Hypothesis of Cognitive Capitalism

* Article: The hypothesis of cognitive capitalism. By Carlo Vercellone. EconPapers. 2005

URL = https://econpapers.repec.org/paper/halcesptp/halshs-00273641.htm

Abstract

"The aim of this presentation is to introduce some aspects of the research programme on Cognitive Capitalism. The main point that characterises this research program resides in the fact that it assume as its main pillar the social crisis of Fordism. Such a crisis manifests itself as a break with respect to the polarising tendency of the forms of knowledge informing Industrial Capitalism, thereby, realising some aspects of Marx's hypotheses concerning the notion of General Intellect. Accordingly, we shall articulate the reasoning as follow. Firstly, we shall explain the main features of the research agenda. In particular, we shall address the application of Marxist methodology and the extent to which its interpretation differs from other approaches to contemporary capitalism. Secondly will shall deal with the historical transformations of the capital/labour relation that has led to the crisis of Industrial Capitalism and, consequently, to the transition towards Cognitive Capitalism. Finally, we shall focus on the analysis of the new nature of antagonism and contradictions (subjective and objective) inherent to Cognitive Capitalism."

Summary

Reading notes by Michel Bauwens, 2006

Carlo Vercellone and his team

   - reject technological determinism
   - do not restrict the knowledge economy to the direct production of knowledge
   - do not abstract it from social relations
   - and do not consider it a independent 'third' production factor

Cognitive capitalism research historizes the economy, takes into account conflicts. It stresses the primary importance of living labour over dead labour. It centrally focuses on the changes in the division of labour. It does not oppose but complement some weaknesses of the financial capitalism hypothesis (part one), differs from the 'new economy' approaches (part two), and proposes a alternative hypothesis of a 'third regime of accumulation (part three).

1. The origin of the research program

Historians have noted a cycle of crisis - innovation-consolidation - but since about 30 years, the crisis seems permanent A standard explanation is the change from managerial to financial capitalism, and the demands and control of the latter. For CC-adherents, it is the structural crisis of Fordism, and the crisis in the extraction of surplus value caused by the dominance of knowledge work, which has contributed to financialization. CC examines the interplay of these 3 factors (i.e. the new division of labour, the growing importance of immaterial assets, and financialization), while still focusing on the core capital vs labour dichotomy. Financialization, i.e. the preference for liquid rather than fixed capital assets, can be seen as an attempt to break the dependence on concrete labour relations. It was also seen as the only way to extract immaterial value.

2. Transition Crisis to a New Capitalism ?

So, instead of crises within the cycle of cognitive capitalism, we have a crisis of the very model itself, which yearns for change, but cannot complete itself.

What are the differences between cognitive capitalism and the information economy ?

- 1) CC distinguishes information and knowledge, the latter being dependent on interpretative capabilities

- 2) the spread of a 'diffuse intellectuality' is the precondition for the development of IT infrastructures, if it is not to be a exogenous import

- 3) its role is ambivalent:

- it reinforces non-market and horizontal forms of cooperation, which put the IP system in difficulty
- but it can also serve as the basis of a new Taylorism.

Discussion

See: Carlo Vercellone on Cognitive Capitalism

From the reading notes of Michel BAUWENS, 2006:

Carlo Vercellone presents a research project, which he stresses is not a fully elaborated theoretical model. The priority is to avoid the different forms of reductionism:

   - 1) technological determinism
   - 2) knowledge production as solely economic
   - 3) refuses historical and social abstractions which view knowledge as a third production factor independent of capital and labor

The reason for the new model is that the cyclic explanation (innovation followed by long consolidation periods), no longer seems to hold, as the crisis has been permanent for already 30 years at least.

One explanation that is also explicitely rejected is that shareholder models (which replace the managerial model) create heightened pressure that results in permanent restructuration. In this 'financial capital thesis', the evolution is viewed from the prism of different factors of capital (financial vs industrial), with the former imposing detrimental short-termism, as well as a cyclic balance of forces between freed finance and state regulation. For these economists, post-fordism is a secondary consequence only. Therefore, what is needed is a re-regulation by the state.

