At the heart of my thesis is an irony that
may sound confusing at first but which I hope to show makes perfect sense: the thing that has killed capitalism is …
capital itself. Not capital as we have known it since the dawn of
the industrial era, but a new form of capital, a mutation of it that has arisen
in the last two decades, so much more powerful than its predecessor that like a
stupid, overzealous virus it has killed off its host. What caused this to happen? Two main
developments: the privatization of the internet by America’s
and China’s Big Tech. And the manner
in which Western governments and central banks responded to the 2008
great financial crisis.
what has already been done to capitalism, and therefore to us, by the screen-based, cloud-linked devices we all use, our boring laptop and our smartphone, in conjunction with the way central banks and governments have been acting since 2008.
cloud capital has demolished capitalism’s two pillars: markets and profits.
Markets, the medium of capitalism, have been replaced by digital trading platforms which look like, but are not, markets, and are better understood as fiefdoms. And profit, the engine of capitalism, has been replaced with its feudal predecessor: rent. Specifically, it is a form of rent that must be paid for access to those platforms and to the cloud more broadly. I call it cloud rent.
how the war in Ukraine is threatening the dollar’s reign; from the death of the liberal individual and the impossibility of social democracy
My father was the only leftie I know who failed to understand why calling Maggie Thatcher ‘The Iron Lady’ was somehow derogatory. And I must have been the only child raised to believe that gold was iron’s poorer cousin. My My catechism in iron’s magical
qualities began in the winter of 1966, began in the winter of 1966,
‘Heat it up again,’ he said. I put the rod back into the fire. ‘This time immerse it in the water before it glows.’ Excited by the hissing iron, I was glad that we repeated the ‘quenching’ process, as metallurgists call it, three or four times. Before I got a chance properly to admire my new sword, Dad announced that the moment of truth had arrived. ‘Pick up the hammer and deliver an almighty strike on the sword’s tip,’ he instructed. ‘But I don’t want to ruin it,’ I protested. ‘Go on, do it, you’ll see. Don’t spare your strength!’ I didn’t. The hammer struck the sword’s tip and bounced right back. I struck it again and again. It made no difference. My sword was impervious to the blows. Hardened.
copper had facilitated our deliverance from prehistory: its ability to alloy with arsenic and tin to make the harder metal bronze gave the Mesopotamians, the Egyptians and the Achaeans new technologies, including new ploughs, axes and irrigation, allowing them ultimately to produce the large agricultural surpluses that funded the construction of splendid temples and murderous armies. But for history to accelerate...It needed to learn the trick I had seen in our living room: how to transform soft iron into hardened steel by ‘baptising’ it in cold water. Bronze Age communities that did not learn how to baptise iron perished, he insisted.
The swords of their ironclad enemies sliced through
their bronze shields, their ploughs failed to cultivate the less fertile soils,
the metal braces holding together their dams and temples were too weak to
fulfil the ambitions of forward-thinking architects.
Homer, who lived a couple of centuries after the Trojan War, was a child of the Iron Age, and thus came of age in the midst of the technological and social revolution that steel had wrought. In case I thought Homer was an outlier, Dad pointed to the lasting influence of iron’s magic by quoting Sophocles, who four centuries later described a soul as ‘hardened like immersed iron’.
Prehistory gave its place to history, Father said, when bronze displaced stone tools and weapons. Once bronze became widespread after 4000 BC, powerful civilisations emerged in Mesopotamia, Egypt, China, India, Crete, Mycenae and elsewhere. But, still, history was counted in the millennia. To be counted in the centuries, we had to discover the magic of iron. Once the Iron Age got going, around the ninth century BC, three different and remarkable eras emerged in quick succession, within no more than seven centuries in total: the geometric period, the classical era and the Hellenistic civilisation.
Henry Bessemer, who invented a technique for producing large quantities of steel cheaply by blowing air through molten pig iron to burn off the impurities.
the taming of electromagnetism, which we owe to another Victorian, James Maxwell, Bessemer’s technique gave us the Second Industrial Revolution – the period of rapid technological innovation from 1870 onwards
I was being inducted in ‘historical materialism’ – the method of understanding history as a constant feedback loop between, on the one hand, the way humans transform matter and, on the other, the manner in which human thinking and social relations are transformed in return.
