Contribution to the Critique of the Political Economy of the Internet

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Essay: Information and Communication Technologies and Society. A Contribution to the Critique of the Political Economy of the Internet. By Christian Fuchs.



"This article argues for the need of Critical Internet Theory. It outlines how such a theory operates by the example of the role of gifts and commodities in the Internet economy. It is argued that after the crisis of the ‘New Economy’, the emergence of what is termed ‘Web 2.0’ signifies the increasing importance of the Internet gift commodity strategy. This strategy commodifies the users who produce content and communications online on free access platforms so that advertisement rates are driven up, and functions as a legitimizing ideology. In this context, the notion of the Internet prosumer commodity is introduced." (


The antagonism between productive forces and relations of production in informational capitalism:

Information as gift and commodity

"Information-based productive forces

The dialectical antagonistic character of social and technical networks as the motor of competition and cooperation in informational capitalism reflects Marx’s idea that the productive forces of capitalism are at the same time means of exploitation and domination and produce potentials that go beyond actuality, point towards a radically transformed society and anticipate a fully cooperative design of the means of production.

The productive forces of contemporary capitalism are organized around informational networks (Fuchs, 2008). It is due to three specific characteristics of such structures that they come in contradiction with the capitalist relations of production and are a germ form (Keimform) of a society that is based on fully cooperative and socialized means of production:

• Information as a strategic economic resource is globally produced and diffused by networks. It is a good that is hard to control in single places or by single owners.

• Information is intangible. It can easily be copied, which results in multiple ownerships and hence undermines individual private property.

• The essence of networks is that they strive for establishing connections. Networks are in essence a negation of individual ownership and the atomism of capitalism.

Informational networks both extend and undermine capital accumulation. Informational networks aggravate the capitalist contradiction between the collective production and the individual appropriation of goods: The contradiction between the general social power into which capital develops, on the one hand, and the private power of the individual capitalists over these social conditions of production, on the other, becomes ever more irreconcilable, and yet contains the solution of the problem, because it implies at the same time the transformation of the conditions of production into general, common, social, conditions. (Marx, 1894: 274)

Networks are a material condition of a free association, but the cooperative networking of the relations of production is not an automatic result of networked productive forces; a true network society in the sense of an association of free and equal producers (Marx, 1869: 62) is something that people must struggle for and that they can achieve under the given conditions but that could very well also never emerge if the dominant regime is successful in continuing its reign. Networks are forms of development as well as fetters of capitalism; paraphrasing Marx one can say that informational capitalism is a point where the means of production have become ‘incompatible with their capitalist integument’ (Marx, 1867: 791).

The antagonistic economic character of network capitalism has two opposing sides, the cooperative one of the informational gift economy and the competitive one of the informational commodity economy.

Knowledge is in global network capitalism a strategic economic resource; property struggles in the information society take on the form of conflicts over the public or proprietary character of knowledge. Its production is inherently social, cooperative and historical. Knowledge is in many cases produced by individuals in a joint effort. New knowledge incorporates earlier forms of knowledge; it is coined by the whole history of knowledge. Hence, it is in essence a public good and it is difficult to argue that there is an individual authorship that grounds individual property rights and copyrights. Global economic networks and cyberspace today function as channels of production and diffusion of knowledge commodities; the accumulation of profit by selling knowledge is legally guaranteed by intellectual property rights.

In society, information can only be produced jointly in cooperative processes, not individually. Hence, Marx argued that knowledge ‘depends partly on the cooperation of the living, and partly on the utilisation of the labours of those who have gone before’ (Marx, 1894: 114). Whenever new information emerges, it incorporates the whole societal history of information: that is, information has a historical character. Hence, information in essence is a public good, freely available to all. But in global informational capitalism, information has become an important productive force that favours new forms of capital accumulation. Information is today not treated as a public good, rather as a commodity. There is an antagonism between information as a public good and as a commodity."

The commodified Internet economy and the non-commodified Internet economy

The gift commodity Internet economy: social networking platforms

There is a commodified Internet economy and a non-commodified Internet economy.