For Vercellone, this fails to see:

   - 1) how the state itself was the protagonis of deregulation and
   - 2) how this financialization was a result of the crisis of Fordism, and in particular, why and how it arose as a response to that crisis, in extracting surplus value from industry itself.

The cognitive capitalism thesis sees a different genealogy based on four major factors:

- 1) the greater role attributed to finance by industrial groups themselves, starting in the 70s as a response to an increase in social conflict; this, together with automation and decentralization, aims at making capital more independent of the workers

- 2) it was also a key method to start evaluating immaterial processes and products, and located profits 'outside of the production process'

Value is now situated, less in the formal knowledge incorporated in the business processes, and more and more in the qualitative living knowledge.

How does the Cognitive Capitalism thesis differ from the "New Economy" thesis ?

- CC is a critique of the 'growth driven by ICT" hypothesis

- the latter are 'technology-deterministic theories which see technology and information as exogenous factors, driving a post-industrial revolution

- the latter also does not take into account the difference between information and knowledge; not seeing that the former is not operative without active transformation.

CC affirms that:

- 1) a new intellectuality is more primary than ICT by itself

- 2) information can only thrive through living labour, i.e. by becoming embodied knowledge

- 3) it stresses the ambivalent nature of ICT

       - a )  in the context of th enew diffuse intellectualityh, i.e. the ICT promotes horizontal non-merchant cooperation
       - b)  but it can also serve neo-Taylorist purposes

Problems with the other theories:

- they often want to offer a general theory, and do not historicize enough

- they only see information in the context of the economy

- those theories that look for continuity, only acknowledge a change from quantity to quality, due to the massive integration of ICT

- they have non-conflictual views of science and technology

The cognitive capitalism hypothesis strongly rejects the notion of knowledge as a third independent factor of production, nor is it a part of 'human capital'.

Whereas CC differs from a-historical and neo-classical theories, it has more in common with approaches that look for long waves of development, and that seek to historicise the changing nature of economic laws. This is in particular the objective of the school of regulation, which seeks to define different regulatory and institutional regimes.

Yet the CC approach also differs from it.

- 1) the regulatory school is too 'structuralist', and looks at 'processes without subjects', by seeing salary and work as simple extensions of capital

- 2) so CC looks at the 'operaist' theories, which recognize the exogenous logic of the worker's conditions, the logic of their conflicts on the relatively autonomous nature of labour.

This has led to 2 important modalities of its influence, which has led to a crisis of Fordism:

1) the extension of non-merchant social services (Welfare State)

2) the partial extension of the democratisation of education and knowledge, which can serve:

.a ) for a collective re-appropriation of the intellectual conditions of production .b ) creates the potential for thereby overcoming the capitalist division of labour

There realities were predicted in certain passages of the Grundrisse about the General Intellect.

Cognitive Capitalism also differs in the periodisation as compared to the Regulatory School. The latter stays within the premises of an industrial capitalism, not seeing, as Braudel has shown, the 'before' of merchant capitalism, and the 'after' of industrial capitalism.

CC theorists have therefore introduced, between the general concept of 'mode of production' (which remains capitalist throughout), and of 'mode of development', a new intermediary term, the "systeme historique d'accumulation", which stresses the different ways in which surplus value is extracted.

