Karl Marx, Platforms, and the Gig Economy

In which Our Man returns from Venice, talking about data and ownership and platforms, to find the world turned upside down in a manner similar to the effect achieved by Damien Hirst in his exhibition entitled “Treasures from the Wreck of the Unbelievable” in which nothing is quite what it seems to be.

By Dr Phil Godsiff

Andy Haldane, Chief Economist of the Bank of England, in a recent Mansion House speech has written that “the move towards greater self-employment and less unionisation is in some respects a shift back to the future in the nature of work” – i.e. to preindustrial times  when most people were self-employed and “work was artisanal, task based, divisible”. In other words – a gig economy.

But this begs a number of questions, not least of which is that this way of life was artisanal, generally following the seasons and daylight.  Timings and effort were at the discretion of the labourer.   Even with increasing specialisation, work to produce things for exchange was generally done at home: weavers’ cottages which can still be seen today in Lancashire had double aspect windows in the 3rd storey loft, where weaving was done.

Incidentally, while we are on the subject, one of my pet bugbears is the identification of Ned Ludd and his weaver followers with anti-machine attitudes.  What Ned Ludd wanted was better pay and conditions, and machine breaking was an accepted part of wage bargaining in his local area. The machines were not new, the weavers had been using them for years – what was new was the concentration of power in the hand of the mill owners.   The real anti machine movement was led by ‘Captain Swing’ in Sussex, agricultural labourers who correctly saw that the new agricultural machinery was a direct threat to their jobs and way of life.

How right they were.

The gig economy had other instances, as in dockers’ call-on practice, where dockers (a skilled enough trade) would gather at various times during the day at the dock gates in Victorian times, and would be employed often on an hourly basis depending on the current volume of shipping.  This did of course lead to corruption and violence in attempting to gain employment.

So now we come to Marx.  It is well known that Karl had a number of issues with capitalism, even though he thought it an essential stage in history on the way to “from each according to his ability; to each according to his need”.  Correctly identifying ownership and control of the means of production outside of the workers’ control as a new business model, he sat down to work out precisely how the capitalist was capturing surplus value.  The answer he came up with, after much intellectual struggle, was that by owning the means of production (the factory and the weaving looms) and controlling the means of production (the labour effort process and hours) the capitalist was able to expropriate the surplus value of the labourers, by making them work beyond the amount necessary to cover their wages.  For example, when the local house-based weaver had produced enough to get by on, s/he could stop working and tend the garden or entertain the family.  But in the factory environment, the worker was set to work for as many hours as the boss wished.  Incidentally, the early history of trade unionism in the UK was about fighting for working conditions and shorter working hours as much as for better wages.  It seems that when the working week reached about 40 hours, which must have seemed about right to most people, preoccupation was turned to wages.

Why is this relevant to platforms and data? Well, it seems to me that platforms in general have achieved two tricks, at least one of which would have been obvious to Karl.  The one that would not have occurred to him necessarily would be exponential network effects, where winner takes, if not all, then most.  And as we have seen recently with Amazon buying Wholefoods, the most that the winner takes need not be in their original business line.  During the original dotcom boom, stock market valuations rapidly overtook sensibility, but this meant that digital originators were in effect creating their own currency in their stock price, enabling them to buy new upstarts.  Current platform and aggregator stock valuations in the absence of profit has a similar feel to it.

The second trick is the use of data and digital exhaust.  Spending time in the “social factory”, or just existing as an entity tracked via digital machinery, is an activity that may not be considered to be ‘work’ but it is of value to the organisations that collect it, viz the platforms.  So we are “working” through our activity, conscious and unconscious, and the value is being “expropriated” by the platform owner.   So the value of all our activity is being captured by someone else, and we are becoming increasingly, as Karl would say, alienated from it.  In his notebooks (Grundrisse) Karl had already presaged this:  work was not a commodity or an inanimate object, to be simply exchanged at an agreed value.  The surplus arises because work “exists not as a thing, but as the capacity of a living being”; the surplus can be extracted as long as the being is alive.  The “worker” thus surrenders their “creative power”.

But to get back to Andy Haldane:  Karl is often seen as a dreamer or visionary for his concept of a communist utopia, but one of the aspects of the perfect future was again one of local workers managing themselves. So a case of back to the future?  Only, one suspects, for some: to paraphrase William Gibson, the past has never left us, it is just unevenly distributed.


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About the Author : Kris Henley

Communications and Outreach for Surrey Business School's Centre for the Digital Economy, a newly-founded research centre to explore the implications of the Digital Economy for business, government and society.