In this longer article, Adam Booth examines the rise of the sharing economy, which has featured heavily in the media because of firms like AirBnB and Uber. These new models are presented as offering a revolutionary new dynamic phase in the life of capitalism. But the reality under capitalism is far from this utopian promise.
Plus ça change, plus c'est la même chose.
(The more things change, the more they stay the same.)
In the second half of the second decade of the 21st Century, we are surrounded by a wealth of technology and innovation, with driverless cars, 3D printing, and an emerging “Internet of Things” connecting people and objects across the globe. Techno-Utopians and libertarian capitalists promise us a world of plenty; a super-efficient system of production and distribution; and a life of leisure. And yet what is the reality for the 99%? Ecological crises, “secular stagnation”, and eye-watering inequality.
For the vast majority, technological progress has not been accompanied by rising living standards, increased wages, or a reduction in the hours of the working week. Despite the incredible technological and scientific potential at society’s fingertips, the most basic problems – of disease, poverty, and homelessness – are not even close to being solved.
Far from being placated and satisfied with what capitalism has to offer in the year 2015, after seven years of global economic crisis, millions of people are rising up, getting organised, and rebelling against the governments and elites who defend this senile system.
Nevertheless, the propaganda continues. In the post-war boom, on the back of mass industrialisation and automation, it was asserted that “we are all middle class now”. Today, despite the gloomy projections from the more serious bourgeois economists, we are told that the next “revolutionary” change is just around the corner. Soon – so the story goes – we will all be free, liberated, entrepreneurial capitalists!
This is the myth that is being peddled across the advanced capitalist world as a supposedly “new” form of economy emerges out of the ashes of the 2008 crisis: the “sharing” (or “on-demand”) economy.
Some, such as those Utopians and libertarians highlighted above, have optimistically proclaimed that we are witnessing the birth of a new, rejuvenated era for the capitalist system. Others, such as Paul Mason in his new book PostCapitalism, have (more soberly) highlighted the contradictions that modern information technology and the “sharing” economy pose within the confines of capitalism – that is, within the limits of private ownership, commodity production and exchange, and production for profit.
But what is the reality? With a plethora of on-demand services now only an app, a swipe, and a click away, are we seeing the dawn of a new smart-phone fuelled era? Does the sharing economy really represent a fundamental change in how society is organised and run? And with a combination of information technology, automation, and high-density networking, has the nature of work and jobs been radically transformed for the better?
Only a click and a tap away
AirBnB and Uber are just the best known examples. But these are only the tip of the iceberg when it comes to the world of the “sharing” – or “on-demand” – economy. Alongside rooms (or whole apartments and houses), it is possible now to “share” everything under the sun, from cars and bikes to tools and textbooks.
Similarly, it is not just taxi-rides that one can order at a moment’s notice; there are now apps for ordering cleaners (Handy), food supplies (Instacart), or restaurant meals to your door (Deliveroo) within minutes. Indeed, companies such as TaskRabbit match an army of “taskers” prepared to do any manual labour – be it assembling furniture, repairing computers, delivering parcels, or mowing the lawn – with those who require such services.
Whilst often lumped together, the “sharing” and “on-demand” economies have clear key differences. Both have risen to prominence within a similar time-frame, on the basis of a proliferation of smart phones, apps, and a young, tech-savvy, interconnected population. The former, however, is focussed on the so-called “sharing” of goods; the latter, on the provision of “on-demand” services.
The revolutionary potential offered by such technologies and models is clear. Rather than wastefully producing houses and cars that are only used for a fraction of their lifetime, we can efficiently share our resources in order to maximise their use. And with the possibility of requesting a whole range of services with nothing but a few taps on a screen, those with skills and time can be matched effectively with the needs of individual users.
The Orwellian world of the “sharing” economy
But whilst the potential and possibilities offered by the “sharing” and “on-demand” economies are clear, within the limits of capitalism, a revolution they are not.
Capitalism, as Karl Marx explains in his magnum opus Capital, is defined by its nature as a system of universal commodity production and exchange. A commodity, Marx elaborates, is either a good or a service that is produced for the purpose of exchange (as opposed to for individual or societal consumption). Whilst commodities have existed in all forms of class society, it is only under capitalism when commodity production becomes generalised.
Inherent within this concept of the commodity is the question of private ownership, another key pillar of the capitalist system. For if a product can be offered for exchange, it must first belong to the producer or owner who is seeking this exchange.
The sum total of the exchanges between commodity owners, meanwhile, forms the capitalist market. Money and credit are the system’s lubricant, keeping the circulation of commodities in motion. And, finally, we see the driving force behind capitalism linked to the question of private ownership: competition between individual producers in the pursuit of profit, obtained through the exploitation of the working class.
Here, then, are the fundamental elements of the capitalist system: commodity production and exchange; private ownership; the market; money and credit; profit and the capital-wage labour relation.
Which aspect of capitalism, one must ask, has been “revolutionised” by the “sharing” or “on-demand” economies? Profits have most certainly not disappeared, as the Guardian points out:
“Joining the sharing economy as a provider of services – accommodation, transportation or whatever else the market calls for – gives you a chance to make money while being part of a “movement”. It sounds tremendously appealing, doesn’t it?...
“But make no mistake: it’s a business. And you forget that at your peril, regardless of how you’re participating in the sharing economy.
“Here’s the bottom line: none of the businesses that have sprung up to serve the sharing economy are…non-profit entities. Rather, they are corporations whose goal is to make a profit out of a much less formal sharing economy that already existed…
“…you don’t get to becomeone of the most valuable venture capital-based businesses in the world, as Airbnb has done, and to be worth an estimated $10bn (more than some hotel chains) if all you are is part of a “movement”. Nope, you have to have found a way to make being the middleman pay off very handsomely indeed – and that’s capitalism 101, not a movement.”
The private ownership is still there, of course: just try staying in an AirBnB flat beyond your agreed dates and see what happens. And it is still fundamentally a market-based economy, with money exchanged for goods and services – i.e. commodities. If this is truly “sharing”, then one might as well classify all sectors and industries within capitalism as being part of the sharing economy, as this so-called “sharing” – i.e. the exchange of money for commodities – is a fundamental trait of all markets.
So what is the “revolutionary” aspect of the “sharing” economy? In reality, there is no sharing taking place here at all. Sharing implies some kind of altruistic reciprocity and/or communal ownership. Indeed, such reciprocity of kindness was (and still is) present in the predecessors to companies such as AirBnB; for example, with online communities such as CouchSurfer, which allowed travellers to find a bed for the night for free thanks to the kindness of others.
No, what we have is not sharing; there has been no abolition of private property or establishment of mass communal ownership. Rather, what we have is the mass conversion of owned products and consumed goods into rented services.
The great trick of the “sharing” economy has been to change the name of things without changing the thing itself. Renting and wage labour – which have existed since the dawn of capitalism – have simply been rebranded as “sharing”. Private ownership, and all the capitalistic laws that flow from this, have not been abolished or changed. The “sharing” economy is just typical commodity exchange given a new gloss and a fancy, trendy, modern spin for the internet age. This is a world of euphemisms that the Big Brother of Orwell’s dystopian classic 1984 would be proud of.
Anthony Kalamar, in an article on OpEdNews.com, describes this “sharing” zeitgeist as “sharewashing”, whereby businesses hide their real profiteering nature behind the kind, smiling mask of “sharing”. In the process, the possibility of a genuine sharing economy –a socialist economy based on communal ownership and a plan of production – is pushed to the side. And whilst these companies may help reduce waste in a certain sector, on a societal level they act to expand the market.
“The key difference between the promise of the actual sharing economy, and the flood of sharewashing companies seeking to hide under its mantle, is that the latter inescapably involve monetary exchange, for profit, in stark contrast to any definition of "sharing" your mother, presumably, once taught you…
“It alsodisables the very promise of an economy based on sharing by stealing the very language we use to talk about it, turning a crucial response to our impending ecological crisis into another label for the very same economic logic which got us into that crisis in the first place….
