PostCapitalism-_Paul-Mason_-_z-library.sk_-1lib.sk_-z-lib.sk_

development of technology, he writes, we are measuring the extent to which ‘general social knowledge has become a force of production … under the control of the general intellect’.⁴⁴

The ideas outlined in the Fragment were recognized in the 1960s as a complete departure from classic Marxism. In the twentieth century, the left had seen state planning as the route out of capitalism. They had assumed that capitalism’s inner contradictions lay in the chaotic nature of the market, its inability to fulfil human need and its propensity to catastrophic breakdown.

In the 1858 Fragment, however, we are confronted with a different model of transition: a knowledge-based route out of capitalism, in which the main contradiction is between technology and the market mechanism. In this model, scribbled on paper in 1858 but unknown to the left for more than 100 years, capitalism collapses because it cannot exist alongside shared knowledge. The class struggle becomes the struggle to be human and educated during one’s free time.

It was the Italian leftist Antonio Negri who described the Fragment on Machines as ‘Marx beyond Marx’. Paolo Virno, one of his co-thinkers, pointed out that its ideas ‘are not present in any of his other writings and in fact seem alternative to the habitual formula’.⁴⁵

The question remains: why didn’t Marx pursue this idea more widely? Why does the general intellect disappear as a concept except on this one unpublished page? Why does this model of the market mechanism being dissolved by social knowledge get lost in the writing of Capital?

The obvious answer – beyond all the textual discussions – is that capitalism itself at the time did not bear out the proposition. Once the 1858 panic was over, stability returned. The socialization of knowledge inherent in the telegraph and the steam locomotive were not sufficient to blow the foundations of capitalism sky-high.

In the following decade, Marx constructed a theory of capitalism in which the mechanisms of exchange are not exploded by the emergence of a general intellect, and in which no mention is ever made of knowledge being an independent source of profit. In other words, Marx retreated from the specific ideas in the Fragment on Machines.

The emergence of twentieth-century Marxism as a doctrine of state socialism and crisis-driven transition was no accident; it was grounded in the Marx of Capital.

Here, though, I am not concerned with a history of Marxism, but with the question: is there a route to postcapitalism based on the rise of information technology? It is clear from the Fragment that Marx had at least imagined such a route.

He imagined socially produced information becoming embodied in machines. He imagined this producing a new dynamic, which destroys the old mechanisms for creating prices and profits. He imagined capitalism being forced to develop the intellectual capacities of the worker. And he imagined information coming to be stored and shared in something called a ‘general intellect’ – which was the mind of everybody on earth connected by social knowledge, in which every upgrade benefits everybody. In short, he had imagined something close to the info-capitalism in which we live.

Furthermore, he had imagined what the main objective of the working class would be if this world ever existed: freedom from work. The utopian socialist Charles Fourier had predicted that labour would become the same as play. Marx disagreed. Instead, he wrote, liberation would come through leisure time: ‘Free time has naturally transformed its possessor into a different subject, and he then enters into the direct production process as this different subject … in whose head exists the accumulated knowledge of society.’⁴⁶

This is possibly the most revolutionary idea Marx ever had: that the reduction of labour to a minimum could produce a kind of human being able to deploy the entire, accumulated knowledge of society; a person transformed by vast quantities of socially produced knowledge and for the first time in history more free time than work time. It’s not so far from the worker imagined in the Fragment to the ‘universal educated person’ predicted by Peter Drucker.

Marx, I think, abandoned this thought experiment because it had scant relevance to the society he lived in. But it has massive relevance for ours.

A THIRD KIND OF CAPITALISM?

To the neoliberals, the emergence of info-capitalism seemed like their greatest achievement. They could barely conceive that it might contain flaws. Intelligent machines, they believed, would create a post-industrial society in which everybody did high-value, knowledge-based work and in which all the old social conflicts died out.⁴⁷ Information would enable the idealized capitalism of the textbooks – with transparency, perfect competition and equilibrium – to become reality. In the late 1990s the literature of the mainstream – from Wired magazine to the Harvard Business Review – was filled with celebratory descriptions of the new system. But there was an ominous silence about how it worked.

