Cognitive Capitalism

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Contextual Quote

“'Cognitive capitalism' is the mode in which capitalism perpetuates itself when its categories have lost their relevance, it perpetuates itself by employing an abundant resource, human intelligence, to produce scarcity. This production of scarcity in a situation of potential abundance consists in erecting obstacles to the circulation and pooling of knowledge. "

- Andre Gorz, L'Immateriel, p. ? [1]


Definition

This interpretation stresses that we are in a third phase of capitalism, where the accumulation is centered on immaterial assets. It follows the earlier phases of mercantile and industrial capitalism.

Cognitive capitalism theorists believe that it is centered around the accumulation of immaterial assets, especially related to the information core of products, which are protected through Intellectual Property Rights, i.e. legal means such as patents. These patents, as they are used by brands, in sectors such as pharma, agribusiness and software (Microsoft), then allow for the creation of a surplus value resulting from monopolistic rents. The contradiction of cognitive capitalism is that the products themselves are generally cheap to produce, so they have to be kept in a state of artificial scarcity through IP protection. Cognitive capitalism is associated with the process of a private appropriation of the Information Commons.

For related interpretations, see the theory of Vectoral capitalism, which sees the Hacker Class, which produces use value but cannot realize its exchange value because it doesn't own the vectors of information (the means of distribution such as mass media), pitted against the Vectoral Class, which does own the vectors.

Finally, the interpretation of Netarchical Capitalism, argues that because of the distribution of the means of production (networked computer), which undermines both the monopolies of cognitive capitalists (through the creation of an Information Commons, and the Vectoral Class (through the distributed nature of the internet), is paving the way for netarchical capitalists, who enable, but also own, the participatory platforms.


Characteristics

Summarized by Ed Emery:

"We can offer the following elements towards a definition of cognitive capitalism:

(a) The production of wealth is no longer based solely and exclusively on material production but is based increasingly on immaterial elements, in other words on raw materials that are intangible and difficult to measure and quantify, deriving directly from employment of the relational, affective and cerebral faculties of human beings.

(b) The production of wealth is no longer based on a standardised and homogenous models for the organisation of the labour process regardless of the types of good produced. Production in cognitive capitalism takes place through a wide variety of labour-process models made possible by the development of new technologies of linguistic communication and transportation, and particularly characterised by forms of networking.

As a result of this restructuring of labour processes the traditional unilateral hierarchical form of the factory gradually comes to be replaced by hierarchical structures that are organised territorially via producer chains of sub-contracting suppliers, characterised by cooperation and/or command;

(c) The way in which work is done alters both quantitatively and qualitatively. In the material conditions of labour there is a marked increase in working hours. Often there is also a piling-on of additional tasks, a tendency for the the separation between work time and life time to disappear, and a greater individualisation of work relations. Moreover the nature of work itself comes to involve more and more elements of immateriality. Relational activities, communicational activities and brain activity becomes increasingly present and important. These activities require training, skills and attention: we move beyond the separation between mind and brawn typical of Taylorised work.

(d) The subjection of the worker within the production process is no longer imposed in disciplinary fashion by direct command (foremen etc); most of the time it is introjected and developed through forms of conditioning and social control. Individualised contractual relations are the order of the day, and this tends to introduce individual competitiveness into people's working behaviours.

(e) The role of knowledge becomes fundamental. To the creation of value through material production is added the creation of value through the production of knowledge. Cognitive capitalism means that the production of wealth takes place increasingly through knowledge, through the use of those faculties of labour that are defined by cognitive activity (cognitive labour), in other words principally through immaterial cerebral and relational activities.

(f) Precisely because of its individual nature, cognitive labour demands a high degree of relational activity, as the instrument for the transmission and decodification of its own brain activity and accumulated knowledges:

Cognitive abilities and relational activities are two faces of the same coin and can be regarded as indivisble. They are the basis of General Intellect, in other words the form of diffuse intellectuality which Marx discusses in his Grundrisse.

(g) Cognitive capitalism is also necessarily a networked reality. In other words it is not linear, and the hierarchies which it develops operate within the individual nodes, and between the various nodes, of the network."



