By ELEUTÉRIO FS PRADO

Considerations about the contemporary capitalism

The contours of the hypothesis

This note aims to critically present a conjecture about the nature of contemporary capitalism contained in the book Techno-féodalisme – Critique de l'économie numérique by Cédric Durand (La Découverte, 2020). According to this hypothesis, industrial capitalism, as a progressive mode of production, generator of economic growth, has already been replaced by rentier, sluggish and predatory capitalism, which should now be called techno-feudalism.

According to this author, digital technologies have not brought, as promised by the ideology of Silicon Valley, a radiant horizon for capitalism; on the contrary, they both stiffened neoliberalism and produced the degradation of this mode of production. For, they reconfigured social relations in a reactionary way: if before them a decentralized system of commodity production still prevailed in which competition prevailed, with them and through them a centralization and monopolization took place that again created a structure of dependency in the sphere of production, a new form of submission of production units to the owners of “land” power. And this form – he says – had been historically suppressed by the competitive capitalism of the XNUMXth, XNUMXth and XNUMXth centuries, having been maintained even when the monopoly phase supervened at the end of the XNUMXth century.

Behold, now all individual companies, small, medium and large have become dependent on a resource, digital platforms, which are owned by a privileged fraction of capitalists; moreover, they are maintained and commanded only by a restricted group of workers, who are also directly dependent on this fraction. Now, these platforms have become universal means of production since they contain the databases and algorithms that are indispensable for the exercise of any important economic activity and, thus, in general.

And if access to them seems free, it only occurs through the implicit or explicit payment of values ​​that are thus punctured through access itself and throughout its occasional or systematic use. According to Durand, the advent of this logic of pecuniary gain and its predominance in society kills the logic of competition in the sphere of commodity production, based on the dispute for industrial profit, which existed in old capitalism, because it introduces the logic of gain by appropriation, rent-seeking, in all relevant economic relationships.

This form of dependence – according to him – has consequences: “the strategy of the platforms that control these digital territories is a strategy of economic development through predation, through conquest”. It's always about collecting more data and acquiring more data sources. There is, therefore, a kind of competition, but it does not aim to operate more efficiently to produce and sell more goods, but only to monopolize more digital spaces in order to increase the amount of income punished. The result of this process, according to him, kills the progressive character of the capitalist economy.

This logic that now prevails in the world, according to him, is similar to the one that prevailed in feudalism; because in this mode of production, as is known, the nobles competed for territorial spaces in order to increase the surplus they could extract from the production units under their domains. As these surpluses were consumed sumptuarily or for the purpose of war, feudalism had no mechanism to encourage increased productivity; on the contrary, it was constituted as a system marked by destructive consumption, by a waste of hard-earned resources.

Properly dynamic capitalism, guided by the profitability of industrial capital within the process of market competition, lasted – he says – from the last third of the 1970th century until the end of the XNUMXs, that is, just two centuries. From that moment on, with the advent of the “digital economy”, it gradually became a system guided notably by income extraction. For the productive process as a whole has become dependent on a given production factor that is monopolized, something that was characteristic of feudalism and which has now been somewhat recovered.

In feudalism, as is known, this factor was the land; now, it consists of the banks and data flows (big data), as well as the means that need to be used to access them. Behold, a very small group of large corporations, such as Facebook, Amazon, Apple, Netflix, Google, etc., currently have and control the economic system of the West, if not of the world as a whole, because they have and control the large digital platforms. And they do not rely on competition and do not seek industrial profit to prosper, but seek to achieve increasing gains in scale based on uncontested monopoly power.

“The reference to feudalism” – says Durand – “refers to the rentier character, that is, non-productivist, of the device for capturing value. It is currently noted the prevalence of the logic of obtaining income over the productive logic in companies that are intensive in intangibles, notably on digital platforms. The powerful rise of computerized activities thus called into question the continuity of competitive processes of profit generation”.

The origin of the hypothesis

The hypothesis that we are now facing a kind of return to feudalism was raised, curiously, based on a journalistic article written by Karl Marx, on June 24, 1856, in the New york tribune. There, this author critically examines a balance sheet, as well as the statutes, of the joint-stock company Property Credit, which emerged in France at the time of the Second Empire, with Napoleon III. The December 1855 accounting document showed that this company had obtained an annual profit of 35%, that is, it had managed to obtain extraordinary profitability even for that time; “not so bad”, as pointed out by Marx himself.