According to Hesiod, iron hardened not only our ploughs but also our souls. Under its influence, our spirit was hammered and forged in fire, our brand-new desires quenched like the hissing metal in the smith’s cauldron. Virtues were tested and values destroyed just as our bounty burgeoned and our estates expanded. Strength begat new joys but weariness and injustices too. Zeus would have no choice, Hesiod foretold, but to one day destroy a humanity incapable of restraining its own, technologically induced, power.
In our days, everything seems pregnant with its contrary: Machinery, gifted with the wonderful power of shortening and fructifying human labour, we behold starving and overworking it; The newfangled sources of wealth, by some strange weird spell, are turned into sources of want; The victories of art seem bought by the loss of character.
Mum complained to Dad that, at the fertilizer factory where she worked as a chemist, she got paid for her time but never for her enthusiasm. ‘My wage is crap because my time is cheap,’ she said. ‘My passion to get the right results the bosses get for free!’ Soon after, she resigned and got herself a job as a biochemist at a public hospital. A few months into the new job, she told us happily: ‘At least at the hospital I love that my efforts benefit patients, even if I am as invisible to them as I used to be to the factory owners.’
the duality of waged labour. The wage she was paid
for her time and formal skills (her certificates, degrees) reflected the ‘exchange value’ of the hours she spent at work. But
that’s not what injected true value into whatever was being
manufactured in her workplace. That was added to what was produced at the
factory or the hospital through her effort, enthusiasm,
application, even flair – none of which were
remunerated. It’s like going to watch a movie at a cinema: the ticket price you
pay reflects the movie’s exchange value, but that is quite separate from the pleasure it gives you, which we might
call the ‘experiential value’. In the same way,
labour is split between commodity labour (Mum’s time, bought by
her wage) and experiential labour (the effort, passion and
flair she put into her work).
For herein lies capitalism’s secret: the uncommodifiable sweat, effort, inspiration, goodwill, care and tears of employees are what breathe exchange value into the commodities that employers then flog to eager customers – this is actually what makes the building or restaurant or school desirable....employers resemble the customer who bought a jacket for a thousand dollars only to find two thousand dollars sewn in its lining.
to think that capitalists owe their profits to an inability, to the impossibility of buying experiential labour directly. And yet, what a boon to suffer from such an incapacity! For it
is ultimately they who pocket the difference between the exchange value they pay employees in exchange for their commodity labour (wages) and the exchange value of the commodities created thanks to their experiential labour. In other words, labour’s dual nature is what gives rise to profit.
capital, like light and labour, features two natures. One is commodity capital, e.g. a fishing rod, a tractor, a company’s server, or any good that is produced to be used in the production of other commodities. Capital’s second nature, however, is nothing like a commodity. Suppose I discover that I possess tools you need in order to produce the stuff for your family’s survival, such as the aforementioned fishing rod, tractor, server. Suddenly I have acquired the power to make you do things, for example to work for me, in exchange for the use of my tools. Capital, in short, is both a thing (commodity capital) and a force (power capital) – just as labour is split between commodity labour and experiential labour.
Einstein himself: ‘It is important to understand that even in theory the payment of the worker is not determined by the value of his product.’ It appeared in an article entitled ‘Why Socialism?’
.
If you want to understand gravity, Einstein explained, you need to stop thinking of space as a box that the universe comes in. Matter and energy, operating as one, mould the contours of space and shape the flow of time. The only way to wrap our minds around space and time, or matter and energy, is to think of them as partners locked in the most intimate, insoluble embrace. Gravity is what we feel as we traverse the shortest path through this four-dimensional space-time.
We evolved on the surface of a planet that is minuscule in comparison to the universe out there. In our limited realm, we can get by quite nicely with our senses’ helpful illusions; for instance, the belief that the grass is green, straight lines exist, or that time is constant andindependent of our motion.
Of his fellow economists, who insisted that money ought to be understood as another commodity, Keynes once said that they ‘resemble Euclidean geometers in a non-Euclidean world’, again confirming in no uncertain terms Einstein’s influence. Conventional economic thinking about money was damaging humanity, Keynes thought. Economists resembled spacecraft designers disastrously relying on Euclid, not Einstein. They were using illusions which, while helpful in the microcosm of a single market (e.g. the market for potatoes, where a fall in the price can usually be relied upon to boost sales), were catastrophic when applied to the economy at large – the macroeconomy, where a fall in the price of money (the interest rate) may never boost money’s flows in the form of investment and employment. In the same way that Einstein had ended our illusion that time stands outside, and apart from, space, Keynes wanted to stop us thinking of money as a thing, as simply another commodity, thatstands outside, and apart from, our other activities in markets and workplaces.
stop thinking about money as something separate from what we do to each other, with each other, at work, during play, in every nook and cranny of our social universe. Yes, money is a thing, a commodity like any other. But it is also something much bigger than that. It is, above all else, a reflection of our relation to one another and to our technologies; i.e. the means and the ways in which we transform matter. Or, as Marx put it poetically: Money is the alienated ability of mankind. That which I am unable to do as a man, and of which therefore all my
individual essential powers are incapable, I am able to do by means of money.