“…for over a hundred years it has been all about growth -- find new markets, develop new products, find new ways to get people to consume. That economy's gotta grow, baby. And all the for-profit sharewashing companies listed above are also growing big time. They don't counteract the growth juggernaut of the mainstream economy --they add to it, because they share that economy's market logic of neverending growth for profit. Those spare rooms, empty car seats, and idle hands can be translated into money, once they are brought to market. Social relations which might have been characterized byreal sharingare brought back under the aegis of monetary calculation and the logic of growth.” (Kalamar, “Sharewashing is the new Greenwashing” – our emphasis)
Author Tom Slee, meanwhile, makes the same point in an article for the radical left online magazine the Jacobin:
“Such examinations clearly show that the entrepreneurial wing of this movement dominates more community-minded initiatives. This tension has led to rapidly changing business models, leaving the original ideas of community-based sharing farther and farther behind as sharing economy models have become attractive to large enterprises…
“The “sharing economy” has seen a rapid slide away from collaborative sharing towards further deregulated and precarious employment — the direct consequence of venture capital funding and the growth imperatives that come with that money. Such a project won’t bring us any closer to the more equitable society we want to see any time soon.”
Rise of the rentiers
The “sharing” economy, then, is characterised by the conversion of ownership into rents. In turn, the companies that run these peer-to-peer rentals – matching supply and demand – take a cut of the rent as their profit. In this respect, there is another importance difference between the “sharing” economy and that of archetypal capitalism: rather than the capitalists’ profits being a slice of the surplus value created in production, the companies at the centre of the “sharing” economy derive their profits from taking a proportion of the rents, which in turn are a share of the surplus value generated in real production.
Marx explains in Capital how all new value in an economy is created through the application of labour. Surplus value, in turn, is simply the unpaid labour of the working class – the value created by the workers above and beyond their own wage costs, which the capitalist in effect gains for free.
This surplus value is then divided up into profits, interest, and rents. The owners of money (the banks and financiers) who charge interest and the owners of property (the landlords) who charge rents, therefore, are not creating new values, but are merely re-distributing value (and surplus value) that has already been created in the process of commodity production.
With the rise of the “sharing” economy, therefore, we are seeing the rise of parasitic rent-seeking capitalism on a vast scale. The main “revolution” of the “sharing” economy has been to turn personal property into private property – that is, to turn the personal property of millions of ordinary people (homes, cars, etc.) into a source of profits for the capitalists. Put simply, it is the mass conversion of small-scale personal property into capital.
Whilst AirBnB and other such companies may help improve in allocating specific resources more efficiently, they are not re-investing their profits into solving the problem of scarcity where it exists. In other words, they are doing nothing to develop the productive forces.
The case of AirBnB is a perfect example. This major player of the “sharing” economy is ultimately benefitting from the fact that there is a lack of housing and affordable accommodation in society. But rather than re-investing its profits into solving the shortage of housing, as would occur within a socialist plan of production, AirBnB simply spends its profits on advertising and marketing in order to expand its share of the market. This is the basis for its entire business model.
At the same time, there are many examples of how AirBnB, rather than helping to solve the housing crisis, is actually responsible for exaccerbating it. Many landlords who previously rented to long-term tenants are now instead choosing to cash-in and turn their properties purely into short-term lets and holiday homes, at much higher rates than those on the long-term rental market. The result is to price renters out of areas they could previously afford and to reduce the supply of housing available to rent. Instead of efficiently allocating resources, then, AirBnB actual serves to increase scarcity.
The example of Uber highlights the same point. Here is a company that benefits extraordinarily from the dire state of public transport in many cities across the world. But rather than using its profits to invest in public transport, Uber – like AirBnB – spends its money on advertising and marketing. Of course, as long as Über is a privately-owned, profit-seeking company, this makes perfect sense. Uber, AirBnB, and other such businesses are only following the laws and logic of the capitalist system, which is driven by competition and the pursuit of profit.
Similarly, companies in the on-demand economy, by classifying their workers as “self-employed” rather than as “employees”, avoid any obligation to provide training or equipment. Rather than investing to improve the skills and tools of the on-demand workforce, and thus help raise productivity across the sector, these firms are just taking advantage of the mass unemployment and low-waged, unproductive labour that exists in swathes across society as a result of the crisis of capitalism. Instead of helping to develop the productive forces, these companies are actually profiteering from the symptoms of society’s stagnation.
Another important difference between the “sharing” economy and a genuine socialist plan of production should also be highlighted in this respect. Whilst a "sharing" economy might be able to allocate resources more efficiently and reduce waste within one sector, the role of workers democracy and a planned economy within socialism is to direct and allocate resources (ultimately social labour time) across the whole of the economy, according to where there is scarcity or need in society.
Under capitalism, it is price signals and the market that play an equivalent role in allocating resources, primarily through directing investment. However, this is done – in capitalism – not on the basis of need, but because of a mismatch of supply and demand for certain commodities, and the possibility for the capitalists of making super-profits by pouring capital into this-or-that sector.
Within those sectors covered by the “sharing” economy, therefore, the allocation of resources may be more efficient. But the companies leading the way in the “sharing” economy (or, indeed, the capitalist economy in general) do not operate to address social needs, but only to make profits. The allocation of resources between different sectors and across the economy as a whole, meanwhile, is still left to the anarchy of the market, which is in fact highly inefficient – hence the fact that such absurd contradictions exist across the capitalist system: mass unemployment alongside overwork; homelessness alongside empty homes; austerity alongside excess capacity and piles of idle money in the hands of big business. Far from being an efficient system, therefore, there is a great waste of resources under capitalism, due to its own internal contradictions.
The fact that investors are pilling money into the “sharing” economy – a purely rentier economy – is yet another reflection of the enormous spectre of overproduction (“excess capacity”) that is haunting the world economy. With inequality at unprecedented levels, there are huge piles of profits accumulating in the hands of the 1%. But with massive levels of overproduction still existing on a world scale, there is little to be gained from investing these profits in real production – hence the rise of speculation, the growth of asset bubbles, and the increasing instability on the stock markets (such as the recent dramatic fall of the Shanghai stock exchange).
This rise of the rentier economy, in the form of the growing “sharing economy”, then, does not herald a new dynamic phase for capitalism; rather, it demonstrates the opposite: the impasse that capitalism has reached in being able to develop forces of production – industry, science, technology, and technique.
In short, the so-called “sharing” economy, far from signalling the dawn of a new era of collaboration, equality, and common ownership, is simply the growth of parasitic capitalism with a bit of lipstick on to make it seem pretty. Like the prostitutes of old who would hide the symptoms of their diseases with makeup, turning sores into beauty spots, the rotting capitalist system in its epoch of senile decay – no longer able to develop the productive forces and take society forward – has tried to mask its most unattractive and repulsive features as something to be revered.
“Micro-Entrepreneurs” or “Precariat”?
Alongside the prolific rise of the “sharing” economy is the equally meteoric rise of the “on-demand” economy. The focus of such on-demand services has thus far mainly been on the benefits to consumers, with enthusiasts gushing about the wonders of being able to order a cheap cleaner to their apartment or a low-cost taxi-ride at 2am with nothing more than the touch of an iPhone.
This aspect of on-demand apps is not really so revolutionary. In reality, they are nothing more than a glorified Yellow Pages (a giant local telephone directory of businesses organised according to the services they offer). The difference is that in the world of the on-demand economy, a business can be anything or anyone – even just a solitary person providing a specific service (or variety of services). As such, through companies like TaskRabbit, customers can request any service imaginable from the ever-growing population of “taskers” who have signed up to offer their time and skills.