This corporation was characterized by having an explicit monopolistic purpose: it intended to function as a single bank, to constitute a fund with all the titles and shares of the great companies, to control all the financing of the industry. Marx, with his well-known corrosive irony, immediately considered that it was a project of “imperial socialism”, which, unlike the hated “revolutionary socialism”, would certainly be loved by the bourgeoisie in general.

There, Marx, to designate this shameless monopoly project, still uses, ironically, a denomination created by Charles Fourier: “it is an immoral merit of Fourier to have predicted this form of modern industry, under the name of 'industrial feudalism'”. Now, this form had not been created by the protagonists of the project: “certainly” – says the author of The capital – “It was not Messrs Isaac, Péreire, Morny and Bonaparte who invented it”. What did they create then? Here is what he says: “There were also, before his time, banks that gave credit to industrial joint-stock companies. What they invented was a joint-stock bank which aimed at monopolizing what was formerly manifold and divided among several private moneylenders. The guiding principle consisted in the creation of a vast number of industrial companies, not with a view to propel productive investments, but simply to obtain gains through the trading of shares. Their new idea was to make industrial feudalism a tributary of stock speculation.”

It seems quite evident that Durand's hypothesis is born from this passage, even because it points to an unproductive use of capital that leads to stagnation. It is necessary here, however, to overcome this appearance.

Now, Marx does not endorse the use of the term “feudalism” as a theoretical category, but only uses it rhetorically and critically to refer to a process of industrial monopolization that is converted, through entrepreneurial engineering, into financial monopolization. Unfortunately, however, Durand took it as a rigorous term since he uses it to characterize a transformation of capitalism that, supposedly, comes to deny it as such. Well, if it's not feudalism, then what is it? It is an endogenous and tendential development of capitalism that Marx himself had foreseen in The capital? Or, if this is not the case, would it have provided the theoretical categories that would allow it to be rigorously apprehended?

capital as a commodity

It is necessary to see, at the outset, that in the special case examined by Marx, as well as in the current stage of capitalism as described by Durand, there is no suppression of the capital relation, that is, of the relation of capital with labor and, in particular, as wage labor. Now, how does this relationship differ from the production relationship that prevailed in feudalism?

Note first of all that the dependence of those who work on the owners of the means of production is not exclusive to feudalism – although, in the latter mode of production, it is characterized by a certain permanence and indissolubility; As is well known, the social bond of dependency in feudalism cannot be broken, especially by the subordinate part, since it is organic, the founder of society. In capitalism, however, this dependency becomes voluntary and temporary, as the relationship between workers and companies takes the form of a contract between individuals and legal entities, a contract that can be terminated at any time. It is, therefore, a dependence that appears as such – but as its opposite.

However, even that being so, this does not imply a complete independence of the parties – but only a formal independence. For there still subsists a reciprocal dependence, necessary and even forced, between the workers in relation to social capital, to capital as a whole. As workers do not own means of production, they have to sell their labor power to survive, with strong necessity, to some capitalist, to a member of the bourgeoisie who owns the means of production. And capitalists cannot subsist as such if they cannot formally subordinate numerous labor forces.

Marx, as we know, to distinguish feudalism from capitalism makes use of the difference between direct social relationship and indirect social relationship, respectively. In the first case, the founding social relations occur through goods, that is, they are “reified relations between people and social relations between things”. In the second case, there are relationships that imply a direct dependence, not mediated by social things that have acquired the character of fetishes.^[1]

Here is how this author presents this distinction in The capital, based on the metaphor of the independent individual contained in the famous novel by Daniel Defoe: “Let's move from Robinson's luminous island to the dark European Middle Ages. Instead of the independent man, we find here all dependents—serfs and lords, vassals and suzerains, laity and clergy. Personal dependency characterizes both the social conditions of material production and the spheres of life structured around it. But, precisely because relationships of personal dependence constitute the given social base, works and products need not acquire a fantastic form, different from their reality. They enter the social gear as services and payments in natura. The natural form of labor, its particularity, and not, as in the case of commodity production, its generality, is here its directly social form.

Durand, however, seems to be right about a historical change in the capitalist mode-of-production: with the advent of the digital revolution, with the computerization of work and communication processes, a transformation of this system did occur since it made unbreakable monopolization possible. of a production factor, informational, cybernetic platforms, which start to mediate a very significant part of social interactions even beyond directly productive activities.

