The global economy is arguably amidst a transitionary process. The ever increasing importance of information is widely acknowledged, a fact which is showcased with the term ‘information’ gradually preceding one by one every discipline of human activity and intellect: from ‘information technology’ to ‘information society’, ‘information economy’, all the way to the ‘information age’.
In this context, Castells in The rise of the network society develops an analytical distinction of the term ‘information’ and ‘informational’, suggesting that there are similar implications for the ‘information/informational economy’ as well. He protrudes that ‘information’ next to society merely emphasises the importance of the former in the latter, whereas information in its broader sense, has been an important element in the development of all societies. On the contrary, the term ‘informational’ points out to ‘the attribute of a specific form of social organization in which information generation, processing, and transmission become the fundamental sources of productivity and power because of new technological conditions’.
Putting the focus on value, in what way are things different in the information age? Adam Smith offers one of the first comprehensive theories for value early in the industrial transition, defining the value of any commodity in exchange as ‘equal to the quantity of labour which it enables him to purchase or command’. With information as ‘the fundamental source of productivity and power’ how are the relations of ‘purchase and command’ changing?
There is widespread scholarly dissent regarding the transformation of work and the nature of labour in the information economy. Consequently, the relevance of the labour theory of value has largely been dismissed in more contemporary views, which make a case for alternative approaches. Wealth creation in the information economy, as opposed to classical views, is increasingly dependent on socialised and networked productive processes. The individual ‘toil and trouble’ in which one gets into in order to produce any commodity, which Smith identifies as its real price of commodities, is thereby becoming more and more difficult to identify and assess. Furthermore, the increasing importance of affect has been claimed to form the basis for a new conception of value, as labour becomes immaterial, that is, more qualitative and ever more complex, both in individual and collective terms. Value is increasingly created in collective cooperative processes by a multitude of diverse actors and is thus less susceptible to control and measure in terms of labour.
The immeasurability of value, apart from a rejection of the classical theory of value, also constitutes to a strong challenge for the conventional practices of management and accounting. This is coupled with the increasing importance of financial markets in the information economy, where the produced ‘value beyond measure’, as Hardt & Negri put it, is associated with an accounting system based on solely sentimental criteria. Thus, even though value is created by collaborative social relationships, it is by and large directly channelled to financial markets, which are affective than rational.
Nevertheless, it is argued that from a Marxist point of view the labour theory of value remains relevant. In the first chapter of The Capital, Marx holds that in capitalist production there are two processes of labour identified: First, concrete labour, which produces use values and represents ‘the everlasting Nature-imposed condition of human existence’. Second, abstract labour that creates the value of commodities. The activity of internet users could thereby be viewed as labour that produces informational content, which is then commodified and exchanged by media advertisers. At the same time they constitute to the audience for advertising, while their attention as a commodity is actually measurable in terms of aggregated time of social labour.
From another perspective, informational content alone does not possess any exchange value, as it is non-rivalrous and it can be reproduced at negligible cost and time. Hence, the produced information does not classify as a commodity but rather as a universal commons, embodying use values. Subsequently, social media companies employ labour to exploit this information and provide services, thus creating exchange value. Marx himself unveils this antagonistic relation of use value and exchange value in capitalist production. The first serves the collective social interest, whereas the second the individual private objectives. This relation is further eradicated in the context of information, due to its non-rivalry form. Consequently, exchange value is only possible to be imposed on information through artificial scarcity and enclosure of the information commons. Therefore, the price extracted from information can be better understood as a form of monopoly rent.
Towards a new measure of value
What can we conclude from the previous section in relation to Marx’s theory of value and, in fact, labour theory in value in general? Firstly, the claim that new forms of social production are surfacing in the information economy which cannot be encapsulated by the labour theory of value, is in principle correct. However, as long as those new forms become monetised in any manner, they still fall within the reach of Marx’s theory of value. Secondly, the Marxian theory of value can be understood as an integration of the preceding theories of value in the framework of his critique on the capitalist mode of production. The rationale provided by the Smithian or the Ricardian labour theory or value are arguably neither rejected nor contradicted by Marx’s analysis; rather they are interpreted in context. From this perspective, since we are living in a capitalist system, the Marxian theory of value will remain relevant.
