3.1.B. The Communism of Capital, or, the cooperative nature of cognitive capitalism

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3.1.B. The Communism of Capital, or, the cooperative nature of Cognitive Capitalism

In modernity, the economic ideology sees autonomous individuals entering into contracts with each other, selling labor in exchange for wages, exchanging commodities for fair value, in a free market where the ‘invisible hand’ makes sure that the private selfish economic aims of such individuals, finally contribute to the common good. The ‘self’ or subject of economic action is the company, led by entrepreneurs, who are the locus of innovation. Thus we have the familiar subject/object split operating in the economic sphere, with an autonomous subject using and manipulating resources.

This view is hardly defensible today. The autonomous enterprise has entered a widely participative field that blurs clear distinctions and identities. Innovation has become a very diffuse process . It is linked with its consumers through the internet, today facing less a militant labor movement than a ‘political consumer’ who can withhold his/her buying power with an internet and blogosphere able to damage corporate images and branding in the very short term through viral explosions of critique and discontent. It is linked through extranets with partners and suppliers. Processes are no longer internally integrated, as in the business process re-engineering of the eighties, but externally integrated in vast webs of inter-company cooperation. Intranets enable widespread horizontal cooperation not only for the workers within the company, but also without. Thus, the employee, is in constant contact with the outside, part of numerous innovation and exchange networks, constantly learning in formal but mostly informal ways. Because of the high degree of education and the changing nature of work which has become a series of short-term contracts, a typical worker has not in any real sense gained his essential skills and experience within the company that he is working for at any particular moment, but expands on his skill and experience throughout his working life. Innovation today is essentially 'socialized' and takes place 'before' production, or 'after' production, with reproduction being at marginal cost concerning immaterial goods, and even if costly in the material sphere, being just an execution of the design phase .

Moreover, because the complexity, time-based, innovation-dependent nature of contemporary work, for all practical terms, work is organized as a series of teams, using mostly P2P work processes. In fact, as documented very convincingly by Eric von Hippel, in his book "The Democratization of Innovation" (Von Hippel, 2004), innovation by users (and particularly by what he calls 'lead users' ) is becoming the most important driver of innovation, more so than internal market research and R & D divisions. It is subverting one of the mainstays of the division of labor. Commentators have noted that the whole dichotomy between professionals and amateurs are in fact dissolving, giving rise to the phenomena of 'citizen engineers' . Users, better than the scientists, know what they need and now have the skills to develop solutions for themselves, using other users for peer support . These user innovation communities are very important in the world of extreme sports such as windsurfing for example , in technology and online music , and in an increasing number of other areas. Recently, in May 2005, Trendwatching.com, a business-oriented innovation newsletter using thousands of spotters worldwide, has devoted a whole issue to the topic of 'Customer-made innovation', highlighting several dozen examples in all sectors of the economy. These trends will be greatly strengthened with the further development of 'personal fabricator' technology. But even before this, the process of creating an infrastructure for this type of do-it-yourself economy is proceeding apace .

The smarter companies are therefore consciously breaking down the barriers between production and consumption, producers and consumers, by involving consumers, sometimes in a explicit open-source inspired manner, into value creation . Think of how the success of eBay and Amazon are linked to their successful mobilization of their user communities: they are in fact integrating many aspects of commons-based peer production. There are of course important factors, inherent in the functioning of capitalism and the format of the enterprise, which cause structural tensions around this participative nature, and the use of P2P models, which we will cover in our explanatory section . The same type of user-driven innovation has also been noted in advertising . Accordingly, new business management theories are needed, which Thomas Malone calls "Coordination Theory", and it involves studying (and organizing accordingly) the dependencies and relationships within and without the enterprise . Not surprisingly this research into 'organizational physics' is also done through open source methods . Apart from 'vanguard corporations' (see my thesis on netarchical capitalism) that incorporate peer production as an essential component of their activities, there is a broad shift towards a new attitude towards consumers, with many associated phenomena. Management theorists with a feeling for these trends argue that a radical shift is occurring, and needs to occur, in the managerial class, in order to be able to capitalize on these developments. David Rotman of the Rotman School of Management argues that they have to become businesspeople will have to become "more 'masters of heuristics' than 'managers of algorithms'" . Books describing this shift are Daniel Pink's A Whole New Mind: Moving from the Information Age to the Conceptual Age, and C.K. Prahalad's The Future of Competition: Co-Creating Unique Value with Customers.

