Adam Arvidsson, on how the ethical surplus can be appropriated. Today, the first two strategies.

This is part of the new ‘Book of the Week’ experiment, where we will publish excerpts of new books. Adam Arvidsson’s book on the Ethical Economy is a draft, to which you are strongly invited to contribute. You may do so in the form of comments, separate blog entries, or by using the discussion page at the Wiki version.

Wiki Entry to Ethical Economy
and the Ethical Economy Book Project

Part 1 is available on this blog here, part two was published yesterday.

Adam Arvidsson:

How does the ethical surplus become valuable? There are basically four ways in which this can happen, and they usually coincide to some extent in each individual case: taxation, appropriation, enclosure and financialization.

taxation

In some cases, as in the case of SMS messaging, dating sites and Online Gaming this can a matter of direct taxation. Site owners make users pay a fee for the privilege of producing what the site owners subsequently sell access to: an environment rich in ‘profiles’ and opportunities for romantic adventure on a dating site, a complex and exciting ‘virtual world’ to explore in the case of Online Games. These can be substantial values. To quote Business Weeks recent survey of ‘virtual worlds’, residents of Second Life,

spend a quarter of the time they’re logged in, a total of nearly 23,000 hours a day, creating things that become part of the world, available to everyone else. It would take a paid 4,100-person software team to do all that, says Linden Lab. Assuming those programmers make about $100,000 a year, that would be $410 million worth of free work over a year. Think of it: The company charges customers anywhere from $6 to thousands of dollars a month for the privilege of doing most of the work.â€?

(http://communities-dominate.blogs.com/brands/2006/05/living_in_the_v.html )

Site owners can charge fees for accessing this user produced content. Alternatively they can charge advertisers for the privilege of using it as a medium or distribution channel (BBC has rented a virtual island in Second Life to used as a platform for the distribution of alternative rock music; both Banana Republic and the Gap have stores there.)

Although of course easier to achieve on the internet, where access and use is simple to restrict, this principle applies in other fields as well. A brand, among other things, consists of an extra experience, attitude, or affective pattern for which consumers are prepared to pay a premium price. Macintosh computers cost more than other computers because they are ‘cooler’, more aesthetically refined and allow you to present yourself to other people, as well as experiencing your own interaction with the computer in different ways. Now, in part this difference is produced by Apple’s own advertising and media investments, but to a large, and for brands in general, increasing extent, it is produced by consumers themselves. Their ethical productivity is put to work through various forms of viral marketing, event marketing, real life product placements, so that it co-produces the affective extra for which brand owners can subsequently charge an access fee. Brands are becoming similar to online environments like Second Life: platforms for action and sociality that enable and empower the production of particular forms of ethical surplus.

Appropriation

This brings us to the second dominant mode of valorization, the appropriation of organized co-production. In many sectors ethically motivated forms of production have proven far more efficient than those coordinated by money or bureaucracy. One famous example of this is the Open Source Software movement. A non-monetary economy of respect and peer appreciation has managed to produce software that is far superior to what corporate giants like Mircosoft have been able to churn out. IBM has understood this lesson and now finances the Open Source movement, uses the software it produces and makes money selling service and support around it. But the same logic applies to the cultural productivity of ‘underground’ or counterculture which has formed a significant engine for the development of consumer capitalism since the 1960s and on. At an early stage the music industry began to systematically survey US youth culture, incorporate its innovations and transform them into commoditised music styles. The fashion industry soon followed suit. Today this ‘capture of cool’ has become systematic and a plethora of trendscouts or cool hunting firms have developed. Nor is this restriceted to the cool of youth culture any more. A growing number of companies make recourse to user-led innovation strategies where consumers are invited to contribute to the design and development of new products or brands, often by means of some form of online forum or web community. Procter & Gamble allegedly increased the productivity of its R&D with 30 per cent by actively outsourcing innovation to its consumers. Here, then is an example of the direct appropriation of the ethical economy of everyday life as an important productive externality. This logic has also begun to feed into urban development policies. The transformation of the city into a rich positive externality that can be drawn upon in creative work has, with the impact of Robert Florida’s work, become a key concern, from small town America, via rural Europe to Singapore, where the authoritarian law and order state has decreed higher levels of tolerance for gays and the urban bohemia in the name of global competitiveness.

The full text of the introductory chapter of the
Ethical Economy Book Project is available on our Wiki.