The Three Regimes of Accumulation

Vercellone wants to examine the 3 stages according to 3 dimentions:

- 1) the labour-capital relation, especially as regards to the knowledge embedded in fixed capital or in the workers themselves

- 2) the historical status of knowledge goods as either public or private, operating as open or closed science

- 3) knowledge as a competitive element

Mercantilism

- was based mostly on craft labour, payed by the piece, with time still based on natural cycles; there is little distinction between work and non-work

- accumulation through merchant or financial mechanisms, or slavery in the colonies

- only 'formal subsumption of labour' took place, which is dependent on merchant and monetary factors

- independent science

- competition for knowledge of expert engineers and workers (not yet very detailed division of labour)

- beginnings of IP with patents, but which are mostly used to copy foreign advances

- beginning of an international division of labour with the colonies

Industrial capitalism

The regulation of the knowledge economy is based on 3 tendencies:

- 1) the social polarisation of knowledge (haves vs have-nots)
   
- 2) the separation of manual and intellectual work
   
- 3) a process of incorporation  of living knowledge into the processes of fixed capital

- IC is dominated by big firms (Manchestarian and Fordist models), making standard durable goods

- The value creation is based on economies of time and 'debit-productivity'

- Formal subsumption becomes real subsumption, i.e. work comes under the full organization of capital, and craft knowledge is appropriated in ever more complex processes, which finds its culmination in Fordism with its completely deskilled workforce at the bottom

- Work becomes arbitrary in content and form, divorced from subjectivity, objectified through coding. Creativity is expelled from the workplace towards the white-collar organizers: work is linear and sequential, aimed at mass output in minimal time

- Competition is based on incorporating knowledge into the process of heavy machinery (equipment goods)

- Research is divided between fundamental, open science, funded by the public, and applied R&D funded by firms; patents are national, clearly limited in time and scope.

Cognitive Capitalism

Three processes are at the origin of the crisis of Fordism:

- 1) the contestation of the scientific organisation of work (Taylorism) and the demand for autonomyu

- 2) the expansion of the welfare state which heightened the cost of reproducing labour

- 3) the general rise in the quality and education of the workforce, which led to the rise of immaterial services (i.e. human to human service)

This crisis also opened the possibility for an alternative logic of development, based on :

- 1) the socialization and re-appropriation of knowledge; leading to alternative workstyles and a rejection of productivism

- 2) the role of welfare services as indicative of a non-mercantile growth path

CV calls these anthropogenetic modes of development.

Cognitive capitalism is a restructuration strategy to subvert these opportunities.

The big change is that the source of value is now the knowledge that is incorporated in living labour, and in the whole economy, not just in one sector. Intangible capital is now bigger than tangible capital, and the most important sources of wealth occur before the production process even starts. It's society in its totality that becomes the source of technological innovation that is exogenous to the corporate world. As a consequence, the division of intellectual labor tends to become obsolete.

The Learning Organisation, based on cooperative learning, by doing, is based on abolishing the frontier between research and production. The new contradiction is now between the 'dead knowledge' of capital and the 'living knowledge' of labour; cooperation can now happen outside of management.

Problems with the transition towards Cognitive Capitalism

- 1) Short term considerations, such as saving on labor, preduce long-term learning investment;

- 2) individual incentives stand in the way of the collective nature of learning

- 3) innovation becomes permanent

- 4) there is a pre-existing cognitive division of labour embodied in cities and regions (risk of de-connection for others ?)

- 5) work should be organized around knowledge blocks

The article concludes that the new IP regime, with an unwarranted extension of patents, aims at creating and consolidating monopoly rents.

Status

The status of the 2005 research project was updated in 2014:

* Lucarelli Stefano, Carlo Vercellone. The thesis of cognitive capitalism. New research perspectives. France. Knowledge Cultures, pp.229, 2014. ⟨halshs-00969289⟩

URL = https://halshs.archives-ouvertes.fr/halshs-00969289

"This Special Issue, The Thesis of Cognitive Capitalism. New Research Perspectives, proposes a set of contributions that presents some of the research lines organized around the thesis of cognitive capitalism, a project that insists upon rereading the historical development of the capital/labor relation from the point of view of the knowledge economy. In this introduction we outline a method of analysis in terms of cognitive capitalism by insisting on the critique of conventional theories of both the economics of knowledge and the knowledge-based economy. This is done in order to explain the role of knowledge in the long-term development of capitalism, while providing a Marxian theoretical map of historical time in the process."