Discussion

Enzo Rullani

Summarized by Matteo Pasquinelli, in: The Ideology of Free Culture and the Grammar of Sabotage:

"The digital revolution made the reproduction of immaterial objects easier, faster, ubiquitous and almost free. But as the Italian economist Enzo Rullani points out, within cognitive capitalism, "proprietary logic does not disappear but has to subordinate itself to the law of diffusion." Intellectual property (and so Rent) is no longer based on space and objects but on time and speed. Apart from copyright there are many other modes to extract rent. In his book Economia della conoscenza Rullani writes that cognitive products easy to reproduce have to start a process of diffusion as soon as possible in order to maintain control over it. As an entropic tendency affects any cognitive product, it is not recommended to invest on a static proprietary rent. More specifically there is a rent produced on the multiplication of the uses and a rent produced on the monopoly of a secret. Two opposite strategies: the former is recommended for cultural products like music, the latter for patents. Rullani is inclined to suggest that free multiplication is a vital strategy within cognitive capitalism, as the value of knowledge is fragile and tends to decline. Immaterial commodities (that populate any spectacular, symbolic, affective, cognitive space) seem to suffer of a strong entropic decay of meaning. At the end of the curve of diffusion a banal destiny is waiting for any meme, especially in today's emotional market that constantly tries to sell unique and exclusive experiences.

For Rullani the value of a knowledge (extensively of any cognitive product, artwork, brand, information) is given by the composition of three drivers: the value of its performance and application (v); the number of its multiplications and replica (n); the sharing rate of the value among the people involved in the process (p). Knowledge is successful when it becomes self-propulsive and pushes all the three drivers: 1) maximising the value, 2) multiplying effectively, 3) sharing the value that is produced. Of course in a dynamic scenario a compromise between the three forces is necessary, as they are alternative and competitive to each other. If one driver improves, the others get worse. Rullani's model is fascinating precisely because intellectual property has no central role in extracting surplus. In other words the rent is applied strategically and dynamically along the three drivers, along different regimes of intellectual property. Knowledge is therefore projected into a less fictional cyberspace, a sort of invisible landscape where cognitive competition should be described along new space-time coordinates. Rullani describe his model as 3D but actually it is 4-dimensional as it runs especially along time.

The dynamic model provided by Rullani is more interesting than for instance Benkler's plain notion of "social production" but it is not yet employed by radical criticism and activism. What is clear and important in his perspective is also that the material can not be replaced by the immaterial despite the contemporary hypertrophy of signs and digital enthusiasm. There is a general misunderstanding about cognitive economy as an autonomous and virtuous space. On the contrary, Rullani points out that knowledge exists only through material vectors. The nodal point is the friction between the free reproducibility of knowledge and the non-reproducibility of the material. The immaterial generates value only if it grants meaning to a material process. A music CD for example has to be physically produced and physically consumed. We need our body and especially our time to produce and consume music. And when the CD vector is dematerialised thanks to the evolution of digital media into P2P networks, the body of the artist has to be engaged in a stronger competition. Have digital media galvanised more competition or more cooperation? An apt question for today's internet criticism." (http://www.rekombinant.org/docs/Ideology-of-Free-Culture.pdf)


George Dafermos

George Dafermos:

"Another business model encountered in the digital economy is that of cognitive capitalism, which is synonymous with the extraction of monopoly rents through the use of intellectual property (IP) rights, like copyrights and patents. This type of ‘capitalism entails the enclosure and commodification of the immaterial: knowledge, culture, DNA, airwaves, even ideas’ (Kostakis & Bauwens 2014: 20). According to the theorists of the digital commons, the effect of this model on innovation is undoubtedly negative (Kostakis & Bauwens 2014, Benkler 2006; 2016). An example that illustrates its extractive and parasitic character is that of Microsoft’s use of a patent related to the scheduling of meetings to impose a licensing fee on Android mobile phones. In this case, which is paradigmatic of how cognitive capitalism works today, IP rights constitute a mechanism for sharing the profits without any participation in the actual process of innovation (Dafermos 2015).

It is clearly impossible to reconcile the practices of commoners and cognitive capitalists. Undoubtedly, the two models are diametrically opposed. As Bauwens (2009: 97) writes, ‘adaptation to participatory modes of innovation, to open models of intellectual property, is antithetical to...the mode of cognitive capitalism.’ The core value creation process in cognitive capitalism consists in the extraction of monopoly rents from knowledge that has been locked up in patents and copyrights. This is a type of capitalism that uses restrictive IP rights so as to create an artificial scarcity in immaterial resources. It encloses scientific and technological knowledge, thereby shattering its inherently social character. By contrast, the use of IP rights (i.e. free/open-source licenses) in the context of commons-based peer production is aimed at making such immaterial resources universally available. To put it simply, whereas the application of IP rights in cognitive capitalism is designed to restrict access, their application in peer production is inclusive, democratizing access.

