The following is a revised version of a presentation I gave at the Media Asia 2012 conference in Osaka, Japan.
Part 1: Understanding the Transition
Beginning in 2007, the current crisis has overturned a great deal of the capitalist utopianism that developed during the 1990s. In order to properly understand this shift, it is first necessary to consider the its historical roots and conceptual foundations. We will begin by addressing its historical roots.
Arising during the 1950s-1960s, Information Society Theory and Post-Industrialism, two important capitalist ideologies, were a response to a number of factors. First, a changing relationship between the urban and rural, and the upwards pressure that put on wages. Throughout the advanced captialist countries, workers from rural areas who had previously worked seasonally, and therefore had their cost of living partially covered by the produce of their farms and gardens (allowing their wages to be lower compared to urban workers) began to move to the cities, and accordingly demanded higher wages to account for their increased cost of living. This put tremendous pressure on profitability. Second, the world witnessed a changing relationship between the core and periphery regions as the breakdown of the dominance of US monopoly capital and movements of decolonization challenged the postwar order. The complacency of American capital that had developed during its period of unquestioned dominance following the war was challenged by the rise of German and Japanese capitalism, with their higher levels of productivity. This forced profound changes in the global organization of capitalism during the 1970s. Similarly the rebellion of the Global South against the dominance of the Global North over their industries and resources upset the postwar order. Third, there was at the same time a breakdown of Keynesian economic regulation and an ensuing monetary crisis. This was directly related to the decline of American industrial dominance, and overturned the reigning Keynesian-Fordist paradigm as stagflation demonstrated that Keynesian claims to have tamed captialism were unfounded. Finally, and most importantly for the development of Information Society Theory, there was the growth of a new subjectivity during the world revolution of the 1960s-1970s that challenged capitalist disciplinary systems and threw up new forms of creativity and organization. While montarism challenged the Keynesian establishment from the right, various new socialist and libertarian ideas challenged it from the left.
Confronting these challenges, the organic intellectuals associated with post-industrialism helped to construct the post-fordist regime of accumulation by advocating a variety of measures. Capital disciplined labour through the introduction of higher levels of automation, and with communication networks that would increase the mobility of capital relative to labour. This meant the roboticization of the assembly line, the introduction of office automation equipment, and the creation of lower cost back offices that could be connected through ICTs. Alongside these disciplinary technologies, the information society theorists argued for a pseudo-anarchist utopianism that suggested that the development of technology under capitalism would automatically lead to a free and equal future, meeting the demands of the “counter-culture.” These two factors were combined in the form of “flexible accumulation,” which harnessed the burgeoning creativity of the working class while simultaneously “freeing” it in the sense of it becoming “freely disposable” to capital. A movement of liberation thus became harnessed by capital and turned into an engine of greater domination.
As time progressed the movement towards an “Information Society” became implicated in the twin movements of “financialization” and “globalization.” These movements were initially somewhat extraneous to the Information Society project, but their development soon became intertwined.
By the 1990s the trinity of informatization (In which we include automation), financialization, and globalization coalesced into a powerful economic and ideological formation that was most clearly expressed in California’s Silicon Valley, and was labelled by Richard Barbrook and Andy Cameron as “The Californian Ideology.”
In the authors’ words this ideology is “a mix of cybernetics, free market economics, and counter-culture libertarianism.” Specifically it celebrates how technological and social development could be driven on a capitalist basis through a set of intersecting strategies. There was a push towards the development of case-by-case venture capital financing through the use of computerized and deregulated networks of finance capital. By encouraging the growth of startups in the ICT sector, this investment method temporarily helped to counteract the tendency towards monopoly and centralization. At the same time new organizational methods for the flexible assembly of the brightest minds from around the world on a project-by-project basis, and the equally flexible exploitation of readily disposable labour in the Global South to produce technology at the minimum possible cost (and thereby increase its speed of development through increases in sales volume) were developed. To a similar extent The Californian Ideologues saw the demands for liberation articulated during the World Revolution of the 1960s-1970s being realized in the personal freedom afforded to highly-skilled workers in the American IT sector, to capitalists operating in the same area, and in the relative ease with which one could switch between the roles of labour and capital during this period. The potentiality and mobility of capital, of information, and of labour were seen as all melding in a new age of creativity and realization of human potential.
