Category Archives: Class and Capitalism

Theory of class, capitalism, social relations of production, technology and the general Marxist or post-modern (Re-thinking Marxism) discussions.

Understanding the Digital Economy: Two Books, Two Views

This post starts as review of Shoshana Zuboff’s The Age of Surveillance Capitalism, considers a different view from McKenzie Wark, and ends up querying whether this is really capitalism and the political implications of such debates.

Surveillance Capitalism

Zuboff’s monumental 600-page book argues that with digital technology we are in a new phase of capitalism – an age of “surveillance capitalism”. She is clear that although it is a market form which would be unimaginable outside the digital milieu, surveillance capitalism is not reducible to nor determined by digital technology. The reluctant admission of a former Google CEO that search engines retain [personal] information for “quite some time” is an exemplar: it is not the search engine that retains the data, it is those who wrote the programs and command/enable this “surveillance capitalism”.

Zuboff situates surveillance capitalism as historically specific. While the (ch 2) history is fairly light (a zeitgeist change with little reference to power or the interests behind the ideological shifts she describes), the basic argument is that neoliberalism stripped the old corporate forms of inefficient social compromises (like collective bargaining, awards, welfare states) and created a new business focus on “shareholder value” (profit maximisation). This, combined with new individualised consumption wants created the moment for the “Apple ipod hack” (i.e. personalised consumption on demand) and the birth of surveillance capitalism.

In this vein, Zuboff cites Piketty on the rising inequality, but argues that the real clash is between the experience of increasing inequality and the modern individualised consciousness with an expectation of making one’s own destiny – a clash between feudal-level wealth distribution and more egalitarian modern thought. This is evident in the Occupy Movement’s fixation on “the 1%” which by definition was not a revolution for the marginalised and oppressed, but for a supermajority of the 99% of society.

Chapter 3 outlines the key political economy of surveillance capitalism in a shift from what began as an original behavioural value exchange (you give google/algorithm behavioural data and they provide a better, more personalised service) to a surplus extraction. Along with your search/click/usage history, a whole lot of surplus data is collected about you (and combined with data that is scraped from across the web). This data is marketised through algorithms and AI to predict future behaviour to maximise advertising returns (by marketing the product to a relevant consumer at the time they are most likely wanting that product).

Note: Google (which is Zuboff’s main exemplar) is not selling your data, they are selling their prediction of your consumption interests in what is in effect a behavioural futures market. Google’s original genius was the discovery of a way to translate non-market interactions (e.g. information searches) into a raw material (behavioural surplus) for products (behaviour predictions) aimed at their real customers (the advertisers).

Chapter 4 take this basic microeconomic analysis into a macro political economy drawing on Polanyi’s famous analysis of how the market transforms human life into “labour”, nature into “land” or “real estate”, and exchange into “money”. Similarly, under surveillance capitalism human experience is commodified into a market process which goes way beyond the consumer’s own interactions or interests.

This is a really interesting framework to which I will return, and at this point I expected the book to begin detailing how this process took place and to trace the contours of this commodification and the accumulation of wealth. Unfortunately though, it took a very different direction.

Much of the technology story and corporate history is treated as assumed knowledge (Zuboff argues it has been well-described but under-theorised in lots of places). Instead the book seeks to add further layers of analysis building on psychology. It argues that surveillance capital now captures not just actions (searches, clicks, views) but also reactions and emotions. It is then able to not only predict, but to “nudge”/change behaviour – a result that limits free will and removes the “will to will” at an industrial scale.

For me, this is where the problems start for the book. It is rhetoric on rhetoric, and the main evidence is two case studies: a facebook experiment which nudged people to vote in a US election (just to turn-out, it did not track who they voted for), and the Pokemon Go phenomena which moved people around the city colonising both public and private spaces (often at advertisers’ direction) and gathered further locational data. This all seemed at the trivial end of behavioural modification and the “end of free will” argument seemed over-blown. People were still making their own decisions (albeit nudged) to vote or to transverse the city – but doesn’t all advertising try to nudge behaviour?

Further, the argument that there is an ongoing drive for more information accumulation is oft-repeated, but it is never really explained why this data capture needs to be exponentially expanded. Certainly, better data and more accurate predictions give commercial advantage, but is this really a uniquely surveil-or-die imperative? And while obviously digital firms like Google, facebook, Apple and Amazon are huge, there is no real discussion of how this surveillance capitalism mixes with or applies to the rest of the economy. (A point dealt with much better by Wark – see below).