At this point in the argument, there is an imperative need to highlight a crucial point: in platform capitalism, social relations continue to take the form of commodity relations. Social interaction continues to be a phenomenal manifestation of reified social relations. Companies gain because they have monopoly ownership of these platforms; however, they do so because they are still suppliers of goods; they therefore continue, like all capitalist enterprises in general, to sell commodities. The question, then, is to know how this sale operation takes place: is the thing itself that supports the form sold, or is only the useful service it can provide sold?

As is known, Marx distinguished two basic forms of the commodity as an elementary form of wealth in this mode of production, the basic structure that sustains modern society: the commodity (M) as a form of industrial capital (in D – M …P … M – D') and capital itself (D) as a commodity (in D – D'). The first form begins to be explicitly presented in Chapter IV of Book I (implicitly, it begins in Chapter I of the work as a whole). As this form M is the form of industrial capital, it necessarily passes through its valorization circuit in form D, that is, in the form of money as capital. And, for that very reason, it contains within itself a possibility that appears only later in the presentation of The capital.

The second commodity form is thus exposed mainly in Chapter XXI of Book III, called The interest-bearing capital. There, he shows that capital as capital becomes a commodity sui generis. The passage is well known and it says what was also tried to be said in this paragraph that is now concluded: “Money – considered here as an autonomous expression of a sum of value, whether it actually exists in money or in merchandise – can, on the basis of capitalist production, be turned into capital. And, by virtue of this transformation, moving from a given value to a value that values ​​itself, that multiplies. It produces profit, that is, it enables the capitalist to extract from workers a certain amount of unpaid work, surplus product and surplus value – and appropriate it. It thus acquires, in addition to the use-value it possesses as money, an additional use-value, namely, that of functioning as capital. Its use value, once transformed into capital, consists here precisely in the profit it produces. In this condition of possible capital, a means of production for the production of profit, it becomes a commodity, but a sui generis commodity. Or, what amounts to the same thing, capital as capital becomes a commodity”.

It is, therefore, now a matter of examining the form D – D' which is precisely the form of interest-bearing capital. Here the metamorphosis of capital into a common commodity does not occur as it necessarily occurs in the circuit of industrial capital, that is, M – M, first, and then the inversion of M – M'. Capital, in other words, does not assume the form of productive capital that commands the process of production of value and surplus value. Now, the transformation of D into D' depends only on a transfer of value from the hands of a private owner A to those of another B, which can only take place under certain forms and legal guarantees. They guarantee the transformation of D into D + ΔD; behold, a certain amount of money, D, goes from A to B and returns increased from B to A, as D + ΔD, in this transaction. The loan form, therefore, is peculiar to capital as a commodity. And it pays “rent”. And this income comes from the rent of capital, it has the nature of interest – and not of land rent. Interest is the payment of rent due for the use of capital as a commodity.

It must now be noted that interest-bearing capital does not only materialize in the loan of money. It materializes whenever there is a loan of capital, whether current or fixed – noting that fixed capital is an asset whose social form is always “glued” to a natural support. Furthermore, this support has a purely material existence, whether this existence is tangible and/or intangible, it does not matter. An ordinary machine, for example, is tangible as iron, but intangible as technology. In fact, therefore, a traditional machine or a computational machine is both tangible and intangible at the same time.

Here, to leave no doubt, it is necessary to quote Marx himself at length in the passage specifically speaking of fixed capital: “Money can be borrowed (...) as fixed capital, for example, when it is repaid in the form of an annuity for life, of so that with interest there always flows back a portion of the principal. [However] certain commodities, by the nature of their use-value, can only be lent out as fixed capital, such as houses, ships, machines, etc. But all borrowed capital, whatever its form and whatever its repayment may be, owing to the nature of its use-value, is always only a particular form of money capital.

Now, this moment of the dialectical presentation of the concept of capital, contained in The capital, cannot disappear from Marxism without leaving any trace, as seems to happen in many works currently circulating in the field of criticism of political economy. For, as a rigorous theoretical contribution, it has a strong and inescapable consequence for the understanding of capitalism based on informational platforms.

A critique of the Durand hypothesis

As seen, Durand makes reference to feudalism to characterize the recent transformation of capitalism because he sees in historical events the emergence of a regression: if before profitability was the dynamic engine of capitalism, now what moves it, much more slowly in fact, would be rentism. And he supports this thesis in an explicit way, as shown in a quote from a small excerpt from his own book: “The reference to feudalism…”.