Ironically, it fell to the people who had rediscovered the Fragment on Machines, the far left disciples of Antonio Negri, to make the first attempt at a theory of info-capitalism, which they dubbed ‘cognitive capitalism’.

Cognitive capitalism, say its proponents, is a coherent new form of capitalism: a ‘third capitalism’, following the merchant capitalism of the seventeenth and eighteenth centuries and the industrial capitalism of the last 200 years. It is based on global markets, financialized consumption, immaterial labour and immaterial capital.

Yann Moulier-Boutang, a French economist, believes that the key for cognitive capitalism is the capture of the externalities. As people use digital devices, they become ‘co-producers’ with the companies they are dealing with: their choices, their apps, their friend lists on Facebook can all be given monetary value by the company that provides the service and harvests the information. ‘Capturing positive externalities,’ writes Moulier-Boutang, ‘becomes the number one problem of value.’⁴⁸

In cognitive capitalism, the nature of work is transformed. Manual labour and industry don’t stop, but their place in the landscape changes. Because profit increasingly comes from capturing the free value generated by consumer behaviour, and because a society focused on mass consumption has to be constantly fed coffee, smiled at, serviced by call centres, the ‘factory’ in cognitive capitalism is the whole of society. For these theorists, ‘society as a factory’ is a crucial concept – vital to understanding not just the nature of exploitation but resistance.

For a pair of Nike trainers to be worth \$179.99 requires 465,000 workers in 107 factories across Vietnam, China and Indonesia to produce to the same exact standard. But it also requires the consumer to believe that the Nike swoosh makes these chunks of plastic, rubber and foam worth seven times the average US hourly wage.⁴⁹ Nike spends \$2.7 billion a year on getting us to believe just that (compared to \$13 billion actually making the shoes and clothing) – and that marketing budget buys way more than advertisements at the Superbowl.

In fact since Nike got its head around the rules of cognitive capitalism in the early 2000s, its spend on TV and press adverts has fallen by 40 per cent. Instead, the focus is on digital products: Nike+ for example, which uses an iPod to log runners’ performances, has recorded – and fed back to Nike – 150 million individual jogging sessions since its launch in 2006.⁵⁰ Like all businesses, Nike is in the process of becoming, effectively, ‘information plus things’.

This is what the cognitive capital theorists mean by the ‘socialized factory’. We are no longer in a world of clearly delineated production and consumption, but one in which ideas, behaviours and customer interactions with the brand are critical to generating profit; production and consumption are blurred. This partly explains why struggles against the new capitalism are often focused on consumer issues, or brand values (e.g. corporate social responsibility), and why protesters behave more like the ‘tribes’ in marketing demographics than a unified proletariat. For cognitive capital theorists – as for Drucker – the primary activity of the new workforce is ‘the production of knowledge by means of knowledge’.⁵¹

However, the cognitive capitalism theory contains a major flaw. It would be one thing to say ‘a new kind of info-capitalism has been born within late industrial capitalism’. But the key cognitive capitalism theorists say the opposite: many of them believe cognitive capitalism to be a fully

functioning system already. Factories in Shenzhen, slums in Manila, metalbashing shops in Wolverhampton may look just as they did ten years ago – but to these theorists their economic functions are already transformed.

This is a technique common in European speculative thought: to invent a category and apply it to everything, thus reclassifying all existing things as sub-categories of your new idea. It saves you the trouble of analysing complex and contradictory realities.

It leads cognitive capitalism theorists to underestimate the importance of the rise of old-style industrial production in the BRIC (Brazil, Russia, India and China) countries, and for some to downplay the significance of the post-2008 financial crisis, or to see it as merely the teething troubles of the newborn system.