At this point Zuboff’s argument could have focused much more on the political rather than commercial implications, but she does not go there until Ch 13 where again the government use of these technologies is only mentioned in passing, or by reference to China’s social credit regime. This is genuinely scary, but a long way from surveillance capitalism. In fact, I got more political relevance from an excellent report by Monash University academics that looked at the impact of audience segmentation and advertising.

They argues that we are literally getting different information from the same searches depending on our profiles, thus reinforcing our views and limiting any shared understanding. We are not just dealing with different views or values, we are working with completely different facts and we don’t even know what facts others are getting. This contributes to political and social fracturing and is a major challenge for democracy and governance. But Zuboff does not really go there, because as one reviewer points out – she is a professor in Harvard Business School and her interest is business and consumers, not political power.

Anyway Chapter 11 contains a good summary of the argument to date and how they did it – with 16 reasons why they get away with it.[2] Some of this elevates commercial tactics (e.g. law suits, normalising) into a grander conspiracy and it never really rises above innuendo or simply the playbook of (non-digital) big tobacco and big polluters. However, chapter 12 tries to develop a more theoretical argument to buttress the concerns about free will, and goes back to BF Skinner’s radical behaviouralist psychology (Zuboff was a young academic in Skinner’s department). This is the belief that there is no free will or individual agency, just responses to a range of stimulus (with the belief in free will holding science back).

In Skinner’s time they did not have the technology to collate and analyse all the stimuli to which people were responding, so could not predict with certainty, but surveillance capitalism now does have those tools. Data is rendered to the objective observer of Skinner’s dreams – the algorithmic “Big Other”. This is different from Orwell’s Big Brother because Zuboff wants to distinguish between totalitarianism (which seeks to wins souls to a belief system) and surveillance capitalism which does not care about beliefs as long as the data can be rendered so that stimulus can be applied (for market purposes).

This chapter (and ultimately the book) was scary, but left me wanting more. Again, there was the lack of evidence of behavioural change that actually took away free will beyond simply being a more personalised way of affecting what all advertising and cultural “nudging” does. (All culture constrains free choice because it imposes a cost of going outside the normal, or constrains visions of “other” so that one does not know what is unknown – the power of the non-decision that Bachrach and Baratz were noting in the 1970s).

In a lengthy (and at times irrelevant or extravagant review) in The Baffler, Evgeny Morozov goes further, noting that the notion of an appropriation of behavioural surplus from users is misleading. Unlike extraction of money or labour time, the fact that a computer knows I like avocado on toast does not mean that I cease to know it. I have lost nothing in this transaction and continue to enjoy breakfast, so it is not appropriation.

More generally, Morozov argues that Zuboff focuses almost exclusively on the “surveillance” part of surveillance capitalism and left the “capitalism” part of the term un-explored. They trace Zuboff’s earlier work and how it is situated within the Parsonian systems theory and a school of business history which tends toward narrow functionalist explanations (changes arise to address dysfunctionalities).

This analysis is blind to macro-economic power (because the focus is on business and consumers who naturally and unproblematically exist in relation to eachother). Indeed, the focus of surplus extraction shifts from the production process (Marx’s extraction of surplus labour) to an extraction from consumers – without a real consideration of the labour processes that lay behind this commodification process.

Finally, when Morozov eventually focuses on the Zuboff’s book (in section IX of the review!), he offers three ways of interpreting Surveillance Capitalism. The first is that it is largely descriptive with no great claim to revealing a new system dynamic. In this case, it is not clear why all the bother just to reveal a few harms done by Google and facebook, if there are no broader implications.

The second thesis is closer to how I read Zuboff, which is that surveillance capitalism is unequivocally worse than other digital regimes and it is becoming the new hegemonic form of capitalism. However, for both Morozov and me, the evidence for this is lacking (though the review goes into much more detail on how this is lacking).

The third thesis is really a circular argument that surveillance capitalism is driven to behave in an accumulative way. However, the particulars and the results are more drawn from the traditional logic of profit-maximising capitalism than from unique data extraction processes.

In short, Zuboff’s book fails because it is narrowly focused on market-exchanges rather than a broader understanding of capitalism as a production and accumulation process. (On top of that, I will add that it was really long-winded with constantly repeating rhetorical flourishes in place of actual evidence).

Beyond Capitalism?