Libertarian capitalists, meanwhile, have extolled the virtues of the on-demand economy for its workers. The on-demand economy (also referred to as the “gig economy”), so we are told, offers a new young generation the chance to break from the tradition of the 9am-5pm working day and from the shackles of being employed by a single business. Young workers just want “freedom”, you see: freedom to choose when to work and what trade to ply. No longer must we be defined by a single occupation, forced to carry out the same monotonous tasks every hour of every day; now the modern worker can be a jack of all trades, developing themselves as a rounded individual with multiple passions and pursuits.
These “free” workers are, it is said, the dynamic driving force behind the on-demand economy; “micro-entrepreneurs” who are pushing capitalism forward with their creativity and ingenuity. The beauty of the on-demand economy is that now anyone can start their own business, be their own boss, and be a “self-made” man.
There is, however, again a vast chasm separating this promise from the reality. As the New York Times notes in an article entitled “In the sharing economy, workers find both freedom and uncertainty”:
“In a climate of continuing high unemployment, however, [on-demand workers] are less micro-entrepreneurs than micro-earners. They often work seven-day weeks, trying to assemble a living wage from a series of one-off gigs. They have little recourse when the services for which they are on call change their business models or pay rates. To reduce the risks, many workers toggle among multiple services.”
Far from being empowered by the on-demand (gig) economy, therefore, these workers are having to resort to freelance work precisely because the capitalist crisis and resultant lack of jobs have taken their power away. These self-employed “taskers” do not represent an aspiring army of entrepreneurs, but are in fact the opposite: the most precarious layer of the working class, still forced to sell their labour power – the only commodity they truly own.
The difference now is that such workers must sell their labour power in smaller and smaller quantities, without any certainty or security; without the guarantee of a contract or of earning enough to live. Companies like TaskRabbit, the Jacobin quips, are just a “glorified temp agency”.
The rise of the self-employed “gig” worker, in this respect, mirrors the rise of the zero-hour contract. It is a return to the “time wages” and “piece wages” that Marx describes in Capital. As the New York Times comments in the same article as above:
“Piecemeal labor is hardly a new phenomenon. But as expedited by technology and packaged as apps, it has taken on a shinier veneer under new rubrics: the sharing economy, the peer economy, the collaborative economy, the gig economy.”
High unemployment, competition for jobs, and the downward pressure on wages have served to intensify the race to the bottom for workers, creating even more precarious terms and conditions. A new term has even been coined to describe those suffering under the emergence of such extremely precarious employment: “The Precariat”. As the NYT goes on to explain:
“If these marketplaces are gaining traction with workers, labour economists say, it is because many people who can’t find stable employment feel compelled to take on ad hoc tasks. In July, 9.7 million Americans were unemployed, and an additional 7.5 million were working part-time jobs because they could not find full-time work, according to estimates from the Bureau of Labor Statistics…”
“With piecemeal gigs easier to obtain than long-term employment, a new class of labourer, dependent on precarious work and wages, is emerging. In place of the ‘proletariat,’ Guy Standing, a labour economist, calls them the ‘precariat’…”
“…The companies essentially channel one-off tasks to the fastest taker or lowest bidder, he says, pitting workers against one another in a kind of labour elimination match.”
Whilst the benefits of the on-demand economy for consumers have been lauded, it is the benefits for the capitalists that are far clearer to see. No need for businesses to provide sick pay and holiday pay, or to contribute towards national insurance and pensions. Indeed, this tendency towards classifying workers as “self-employed” has already been seen in Britain, where the number of self-employed workers has been on the rise since the onset of the 2008 crisis, and unions have fought against “bogus” self-employment by companies in the construction industry, who are trying to cut labour costs by outsourcing and employing “self-employed” workers through agencies.
More importantly, by signing up individually and interacting through the portal of an app, workers in the on-demand economy have been isolated and atomised – taken out of the collective environment of the workplace and the tendency towards organisation that this cultivates. Atomised and devoid of organisation, Über’s drivers and TaskRabbit’s “taskers” are raw material for exploitation by the capitalists, as the NYT stresses:
“Uber has raised more than $1.5 billion from investors; Lyft has raised $333 million; and TaskRabbit, $38 million. Part of the attraction for investors is that the companies can avoid huge employee payrolls by effectively functioning as labour brokers.”
Like the “sharing” economy, then, the on-demand economy is not a revolutionary, progressive development in the lifecycle of capitalism, but is yet another dystopian reflection of the senile and crisis-ridden nature of the system. It is the same old story of exploitation, inequality, and insecurity re-packaged and re-booted for the smart-phone generation.
On the one hand, we see a “race against the machine”, with workers facing the threat of “technological unemployment” as a result of information technology and automation. One study by Oxford University academics predicted that almost half of all jobs in the advanced capitalist world would be made obsolete by 2034 due to automation, including many white collar jobs such as accountants and estate agents. In the process, a whole swathe of unemployed, highly-educated youth has been created; young people who cannot find a job, and must therefore hunt around for insecure, precarious work.
As an article on TechCrunch.com highlights:
“…we’re standing at an intersection where over-educated, under-experienced knowledge workers are meeting an influx of task-based gigs. It seems today’s oversupply of knowledge workers only has one interim career option: become a gig worker….
“So what happens when the over-educated, under-skilled knowledge worker enters the sharing economy? They give us a lift to the airport or deliver dog food on demand. At least until driving is automated.”
On the other hand, alongside the competition between workers and technology, there is the intensification of the competition between workers. And these are two sides of the same coin: those thrown out of work – in the short term by the crisis and in the long term by automation – are forced to compete against one-another. The result is an ever-widening chasm between the super-rich and the rest. Precarious self-employment, zero-hour contracts, and piecemeal wages: this is the real future of work under capitalism for the 99%.
Alienation and exploitation
With the rise of on-demand services fuelled by an abundance of self-employed individuals, the capitalists have created the ultimate libertarian rat-race: pure competition between workers, spoon-fed the myth that they have been “freed” from the obligations of fixed-term contracts and set hours.
It is true, however, that some young workers have bought into this rhetoric of “freedom” and “liberation” peddled by the capitalists at the head of the on-demand economy. But this does not prove the strength of bourgeois libertarian ideas. Rather, the embracement of the freelance lifestyle reflects the opposite: the alienation from work that many experience as a result of their experiences toiling away in mind-numbing jobs within giant, faceless capitalist corporations. As the NYT explains:
“Gigs hold out the prospect of self-management and variety, with workers taking on diverse assignments of their choice and carving out their own schedules. Rather than toiling at the behest of some faceless corporation, they work for their peers.”
Instead of being just another cog in the machine, there is a strong desire to be in control of our own lives – something we evidently are not when working 9-to-5 and selling our labour power to the major monopolies that are really in control of society. The decision – the “choice” – to work in the on-demand economy, therefore, is being taken by many as an act of rebellion; a stand against the system.
But this rebellion is that of the individual – and as individuals we are powerless. Whilst a few might find a personal, temporary salvation under life as a “tasker”, there is no salvation for the vast majority down this path of intensified competition. Freelance work doesn’t give us any real control – not as long as the banks and big businesses remain in private hands, making all the most important decisions in society. And even on the individual level, all that self-employment and freelance work does is substitute the crushing domination and exploitation of one worker by one company for a lifetime of insecurity, competition and precariousness.
At the same time as alienating workers from work, the on-demand and “sharing” economies have increased our alienation from each other. Our interactions with one-another now increasingly take place through an app and a list of prices or profiles. Marx explained throughout his writings how such alienation was inherent within a society dominated by money and commodities. Now everything has been – or can be – commodified, turning all human relations into money relations.
As anarchist anthropologist David Graeber notes, capitalism today seems to be characterised by a proliferation of “bullshit jobs” – seemingly pointless, skull-crushingly boring jobs that play no socially useful role. But as the Economist explains in their response to Graeber, such jobs do play a role in society – capitalist businesses do not employ people and spend money on labour costs unnecessarily, for this would bite into their profits. Many of the jobs that Graeber identifies as being “bullshit” are in sectors that are clearly only necessary under capitalism, due to competition and private ownership: the bloated legal sector; advertising and marketing; financial houses and hedge funds, etc. And clearly such jobs and sectors would disappear under a socialist society, with labour time freed up in the process to be channelled into addressing important needs such as scientific research, healthcare, education, and green energy.