From this standpoint, it appears that the best possible development in the Marxian theory of value is to reach to appoint where it will be made obsolete by a radical change in the productive relations beyond capitalism. Indeed, the case of commons-based peer production unseal a political economy which goes beyond the Marxian framework of critique and negate the conventional canons of value altogether. As it has been first observed in the realm of the Free/Open Source Software and in projects such as the free encyclopaedia Wikipedia, it is indigenous to the information economy and encapsulates its transformative dynamics. It is about a new mode of production, different from private for-profit or public state-owned production. Its product does not possess exchange value for markets but rather use value for a community of users/producers. Those are organised in spontaneous productive structures, beyond hierarchy and central coordination and make use of common property regimes to make use value freely accessible. In other words, commons-based peer production celebrates a genuinely sharing economy, in a rather different use of the term from the one purported by the Silicon Valley giants.
So if the value production has fundamentally transformed in the information economy, what is holding back this mode of production to establish its political economy? We suggest that this transformative process can be observed in three interrelated levels: (a) production of value; (b) record of value; and (c) actuation of value.
The first level has already been discussed, with emerging modes of value creation already established in the information economy. On this level it is already made apparent that the produced use value is not measurable in terms of labour time, while the intrinsic value of the products is not associated with the cost of production, since this is almost negligible. At the core we identify an ecosystem of diverse communities of contributors, which are simultaneously users and producers. As the nature of their produce is non-rival, production for exchange is no more relevant and gives way to production for sharing of use values.
The second level is associated with the method used to track and record the produced value, which to a large extent reflects the wider logic of the established economic system. Following the view of Werner Sombart, scientific accounting identified by the double-entry system had played a vital role in unleashing and stimulating the business activities of the economic system, which he is said to have first called capitalism. Double-entry bookkeeping, before its first systematic representation by Luca Pacioli in 1494, had been developed as a practice of merchants in Venice of 14th and 15th century. Much like modern practices that gave eminence to the information economy, bookkeeping has been indigenous to the practice of exchange, which together with the division of labour carve the bedrock of the capitalist mode of production, that is, as Marx puts it, ‘production for exchange’. Likewise, elsewhere (1, 2) it has been argued that the blockchain is the first native digital medium for value.
Finally, the third level, concerns the actuation of the produced value. In industrial capitalism the products of labour in production for exchange are transformed into commodities and their value is represented in money through price mechanisms. Similarly, the same process can be observed in our contemporary information economy, which one could perhaps better describe as information capitalism. Even though production of value is socialised, it can only be actualised through enclosure and appropriation. Labour time remains relevant in the production of value, in the sense that people are still working to produce goods and services, while, even though productivity varies in different levels of technology or different tasks and positions, there is definitely some type of relation of labour time and output. Nevertheless, value is then again only measurable, tracked and redistributed through a price mechanism that assigns the actualised value with a money equivalent. Particularly in the case of the so-called sharing economy, even though business giants, such as Facebook and Google, shift away from direct production and instead allow and enable decentralised peer-to-peer operations, the monetisation of the produced value takes place on a central proprietary level.
A more inclusive accounting system would allow the assessment and measurement of value to stream from a process of decentralised consensus and participatory evaluations of a variety of contributions. These two elements complement each other to enable effective evaluation and reward of qualitative different contributions and support decentralised governance. Furthermore, recent cases like Backfeed, propose a token-based economic model, which could tentatively integrate the political economy of this mode of production, providing the final level of value actuation. It envisions a system composed by the circulation of information commons in a sharing market economy. An ecosystem fuelled by a multiplicity of diverse digital tokens coupled with reputational rewards, representing a variety of value systems, while consumption shifts away from utility towards participation and cooperation.
Based on the paper titled: ‘Blockchain and Value Creation in the Information and Sharing Economy: The Case of Backfeed’, by Pazaitis, A., De Filippi, P. & Kostakis, V. (under review).