For digital commons theorists, cognitive capitalism represents a variant of capitalism which is out of sync with the needs, the wants and the capabilities of human beings in the contemporary world. In that sense, it has become socially irrelevant. That, however, has not stopped it from becoming increasingly more aggressive. Most alarmingly, it has expanded into new enclosures of the commons of knowledge and culture, resulting in the privatization of resources like seeds that were hitherto considered the common heritage of humankind (Dafermos & Vivero-Pol 2015; see also Aoki 2009: 2279-96, Kloppenburg 2010: 370-372). Its driving force, as Kostakis and Bauwens (2014: 20-21) remark, ‘is the eradication of all Commons and the commodification of all things.’

Undeniably, this is a powerful class of capitalists with strong connections to politicians and policy makers (Benkler 2006: chapter 11). That, however, does not mean that they will prevail in the struggle for hegemony in the information economy. As the theorists of peer production point out time and again, cognitive capitalism is confronted with many resistances and antagonisms. As a result of the legal war it has been waging against peerto-peer technologies and file-sharing networks, it has made many enemies. Take, for example, the cyber-groups of ‘pirates’ who distribute copyrighted software programs out of ideological reasons, that is, as a form of direct action (Rajagopal & Bojin 2004), or the ‘hacktivists’ who develop new peer-to-peer technologies and file-sharing networks, with the aim of encouraging ‘mass defection from the intellectual property regime’ (Dafermos & Söderberg 2009: 54-55). Most importantly, by ‘putting young people who share music in jail,’ cognitive capital’s campaign of legal repression has led to the politicization of the file-sharing communities that were repressed, which, in turn, has resulted in the formation of new political parties like the Pirate Party in various European countries (Bauwens et al. 2019: 66; also, see Benkler quoted in Frick 2012). Then, there is the vehement opposition from new social movements, like the Free Culture Movement, the Free Software Movement and the Open Access Movement, which are fiercely opposed to the capitalist enclosure of art, technology and science (Bauwens 2005).

The changing configuration of the global economy poses another serious threat to cognitive capital. Most notably, it is antagonized by the development of ‘a new sector of commons-based petty production’ in the Global South (Arvidsson 2019). This is none other than the ‘global pirate or shanzhai economy’ of ‘cell phone charging and repair shops that proliferate on street markets in Asia, Africa and the Middle East’ (Arvidsson 2019: 17). The reason why such ‘petty traders’ and ‘popular entrepreneurs’ are relevant to the analysis of the points of rupture and antagonism between the commons and capital in the contemporary world is because they ‘rely on open source software and peer-to-peer hacker forums,’ that is, ‘on the common nature of the skills needed for even advanced forms of commodity production, along with open design practices and new collaborative business models’ (Arvidsson 2019: 17). That is what practically unites them as a class of ‘micropreneurs’ and makes them a potential ally of commoners and peer producers. Furthermore, by taking into account the ‘disappearance of stable industrial jobs in the West’ and the creation of ‘a new generation of outcasts’ and ‘middle-class university graduates, who are forced into freelance careers,’ commons theorists predict that this mode of commons-based petty production is bound to rapidly expand into the Global North (Arvidsson 2019: 17).

What is most important of all, the class of cognitive capitalists may be very powerful, but does not represent the most evolved form of the capitalist model. As Bauwens (2010) points out, cognitive capitalists, ‘even as they ascend to the heights of power through restrictive copyright legislation, have already reached the zenith of their power, and they will eventually be replaced by new formats of capitalist exploitation, which accommodate themselves in much more intelligent ways to the peer to peer realities.’ But if that is true, then it is not cognitive capitalists who are the ‘arch-enemies’ of commoners and peer producers in their counter-hegemonic struggle in the information economy. Perfectly suited to this role, a new sub-class of cognitive capitalists has arisen, which does not depend on patents and copyrights, but on the control of digital platforms. ‘Rather than living off knowledge assets,’ as cognitive capitalists do, ‘this new capitalist sub-class’…‘accommodates itself with the networks, places itself at crucial nodes and proposes itself as voluntary hubs’ (Bauwens 2010). According to Bauwens and his colleagues, the manner in which value is created and captured through this new model is so profoundly different from the classic model of cognitive capitalism that it must be theorized as a distinct mode of production (Bauwens 2009, Bauwens et al. 2019, Kostakis & Bauwens 2014).