What the abundance of “bullshit jobs” really demonstrates, the Economist notes, is the immense and unfathomable levels of division of labour that modern capitalism has created in the economy, with processes in production divided up and broken down into the most repetitive and seemingly trivial tasks. It is this incredible division of labour, with workers slaving away purely in the interests of the bosses’ profits, that has led to the heightened sensation of alienation that workers today feel towards their jobs.
As Marx and Engels explain in the German Ideology:
“…the division of labour offers us the first example of how, as long as man remains in natural society, that is, as long as a cleavage exists between the particular and the common interest, as long, therefore, as activity is not voluntarily, but naturally, divided, man’s own deed becomes an alien power opposed to him, which enslaves him instead of being controlled by him. For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood…” (our emphasis)
Under socialism, as Marx and Engels continue to explain, however:
“…where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.” (our emphasis)
Indeed, for many, the promise of “variety”, “freedom”, and “liberation” offered by the self-employment of the on-demand economy might even sound like Marx and Engels’ maxim above about socialism and the ability “to do one thing today and another tomorrow”; “to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner”.
But as Engels stresses elsewhere (in Socialism: Utopian and Scientific), the “ascent of man from the kingdom of necessity to the kingdom of freedom” is only possible when “anarchy in social production is replaced by systematic, definite organisation”; only then does “the struggle for individual existence disappear”; only then is humanity “finally marked off from the rest of the animal kingdom, and emerges from mere animal conditions of existence into really human ones.”
Only when humanity is free are we all free individually. Only when there is a democratic and rational plan of production can we guarantee everyone a secure future, with a house, a job and a decent wage. And only when we are control of the means of production – of the technology and wealth in society – are we really in control of our own lives.
“The whole sphere of the conditions of life which environ man, and which have hitherto ruled man, now comes under the dominion and control of man, who for the first time becomes the real, conscious lord of nature, because he has now become master of his own social organisation. The laws of his own social action, hitherto standing face-to-face with man as laws of Nature foreign to, and dominating him, will then be used with full understanding, and so mastered by him. Man's own social organization, hitherto confronting him as a necessity imposed by Nature and history, now becomes the result of his own free action.” (Engels, Socialism: Utopian and Scientific)
The fact that the on-demand and “sharing” economies have risen to prominence in the wake of the 2008 crash is no coincidence. For starters, as explained above, it is the swelling ranks of the “reserve army of labour” and the permanent scar of mass unemployment that has fuelled the seemingly endless supply of cheap, self-employed labour that the on-demand economy is so reliant upon.
As Jeff Tennery of PSFK.com highlights:
“Back in 2008, when the market crashed and full-time jobs evaporated, millennials graduating from college were left with few secure employment opportunities. This particular group had very little choice but to move into their parents’ basement and work entry-level jobs that did not match their degrees or interests.”
Meanwhile, the demand for on-demand services has picked up; not because people are richer or “lazier”, but rather because people have become desperate for convenience and leisure. Despite the proliferation of “time saving” devices, we are more busy, stressed, and anxious than ever. The increased productivity offered by automation and technology has meant bigger profits for a tiny elite, not more leisure time for the masses. All the benefits have been concentrated at the top, both in terms of time and money.
Workers everywhere are so squeezed for time by the intense pace and rhythm of life under capitalism, that they are willing to pay someone else for even the most basic of services. Time has become a luxury for the privileged. Hence the appeal of the on-demand economy for ordinary people.
In terms of the “sharing” economy, it is clear that the ongoing crisis of capitalism has impoverished millions and shaken up lifestyles. As a result, people are searching out cheaper, alternative ways of living and consuming. Working class families – previously reliant on an expanding credit bubble to make any major purchases – are now forced to rent (sorry, “share”), as the Economist notes:
“It is surely no coincidence that many peer-to-peer rental firms were founded between 2008 and 2010, in the aftermath of the global financial crisis. Some see sharing, with its mantra that ‘access trumps ownership’, as a post-crisis antidote to materialism and overconsumption.”
For techno-utopians, the rise of the “sharing” / on-demand economy is merely the realisation of a good idea come true. Some clever coders and enthusiastic entrepreneurs bashed heads and – voilà! – a new economy was born!
But what the above demonstrates, by contrast, is that the technology behind the “sharing”/on-demand economy does not just fall from the sky, like manna from heaven. As Marxists, we are materialists – that is, we understand that any ideas in society (including those of science and technology) can only operate within the limits imposed by material conditions. In other words, for any technology to take hold in society, the material conditions for its growth and development must exist.
A common example given to prove this point is that of the steam engine. Despite claims that it was James Watt, the Scottish engineer, who developed the steam engine, it was in fact Hero of Alexandra, an ancient Greek mathematician, who is first credited with having invented a steam-powered engine. But Hero’s steam engine, invented at the turn of the first millennium, was nothing more than a toy.
Within an economy based on an abundant supply of slaves, tools to improve productivity – such as the steam engine – would play no role. Only with the development of capitalism and wage-labour, whereby the worker’s ability to work for a definite period of time is purchased (rather than buying the worker themselves, as is the case under slavery), was there an incentive to invest in productivity-enhancing devices and techniques.
In the case of the “sharing” / on-demand economy, as explained above, the crash and crisis were necessary to create the conditions that these new business models could thrive in: mass unemployment; austerity and impoverishment; and growing inequality. In this respect, the rise of the “sharing” economy and the on-demand economy is not the product of any individual genius, as the capitalists would like to claim, but – again – a reflection of the impasse, stagnation, and crisis of the capitalist system.
“Small is beautiful”
With the growth of the “sharing” / on-demand economy, there has been a re-emergence of the “small is beautiful” rhetoric that was popular in previous decades. The idea then, embraced by the liberal bourgeoisie and petit-bourgeoisie, was that the economy would be driven forward not by giant multinationals, but by a wave of smaller, more innovative businesses.
The rise of the internet and app based economy, where start-ups can reach valuations of billions with only a skeleton staff, has given the “small is beautiful” movement a new lease of life. Like the American gold rushes of the 19th Century, the promise is made today that any budding young entrepreneur can get rich quick – all they need is a good idea and a bundle of enthusiasm and audacity. There’s gold in them thar hills!
But such jubilant and euphoric calls are frequently heard at the beginning of every new bubble. Marx highlighted the nature and dynamics of such bubbles in Capital, which arise from the anarchic nature of the capitalist market: a new market opens up; early pioneers make super-profits in the absence of competition; a herd mentality sets in as hordes of investors pile in, afraid of missing the party; the sector becomes bloated with excess capacity; and crisis sets in as the capitalists find they are over-burdened with debts they cannot pay back, as a result of borrowing money on the assumption of profits that can never be realised.
This is the pattern of every bubble, from the earliest recorded cases, such as the Dutch tulip mania of the 1600s, to the modern case of American shale gas. Now with cash hoards piling up in the hands of the capitalists, but without any avenue for profitable investment, stock market prices and the amounts of money being thrown at start-ups are becoming increasingly separated from the real state of the economy.
One doesn’t have to go back many years to find the most recent example in the tech industry: that of the dotcom bubble at the turn of the new millennium – a bubble that burst, leaving a sharp economic downturn in its wake.
Today, new info-tech-based companies are being valued at eye-watering amounts. Pinterest, WhatsApp, Snapchat, and Instagram have been valued at $11bn, $19bn, $20bn, and $35bn respectively – and yet none have any source of income. All the signs of another tech-bubble are there; again, another reflection of the enormous overproduction that exists on a world scale, and the dearth of genuinely profitable places for the rich to put their money.