In fact, the system we live in is not a new, coherent and functioning form of capitalism. It is incoherent. Its tense, febrile and unstable character comes from the fact that we’re living in an age of the network alongside the hierarchy, the slum alongside the web café – and to understand the situation we have to see it as an incomplete transition, not a finished model.

POSTCAPITALISM: A HYPOTHESIS

The debate on postcapitalism has come a long way since Peter Drucker, yet in another sense it has gone nowhere. It has been marked by speculative thinking, technobabble and a tendency to declare the existence of new systems rather than to explore their relationship to old realities.

Benkler, Kelly and Drucker each declared something akin to a ‘new mode of production’, but none advanced an explanation of what its dynamics might be. The Ontario-based economist Nick Dyer-Witheford, in his 1999 book Cyber-Marx, produced a decent speculative account of what information-based communism might look like.⁵² But the debate on this has rarely achieved the status of economics.

Jeremy Rifkin, an influential management consultant, came closest to describing current reality in his 2014 book The Zero Marginal Cost Society.⁵³ Rifkin argues that peer-production and capitalism are two different systems; currently they coexist and even gain energy from each other, but ultimately peer-production will reduce the capitalist sector of the economy to a few niches.

Rifkin’s most radical insight was to understand the potential of the Internet of Things. The most enthusiastic consultancies – for example McKinsey – have valued the impact of this process as up to \$6 trillion a year, mainly in healthcare and manufacturing. But the vast majority of that \$6 trillion is in reduced cost and increased efficiency: that is, it contributes to reducing the marginal cost of physical goods and services in the same way as copy and paste reduces the cost of information goods.

Rifkin points out that the impact of wiring every person and every object into an intelligent network could in fact be exponential. It could rapidly reduce the marginal cost of energy and physical goods in the same way as the internet does for digital products.

Like all books destined for the business shelves at airports, though, Rifkin’s is light on the social dimension. He understands that a world of free stuff cannot be capitalist; that the free stuff is beginning to pervade the physical as well as the digital world, but the struggle between the two systems is reduced to a struggle between business models and good ideas.

Conducted among social theorists, lawyers and tech visionaries, the postcapitalism debate exists in a parallel universe to the debate among economists about the crisis of neoliberalism, and the debate among historians about the problematic takeoff of the fifth long wave. To move forward, we need to understand how the new economics of info-tech, the post-2008 crisis and the long-cycle pattern fit together. What follows below is a first attempt to do that. It’s a hypothesis – but it is based on evidence and can be tested against reality.

Since the mid-1990s, a revolution in the way we process, store and communicate information has created the beginnings of a network economy. This has started to corrode the traditional property relations of capitalism in the following ways.

It corrodes the price mechanism for digital goods, as understood by mainstream economics, by pushing the cost of reproducing information

goods towards zero.

It adds a high information content to physical goods, sucking them into the same zero-price vortex as pure information goods – and often, as with the trainers, making their value dependent more on socially created ideas (the brand) rather than the physical cost of production.

It makes financialization necessary, creating two streams of profit flowing to capital from the general population: as workers producing goods, services and knowledge; and as borrowers generating interest payments. So, while it’s true to say ‘the whole of society has become a factory’, the mechanisms of exploitation are still first of all wages, then credit and only finally our mental collusion in the creation of brand value, or the giveaway of externalities to tech companies.

It is in the process of revolutionizing the productivity of physical things, processes and energy grids, as machine-to-machine internet connections begin to outnumber person-to-person links.

If information corrodes value, then corporations are responding with three types of survival strategy: the creation of monopolies on information and the vigorous defence of intellectual property; the ‘skating to the edge of chaos’ approach, trying to live within the gap between expanded supply and falling prices; and the attempt to capture and exploit socially produced information such as consumer data, or by imposing contracts on programmers that say the company owns code they write in their free time.

However, alongside the corporate response, we are seeing the rise of nonmarket production: horizontally distributed peer-production networks that are not centrally managed, producing goods that are either completely free, or which – being Open Source – have very limited commercial value.

