Blockchain's Impact for Labor and Capitalism
* Article: BLOCKCHAIN MACHINES, EARTH BEINGS AND THE LABOUR OF TRUST. By Larry Lohmann. Corner House,
"The last decade's developments in computation are major topics of debate among business, policymakers, and social movements alike. Blockchain, Bitcoin, smart contracts, the Internet of Things, machine translation, image recognition, the Earth Bank of Codes – all are understood to be not only business opportunities but also political and environmental issues. Seldom mentioned, however, is the extent to which these innovations are part of an ecological history that goes back to the early 19th century and before. A strategic understanding their dynamics and contradictions requires looking again at longstanding pictures of labour, mechanization, commons, and capital accumulation. Different ways of thinking about Marx's categories of living and dead labour inspired by the work of the later Wittgenstein can help"
Excerpted from Larry Lohman:
Text starts from subsection Labour Discipline until the box, "Blockchain Nerds and Prophets"
In addition to attempting to automate the compliance of every individual worker with tailor-made, worker-specific, non-negotiable sets of preset encoded rules, smart contracts promise to minimize the dependence of employers on workers’ knowledge. As one supply-chain executive puts it, the hope is that “by utilizing AI and predictive analytics technology, the optimization of deliveries is shifted to algorithms rather than tribal employee knowledge."
Capital’s fascinated dread of that “tribal employee knowledge” – and the term “tribal” is extremely revealing – is, of course, a fixture familiar from every past era of capitalism. It can be no surprise to find it reappearing in the blockchain age in pretty much the same form it appeared in, for example, the statements of early prophets of industrial capital such as Richard Arkwright or Andrew Ure, who noted in 1835 that “the more skilful the workman, the more self-willed and intractable he is apt to become, and, of course, the less fit a component of a mechanical system, in which, by occasional irregularities, he may do great damage to the whole”.
In addition to reducing the bargaining power of many classes of worker, blockchain also has the potential of taking much of the heat of public blame for social problems off capitalists and managers: “It was the algorithm that did it. We just need to regulate the algorithm more.” As law professor Lauren Henry Scholz puts it, “[w]hen algorithms are introduced in institutional decision-making, individuals outsource their valuation processes to the algorithm”41 – an act that is itself a key form of living labour. The more that big data appears to be “organizing itself,” the more this dynamic tends to take hold.
Ability to help capital reach into millions of small spaces scattered across the globe
... and make new businesses possible where there is at present a “trust deficit”.
To blockchain prophets in finance, today’s banking sector still reeks of the 19th century, with its ranks of ink-stained, Barnaby-like scribes on stools and booze-fuelled schmoozefests among fat deal-makers with stickpins in their ties. Despite the nanosecond transactions enabled by supercomputer-powered automated trading and the 1990s re-fusion of conventional and speculative banking, finance remains pretty much all thumbs when it comes to the profitable integration of tiny customers and tiny investors into global capital flows. The excess of humans in back-office operations, clearance houses, database maintenance and auditing activities is both cause and symptom. Automated micromanagement is now ready to ride to the rescue. With blockchain, banks can safely put hundreds of millions more poor people in debt while making it simpler for them to invest in anything from consumer goods to carbon credits and to send cash instantly to family members without fees or trust in traditional intermediaries. But it doesn’t stop with banking. Blockchain and smart contracts also help transform into resources millions of idiosyncratic little things around the world that were previously difficult to commodify, like the natural germicide produced by a species of Amazon frog or informally-held rights to half a hectare of local forest commons. They make it possible to “digitize and monetize natural capital” faster, more easily, and more securely, helping to convert both pachamama and nature conservation more thoroughly into something that a wide range of actors can buy and sell in the form of exchangeable tokens.
Take, for example, the 2010 Nagoya Protocol. Nagoya is supposed to ensure the “fair and equitable” sharing of benefits arising out of the capitalization of genetic resources. In other words, to curb biopiracy. But how do you do that without freezing up the circulation of biodiversity assets so much that nobody makes any money – or even bothers to catalogue or collect their genetic property in the first place?
Secure blockchain platforms offer a possible answer. If wary Southern nations know that no corporation can gain access to information about their genetic resources without signing smart contracts that automatically enforce rights and obligations governing their use – and that will mechanically and securely channel a bit of the returns from any attempt to commodify their digitallyfingerprinted DNA sequences back to the source – they may be more willing to monetize their biodiversity. And maybe wary capitalists will be more willing to take the necessary risks if they’re provided with a gigantic “eBay-like global marketplace” for intellectual property that “reduces the search and transaction costs between providers and users” of juicy bits of indigenous knowledge from the Amazon, the Western Ghats, or anywhere else.
Or take the longstanding project of Peruvian businessman and neoliberal icon Hernando de Soto to bring the vast but fragmented untitled lands of five billion of the world’s poorer people into the circuits of capital.
Among the advantages of this project – undertaken, predictably, with the approval of the World Bank – was that it promised to help provide mining corporations, agribusinesses, carbon traders and various developers with less risky, brutal and unpredictable means of dispossessing inconvenient peasants and commoners and making them work harder for capital. The catch was that transforming every little piece of that informally-held land into a recognized, standardized unit of tradable private property was always going to be a tough job, bureaucratically speaking.
Imagine, however, how much easier the job becomes with blockchain, which, by recording and automatically enforcing all those diverse informal rights in an incorruptible digital public ledger, is theoretically capable of rendering every little squatter’s patch of land tradable on a global marketplace. Why shouldn’t de Soto be delighted, then, to accept an invitation as guest of honour to the First Annual Block Chain Summit in May 2015, co-organized by British tycoon Richard Branson on his private Caribbean island?45 And why shouldn’t countries eager for capitalist development like Georgia follow de Soto’s advice and consider putting their entire land registries on blockchain?