Investors, meanwhile, are pouring money into the “sharing” / on-demand economy. AirBnB and Uber, valued at $26bn and $41bn respectively, have raised over $8bn in funds respectively, without yet actually making a profit for their investors. All this money is being gained from investors on the promise that these companies will solidify a monopoly position for themselves and will eventually, therefore, be able to make super-profits in the not-too-distant future.
Indeed, the fact that companies such as AirBnB and Uber must establish themselves as monopolies before they can make a profit is a powerful punch in the face of the “small is beautiful” argument. The tech industry, so often lauded for its dynamic and fast-growing start-ups is still – like every other sector – dominated by monopolies. Apple, Google, Facebook, and Amazon: all of these household names and giant multinationals have a near-monopolistic hold in their respective markets. And, as the purchase of WhatsApp and Instagram by Facebook show, the small will always end up being swallowed up by the big.
The same is true of the “sharing” economy. For example, Zipcar, a car “sharing” company and early pioneer of the “sharing” economy, was bought up by Avis, a massive multinational car-hire company, in early 2013. Meanwhile, whilst companies like AirBnB promote themselves as being a platform for ordinary people to make a bit of money on the side by renting out their spare rooms, one study of AirBnB’s business in New York found that approximately 50% of AirBnB’s revenue generated in the Big Apple came from those with multiple listings – i.e. landlords. Similarly, three-quarters of AirBnB’s business is for whole-home rentals – clearly not a case of ordinary people making some pocket money on the side.
The Economist highlights this perspective of big business domination over the “sharing” / on-demand economy:
“What looks like a disruptive new model will probably end up being mixed into existing models and embraced by incumbents, as has often happened before. Tim O’Reilly of O’Reilly Media, a long-term watcher of internet trends, says such consolidation is inevitable. “When new markets come in, they often look more democratising than they end up becoming,” he says. The idea of renting from a person rather than a faceless company will survive, even if the early idealism of the sharing economy does not.” (our emphasis)
The “sharing” / on-demand economy gives the illusion of de-centralisation, because of its peer-to-peer nature, because work is outsourced to the self-employed, and because interaction is through an app; but the reality is that these markets are still dominated by monopolies. Furthermore, although they are peer-to-peer, there is still an incredible level of planning and centralisation involved, as there is inside any big business: planning of production internally, for the sake of increasing efficiency, decreasing costs, and boosting profits.
This is yet another absurd contradiction of capitalism: enormous levels of planning inside companies in terms of labour, infrastructure, and resources (all in the name of profits, of course); but yet complete anarchy between companies, with the allocation of resources on a societal scale left to the “invisible hand” of the market.
Like in any profit-seeking company, planning and centralisation most certainly exists within the major monopolies of the “sharing” / on-demand economy, such as AirBnB and Über; the difference is that much of this planning is automatic (due to intelligent software and algorithms) and spatially distributed. A plan is still in operation; it just isn’t under one roof, clearly identifiable and visible, as it is in the case of a factory or office.
Above all, this serves to demonstrate the potential for planning the whole economy in a rational and democratic way, if only such monopolies were taken out of private hands and placed under common ownership. Companies such as AirBnB and TaskRabbit prove that the technology exists today to have a genuinely democratic plan of production; to be able to actually share out the wealth and resources in society in an efficient and equitable way; for ordinary people to be able to directly participate in the running of society, without the need for a bureaucratic state apparatus.
Everywhere we look, our lives are dominated by monopolies; and it is these giant multinationals who currently make all the real decisions in society. The introduction of the internet, social media, and smart-phones has done nothing to change this. We may be more networked to one-another than ever, but the networks are still all owned and control by big business. One only has to look at the media industry – owned by oligarchs, and dominated by just a handful of companies – to see how, despite a plethora of independent blogs, etc., the news and information we receive is still the product of a group of gangsters, such as Murdoch and co.
At the same time, inequality is rising and wealth is more concentrated than ever, as demonstrated by recent figures from Oxfam, who reported that by the end of 2015 the richest 1% worldwide are predicted to have as much wealth as the rest of the planet’s population put together.
All of this is a stunning vindication of Marx’s analysis of capitalism; of how the laws and dynamics of competition necessarily lead to concentration and centralisation; of the organic tendency for the free market to turn into its monopolistic opposite. For all the talk of “small is beautiful”, it seems that the world is still very much dominated by the big.
Capitalism’s “long waves”
The modern world is a seemingly incomprehensible system; complex, chaotic, and contradictory. On the one hand, we see an abundance of wealth and the most incredible scientific and technological advances all around us. On the other hand, simultaneously, we see rising inequality and a neverending crisis of the economy.
It is these contradictions that Paul Mason, economic editor for Channel 4 News, tries to unpick in his new book PostCapitalism. As the title of the book suggests, PostCapitalism is an incisive analysis of how the driving forces behind capitalism in its progressive heyday – competition, private ownership, and the pursuit of profit – have now become an enormous fetter on social and scientific progress; thus posing the vital question of what kind of system is needed now in order to take society and humanity forward.
Most impressively, Mason ties together the various threads of 21st Century capitalism’s rich tapestry in order to explain how technology, the economy, and class struggle interact. Taking up the “long-wave” theory of capitalism’s development, originally proposed by Soviet economist Kondratieff, Mason argues that overlaying the more frequent and periodic booms and slumps that capitalism undergoes are longer cycles – or waves – marked by the invention and dissemination of certain key technologies: steam-powered machines and canals; railways and telegraphy; electricity, the telephone, and production management techniques; automation, plastics, aeroplanes, semi-conductors, and nuclear power; and now, the internet and information technology.
Whilst Mason maintains a slightly schematic view of history, with his description of capitalism as a series of cyclical epochs, he diverges from Kondratieff is in his explanation for the cause of capitalism’s long-wave turning points, providing a more materialistic analysis than the founder of long-wave theory.
Whereas Kondratieff presented his long-wave theory in an extremely mechanical, deterministic – and, indeed, philosophically idealistic – fashion, seeing capitalism’s conjunctions as being primarily technological, through innovations that qualitatively transform production, Mason goes one step further and asks: what conditions were responsible for allowing such technologies to take hold across society in the first place?
For, as was discussed earlier, technology is not a deus ex machina to the capitalist system, randomly appearing out of nowhere. Certain material conditions are required for science and technology to make progress. Whilst the success of this-or-that inventor or the generation of this-or-that innovation might have a certain arbitrariness, these accidents are nevertheless a reflection of an underlying necessity: within capitalism, the need to develop productivity in the drive for profits.
For Mason, the key to understanding the creation and development of these historically revolutionary technologies lies in the question of class struggle. What precedes all such turning points in the first two hundred years of capitalism, Mason argues, are militant struggles of the working class, fighting against attempts by the capitalists to drive down their wages and attack their conditions. It is this mass resistance, Mason asserts, that provides the main incentive for the capitalists to invest heavily in new technology, in order that they can raise productivity and thus increase their profits whilst also accepting higher wage levels.
In Mason’s own words:
“If the working class is able to resist wage cuts and attacks on the welfare system, the innovators are forced to search for new technologies and business models that can restore the dynamism on the basis of higher wages – through innovation and higher productivity, not exploitation…
“…working-class resistance can be technologically progressive; it forces the new paradigm to emerge on a higher plane of productivity and consumption. It forces the ‘new men and women’ of the next era to promise and find ways of delivering a form of capitalism that is more productive and which can raise real wages.
“Long cycles are not produced by just technology plus economics, the third critical driver is class struggle. And it is in this context that Marx’s original theory of crisis provides a better understanding that Kondratiev’s ‘exhausted investment’ theory.” (Paul Mason, PostCapitalism, Allen Lane publishers, 2015 hardback edition, p76)
So where does information technology and the internet fit in within this general picture painted in PostCapitalism? Well, according to Mason, the worldwide crisis in the 1970s, which marked the end of the post-war boom, was the highpoint of the fourth long-wave of development. But unlike in previous waves, in which successful mass class struggles had ensued after crises, the fights that followed on from the crisis of the 70s ended in defeats. “Neoliberalism”, as personified by Thatcher and Reagan, had been victorious. The trade unions were beaten; the Berlin Wall fell and the Soviet Union collapsed; and the labour movement and the Left were routed.