Peer-produced free stuff drives out commercially produced commodities. Wikipedia is a space in which commerce cannot operate; with Linux or Android there is clearly commercial exploitation, but at the edges – not based on ownership of the main product. It is becoming possible to be both producer and consumer in the same process.

In response, capitalism is beginning to reshape itself as a defence mechanism against peer-production, through info-monopolies, through allowing the wage relationship to weaken and through the irrational pursuit of high-carbon business models.

Non-market forms of production and exchange exploit the basic human tendency to collaborate – to exchange gifts of intangible value – which has always existed but at the margins of economic life. This is more than simply a rebalancing between public goods and private goods: it is a whole new and revolutionary thing. The proliferation of these non-market economic activities is making it possible for a cooperative, socially just society to emerge.

The rapid change in technology is altering the nature of work, blurring the distinction between work and leisure and requiring us to participate in the creation of value across our whole lives, not just in the workplace. This gives us multiple economic personalities, which is the economic base on which a new kind of person, with multiple selves, has emerged.⁵⁴ It is this new kind of person, the networked individual, who is the bearer of the postcapitalist society that could now emerge.

The technological direction of this revolution is at odds with its social direction. Technologically, we are headed for zero-price goods, unmeasurable work, an exponential takeoff in productivity and the extensive automation of physical processes. Socially, we are trapped in a world of monopolies, inefficiency, the ruins of a finance-dominated free market and a proliferation of ‘bullshit jobs’.

Today, the main contradiction in modern capitalism is between the possibility of free, abundant socially produced goods, and a system of monopolies, banks and governments struggling to maintain control over power and information. That is, everything is pervaded by a fight between network and hierarchy.

It’s happening now because the rise of neoliberalism disrupted the normal fifty-year patterns of capitalism. And that’s another way of saying that the 240-year lifecycle of industrial capitalism may be nearing its end.

So there are two basic possibilities ahead of us. Either a new form of cognitive capitalism does emerge and stabilize – based on a new mix of firms, markets and networked collaboration – and the remnants of the

industrial system find an orderly place within this third capitalism. Or the network erodes both the working and the legitimacy of the market system. If so, a conflict will take place that results in the abolition of the market system and its replacement by postcapitalism.

Postcapitalism could take many different forms. We’ll know it’s happened if a large number of goods become cheap or free, but people go on producing them irrespective of market forces. We’ll know it’s underway once the blurred relationship between work and leisure, and between hours and wages, becomes institutionalized.

Because its precondition is abundance, postcapitalism will deliver some form of social justice spontaneously – but the forms and priorities of social justice will be negotiable. Whereas capitalist societies always had to worry about ‘guns vs butter’, postcapitalist societies might fight over growth vs sustainability – or the timeframe for delivery of basic social goals, or challenges like migration, women’s liberation and demographic ageing.

So we have to design the transition to postcapitalism. Because most theorists of postcapitalism either just declared it to exist, or predicted it as an inevitability, few considered the problems of transition. So one of the first tasks is to outline and test a range of models showing how such a transitional economy might work.

Today we are used to hearing the word ‘transition’ to describe tentative local attempts to build a low-carbon economy; local currencies, time banks, ‘transition towns’ and the like. But transition, here, is a bigger project.

To make it happen we need to learn the negative lessons of failed transition in the USSR. After 1928, the Soviet Union tried to force a route through to socialism via centralized planning. This produced something worse than capitalism, but among the modern left there is a strong aversion to discussing it.

If we want to create a postcapitalist society, we have to know in detail what went wrong, and to understand the fundamental difference between the spontaneous non-market forms that I’ve been describing here and the Five Year Plans of Stalinism.

To go forward, we need to know how, exactly, information goods corrode the market mechanism; what might happen if this tendency was being promoted instead of restrained; and what social group has the interest to make the transition happen. We need, in short, a better definition of value and a more detailed history of work. What follows is an attempt to provide them.