However, in light of these issues, the next book I read was much more interesting – particularly if viewed in the light of Zuboff’s arguments up to chapter 3. McKenzie Wark’s Capital is Dead: Is this Something Worse? suggests that the sorts of digital market processes that Zuboff describes[3] actually constitute new relations of production and accumulation which are not capitalist.

Unlike Zuboff, Wark comes out of a Marxist tradition and does focus on production relations (not market exchanges). Wark argues that the wealth derived in these digital businesses does not come from the appropriation of surplus labour from a waged proletariat or from the ownership of capital (as per capitalist production relations), but from:

  • The surplus information/data supplied for free by consumers, not as a commodity in a capitalist value-exchange; and
  • The intellectual/technical output of a “hacker workforce” which provides the knowledge for the algorithms and data management, but whose creative work is developed at any time and place and not confined to an industrial/office process.

Wark recognises that the digital machines are produced in standard capitalist industries, and there are a range of other capitalist industries in play, but the point is that the surplus of industrial owners is increasingly wrested by the “vector class” who own the means of information management. We (the left) are so schooled in a Marxian historical story that capitalism would be replaced by socialism (either evolutionary or revolutionary) that we are not seeing new production relations which are not capitalist.

The moment of the proletarian revolution was lost (or perverted) early last century, but it is worth remembering that it was not the peasants that overthrew feudalism. Rather it was capitalists that supplanted feudal lords (over time, sometimes with force/law, sometimes with greater efficiency). Similarly, according to Wark, the new vector class who control information is supplanting those who own capital as the hegemonic class. Capitialism and capitalist production relations continue to exist (just as non-capitalist forms of production continued under capitalism), but they are no longer the dominant part of the economy.

Unfortunately, IMHO, at this point in the book Wark goes off into cultural arguments rather than further considering the production relations, but the argument around production relations took me back to my PhD reading and the “Rethinking Marxism” school. Over 30 years ago they theorised capitalism as a specific production relation (rather than an over-arching “mode of production”) and as only one among a number of existing production and class processes.

I was surprised/frustrated that Wark did not draw on that thinking at all, but when I went to the Rethinking Marxism journal there were (unsurprisingly) a range of articles on how to theorise digital technology and production. After an introductory note about “magic” and technological fetishism, these articles ranged from seeing simply “variants of capitalism as usual” to considerations of “more-than-capitalism”: digital feudalism (extraction of rent in the form of data), knowledge creation and non-class processes of accumulation, and a potential to strengthen the commons/community.

Unfortunately, most of the articles in that issue are not online, so that rich reading must wait for another day when I can get to a university library.

POLICY IMPLICATIONS

Ultimately though, I am less interested in the labels (capitalism/not-capitalism) than in the analysis and its implications. Despite the gaps in both Zuboff and Wark’s books, both argue that our thinking and legislation has not caught up with the new digital world. This is important because it seems to me that unless we can understand the logic of accumulation in a digital economy, our political responses will be limited, or flawed.

For instance, traditional consumer issues like privacy and consumer data rights, while important, are based on liberal capitalist concerns which struggle for relevance in a digital age. Similarly, the horrors of digital surveillance in predictive policing, court sentencing and welfare compliance that Virginia Eubanks details in Automating Inequality are a serious problem, but addressing this won’t disturb the new logic of accumulation.

If we are interested in political economy from a perspective of class, inequality and a fair sharing of wealth, and if the digital economy is indeed based on new forms of power and wealth creation, then we need to go beyond the legalistic issues above and build new social regulation and redistribution mechanisms.

A starting point could be the combination of new and old tax measures of the type proposed by Thomas Piketty (Capital and Ideology, Ch 17), or new measures such as the proposal from Yanis Varoufakis to make big tech companies pay into a public wealth fund with a capital return to every citizen (in recognition of the value of the public’s data that underscores the tech giants’ profits). These proposals provide a positive agenda, but it is noteworthy that even Varoufakis’ radical proposal is based on the logic of capitalism (the rights to a return on capital, which in this case is data). Accordingly, the transformative nature of these proposals may also be limited.

Perhaps that is ok, but it probably depends on whether we understand the globalised digital economy as a continuation of the economy we have known or something fundamentally different. On this, I suspect there is more exploration to be done.


[2]              Maybe just read Ch11 – it would be much quicker than wading through the whole book!

[3]              This is my shorthand. Wark only refers to Zuboff in passing and along with others who have theorised new forms of digital/platform capitalism.