The capitalists emerged victorious from these battles and the system was able to carry on growing on the backs of those who had been defeated. Wages in the advanced capitalist countries were held down; globalisation took off as the market expanded into China, Eastern Europe, and the former Soviet Union; and growth was temporarily maintained, artificially, through financialisation and a massive expansion of credit.
The key difference, then, was that the working class – this time – did not successfully resist the attacks of the ruling class, and wage levels could not be maintained through struggle. The result was an economy that, instead of investing in technology and productivity, became increasingly parasitic, with growth based on fictitious capital, bubbles, speculation, and the exploitation of millions of low-wage workers in the ex-colonial countries.
Now, Mason says, we are at the beginning of a new “fifth wave” of capitalism, which is occurring in the midst of this sclerotic fourth wave. But this fifth wave has already stalled. And the reason, Mason explains, lies in the nature of the technological driving force at the heart of this latest wave: information.
The contradiction of an information-based economy
In order to explain the stalled fifth wave, Mason takes us on a whirlwind tour of Marxist theory, including an examination of the labour theory of value and an overview of Marx’s analysis of capitalist crisis. Indeed, Mason argues, an appreciation that labour is the source of all real values is essential in understanding the extreme contradictions posed by the information age.
Throughout capitalism’s existence, the capitalists have – under the impulse of competition – re-invested their profits back into new technologies and techniques in order to increase productivity and thus decrease their costs, producing more for less. By lowering their own production costs below the current market price, the most productive and advanced capitalists can reap super-profits and drive their competitors out of business. Such new innovations and methods, however, soon become generalised throughout the economy, and a new “socially necessary” value becomes established.
The tendency within capitalism, therefore, is towards an increase in productivity and a lowering of the labour time required to make the commodities needed in society. Breakthrough technologies, such as those discussed above, were revolutionary in providing a qualitative boost to productivity.
But within an information-based economy, this tendency has reached extreme limits, and in doing so highlighted the contradictions of the capitalist system and its inability to utilise the technological potential that exists. For example, many of the goods we buy now are either digital – such music, videos, and other media, etc. – or are mass produced on the basis of information – for example, the computer designs for 3D-printed products. Meanwhile, the means of production and infrastructure of production are now themselves also digital, such as computer software programmes and HTML websites.
This rise of the information-based economy has revolutionary implications. For the unique quality of digital information is that once the original product has been made (or coded), all future copies are infinitely replicable at almost zero cost. The value (and thus price) of such digital commodities, therefore, should tend towards zero, if a free market of perfect competition really existed. Indeed, millions of people are obtaining such commodities for free, either through illegal downloading or “Open Source” software, such as the Firefox web browser or the Open Office suite of programmes.
Under capitalism, however, this poses an enormous contradiction. Capitalist corporations do not produce to fulfil needs, but to make profits. But since profits are ultimately derived from the value produced by labour, if the socially necessary labour time – and thus value – in commodities is reduced to zero, then the profits will tend towards zero also. Hence the difficulty that many info-tech companies are having in “monetising” their products and services, as discussed earlier.
The result is that for many info-tech companies, the main source of income is actually from advertising, raising money from advertisers who are willing to pay large amounts in exchange for the data that such companies have collected for free from their users and subscribers.
The other alternative for the info-tech industry – and the one most commonly seen – is to try and abolish the link between the value of their commodities and the price by cementing a monopoly position and thus removing market forces from the equation. As Marx always explained, in this respect, the law of value is really only a tendency; where there are monopolies or restrictions to the supply of certain commodities, prices can diverge wildly from actual values.
As discussed earlier, the dominance of monopolies in the info-tech sector is clear: Apple, Amazon, Facebook, and Google – all of these giant information-based corporations, for the sake of their own profits, actually do everything they can to restrict society from fulfilling its potential for digital superabundance, as Mason explains:
“Once you can copy and paste something, it can be reproduced for free. It has, in economics-speak, a ‘zero marginal cost’…
“This has major implications for the way the market operates…once the economy is composed of shareable information goods, imperfect competition becomes the norm.
“The equilibrium state of an info-tech economy is one where monopolies dominate and people have unequal access to the information they need to make rational buying decisions. Info-tech, in short, destroys the normal price-mechanism, whereby competition drives prices down toward the cost of production…
“With info-capitalism, a monopoly is not just some clever tactic to maximise profit. It is the only way an industry can run. The small number of companies that dominate each sector is striking…Apple’s mission statement, properly expressed, is to prevent the abundance of music.” (PostCapitalism, p117-119)
In essence, therefore, information technology has exposed the key contradiction at the heart of the capitalist system: the contradiction between use value and exchange value. An abundance of use-values (i.e. wealth) in society is entirely possible. But as long as there is private ownership and production for profit, it is impossible to resolve this contradiction, and instead of super-abundance we see scarcity.
Indeed, this contradiction that info-tech highlights so clearly is already seen in the case of many of our more tangible needs, from food (with supermarkets going to extraordinary lengths to prevent people taking leftover foods from their skips) to medicine (with big pharma companies taking legal action against drug-producers in the developing world for producing “generic” copies of their patented drugs).
The contradictions posed by an info-tech economy, in other words, are not completely new or unique; they are just an extreme and acute form of this contradiction between use value and exchange value – or, as Mason himself quotes, “between the ‘forces of production’ and the ‘social relations’”. In other words, we have the productive ability to create super-abundance and satisfy a whole range of global needs; but the ‘social relations’ – the way in which production is owned, controlled, and organised, and the laws and logic of the system flowing from this – prevent us from doing so.
Modern information technology and automation, as we have discussed earlier, have opened up a world of possibilities that were previously unimaginable. The horror and injustice lies in the chasm that exists between these hypothetical – and entirely realisable – possibilities and the dystopian future (and present) that capitalism offers:
“Technologically, we are headed for zero-price goods, unmeasurable work, and 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 of over power and information.” (PostCapitalism, p144, emphasis in the original)
“…the real danger inherent in robotization is something bigger than mass unemployment, it is the exhaustion of capitalism’s 250-year-old tendency to create new markets where old ones are worn out.
“…We should be going through a third industrial revolution but it has stalled. Those who blame its failure on weak policy, poor investment strategy and overweening finance are mistaking symptoms for the disease. Those who continually try to impose collaborative legal norms on top of market structures are missing the point.
“An economy based on information, with its tendency to zero-cost products and weak property rights, cannot be a capitalist economy.” (PostCapitalism, p175, emphasis in the original)
Which way forward: postcapitalism or socialism?
For Marxists, the solution to this contradiction is clear: we need a revolution in how production is owned, controlled, and organised; a revolution in how society is run. We need to abolish the laws and logic of the capitalist system and replace them with a new set of economic laws: ones based on common ownership, a rational plan of production, and democratic control and management. In other words, it is socialism or barbarism.
For Mason, however, the perspective and solution are not so clear cut. Mason agrees – citing the prospect of “secular stagnation” and the impending climate catastrophe – that without a radical change in society, humanity most certainly is facing a barbaric future. But the alternative, Mason asserts, is not socialism, but “postcapitalism”.
Mason’s description of his hypothetical postcapitalism, however, would sound to many like socialism: democratic and public control over the banks and major monopolies; investment in technology and automation to reduce the value of goods and the hours of the working week to a bare minimum (and eventually to zero); the provision of a universal basic income, with the need for wages and money gradually withering away as more and more of the economy comes under a common, socialised, democratic plan of production.