The new phase of cognitive capitalism

George Dafermos:

"The new phase of cognitive capitalism is inextricably linked to the so-called ‘sharing economy.’ The concept has been in much vogue since the dawn of the new millennium. Originally it referred to websites like Facebook and YouΤube, which allow users to create some form of digital content and then share it by posting it on the website. YouTubers share the videos they make. In the case of Facebook, one could say that users share bits of their private and social life. Over time, however, the milieu of the sharing economy came to encompass companies like Uber and Airbnb on account of providing an online platform through which people can supposedly share things like their houses or cars. Of course, as has been noted by various critics, the type of activity in which users of Uber and Airbnb are engaged can be hardly considered a form of sharing, as it always involves a commercial transaction (e.g. Eckhardt & Bardhi 2015). For instance, in the case of Airbnb, what users actually do is not house-sharing but house-renting. Even more contradictory from this vantage point is the growing use of the term in reference to so-called ‘crowdsourcing platforms’ like A m a z o n ’ s ‘Mechanical Turk’ through which ‘crowdworkers’ are getting paid to perform various digital tasks requested by clients (e.g. Taeihagh 2017). It is hard, of course, to see how offloading work to the network of logged-in crowdworkers has anything to do with real sharing. On the contrary, as has been argued, the organization of productive activity in this manner is paradigmatic of the ongoing ‘platformization of labor,’ which, under present circumstances, amounts to a type of freelance work characterized by exploitation and precarity (Casili & Posada 2019, van Doorn 2017). The issues, however, raised by the sharing economy are not merely of a conceptual nature.

In examining the business model of leading sharing economy actors like Facebook and YouTube, digital commons theorists observe a significant commonality. They are all owners and administrators of online platforms whose content is contributed by end users. The owners and administrators ‘valorize’ this content (as well as the data that is generated as a by-product of users’ activities and interactions) by exploiting it commercially. There is, therefore, a clear distinction between the users who create the content and the owners-administrators who reap the benefits of its economic exploitation (Bauwens & Kostakis 2016, Kostakis & Bauwens, 2014, Pazaitis et al. 2017a). Essentially, the appropriation of value by platform owners makes the concept of the sharing economy a euphemism for ‘platform capitalism’ (e.g. Bauwens & Niaros 2017, Gorenflo 2015, Kostakis & Bauwens 2014, Schneider 2018a, Scholz 2016)." (http://heteropolitics.net/wp-content/uploads/2020/12/Digital-Commons.pdf)


As Bauwens et al. (2019: 37) write:

- In the so-called ‘sharing economy’ there are distributed market (P2P) exchanges taking place over private platforms, whose owners extract a toll from the exchanges. The process is controlled by the owners of the platforms, who extract value (rents or fees) from these processes. The ‘sharing’ concept here is no more than a marketing ploy.

Just as traditional capitalists exploit and profit from the labour of their workers, so, too, do platform owners exploit and profit from the contributions and the immaterial labour of their users. As we mentioned in the previous section, leading theorists of the digital commons, such as Bauwens and Kostakis, claim that this model represents, in fact, capitalism in its most developed form. Interestingly, this is a conclusion they come to by engaging with the work of critical theorist MacKenzie Wark (2004). As in Wark’s polemic, the starting-point of their analysis is that a new class of capitalists has arisen, which does not produce anything, but it controls crucial nodes in the computer network and media infrastructures of strategic importance, which enables it to capture and commodify a large part of the creativity of those using them. That is why these ‘vectoral capitalists,’ as Wark (2004) calls them, can be considered the most evolved segment of the capitalist class. They have managed to get rid of workers altogether by tapping into the creations of all those around the world who use their proprietary media channels and ‘information vectors.’

