cameron (1996) christen the conflation between information technology and market ideology the “Californian Ideology.” In this techno-political vision, they say, the convergence of information and communication technologies is seen as leading to “the apotheosis ofthe market—an electronic exchange within which everybody can become a free trader” (Barbrook and Cameron 1996). According to this vision, network technology embodies an ideal of the free market (Robins and Webster 1999, 67). The Californian Ideology presents not only a new vision for society but also a new vision of what society is. Rather than seeing society in terms of structures and institutions, it sees information society as a network of free-floating individuals, who meet in the market place in order to trade and exchange ideas. According to the Californian Ideology, information technologies inherently “empower the individual, enhance personal freedom and radically reduce the power of the nationstate” (Barbrook and Cameron 1996). The fact that these outcomes are inherent to the technology makes any intervention of regulatory bodies (most notability, governments) an anachronism that is doomed to fail.

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What these analyses share in common is a perception of the digital discourse as an ideology in the Marxist sense: an ideational construction that conceals material reality. Such an approach is also articulated in the work of Best and Kellner (2000), who criticize Kelly’s analysis of contemporary society for ignoring the realities of capitalism that still prevail. They limit their discussion largely to refuting Kelly’s arguments about the network economy by upholding the centrality of capitalism in shaping contemporary society. The ideological thrust of Kelly’s discourse, according to Best and Kellner, is anchored in the biological framework he is using in order to provide a social analysis. Kelly, they contend, collapses the dividing lines between biology and society and transplants the new model of complexity theory from the natural world to the social world. They reject this unproblematic extrapolation of complexity theory from nature to society and see this blurring between nature, technology, and society as mystifying and depoliticizing the restructuring of capitalism along neoliberal lines by resorting to a language of inevitability.

Such analysis presents the digital discourse as a concealment of the new realities of capitalism. The thrust of the analysis offered in this chapter is different inasmuch as it situates the digital discourse on the network market in its historical context and interprets it within the analytical framework of legitimation discourse. According to this analysis it is not so much that the vector of capitalism is externalized from the digital discourse; instead, the realities of the new capitalism are very much internalized within the discourse, but they are masked and given technological clothing. Put differently, the digital discourse both articulates and legitimizes the transformations of capitalism.

Somers and Block (2005) use the term “ideational embeddedness” to account for the relations between an ideology of market fundamentalism and policies that have direct economic and social effects; market practices are embedded within a broader set of ideas and ideologies, which, they say after Bourdieu, have the power to create what they purport to describe (Somers and Block 2005). Following Somers and Block, I see the digital discourse as providing the ideational embeddedness for the new realities of capitalism and its new spirit. To put it somewhat ironically, the approach I take is to accept the digital discourse as a true representation, albeit, a true representation of a different object than the one the discourse purports to represent. In other words, the digital discourse represents not merely a new techno-social reality but also a new dominant ideology, political culture, and spirit that accompanies and supports it.

The comparison of the digital discourse to the neoliberal discourse sought to go beyond their overt ideological affinity (promarket and antigovernment) and explore the rationalizations and theorizations that underlie these assertions. What we have seen is that the digital discourse does not simply reiterate neoliberal tenets but translates many of the neoliberal tropes into a digitalistic language, rendering the deeper theoretical claims of neoliberalism digital. In that sense, the distinctions between the two discourses are no less revealing than the similarities, since most of these dissimilarities are a result of the digitalization of the tenets of neoliberalism. This is perhaps epitomized in the notions of markets and networks, as they are used in the digital and neoliberal theory, respectively. The market is an abstract construct, a scientific discovery, a social fact, in Durkheim’s terminology. Networks (as they are construed by the digital discourse), on the other hand, stem from, and are anchored in, a material reality: the web of information and communication technology spanning virtually all geographical and social space. In that manner, a priori intellectual assumptions put forth by neoliberal theory are reaffirmed a posteriori by technological evidence in the digital discourse.

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The significance of the digital discourse lies not in its overt embrace of free market ideology (as Barbrook and Cameron 1996, for example, point out) but—to use a somewhat harsh rhetoric—precisely in its rejection of ideology as such. The digital discourse strives to be precisely what a free market ideology, like neoliberalism, might have a hard time being—not an ideology at all. Unlike neoliberalism, it is based not on intellectual ideas, cognitive constructs, and abstract metaphors and models, and it has no overt political trajectory. Instead, it builds its foundations on the seemingly technical, materialist, and instrumentalist reading of technology. It is this “technological hermeneutics” that gives it a gloss of an impartial, apolitical rendering of reality.

As an analytical framework to explain and legitimize the realities of free market—that is, as ideology—the digital discourse therefore seems superior to neoliberal theory because it anchors much of the neoliberal arguments in material tools. If rationality is a product of the disparate and selfish wants of individuals, if it emerges spontaneously and is selfregulating, and if it requires a mechanism of communication, then the market, once digitized and incorporated into cyberspace, promises to be the most sophisticated market in the history of humanity. In that sense, the digital discourse not only reiterates but also supersedes the neoliberal arguments regarding the operation of markets by embodying it within network technology. In the digital discourse, economic rationality is redefined as emanating solely from the operation of networks, and so it is inextricably bounded with network technology.

It is therefore no surprise that advocates of neoliberalism are enthusiastic about network technology no less than technological enthusiasts seem excited about neoliberal ideas (Gere 2002, 140–41; Harvey 2005,

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