Why then not just call a spade a spade? Why the need for the term “postcapitalism”? Part of this semantic question originates from Mason’s own view of socialism, which is consistently equated throughout his book with the top-down, bureaucratically controlled Stalinist regimes seen in the 20th Century. In reality, such societies were not socialism, but were monstrously deformed caricatures of socialism; and to attack socialism on the basis of these examples is to attack a straw man.
Nevertheless, there is a key difference between Mason and Marx, which the author of PostCapitalism himself acknowledges, and this difference lies in the identification of the agent of change for this historical and radical transformation of society.
For Marx, Engels, Lenin, and Trostky, the revolutionary agent of change was the organised and conscious working class – the “gravediggers” that capitalism had created. For Mason, by contrast, there is “a new historical subject”: “networked individuals” – in other words, the educated, smart-phone-wielding, social-media-connected masses. The fact that the labour movement failed to successfully resist the ruling classes’ attacks in the 1980s, and the fact that recent mass movements that have taken to the streets across the world in the previous period have done so spontaneously and without hierarchies is proof, according to Mason, of the need to look towards the “network” rather than the organised working class for the revolutionary change that is needed today.
But – and these are the main limitations of Mason’s otherwise excellent new book – there are two key flaws with the conclusions drawn by Mason. Firstly, whilst it is true that the organisations of the working class have been found lacking in the past few decades, one should not assume that spontaneous, “horizontal” movements are the way forward.
For a start, it is not the fault of the working class that their organisations – or, more precisely, their leaders – have failed them at key moments in the class struggle. Workers have done everything that can be asked of them: from Venezuela to Greece, workers have demonstrated, gone on strike, and elected in radical left leaders who promised to change the world; the problem is that such leaders have not lived up to their promises. The trend towards spontaneous movements – from the Arab Spring to the Indignados in Spain – is a reflection of the bankruptcy of the so-called leaders of the working class and the lack of a revolutionary leadership.
The fact that these mass spontaneous movements draw in such a wider layer of the population – “the 99 per cent” – does not highlight the destruction or death of the working class, but quite the opposite: it demonstrates the enormous “proletarianisation” that has taken place in society, with even formerly middle-class layers now impoverished and pushed down into the ranks of the working class by capitalism – hence the fact that civil servants, university lecturers, and even lawyers are now unionising and taking strike action these days, in 21st Century Britain.
In addition, one must note that these spontaneous movements ultimately achieved none of their aims. In some respects, Mason is correct: what is left of #Occupy and the Indignados movements are “networks”; but these are not simply utopian experiments or communal camps in a city square, but organised, networks and political movements that have gathered around radical figures such as Bernie Sanders in the USA or Pablo Iglesias of Podemos. The same could be said of the rise of the SNP in Scotland, the OXI referendum in Greece, or the mass movement behind Jeremy Corbyn in Britain. In other words, spontaneous movements of “networked individuals” have been transformed into organisations and political movements with a programme to fight austerity and change society.
Secondly, whilst Mason emphasises the role of the network, a large part of his final chapter describing the transition to postcapitalism emphases the need for the state “to use governmental power in a radical and disruptive way” to bring about “revolutionary reformism”. In other words, for all the talk of capitalism’s key contradictions and the revolutionary potential of the “network”, Mason’s vision is for a gradual, state-led, reformist change towards what is ultimately just another version – but a bit more radical – of the “responsible capitalism” called for by many other left-reformists.
The question of the state’s role is key in all of this discussion. For example, Mason tells us that, “In postcapitalism, the state has...to nurture the new economic forms to the point where they take off and operate organically” (p273). Later, in a discussion on the changes needed in the workplace, Mason comments: “What could induce corporations to do any of this? Answer: law and regulation.” (p277)
Elsewhere, we are told that: “under a government that embraced postcapitalism, the state, the corporate sector and public corporations could be made to pursue radically different ends with relatively low-cost changes to regulation, underpinned by a radical programme to shrink debt” (p278); and that, with regards to banking and finance, “the intention is not to reduce complexity…but to promote the most complex form of capitalist finance compatible with progressing the economy towards high automation, low work, and abundant cheap or free goods and services.” (p283)
But throughout this description of postcapitalism and the transition to it, we are not told what kind of state is carrying out this transition, and which class is it that is controlling this process? Like the reformist analysis of the state and of the transition to socialism put forward by the social democrats at the beginning of the 20th Century, which Lenin polemicises against in his 1917 masterpiece State and Revolution, there is a vagueness and obscurity to Mason’s description of the postcapitalist state.
If this postcapitalist state is not just a benign version of the bourgeois state, then one can only assume that it is a new, qualitatively different state, constructed by the “networked” masses to take over the key levers of the economy, in order to democratically run and control the economy and society. But again, if the latter is meant, then really we are describing a socialist state – only a healthy workers’ state, as opposed to the degenerated or deformed workers’ states of the bureaucratic Stalinist regimes.
However, with his call for “revolutionary reformism”, it would seem that Mason is in fact referring to the former – calling for the capitalist state to somehow act against the interests of the ruling class, take power away from the major monopolies that currently control society, and carry out the transformation to a new form of society that would work in favour of the exploited masses that the capitalist state currently serves to oppress. Why, one has to ask, would a capitalist state act in such a manner to undermine capitalism’s very existence?
Indeed, as the recent example of Tsipras’ capitulation in Greece has demonstrated, there is no reformist way out of the capitalist crisis; and any attempt to do so, rather than being nurtured by the bourgeoisie and the capitalist state, will see the full force of the ruling class, the media, and the bourgeois state used to crush such resistance to the needs of capital.
Mason’s presentation of Marx’s ideas, analysis of the current impasse of capitalism, and vision for a potential future of plenty based on technology and automation is insightful and inspiring. Ultimately, however, his conclusions fall short because of what seems to be a pessimism about the possibility of a real, genuine, revolutionary change and a lack of faith in the ability of the organised working class to bring about such a transformation in society.
Nevertheless, despite its limitations, PostCapitalism is an extremely useful read for anyone who wants a thorough and revealing insight into the contradictions of capitalism and how they are manifested today in this era of information and the internet.
["PostCapitalism: A Guide to Our Future" by Paul Mason is available to purchase now from Allen Lane publishers]
The solution: boycotts; the law; or organisation?
Back in the world of the “sharing” / on-demand economy, a number of “solutions” have been put forward in an attempt to promote the progressive side of these newly-developing models, whilst abolishing their worst excesses and ugliest symptoms.
The most simplistic solution proposed is for customers and users to boycott the profiteering companies that lie at the heart of the “sharing” / on-demand economy. But such individual actions, whilst full of good intentions and high morals, do little to address the main contradictions at the heart of these rising models and platforms. Indeed, by boycotting, the progressive side of these potentially revolutionary methods and technologies is lost altogether – the baby is thrown out with the bathwater.
Yes, the hypothetical possibility exists to create new, less morally-dubious versions of certain on-demand services and to restore the original ethos of altruistic reciprocity to the sharing economy. But, like with all small-scale utopian experiments, such attempts will remain islands of socialism in a sea of capitalism, unable to compete against the big for-profit companies in the “sharing” / on-demand sectors with their access to capital, lower wages, and economies of scale.
Importantly, an attempt to boycott the bad apples and promote the best examples ultimately does nothing to tackle the key question: that of private ownership and the anarchy of the market. It is these, not the morals of this-or-that capitalist, that are the driving force behind the attempts to squeeze workers in the on-demand economy. And it is not individual action, but collective action, that will enable workers to fight back. As Marx commented, “the emancipation of the working classes must be conquered by the working classes themselves.”
Indeed, in order to resist the race to the bottom that the on-demand economy accelerates, there is talk of trying to unionise and organise those currently working – atomised – within the sector. There have been stories of Uber drivers in some cities forming unions. Elsewhere, a “freelancers” union has been set up to try and protect those in the on-demand economy from the most extreme levels of exploitation.