They were baffled by my claim to be a libertarian Marxist
my inability to see how one could genuinely cherish freedom and tolerate capitalism (or, vice versa, how one could be both illiberal and left wing)…conventional fallacy: that capitalism is about freedom, efficiency and democracy, while socialism turns on justice, equality and statism. In fact, from the very start, the left was all about emancipation.
If you were born into the landed gentry, it would never cross your mind to sell your ancestors’ land. And if you were born a serf, you were compelled to toil the land, on the landowner’s behalf, free of any illusion that, one day, you might own land yourself. In short, neither land nor labour power was a commodity.
Because of advances in shipping and navigation, international trade in things like wool, linen, silk and spices made them lucrative, thus giving British landlords an idea: why not evict en masse the serfs from land that produced worthless turnips and replace them with sheep whose backs produced precious wool for the international markets? The peasants’ eviction, which we now remember as the ‘enclosures’ – for it involved fencing them off from the land their ancestors had toiled for centuries – gave the majority of people something they had lost at the time that agriculture was invented: choice. Landlords could choose to lease land for a price reflecting the amount of wool it could produce. The evicted serfs could choose to offer their labour for a wage. Of course, in reality, being free to choose was no different from being free to lose. Former serfs who refused squalid work for a pitiful wage starved to death. Proud aristocrats who refused to go along with the commodification of their land went bankrupt.
a society that has
conjured up such gigantic means of production and of exchange, is like the
sorcerer who is no longer able to control the powers of the nether world
whom he has called up by his spells. For over a century, the left was
concerned primarily with deliverance from self-inflicted unfreedom
– which is why it was so fundamentally aligned with the anti-slavery
movement, the suffragettes, groups sheltering persecuted Jews in the 1930s.
So, how did we get to the situation, today, where ‘libertarian Marxist’
sounds like a joke? The answer is that, sometime in the twentieth century, the left traded freedom
for other things. In the East (from Russia to China, Cambodia
and Vietnam), the quest for emancipation was
swapped for a totalitarian egalitarianism. In the West, liberty was left to its enemies, abandoned in exchange for an
ill-defined notion
of fairness. The moment people believed
they had to choose between freedom and fairness, between an iniquitous democracy
and miserable state-imposed egalitarianism, it was game over for the left,
the end of the social democratic dream: of a mixed economy,
in which government provided public goods while the private sector
produced plentiful goodies to satisfy our whims
‘You don’t buy a Hershey bar for a couple of ounces of chocolate. You buy it to recapture the feeling of being loved that you knew when your dad bought you one for mowing the lawn.’The mass commercialisation of nostalgia Draper alludes to marked a turning point for capitalism.
Capitalism now involved the skilful manufacture of desire. Capitalism had begun as a relentless drive to put a price on things that once had no price: common lands, human labour, all the stuff that families once produced for their own consumption – from bread and home-brewed wine to woolly jumpers and various tools. If there was something that humans shared and enjoyed but which had no price and mattered to us only for its intrinsic or ‘experiential value’ like granny’s handcrafted tablecloth, or a beautiful sunset, or a beguiling song – capitalism found a way to commodify it: to subjugate its experiential value to an exchange value.
he comes up with magical ways of reimagining anything from mediocre chocolate and humdrum steel products to second-rate hamburger restaurant chains in ways that make them emotionally resonant
capitalism’s post-war transformation: the discovery of a new market, namely the market for our attention
His bosses would love to be able to purchase his ideas without having to tolerate him lounging around the office half drunk. In the language of the previous chapter, they would jump at the opportunity to buy Draper’s experiential labour directly. Only they couldn’t, even if he wanted to sell it to them. Instead, they are forced to buy his commodity labour (i.e. his time and potential)
paradox of commodification. Yes, capitalism must commodify everything it touches. But at the same time, high exchange value, and thus serious profits, depends on failing to do so fully. If it is to avoid the fate of a school of predators that devours its prey so efficiently that it starves to death, capitalism relies on there being an endless supply of experiential values for its exchange values to trounce and cannibalise. It must always be discovering and commodifying what has so far escaped it. Smart advertisers do exactly that: they tap into emotions that have previously escaped commodification in order to capture our attention. And then they sell our attention to an entity whose business is to commodify whatever experiential value was hiding in our soul, fleeing commodification. With his Hershey bar speech, Draper lays bare a crucial aspect of how, soon after the war, capitalism reached its golden age. How could the profits keep flowing once everything has seemingly been commodified already? Draper’s answer: through the triggering of uncommodified emotions deep inside us. Thus a Hershey bar becomes the simulacrum of a dead father’s caress. Bethlehem Steel is rebranded as the spirit of the American polis, with the steel product symbolising the New World’s own Iron Age.