From the outset, where does the interest in thinking about contemporary capitalism based on notions such as “rentism” and “techno-feudalism” come from? Now, the need – common in the Keynesian field, but which also appears in the Marxist field – seems irresistible to point out the external gain to production as a regressive element, something that is in capitalism, but that does not belong to it as such, that is not part of it. immanent.^[2] And this tendency, as you know, already appeared in the works of authors like Proudhon and Keynes. If these authors considered that this type of gain could and should be suppressed in some way, Durand, on the other hand, now sees it as insurmountable due to technological development. It is evidently a matter of self-deception or ideological infiltration. Capitalism is not regressing, but progressing – and according to its immanent laws – towards its final sunset. And this, as we know today, may not be auspicious, but catastrophic.

How, then, can one apprehend the transformations described by Durand in a rigorous way from the logic of presentation of The capital?

It is quite evident that computer programs, collected databases and, thus, the service of digital platforms, by virtue of their very nature as use values, even if they do not cease to be commodities, cannot be sold as common commodities. . Computing machines in general – desktop, laptop, tablets, etc. – are, yes, sold in this more usual way. But, the digital services that are needed in general to employ them properly in the sphere of production and even outside it cannot be commercialized in the same way. Well, the reproduction costs are practically zero in this case. Its use must be licensed for a certain period; as a form of capital as a commodity, they therefore have to be rented, formally or informally.

As a result, this is not a variant of “land rent”, but interest, since this is how, as is known, the return from renting capital as a commodity is called. Furthermore, it is quite evident that the capital form involved in digital platforms is not new; on the contrary, it has existed since the dawn of capitalism. The potential for monopolization itself was already present in the types of capital listed by Marx.

What's new with such platforms is that, because of the network economies they provide, monopolization happens and has to happen inexorably. As some use this resource others will have to use them, thus producing a technological closure (lock in). Hence, they make it possible to extract compulsory “rents” from users, in a way that is similar to what is traditionally called loan sharking. Well, both exploit the client's situational weakness. They suppress, moreover, the consumer's freedom of choice so praised by liberal and neoliberal ideologues of all times.

Because of all this, the transformation brought about by the third industrial revolution competes with the so-called financialization of social relations that has expanded enormously in contemporary capitalism, although, as an emerging phenomenon, it is not something entirely new either. It competes, therefore, with other trends that are now manifesting themselves there, such as the large structural indebtedness of companies, state bodies and families and, in particular, with the diffusion and predominance of share capital.

This tendency towards the socialization of capital, as is known, is inherent to capitalism itself and is recorded as such in Chapter XXVII of Book III of The capital: “Capital, which in itself rests on a social mode of production and presupposes a concentration of means of production and labor forces, here directly receives the form of social capital (capital of directly associated individuals) as opposed to private capital, and their companies present themselves as social enterprises as opposed to private companies. It is the overcoming of capital as private property, within the limits of the capitalist mode of production itself”.

Given the above, doing justice to the ironic spirit of the ancient Marx, instead of techno-feudalism, one should speak of “capital socialism”.^[3] Instead of rentism, therefore, one should speak of “juridism”. In any case, there is a historic moment of change; According to Marx, at the moment when this result of the maximum development of capitalist production occurs, it is a necessary passage point for the transformation of capital into the property of the producers, however, no longer as the private property of individual producers, but the property of associated producers, as directly social property. Put another way, the issue is not “capitalism versus feudalism”, but “capitalism versus post-capitalism.

* Eleutério FS Prado is a full and senior professor at the Department of Economics at USP. Author, among other books, of Complexity and praxis (Pleiad).

Notes

[1] Perhaps, these direct relationships can be called “social relationships by rules”, noting that these rules establish a social hierarchy and that they tend to be socially sacralized, deified.

[2] This way of thinking appears, for example, in Ladislau Dowbor's review of the book the value of everything: produce and extract in the global economy, by Mariana Mazzucato, published in the earth is round. Available in https://dpp.cce.myftpupload.com/produzir-e-extrair-na-economia-global/

[3] This theme is well treated in an article by Bruno Höfig, Equity capital and its necessity: elements for understanding the financialization process of the firm. Economy and Society, vol. 26 (special issue), December 2017