So the general conclusion of all the above has to be the essentially cooperative nature of production, the fact that companies are drawing on this vast reservoir of a 'commons of general intellectuality', without which they could not function. That innovation is diffused throughout the social body. That, if we accept John Locke's argument that work that adds value should be rewarded, then it makes sense to reward the cooperative body of humankind, and not just individuals and entrepreneurs. All this leads quite a few social commentators, from both left and liberal (free enterprise advocates), to bring the issue of the universal wage on the agenda and to retrieve the early Marxian notion of the 'General Intellect' .

Why do we speak of ‘cognitive capitalism’? For a number of important reasons: the relative number of workers involved in material production is dwindling rather rapidly, with a majority of workers in the West involved in either symbolic (knowledge workers) or affective processing (service sector) and creation (entertainment industry). The value of any product is mostly determined, not by the value of the material resources, but by its level of integration of intelligence, and of other immaterial factors (design, creativity, experiential intensity, access to lifeworlds and identities created by brands). The immaterial nature of contemporary production is reconfiguring the material production of agricultural produce and industrial goods. In terms of professional ‘experience’, more and more workers are not directly manipulating matter, but the process is mediated through computers that manage machine-based processes.

But the most important argument as to the existence of a third phase of Cognitive capitalism is therefore a hypothesis that the current phase of capitalism is distinct in its operations and logic from earlier forms such as merchant and industrial capitalism . It is based on the accumulation of essentially knowledge assets. Instead of the cycle conception-production-distribution-consumption, we have a new cycle conception – reproduction of the informational core – production – distribution. The key is now to possess an informational advantage, in the form of intellectual property, and that can be embedded in immaterial (software, content) or material (seeds, pharmaceuticals, biotechnology) products. The production itself can be outsourced and is no longer central to competitive advantage. And because the advantage is in the information, it is protected through monopolies, enforced by the state. This in turn leads to increasing and protected profits, with prices no longer bearing any necessary relation to the production cost. This fact is true for seeds, pharmaceuticals, software, content products, biotechnology, etc… These inflated profits in turn have put an enormous pressure on the totality of the economy.

According to the hypothesis of cognitive capitalism, there are three main approaches in analyses of the current political economy:

  1. ‘neo-classical economics’ seeks for the laws of capitalism ‘as such’, and is today much involved in creating models and mathematizing them; according to CC theorists, it lacks a historical model to take into account the changes.
  2. Information economy models claim that information/knowledge has become a independent third factor of production, changing the very nature of our economy, making it ‘post-capitalist’
  3. In between is the hypothesis of cognitive capitalism, which, though it recognizes that we have entered a new phase, a third ‘cognitive’ phase, it is still within the framework of the capitalist system.

What CC-researchers are building on is an earlier and still very powerful school of economic theory, known as the Regulation School and especially strong in France (M. Aglietta), which considers that, despite differences in national models, there are commonalities in the structural evolution of the capitalist system, that it has been characterized by different ‘regimes’ which each had their particular modes of ‘regulation’ (forms of balancing the inherent instability of the system). It was they, who focused most on the theories of post-Fordism, arguing that after 1973, the Taylorist-Fordist system of organizing work and the economy (with as its corollary Keynesianism) had been replaced by new systems of organizing work and regulating the economy.

McKenzie Wark’s Hacker Manifesto (Wark, 2004) goes one step further in this analysis and argues that not only is the key factor of the new era ‘information as property’, but with it comes the creation of a new ruling class and a new class configuration altogether. While the capitalist class owned factories and machinery, once capital was abstracted in the form of stocks and information, a new class has arisen which controls the ‘vectors of information’, the means of producing, storing and distributing information, the means to transform use value in exchange value. This is the new social force he calls the ‘vectoralist’ class. The class who actually produces the value (as distinct from the class that can ‘realise’ it and thus captures the surplus value), he calls the hacker class. It is distinguished from the former because it actually creates new means of production: hardware, software, new knowledge (wetware). See 3.3.D. for a fuller explanation of the different interpretations of the current political economy, of which P2P is a crucial element.

However, we believe that though the cognitive capitalism and vectoralist class arguments are key to understand the current era, it is not sufficient, and we will put forward our own hypothesis that will help in understand the emerging future: the emergence of a netarchical class, which is not dependent on either knowledge assets or information vectors, but enables and exploits the networks of participatory culture. See section 3.4.E. for a full explanation of this idea.