Once James Clerk Maxwell had written down the equations linking electrical current to magnetic force, it was only a matter of time before someone like Thomas Edison would turn them into the electricity and telegraph grids that ultimately begat the networked, top-down, mega-corporations
To produce the rivers of credit necessary to fund the Edisons, the Westinghouses and the Fords of early-twentieth-century capitalism, small banks merged to form large ones and lent either to the industrialists directly or to speculators eager to buy shares in the new corporations. That’s how electromagnetism transformed capitalism: while its grids would go on to power mega-firms and its megawatts translated into mega-profits, it also created the first mega-debts in the form of vast overdraft facilities for the Edisons, the Westinghouses and the Fords. And it led to the emergence of Big Finance, which grew up alongside Big Business in order to lend it monies borrowed effectively from the future: from profits not yet realised but which Big Business promised to deliver. These wagers on future profits funded not only the construction of Big Business’s grids and production lines but an almighty froth of speculation as well.
Parsimony was out and largesse became the new virtue…the creed that ‘what is good for Big Business is good for America’. The Jazz Age swept restraint away, debt’s dirty name was cleansed in the torrents of anticipated profits, caution was thrown to the winds of credit. Within a decade, electromagnetism had sparked the Roaring Twenties
the US government began to emulate … the Soviet one. It told factory owners how much to produce and to what specifications, from aircraft carriers to processed food. It even employed a price czar – the economist John Kenneth Galbraith – whose job, literally, was to decide the price of everything, to fend off inflation,
the state would reward them with four incredible gifts. First, state guaranteed sales translating into state guaranteed profits. Second, freedom from competition, since prices were fixed by government. Third, huge government-funded scientific research (e.g. the Manhattan Project, jet propulsion) that provided Big Business with wonderful new innovations and a pool of highly skilled scientific personnel to recruit from during and after the war. And fourth, a patriotic aura to help rinse off the stench of corporate greed that clung to them after the crash of 1929
the heat of war had transformed American capitalism at a molecular level, just as the heat of our fireplace had transformed iron into steel. By the war’s end, American capitalism was unrecognizable. Business and government had become profoundly entwined. Indeed, the revolving doors between government departments and corporations saw to it that the same crowd of mathematicians, scientists, analysts and professional managers populated them both. The heroic entrepreneur at the helm of the corporation and the democratically elected politician at the head of the government had both been usurped by this new private public decision-making network, whose values and priorities indeed its survival – boiled down to one thing: the survival and growth of the conglomerates now that the war, with its infinite demand for stuff and technologies, was over. Galbraith called this nexus the technostructure
But it wasn’t until the twentieth century that the process of attention-grabbing was
commodified. Once again, it was electromagnetism that achieved this
revolutionary feat
At first, radio and television gave Big Business a headache. It offered
them immense opportunities to engage and persuade the masses, but fundamentally
its output – the programmes it broadcast – had the properties of a sunset
rather than a tin of beans: however much you loved watching I Love Lucy on
television, and even if you were prepared to pay good money to watch it, no one
had the capacity to make you pay for it (at least not before cable TV was
introduced). But this stopped being a problem once they realised that the
programme was not the commodity: it was the attention of the people watching
it. By broadcasting the programme for
free, they could secure the audience’s attention allowing them then to sell it
– in the form of advertisement breaks – to Draper’s clients, who were now so
eager to instil new desires in the hearts of the American public. With the
birth of commercial television, the technostructure appended a boisterous
attention market to its labour market. The dual nature
of labour was now coupled with the
dual nature of the spectacle: on the one
hand, a cultural product with large experiential value but no
exchange value, and on the
other the captured attention of viewers with substantial
exchange value but no experiential value.