Only those aspects of the Internet economy that are non-profit gifts, that just have use value and no exchange value and are hence provided without costs for the users and without selling advertisement space, can be considered as decommodified or non-commodified. Examples are file-sharing platforms, Wikipedia, Linux and Indymedia.

Commodified Internet spaces are always profit oriented, but the goods they provide are not necessarily exchange values and market oriented; in some cases (such as Google, Yahoo, MySpace, YouTube, Netscape), free goods or platforms are provided as gifts in order to drive up the number of users so that high advertisement rates can be charged in order to achieve profit. In other cases, digital or nondigital goods are sold with the help of the Internet (e.g. Amazon), or exchange of goods is mediated and charged for (online marketplaces such as eBay or the Amazon Marketplace). In any of these cases, the primary orientation of such spaces is instrumental reason: that is, the material interest of achieving money profit, a surplus to the invested capital.

In the early phase of the World Wide Web, platforms that provided content were important business models. Many new stock companies in the areas of Internet content and Internet services had emerged up to the mid-1990s. By the years 2005 and 2006, accumulation strategies related to the Internet had shifted from a primary focus on information to a focus on communication and cooperation (Fuchs, 2008). Some scholars like to designate this transformation as the emergence of ‘Internet 2.0’ and ‘Web 2.0’, although the main purpose behind using these terms seem to be a marketing strategy for boosting investment. The most characteristic example of Web 2.0 are the social networking platforms like MySpace or Facebook, which allow the online maintenance and establishment of social relationships by an integrated use of technologies like email, websites, guest books, forums, digital videos, or digital images. So, for example, MySpace is a Web platform that allows users to generate personal profiles, on which they can upload pictures, text, videos, music, and keep their personal blogs. It networks users with a friendship system (users can add others to their friend list and post comments to their friends’ guest books), discussion forums, interest groups, chat rooms and a mail function. Such platforms have both a commodity form and ideological character.

The commodity form of social networking platforms Commercial Web 2.0 applications are typically free to users; they generate profit by achieving as many users as possible by offering free services and selling advertisement space to third parties and additional services to users. The more users, the more profit, that is, the more services are offered for free, the more profit can be generated. Although the principle of the gift points towards a postcapitalist society, gifts are today subsumed under capitalism and used for generating profit in the Internet economy. The Internet gift economy has a double character: it supports and at the same time undermines informational capitalism. Applications such as file-sharing software question the logic of commodities, whereas platforms such as Google and MySpace are characteristic of the capitalist gift economy.

Internet 2.0 is characterized by this antagonism between information commodities and information gifts.

The Internet gift commodity economy can be read as a specific form of what Dallas Smythe has termed the Audience Commodity (Smythe, 2006). He suggests that in the case of media advertisement models the audience is sold as a commodity. ‘Because audience power is produced, sold, purchased and consumed, it commands a price and is a commodity. . . . You audience members contribute your unpaid work time and in exchange you receive the program material and the explicit advertisements’ (Smythe, 2006: 233, 238). Audiences would work, although unpaid; the consumption of the mass media would be work because it would result in a commodity, hence it would produce that commodity. Also the audience’s work would include ‘learning to buy goods and to spend their income accordingly’, the demand for the consumption of goods and the reproduction of their own labour power (Smythe, 2006: 243ff.).

With the rise of user-generated content and free access social networking platforms like MySpace or Facebook and other free access platforms that yield profit by online advertisement, the Web seems to come close to the accumulation strategies employed by capital on traditional mass media like television or radio. The users who ‘google’ data, upload or watch videos on YouTube, upload or browse personal images on Flickr, or accumulate friends with whom they exchange content or communicate online on social networking platforms like MySpace or Facebook, constitute an audience commodity that is sold to advertisers. The difference between the audience commodity on traditional mass media and on the Internet is that in the latter the users are also content producers: there is user-generated content, the users engage in permanent creative activity, communication, community building and content production. That the users are more active on the Internet than in the reception of television or radio content is due to the decentralized structure of the Internet that allows many-to-many communication."