Economics and Business
In the digital age, markets become property. Today’s most powerful companies are internet giants like Google, Apple, Amazon and Tencent. The dominant platforms now control digital ecosystems that represent a fundamental transformation of capitalism. Liberalism imagined the market as a free space dedicated to the exchange of goods and services, a creator of knowledge and innovation. The internet meta-platforms have transformed the marketplace into a set of tightly controlled domains. This book examines the historical roots of this phenomenon and outlines its contemporary manifestations. It shows how digital surveillance and algorithmic management are employed to control entire markets, and how the same methods appear in the digital labour process. Widening social inequality is one inevitable outcome. What is specific to digital capitalism, the book argues, is the emergence of ‘proprietary markets’. This signals not only an end to the liberal notion of the economy. The conflicts over its future trajectory will be decisive for life chances in digital capitalism.
Ecological economics has been labelled both a subfield of mainstream neoclassical economics, in a modern positivist tradition, and a post-normal science, in a postmodern constructionist tradition. This chapter starts by explaining the arguments for and meaning of pluralism. It reveals the contradictions of its ecological economic advocates and particularly criticise their failure to reject orthodox mainstream economics and instead present apologetic arguments for continued use of its methodology and methods. The chapter next turns to the foundational positions that can create a positive alternative social ecological economics. Employing critical realism as an aid, it works through a series of philosophical presuppositions - reality independent of humans, truth in science, limits to empirical knowledge, how we can have knowledge in a changing world and the similarities across social and natural sciences. The chapter brings together various reflections on how knowledge can be created.
Chapter 6 draws together the strands and proceeds towards theory-building. Looking for earlier forms of capitalist accumulation with relevant similarities, it employs historical studies and world system theory to capture digital capitalism’s operations as a privatised form of mercantilism. Historically, like today, mercantilism emerged as a strategy for a world without economic growth. In the two eras, mercantilism shares a vision of the global economy as a zero-sum game, using trade monopolies to obtain profit via market control. In both cases, the leading companies operate in global markets that exercise quasi-governmental authority. However, while classic mercantilism was ultimately a political operation with state-granted trade monopolies enriching absolutist rulers, the state today is the loser in many different ways. The chapter revisits the core themes of the preceding chapters (privatisation, financialisation, rent extraction, labour control, inequality) and embeds them in theory. In particular, it develops a theory of social conflict over digital capitalism. The argument is that the social formula implemented by digital capitalism’s leading corporations is an alliance of capital and consumers against labour. This creates role conflicts, as people are usually both consumers and workers. This, the chapter argues, makes social conflict over digital capitalism unlikely.
Trying to define a preanalytic vision as an explicit cognitive act is not an easy task and especially if the hope, as here, is to make this more comprehensive and extend from philosophy of science to ideology and axiology. Social ecological economics can be understood as in opposition to two paradigmatic positions, one constituted by economic growth and the other price-making markets. This chapter outlines the foundations in the natural sciences. It then turns to the overarching aims of economic science and the need to redefine them away from the orthodox goals of growth and efficiency, and towards social provisioning. This is followed by outlining four areas where social ecological economics develops interdisciplinary and heterodox thought: human behaviour; ethics and value; non-human Nature; and institutions. The chapter ends with a summary of positions that constitute social ecological economics in terms of ontology, epistemology, methodology, axiology and ideology.
The idea of a preanalytic vision as explaining scientific change was originally proposed by Joseph Schumpeter in his posthumously published History of Economic Analysis. Schumpeter's proposal is put into a broader perspective by comparison with the theories of Neurath and Kuhn and issues in the sociology of science that they all raise. The chapter then turns to clarifying the meaning and role of ideology and the differences that have occurred over time and between different authors - Marx, Engels, Schumpeter and Gramsci. It turns to the critical realist approach termed 'explanatory critique', and the implications this has for social ecological economics and the role of researchers in the transformation of society. The chapter shows how calls for change in economic thought have appealed to concepts of a preanalytic vision and paradigm shift as invoking a revolutionary change and substantive transformation.