At the moment, self-employed workers offering their services via such apps are competing on price and quality, with ratings given to “taskers”, etc. by customers meaning that intense competition between workers is explicit. Regulation and/or unionisation have been suggested to resist this, with possibilities including the introduction of a minimum wage rate for all those working in the on-demand economy. Whichever way you look at it, the rules of the game are currently stacked firmly in favour of the capitalists.
As Dean Baker, a Washington think-tank economist, commented in the New York Times, “You are getting people to self-exploit in ways we have regulations in place to prevent.” Stanley Aronowitz, a researcher at the City University of New York, stated in the same article that, “It might as well be called wage slavery in which all the cards are held, mediated by technology, by the employer, whether it is the intermediary company or the customer.”
Similar suggestions have been made in relation to the “sharing” economy. Currently, big companies in the “sharing” economy offer no protection for their suppliers or their customers. For example, AirBnB hosts or guests are liable for damages, which would typically be covered by the hotel or hostel in a normal hotel business. The same situation exists in the on-demand economy, with Uber drivers having all liability for the maintenance and insurance of their vehicles. Again, it is the workers who are made to pay all the costs whilst the bosses reap the profits. And again, the solution proposed by some, such as Juliet Schor, a Boston-based academic writing for The Great Transition, is organisation and regulation:
“An alternative…is one in which sharing entities become part of a larger movement that seeks to redistribute wealth and foster participation, ecological protection, and social connection. This will only happen via organization, even unionization, of users. Indeed, the question of whether providers should organize is now firmly on the table, although it is too early to know how things will evolve.”
“Airbnb has begun to encourage its users to organize…The company wants these groups to push for favorable regulation. But they may develop agendas of their own, including making demands of the company itself, such as setting price floors for providers, pushing risk back onto the platforms, or reducing excessive returns to the entrepreneurs and the venture capitalists. On the labor exchanges, where the need for organization is perhaps most acute, providers could push for minimum wages.”
The whole of capitalism has been a history, on the one hand, of the bosses doing everything in their power to atomise and exploit workers; and, on the other hand, of previously unorganised workers coming together, taking collective action, and fighting back.
For example, earlier in the 20th Century, work at the docks was characterised by its extremely precarious nature, with workers forced to turn up every day in the hope of being selected for the few jobs going. By the 1970s, however, the dockers were highly organised – one of the most militant sections of the working class. Today, meanwhile, we see strikes by workers in the USA in the fast-food industry, previously renowned for being one of the hardest sectors to organise in.
In all such cases, it is through struggle that organisation occurs. Pushed into a corner by the insatiable appetite for profits of the capitalists, the unorganised workers in the on-demand economy today could be a powerful component of the labour movement of tomorrow.
There is much talk at the moment of using legal methods to improve the lot of those in the on-demand sector. In particular, there are a variety of cases being brought forward in order to address the legal status of workers in the on-demand economy – for example, Über is being taken to court for not classifying their drivers as employees, but as “independent contractors”. The difference is not trivial, with employee status coming with certain guarantees, provisions, and transfer of liabilities onto the company.
It is important to retain a sense of proportion, however. Whilst individual legal cases may go the way of the workers involved in this-or-that on-demand company, such victories would be largely pyrrhic, taking place as they are amidst a full frontal global attack and onslaught against workers and their wages, jobs, and union rights. As Juliet Schor notes in her article for The Great Transition:
“Part of the difficulty in assessing the impact of these new earning opportunities is that they are being introduced during a period of high unemployment and rapid labor market restructuring. Working conditions and protections are already being eroded, real wages are declining, and labor’s share of national income in the US has declined to historic lows. If the labor market continues to worsen for workers, their conditions will continue to erode, and it will not be because of sharing opportunities. Alternatively, if labor markets improve, sharers can demand more of the platforms because they have better alternatives.”
In the final analysis, whilst certain groups might be able to improve their terms and conditions through the courts, the Law remains part of the capitalist state, designed to protect the rights of private property and the profits of the rich.
In the face of the general attack against the working class by the ruling class, therefore, there needs to be a general resistance and counter-attack by workers, designed not merely to win this-or-that court case and this-or-that particular reform; but a mass political movement that has as its aim the abolition of the capitalist state and bourgeois property relations, and the introduction of a socialist plan of production involving common ownership and democratic workers’ control.
As a first step, the demand should be for the big profiteering companies of the “sharing” / on-demand economy to be nationalised and turned into public services. If Uber was part of a nationalised, democratically controlled public transport network (including the trains, buses, and rental bikes), then public transport could be planned with extraordinary levels of efficiency at low cost. Drivers could be guaranteed decent conditions and a living wage, without the need to compete against one-another. Eventually, with automation and driverless cars, drivers could be replaced altogether and provided with training and education to move into other jobs.
A publically run AirBnB, alongside the nationalisation of the major hotel firms and a mass programme of council housing, meanwhile, could be used to provide a home for everyone and cheap holiday accommodation for all. Combined with a programme of nationalising the banks and financial houses, investment could be poured into public transport, housing, and many other sectors. Scarcity of society’s needs and the scourge of precarious employment could be eliminated at a stroke.
The fetter of capitalism and the need for revolution
At the same time, legal questions relating to the “sharing” economy are highlighting capitalism’s contradictions; in particular, the fetter that private ownership has become in terms of progress. On the one hand, with the rise of the “sharing” economy, there is a clear potential for organising and distributing society’s resources rationally, fairly, and efficiently. On the other hand, under capitalism, firms like AirBnB have given rise to a whole host of legal cases, with tenants being sued by landlords for sub-letting their rooms. The need to efficiently distribute – for example – accommodation, therefore, is coming into conflict with laws that are designed to protect the landlord’s (private) property rights and his/her income from rents.
Such legal cases only go to prove Marx’s general point, outlined in the Preface to a Contribution to the Critique of Political Economy, that:
“At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters.” (our emphasis)
In other words, the legal relations – that is, the property relations – that we have within capitalist society are not compatible with the technological and scientific potential that capitalism has created. And the presence of such a contradiction highlights, Marx notes, the dawn of “an era of social revolution”.
As Juliet Schor explains in her article entitled “Debating the Sharing Economy”:
“…these new technologies of peer-to-peer economic activity are potentially powerful tools for building a social movement centered on genuine practices of sharing and cooperation in the production and consumption of goods and services. But achieving that potential will require democratizing the ownership and governance of the platforms.”
“The sharing economy has been propelled by exciting new technologies. The ease with which individuals, even strangers, can now connect, exchange, share information, and cooperate is truly transformative. That’s the promise of the sharing platforms about which virtually everyone agrees. But technologies are only as good as the political and social context in which they are employed. Software, crowdsourcing, and the information commons give us powerful tools for building social solidarity, democracy, and sustainability. Now our task is to build a movement to harness that power.” (our emphasis)
Professor Schor provides an insightful materialist perspective on the question of the new models and technologies that are emerging. As we have discussed earlier, and as Schor highlights here, under capitalism, the potential for such technologies will remain just that: a potential.
“No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.
“Mankind thus inevitably sets itself only such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation.” (Karl Marx, Preface to a Contribution to the Critique of Political Economy)
These words by Marx highlight the situation today. The potential is vast, as Mason and others have pointed out: the possibility to allocate resources efficiently and equally; to democratically run production and society in a rational way; and to vastly increase living standards whilst simultaneously reducing the hours of the working day. Marx’s maxim of “from each according to their ability; to each according to their need” could be easily achieved.
But as long as we are stuck within capitalism, this potential will be squandered. As long as the giant monopolies – of the info-tech world, the finance sector, and elsewhere – remain in private hands, the anarchy of the market will continue to reign.
All attempts to “democratise” and “socialise” these new platforms and technologies will come into conflict with the legal, property, and social relations that exist currently – designed to defend private property and the profits of the 1%. A revolutionary break with capitalism will be required. We invite you to join us in the fight for revolution, so that we may release the creative and technological potential that sits before humanity at the present time.