However just as the Californian Ideology achieved a kind of global hegemony, it was challenged by the reemergence of the crisis tendencies of capitalism, and with them the dark underside of capitalism that had been obscured by the utopianism of the era.
Part 2: Crisis and Recovery?
At the same time that the Global North was entering the “Information Age,” industry was being offshored; mostly to Asia, where capital found reasonably well educated and low cost labour that allowed for considerable increases in the rate of exploitation, and therefore of profitability, offsetting a falling profit of enterprise. This process was by no means external to the “Information Revolution” or “financialization,” as improvements in ICTs allowed for improved logistics, reduced inventory sizes, and better coordination of international finance needed to organize the new system of transnational production.
Those industries that did remain in the Global North made use of increasing levels of automation in order to compete with super-exploited labour in the Global South, a factor that contributed to so-called “deindustrialization” even as the actual amount of industrial production performed in the Global North often remained quite high.
Workers were either pushed or pulled into widely diverse forms of service sector work in the Global North, and unions were considerably weakened by this shift. With the rise of transnational production the tendency towards immiseration outlined by Marx in his General Law of Capitalist Accumulation began to appear more and more pronounced, as labour’s relative share of income became either stagnant or eroded by inflation and government “reform” programs that reduced the social wage. At the same time wage levels in some parts of the Global South rose to begin to equalize with wages in the Global North.
In order to understand the effect of these trends, it is important to understand a fundamental distinction in Marx’s economic thought between wealth and value, or in other words the distinction between use-value and value
. For Marx, commodities which are produced for and sold in the market possess a material or sensorial aspect (their weight, their smell, their appearance, their chemical properties, and so on) which he calls a use value; and an ideal, immaterial, purely social aspect which is determined by the socially necessary labour time require to produce them, and which determines the proportions in which they exchange with other commodities, which he calls value
. In pre-capitalist society production was pursued for the purpose of satisfying human needs, that is for the purpose of producing use values. However under capitalism the production of use-values in effect becomes a side-effect of the real purpose of production, which is the production of value, a purpose and drive which is enforced by market competition and the social power which possession of money affords. When we analyze the effects of automation and globalization it is important to bear this distinction in mind.
Automation reduces the amount of socially necessary labour time require to produce a commodity, and therefore lowers its value. Often times these improvements in machinery or software are accompanied by improvements in the organization of production, such as the famous Toyota Production System
, which also have the effect of lowering the value of commodities. This lowering of value affords the producer a temporary ability to out-compete their competitors on the market, but in the long term ends up lowering prices. A similar lowering of values and therefore prices can be achieved through finding cheaper sources of labour, such as those found in Asian sweatshops. The combined result of this lowering of prices is that capitalists’ wage bills can be lowered to some extent because “the worker’s dollar goes further.” Today we often call this the “Wal-Mart effect,” or perhaps in Japan the “Aeon effect,” which is often passed off by dishonest intellectuals as evidence that the working class is actually now “rich.”
Let us consider what has happened during the last two decades. As I mentioned before, the end of the 1990s increasingly made clear the dark underside of capitalism to those who did not already experience it on a day to day basis. In 1997 the Asian Flu crisis represented the latest eruption of the 10 year industrial cycle, sending shock waves around a highly financialized world. As a result of the panic that jumped from one country to the next in a wave of financial contagion, capitalists sought safety in the US Dollar, strengthening the financial position of the United States and allowing for it to largely prevent the crisis from spreading to the Global North. In the Global South the situation was hardly so rosy, but after a number of fire sales many of these countries were able to export their way back to prosperity by selling to the consumers of the United States. Yet this put tremendous pressure on the American consumer to buy, and indeed when combined with the flood of capital into the United States after the crisis and the fact that the wages of the working class had stagnated, much of the ensuing wave of consumption was debt-financed. Furthermore because investment in real estate was considered “safe as houses” a great deal of this consumption was constituted through and financed by real estate investment. The most important point of the ensuing real estate bubble is that it represented a deferral of the 1997 industrial cycle crisis in the Global North by means of the credit system.