Up to this point, the analysis underlying the digital commons theorists’ critique of the sharing economy is largely the same. However, whereas Wark insists that ‘vectoralism’ implies the enclosure of the creations of the commoners and peer producers, Kostakis and Bauwens (2014) argue that the appropriation of value in the sharing economy platforms does not depend at all on the restrictive use of IP rights. Hardly ever do platform owners use restrictive clauses that enclose the creative property under their ownership. This is what makes the platform model so radically different. In contrast to Wark’s vectoral capitalists who ‘rely on monopolistic rents derived from intellectual property...platform capitalists enable and empower participation and sharing to occur, but they are able to convert part of the created use value into exchange value through the sale of user attention’ (Bauwens 2009: 133), as happens in the case of YouTube and Flickr (Bauwens 2009: 126). In a nutshell, the capitalists who own the platforms ‘no longer rely on closed intellectual property strategies, but enable and empower the direct creation of value by sharing communities’ (Bauwens 2009: 132). To emphasize their distinctiveness from both cognitive capitalists and Wark’s vectoral capitalists, Bauwens and Kostakis call them ‘netarchical capitalists.’

Essentially, the problem with this new category of capitalists and their platforms is that:

While individuals share through these platforms, they have no control over the design and the protocol of these networks/platforms, which are proprietary. Typically...while sharers directly create or share use value, the monetized exchange value is realized by the owners of capital. This...creates a longer-term ‘value crisis,’since the value creators are not rewarded (Kostakis & Bauwens 2014: 23).

In short, the netarchical capitalists who own the platforms monopolize managerial authority and the means of appropriation of value. They do not share their profits with users, nor are the latter involved in the managerial process of the platform. In the light of this analysis, it is clear that the sharing economy constitutes a field of exploitation and antagonism. In specific, what defines the character of the conflict in this setting is the opposition of interest between the platform capitalists who own the platforms and the multitude of the users and precarious crowdworkers, who are the real value creators. In order to transcend this antagonism, commons theorists argue that an economy of genuine sharing would have to be organized along P2P lines, that is, by means of platforms collectively owned and managed by their users. In their view, the only way to stop netarchical capitalists from appropriating the lion’s share of the value realized through the platforms is by collectivizing their ownership and management structure (Bauwens et al. 2019, Bauwens & Kostakis 2016; 2017, Kostakis & Bauwens 2017, Pazaitis et al. 2017a). This project of commonification is the basis of their proposal for the development of open platform cooperatives." (http://heteropolitics.net/wp-content/uploads/2020/12/Digital-Commons.pdf)

More Information

  1. Check of P2P Foundation blog archive for more articles on cognitive capitalism.
  2. Self-organisation and cooperation in cognitive capitalism, special issue of Solaris magazine, at http://biblio-fr.info.unicaen.fr/bnum/jelec/Solaris/d05/5introduction.html , http://biblio-fr.info.unicaen.fr/bnum/jelec/Solaris/d05/5link-pezet.html
  3. A critique of the thesis by Siliva Federici and George Caffentzis, at http://www.commoner.org.uk/12federicicaffentz.pdf

Key English-language Books to Read

The theory of cognitive capitalism has its roots in mostly French and Italian thinkers. Therefore, we are able to present a number of specific books in French, but English books on the subject are less precise in regard of this concept.


Book in progress by Adam Arvidsson: The Ethical Economy Book Project


Jeremy Rifkin. [The Age of Access: The New Culture of Hypercapitalism, Where all of Life is a Paid-For Experience]

(what if the new capitalism produced a new kind of feudalism? Indeed, as products are increasingly replaced by immaterial experiences, and are licensed rather than sold, then this means that consumers will no longer ‘own’ anything, merely a right to use it, and that those without means will be excluded from access to these networks)

Nick Dyer-Whitheford. [[[Cyber-Marx]], cycles and circuits of struggle in High-Technology Capitalism]. Univ. of Illinois Pr., 1999.

(“well-researched overview on contemporary Marxist responses to the information age" - Soderbergh copyleft essay)


[Class Warfare in the Information Age]. Michael Perelman. Palgrave.

(“shows how class conflict remains a contemporary issue")


[The Corrosion of Character: The Personal Consequences of Work in the New Capitalism]. By Richard Sennett. Norton & Co, 1998.

(vignettes which show the contradictions inherent in the postfordist model of capitalism, and the high personal price to be paid by its employees / French: “Le Travail sans Qualite", Albin Michel, 2000)