Commentary below by David Week.
” In a traditional capitalist society, labour creates value, and capital captures that value: workers in a factory produce a car, and the surplus value of the car is captured by the factory owner. Unions (where they still exist) may help the workers get a share of some of that value.
But in a company like Google or FB, the value does not lie directly in the work being done by the workers (e.g. me). I’m not producing text which they can sell, as a newspaper might employ a journalist. Rather, the value to them comes from my very presence, and my attention on this page. This is what they sell to advertisers, like the ones in my peripheral vision, off to my right.
They operate not as traditional manufacturers, but in the mode of media companies, which is brilliantly dissected in this talk by Sut Jhally: The Factory in the Living Room.
There’s a wonderful reflexivity in watching that video on Vimeo, where you can see being played out exactly what describes, in the situation in which you find yourself.
Here’s an urban metaphor. There’s a public square in the town, in which occasionally people congregate to talk and to dance. I come along and I buy all the buildings around the square, so that though the square is open, I have captured the container. I then lease this out to restaurants and cafés, who make good money from the dancers and the talkers. The restaurants and cafés attract more dancers and talkers, and in fact the general “buzz” attracts people, who in turn by more food and coffee: the fortunes of my tenants increase, and I can continuously raise the rent.
Nor is it necessarily just chatter and dancing in the square. Some of those discussions lead to books and businesses. The musicians become popular and create albums. Whether socially or commercially, the people in the square are enriching themselves. But their very presence is the value which generates the income for the owner of the container.
This metaphor explains a few things about Facebook, for instance. The first is why it paid $16bn or so for WhatsApp. According to analysts, it was the rapid rise in WhatsApp’s popularity. The owner of the shops around square 1 is always aware that the crowd is fickle, and today’s Facebook Plaza may become tomorrow’s Piazza Myspace. The other is that the cafés and restaurants get their business by using touts and waiters to interrupt the users of the square, and if allowed to so too aggressively, they might actually drive them away. So this explains the extraordinary care with which ad placement is introduced in sites like FB.
So: not saying it’s not capitalism. But it does not follow the same model as manufacturing. The value captured is not the value being produced, but something else altogether.”