Almost exactly 10 years later, the deferred crisis met the next crisis of the industrial cycle, and was multiplied in its ferocity by the same financial system whose supposed “innovations” had saved the world from the last crisis. This was the beginning of what is commonly known as the Global Financial Crisis, and for the working class its main effects have been wage repression, unemployment, and the vicious slashing of the social wage in the name of “austerity” – with no end in sight. While productivity continues to charge ahead, the use-values it produces remain mediated through exchange relations, and therefore through value, denying large swathes of the working class even the ever-smaller share of the social product that they enjoyed before the crisis. These conditions give rise to social unrest as financial chaos and immiseration drive people hopefully towards anti-austerity and socialist movements, and more ominously towards xenophobia and fascism. In a crisis it becomes clear that apologetics that claim that capitalism is a system driven by the aim to satisfy human needs, or in other words to produce use-values, are a contemptible farce. Clearly this situation is not “good enough.”
Part 3: Future Prospects
But what of the future? We understand that the present moment of crisis is miserable for a great many people, but what about when the fabled recovery finally sets in? Unless the current crisis brings about a global socialist revolution or a catastrophic world war, both of which seem unlikely at the moment, there will eventually come a day when the system once again enjoys vigorous expansion. At the present moment the libertarian utopianism of the Californian Ideology appears ludicrous, but people have short memories, and in the next boom phase of the industrial cycle many will no doubt believe that this time we have finally entered a new crisis-free era. Indeed the roots of the Californian Ideology can be traced back as far as the Saint-Simonian societies of the 19th century, the legacies of which have survived in one way or another through every crisis of capitalism that humanity has endured since that time.
It would therefore be premature to dismiss the futurist utopias of the 1990s as irrelevant. The digital era elite continue to promote these ideas quite vigorously through the usual channels of Wired
magazine, think-tanks, and the ubiquitous TED talks. Looking past the crisis, an April edition of the Economist
recently declared that we are on the verge of a “third industrial revolution”
driven by automation, additive manufacturing, and nanotechnology.
One futurist book that has attempted to outline the consequences of this “third industrial revolution” is Peter Diamandis and Steven Kotler’s Abundance: The Future is Better Than You Think. The two authors are associated with the X Prize and the Singularity University, organizations created to promote “world-changing” technological development on a capitalist basis. Abundance is written for a popular audience, and reads like something of a literature review of the last five years of TED talks. While this might normally disqualify such a book from serious academic consideration, I believe precisely because Abundance represents the current “common sense” of the Californian Ideology, that it is worth examining.
Abundance is a book dedicated to “improving global living standards,” mainly through “technophilanthropy” conducted by the new bourgeoisie thrown up by the development of ICT industries since the 1990s. It is a book outlining the globe-spanning ambition of the Californian Ideology, and celebrating its leaders as “hyper-agents” able to make long-term decisions for the benefit of humanity, unconstrained by bureaucracy or special interests. According to Diamandis and Kotler, technophilanthropists will make use of their financial resources and technical know-how to create new technologies that will empower the world’s poor to lift themselves into the sunny uplands of prosperity. All this is hardly anything new, yet if we look past the self-congratulatory froth of their work and examine its conceptual depths a more interesting picture emerges.
Abundance in fact pays very little attention to the market, focusing on productivity, cooperation, and planning as the basis for “changing the world.” There is hardly any evidence in the book of the neoliberal worship of “market efficiency,” with emphasis instead put on how technologies that allow for open-source style collaboration can be encouraged through direct investment by philanthropists in order to increase the amount of use-values that can be produced in a given amount of time, thereby creating the eponymous “abundance.” The authors approvingly quote Matt Ridley, author of The Rational Optimist as stating “Forget dollars, cowrie shells, or gold, the true measure of something’s worth is the hours it takes to acquire it.” This insistence on labour time almost sounds Marxist!
Marx hailed capitalism’s capacity to truly socialize production by bringing together all the workers of the world into one productive system. For the authors of Abundance this takes the form of the development of the division of labour, and the development of new forms of cooperation, particularly that of the open-source model. One of the many examples of technical progress Diamandis and Kotler make use of is that of the PR2 robot, which is designed to operate as an open platform for the development of robotics so that engineers can more quickly share and test their ideas with one another. The leader of the PR2 project, Scott Hassan, is quoted in Abundance as stating that the main reason he decided to build the PR2 as an open platform is because “Proprietary systems slow things down” and prevent “the best minds” from working to advance the technology. Quite a remarkable statement to find in a book written by advocates for privately financed space exploration!