Chapter 2 describes the historical background of digital capitalism. It starts by drawing a broader picture of the post-Second World War political economy, where the 1970s saw the OECD world stumbling into the current situation of long-term stagnation. Digital technology emerged as an outlier, securing consistent growth through successive capitalist crises. The chapter describes the emergence and growth of the digital technologies as an effect of multiple strategies for capitalist rejuvenation: automation intensified from the 1970s onwards, boosting demand for digital equipment. Globalisation and financialisation of production caused demand for digital information and communication technologies to surge, spurring growth for the leading digital companies of the time. On the more political side, military Keynesianism and the deregulation of telecommunications paved the way for the rise of big tech. The chapter pays particular attention to the different national trajectories of privatisation in the 1990s. These help explain why today’s big tech companies appeared in the United States rather than Europe or Japan, which were also leading technology regions at that time.
Chapter 4 digs deeper into the strategies and practices of the leading digital corporations of the present age, focussing on Alphabet/Google, Apple, Meta, Amazon, Alibaba and Tencent. Their function as ‘proprietary markets’ is identified as the heart of digital capitalism. The chapter begins with a more analytical perspective on the post-Second World War political economy, drawing on regulation theory and Wolfgang Streeck’s theory of democratic capitalism. The term ‘proprietary markets’ captures what sets the new digital accumulation regime apart from the Fordist and post-Fordist models that preceded it. While Fordism was about selling uniform mass products to unsaturated markets and post-Fordism shifted the focus to individualised products in more competitive markets, digital capitalism’s leading corporations have basically exited the competition game altogether by becoming the markets themselves. The chapter introduces a distinction between platforms per se and meta-platforms like Android or Amazon, which operate as markets for an ever-growing range of products and services. The latter’s strategies have ensured that it is almost impossible to access important markets without them. The chapter outlines how their expansion to date has relied on strategies such as ecosystem-building through mergers and acquisitions, and suggests that control of infrastructure will represent their main future growth strategy. This analysis is embedded in a theory of rent extraction: maintaining the digital infrastructures in question is often very cheap compared to the profits these companies extract from their position as owners of markets.
Chapter 5 examines the consequences of proprietary markets for labour. Two points in particular are stressed: first, market-owning companies use their power to extract value from the economy and especially from the supply side of proprietary markets. Producers within these systems come to depend more and more on the market-like meta-platforms, which can then increase the proportion they extract. As a consequence, the share taken by the meta-platforms for market participation is missing on the external provider’s revenue income side and cannot be distributed in wages. Digital capitalism’s accumulation model is thus a driver of social inequality. Second, the chapter uses material case studies and the broader literature to demonstrate how algorithmic management methods are applied to expand control and exploitation in the digital labour process. The digital tracking, performance rating, scoring technologies and information asymmetries employed for labour control are captured as filiations of the control strategies developed for proprietary markets. The chapter elaborates their dissemination through new business models and in particular the ‘gig economy’, through corporate software and through wearable technologies in manufacturing. While the bottom line is that the new means of control are again drivers of social inequality, day-to-day resistance strategies and the limitations of digital control are also discussed.
This chapter explores the subterranean politics of anxiety in the student bodies of the USA, UK, and Canada. As a new generation is emerging into adulthood, for whom neoliberalism, financialisation, and its anxieties are all they have ever known, what forms of struggle, survival, and mutual aid are they inventing? Could everyday practices of student self-sabotage become the basis for collective acts of self-sabotage aimed at the financial machinery of the contemporary university?
This chapter explores the relation between death and economy through an engagement with the work of Georges Bataille, Norman Brown, and Jean Baudrillard. While capitalism is just the latest in a long series of attempts to manage death anxiety, the accumulation of capital fails to alleviate guilt, resulting in an endless thirst for ever more money, wealth, and power.