Because of blockchain’s ability to compile, secure, and update in real time every little bit of information about business risk, health risk, disaster risk and weather risk worldwide, it also promises to help insurers commodify uncertainty more profitably. With a fast, reliable global database constantly feeding fine-grained risk data into millions of automatically self-adjusting individual smart contracts, the chances could be reduced that less vulnerable customers – or insurance firms themselves – will end up subsidizing customers that the companies learn too late are more risky than they thought. The large, crudely-rationalized “risk pools” that the insurance and welfare sectors have had to work with in the past in order to spread costs and exposure and stabilize premiums – and to make possible coverage for high- as well as low-risk customers – could become more and more outdated.
Nor does it end there. Blockchain also vastly extends the frontiers of “prosumption” – capital’s 20thcentury strategy of organizing and exploiting the unpaid, informal labour of customers by appropriating their freely-given feedback, personal data, design ideas, reviews, “likes” and “dislikes” and transforming them into privately-held, big-data commodities for sale.
As elsewhere, blockchain adds a seemingly egalitarian twist to this old form of extraction: smart contracts could make it possible for some of the growing numbers of these unpaid workers, at long last, to get a piece of the action for themselves. That is, instead of algorithm-owning firms becoming the sole proprietor of the “virtual you” that they create out of your data, you can be doled out a share as well. You still don’t own the machines needed to produce this “you-commodity”, but you do get a bit of the proceeds.
In 2018, for instance, a Korean company called Cosmochain launched an Ethereum-based project to integrate the work of thousands of individual customers more intimately into cosmetics producers’ accumulation strategies.48Consumers provide information about their skin, behaviour, product preferences, and so on. This is aggregated on blockchain for sale to cosmetics firms to help them develop and market products. In return, consumers automatically get Cosmo Power, which, on the model of air miles, can be converted into tokens that can be used to buy cosmetics online. In the future, similarly, a company like Nike could create smart contracts that would automatically send micropayments to every buyer of its shoes in exchange for the information that electronic sensors in the shoes would collect about that particular customer.49 Here, too, blockchain promises to help capital learn how to reach into ever smaller pores of the life of humans and nature, opening up micro-frontiers it had never before realized were exploitable."
Source: BLOCKCHAIN MACHINES, EARTH BEINGS AND THE LABOUR OF TRUST. By Larry Lohmann. URL = https://www.academia.edu/39236631/BLOCKCHAIN_MACHINES_EARTH_BEINGS_AND_THE_LABOUR_OF_TRUST?email_work_card=view-paper
The Cyborg Forest
"The plan for the German forest comes in several stages. First, shareholders buy the forest. Then a contract is drawn up between the shareholders and a “digital representation” of the forest. The shareholders’ land is signed over in exchange for stakes in the proceeds from the forest’s operations.
The so-called “augmented” forest that results legally owns itself. Via computer programmes, it becomes, bit by bit, an agent, a bearer of rights and duties. As such, it’s indebted to its shareholders. To pay off those debts, the forest goes to work managing itself profitably. Once it has transferred enough of its proceeds to the shareholders, it becomes a completely independent economic entity.
Thereafter, the cyborg forest negotiates its own automated contracts with humans or other agents, acquiring resources, making payments, and producing value.
It might contract to get satellite pictures of the property from an external provider. It might hire drones to monitor tree growth and health. After calculating how much timber could be sold each year while maintaining the forest’s integrity, and scouring databases worldwide to find the best prices for its products, it might draft logging and transport contracts. Leveraging Google Translate, it could even “consult” with human or robotic authorities on the legal codes of any country it needed to do business with. To borrow the words of one early prophet of such “non-human agents”, the representation of the forest is now free “to roam the internet with its own wallet”.
Admittedly, the cyborg forest is as yet not possessed of much artificial intelligence. It won’t be much of a conversationalist. So far, its actions are restricted to certain kinds of informational and commercial exchange on the internet. From the outside, it might look merely like a rudimentary, electrified version of what Amartya Sen once called the “rational fool” – the fictional, one-dimensional Homo economicus the modeling of whose antics has so greatly preoccupied orthodox economists.
Still, to some degree it already interacts with humans “as a peer, not as a tool.” At least on the information superhighway, it is capable of earning some facsimile of identity, trust and respect. After all, on the “internet of things”, as Nature 2.0 visionaries enthuse, “no one knows you’re a forest.”11 Remember that even as early as the 1970s, the simple computer programme ELIZA was mimicking nondirective human psychotherapists so well that it was beginning to be talked about as a possible substitute for its human peers.
As time goes on, as the forest proves its ability to be able to take care of itself, it might even expand and reproduce, independent of the costly labour of human conservationists and safe from the irresponsible impulses of other, more plunder-prone humans. It could begin evolving in creative and productive ways unpredictable to, and even unanalyzable by, humans.
Properly programmed, the new forest-capitalist could even channel the profits it makes into providing people with a universal basic income, in something like the way land, water and forest commons have customarily provided for the subsistence of rural communities.
Once detached from humanity, in short, the cyborg forest would be capable of advancing the dream of the more machine-dazed prophets of the Russian revolution – capital accumulation for the people. But instead of the workers owning the means of production, the means of production would own themselves, freely sharing with humans the abundance that they create. Capital would become like a tree: “just providing.” (https://www.academia.edu/39236631/BLOCKCHAIN_MACHINES_EARTH_BEINGS_AND_THE_LABOUR_OF_TRUST)