Of similar interest is the issue of “Technophilanthropists” who use their massive private wealth and technical know-how to fund projects which they deem worthwhile. These so-called “hyperagents” according to Abundance do not face elections, shareholders, or donors like the heads of traditional organizations, and so can afford to “think long term.” In fact this sounds remarkably like Marx’s criticisms of the anarchy of the market in impeding rational social planning.
While Abundance and similar utopian texts of the Californian Ideology highlight the potential of new forms of production, cooperation, and planning, they offer no solution whatsoever to the problems posed by the capitalist system of value production, treating the questions of production and distribution as though they were already settled. As such they offer to the oppressed no escape from the inhuman crisis tendencies of capital and simply ask them to weather the storm and hope to receive their scrap of the expanding pie when times are better. If we make the well supported assumption that these crisis tendencies are inherent to capitalism and will persist so long as the capitalist mode of production remains dominant these ignored problems appear as a glaring flaw in the Californian Ideology.
In my opinion, what is necessary in order to address this flaw is not to critique it from a traditional social democratic perspective, as Barbrook and Cameron originally did, treating its developments as purely deviant. Instead what is needed is to cast a critical light upon its ideas, a light in which its shallow utopianism takes on a different form and reveals new possibilities. While the Californian Ideology may be facile, it does represent what Marx called the poetry of the future, and can reveal to us new possibilities for society. This was the approach that he took in critiquing the utopian socialisms of his day. The Left today relies altogether too much upon the poetry of the past, and is in dire need of this kind of inspiration.
What might this critique reveal? In the Grundrisse Marx offers us some ideas that may be of use in understanding the implications of the “abundance” of the third industrial revolution. In his famous “Fragment on Machines” Marx reiterates that the basis of capitalist production, the production of value, is based on the measurement of labour time. However as large scale industry develops, it does so on the basis of the commonly shared “general state of science and on the progress of technology, or the application of this science to production.” For Marx this development of science and industry constitutes the development of a “social individual” or “general intellect.” We can think of the general intellect as analogous to the concept of the “noosphere” which has entered into popular discourse in recent years. The forces of science and technology are general, in contrast to the traditional basis of capitalist production – direct labour, which is particular. While productive forces continue to grow at a tremendous rate on the basis of the common general intellect, wealth is distributed to particular workers according to their direct labour time, labour which has become ever more abstract as the division of labour renders the production process into a truly social phenomenon. There therefore forms a “monstrous disproportion” between “labour time applied and its product.” Compensation based on labour time then becomes for Marx “a miserable foundation” in the face of the abundance of social production.
In fact we see exactly what Marx means when we
consider the staggering disproportion between productivity and working class income growth that has come to characterize the advanced capitalist economies. In describing the growth of inequality in America, Paul Krugman states that “Income stagnation does not reflect overall economic stagnation; the incomes of typical workers would be 30 or 40 percent higher than they are if inequality hadn’t soared.” Imagine how much higher these incomes would be under an actually equal distribution! “Abundance” isn’t just coming in the Third Industrial Revolution, it is already here, even though the notion may appear absurd to Americans getting by on food stamps or Spaniards reduced to digging in dumpsters for their next meal as a result of “austerity.” This disproportion is often explained away by the idea that productivity growth is due somehow to “capital investment” yet scientific and technological development has always and will always be a general social process, no matter how many obstructionist intellectual property laws attempt to enclose it. As we saw mentioned in Abundance “Proprietary systems slow things down.” Open source development is faster and more dynamic than that conducted under non-disclosure agreements and hermetically sealed corporate labs.
To be sure scientific development requires considerable material support, yet ironically the “Technophilanthropists” frustration with the short-term profit motivations of corporate science actually betray how superfluous the capitalist form is to this development. This not even taking into account the disproportionate role already played by public investment in science and technology.
When subjected to a proper critique of the dynamics of capitalism such as that found in the Grundrisse, what the Californian Ideology reveals is not the triumph of capitalist utopianism, but rather its miserable inadequacy to the development of the forces of production and equitable distribution of their fruits. What is needed to address the root causes of our crisis, as well as the challenges of our future, is a form of socialism that is just as, if not more flexible than the forms of capitalism that have developed during the information age. The development of the ICT-based planned economies internal to transnational corporations and of open-source methods of intellectual production form the obvious basis for such a type of society, but only further development can render these prefigurations into a concrete form adequate to a socialist mode of production.