Brian Holmes: the next phase of capital

The following contribution appeared in the IDC mailing list, and was a reaction against applying the labor theory of value to Facebook and other social networks. Apart from stressing that we need to go ‘beyond Marx’, Brian gives an interesting overview of recent analyses of post-meltdown capital structures, as well as a pessimistic prediction of what may be next.

Brian Holmes:

“I do think there is a lot of time wasted trying to apply Marx’s ideas verbatim to vastly changed situations.

It’s a matter of layers, and there is always a next layer. Thus, the ontological status of human labor as the source and measure of value in capitalist societies continues to justify the hyper-exploitation of factory workers and sweatshop laborers all over the planet, and therefore, to govern important aspects of the economic relations between classes, as well as the geo-economic relations between core and peripheral states. But at the same time, at least two further types of social relations that Marx did not directly observe are layered onto that. The first layer came in the 1930s and reached maturity in the 1950s: it is the welfare state, which created large tracts of socialized capital (public facilities of all kinds, redistribution mechanisms for retirement, health care, education etc). This has been described extensively by David Harvey as the “secondary circuit of capital” and it has made a huge change in the way capitalism works within the core states where it was applied, creating a new mediator class between bourgeoisie and proletariat which is commonly and perhaps rightfully described as the “middle class.” One important consequence of this for Marxist thought was the realization that the “socially necessary labor time” required for the reproduction of the labor force was itself a function of the standards that apply in any given society at any given time, a fact to which Marx does allude at one point, but whose full implications only became visible with the rise of the welfare state. Today, some theorists including Harvey speak not of the labor theory of value but rather of the “value theory of labor,” stressing that it is the agency of the working classes, gained through conflict and struggle, that determines what the standard wage and the minimum acceptable standard of living will be.

For this, see an excellent short piece by Bob Jessop:


So that’s one important layer, and Marx did not theorize it because he did not live to the 1930s. Another important layer is added from the 1980s onward, and that is neoliberal finance. Of course, Marx has lots of things to say about finance capital; but as he did not foresee the vast expansion of the secondary circuit and therefore, the partial socialization of the capitalist state, nor perforce the rise of the “middle classes” as the mediators between what he thought was the essential and inevitable conflict between the proletariat and the bourgeoisie, he obviously did not foresee the emergence of a kind of finance that would prey upon the vast amounts of capital won by working class agency. Yet this is what has happened in our time: under the logic of neoliberalism, much of what used to be welfare state entitlements has been transformed into fungible private assets (health insurance policies, 401k accounts, private suburban homes, etc) and delivered over to the nominal control of individuals or relatively small and localized groups.

These individuals and groups then find themselves at the mercy of large, sophisticated, rapacious financial operators who offer them further market schemes encouraging them to speculate on their tiny stake of capital, in order to expropriate some generous percentage of their assets as we have just seen done so blatantly in the course of the recent housing bubble. I think Marx can be used pretty successfully to describe a lot of this, but just repeating his concepts adds nothing: you have to get into the materiality of the social relations that have emerged since the 1980s. For that there is a really excellent book by James K. Galbraith, who interestingly enough is the son of the great theorist of the welfare-warfare state, John Kenneth Galbraith. I really recommend this short and well-written book to everyone: it is called “The Predator State.

OK, all that takes us far from the Internet and it’s another long, soaring post which any uninterested person has already, I trust, stopped reading. The point remains that treating Facebook users as the nineteenth-century working class is not only absurd; it also distracts from the enormous changes that are going on before our eyes. Adam Arvidsson says we are moving into an “ethical economy” and he expects that the reputation-ranking functions of social media will create a new breed of what you might call “clean and serene” corporations, to replace the old “lean and mean” ones. I would submit instead that while intellectuals waste their time pandering to people who are fascinated by the tawdry narcissism of networked environments organized to promote the delusion of transparency and community, the major predators are organizing the last great suicidal development of the capitalist economy, in which a newly concentrated and now truly global banking sector will systematize and intensify the chaotic trends of the three preceding decades, in order to promote and realize an extreme version of neoliberal development unencumbered by any organized resistance whatsoever. This new social order will continue to depend on large consumer and prosumer classes to manage surplus and to waste lots of it, while laying waste to the environment at the same time; so I am afraid you will still not have the simple face-off between bourgeoisie and proletariat that Marx predicted. But the new social order, if it is left to establish itself without resistance as is presently being done, will also require all the trappings of an extreme security state, in order to ward off the attacks of great percentages of the population thrown into poverty even in the core states, and also great numbers of people, initially in the underdeveloped world, whose cities will be underwater and who will be migrating towards the golden towers. Under these conditions, those who labor, and do not speculate on their assets or human capital as most middle-class Internet users do — nor much less have access to venture capital, as was just described in the interesting post by Christopher Kelty — will see their capacities for resistance and agency reduced to nil, and both the “labor theory of value” and the “value theory of labor” will finally be obsolete. What’s left in the absence of organized resistance is just one thing: capital as power, the power to create social relations and impose an order upon them. This is subject of Shimshon Bichler and Jonathan Nitzan’s new book, Capital as Power: A Study of Order and Creorder, which among many other things contains a specific refutation of the labor theory of value.

I actually don’t think we are there yet — that is, I think there is still some organized resistance left in the world, from the working classes, from peasant classes unwilling to be entirely expropriated of their traditional relations to the land, and also among middle classes who know how to protect and develop their relative political autonomy won over the course of centuries — but nonetheless, I do highly recommend reading Bichler and Nitzan if you want to understand how corporate power is expressing itself right now, and how far we are from the social-democratic pipe dream of an “ethical economy.” The first chapter of their book can be downloaded from their archive, as can an earlier essay including similar references to the subject of our conversation here, the famous labor theory of value:



For the next layer of capitalist power to be fully installed — and for the economy to “recover” from its present state of uncertainty and flux — I think the developed societies need a perfected system of second-order cybernetic control over the consciousness of their middle classes, exactly the kind of world-creating and attention-channeling system that is discussed by Greg Elmer and his co-authors in their excellent article. The initial basis of this system is contemporary social media in its dominant corporate 2.0 forms. It really has to be explored a little more seriously, within the existing social relations and not in terms borrowed from the past. But that kind of exploration remains very rare, leaving media theory in a realm of fantasy. So in my opinion, friends, we can talk all we want about the marvelous freedoms of playlabor, or on the contrary, about the horrifying expropriation of our proletarian toil by Facebook or Orkut: so doing, we’ll be shooting the breeze, no autonomy will be won and the processes underway will run their course.”

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.