Once we recognise that capitalism itself is diverse, however, we may find that there are some forms of it, suitably regulated, that make a positive contribution overall to our well-being. Given this possibility, we can no longer simply dismiss all capitalism on the grounds of Marx’s spurious theory of exploitation. Instead of applying the formulaic dogma of Marx’s labour theory of value, we need to evaluate forms of capitalism by identifying their real tendencies and assessing their actual effects against explicitly stated and justified ethical standards.

Excerpted from Dave Elder-Vass:

“We could change our economy by progressively altering the mix of economic forms, steadily reducing the more harmful forms of capitalism and building more human forms of economy alongside. Indeed, it is only if we do build alternatives alongside capitalism that viable alternative economic futures can be developed, and we should welcome the work of thinkers like Erik Olin Wright and Yochai Benkler who are examining some of the ways in which this could occur.

On the other hand, however, this optimism must be qualified. As we have seen, alternative appropriative practices can themselves be entangled in capitalist forms, and ultimately the viability of alternative forms will depend not only on growing them within our existing economy but also on finding ways to criticise and curtail the role of capitalist appropriative practices. Capitalism, despite being only part of our contemporary economy, is still capable of generating massive harms – notably extreme exploitation, alienation, inequality, massive distortions in the use of resources, environmental damage and support for oppressive political regimes. It is still backed by enormous political and discursive power, and it constantly tends to subvert alternatives to its thirst for profit.

Once we recognise that capitalism itself is diverse, however, we may find that there are some forms of it, suitably regulated, that make a positive contribution overall to our well-being. Given this possibility, we can no longer simply dismiss all capitalism on the grounds of Marx’s spurious theory of exploitation. Instead of applying the formulaic dogma of Marx’s labour theory of value, we need to evaluate forms of capitalism by identifying their real tendencies and assessing their actual effects against explicitly stated and justified ethical standards. When we do so I believe we will find, for example, that forms of capitalism that rest on the provision of free content by users are considerably less harmful than those that rest on the extraction of minerals by slave labourers in Africa (Fuchs, 2014, pp. 172–81) and those that rest on the creation of unstable financial assets. These forms can be separated. They are not all parts of one monolith, and they should be treated differently: lightly regulated, heavily regulated or abolished entirely depending upon their impact on human flourishing.

Alongside the less harmful remnants of the capitalist economy, we need to support the development of other forms. The state has an important continuing role to play in the provision of essential services that are made available to all irrespective of their ability to afford them, and in the provision of public goods that we all benefit from. Non-capitalist commodity forms should also continue to be important: family businesses and co-operatives, for example. But the gift economy, particularly if we include large parts of the household economy, is already as important as these, and the digital gift economy is particularly promising. As we have seen, the gift economy is particularly suited to the distribution of digital goods, with their trivial marginal costs, and innovative forms of collaborative production have flourished there, with benefits not only for the users but also for the creators of the content that they share.

Nevertheless, there are also good reasons to restrain claims for the potential of the digital gift economy. One limitation arises from the same factors that give the digital gift economy its advantages: virtually costless distribution of gifts that entails no sacrifice by the donor is only a characteristic of digital information goods. There is little reason to believe that similar economic processes might roll back the non-digital market economy in the way that the open-source movement has generated a tendency for the decommodification of software. Indeed, the digital gift economy itself clearly depends on other sectors of the economy that are currently dominated by the market: for example, the hardware and networks that make the digital gift economy possible are themselves physical products created in the commercial economy, and independent programmers that contribute to open-source software must have other sources of income to support them, which are often derived from the commercial economy (Barbrook, 2005).

Certain elements of the digital gift economy also face attempts at outright suppression by government, acting in the interests of pre-digital media corporations. Most notably, governments have been persuaded by lobbyists for these corporations to extend copyright protection in an attempt to prevent the free distribution of vast amounts of digital media products (Gillespie, 2007, chapter 4; Lessig, 2004). Open-source software seems likely to escape this, partly because of some clever work on copyleft licensing, but perhaps more so, ironically, because of the many ways in which it has become embedded in commercial business. Many IT businesses have found ways to make money out of open-source software, and at least some major open-source software products are predominantly developed at the expense of such companies (Elder-Vass, 2015c). But this is only half of the picture: we must also recognise that commercial companies are amongst the largest beneficiaries of the financial savings that arise from using free open-source software – these savings are a major reason for the massive ‘market’ shares of products like Linux and Apache.

Such entanglements warrant scepticism towards suggestions in the literature that phenomena like open-source software herald the replacement of capitalism (Berry, 2008, p. 98). But once we recognise the diversity of the economy, we no longer need all-or-nothing alternatives to capitalism. The issue we face is not a choice between a gift economy and a commodity economy; the issues are how much of the economy will take a gift form, what kinds of gift form, how much will take a commodity form and what kinds of commodity form.

Let me end… by asking what role a book like this can play in advancing such changes. Books alone do not change the world; any impact they might have depends upon influencing people, and movements of people, but where are the movements that might back a progressive shift towards a gift economy? Part of the problem we confront is what David Harvey calls a ‘double blockage’: ‘the lack of an alternative vision prevents the formation of an oppositional movement, while the absence of such a movement precludes the articulation of an alternative’ (D. Harvey, 2011, p. 227). As Harvey rightly says, the solution to this double blockage is inevitably iterative: the relation between these two absences ‘has to be turned into a spiral’ (D. Harvey, 2011, p. 227).

That spiral is already in progress, though its overall direction is uncertain. There are already movements working towards aims compatible with the ideas expressed in this book, for example Green parties, the Occupy movement, many of the groups that combine in the World Social Forum, and the movements against austerity policies in Europe. And there are already huge numbers of people participating in gift forms of economy. Though many of them do not even recognise that they are forms of economy, these are people who could be persuaded to back further growth of these forms. There are already, too, writers expressing ideas that complement those in this book, for example those who have contributed to the Convivialist Manifesto (Clarke, 2014), and those whose work is collected in The Human Economy (Hart et al., 2010). This book and the political economy of practices that it advocates are, at best, another turn of the spiral, one that encourages a more open but more realistic alternative vision of a future that could enable more of us to flourish rather than being subjected to a logic of pointless accumulation that ultimately benefits no-one.

We cannot know exactly what kind of economy and what kind of society this will lead us to, not least because there is no end point and no single overriding logic to social development but rather a continuing process of change in a fundamentally open system. The mix of economic forms within that system will inevitably develop in response to emerging possibilities but it is up to us, collectively, to find ways to encourage those forms that seem most beneficial for all human beings in the light of ethical debate. We will only be able to engage productively in such a process by abandoning monolithic visions of nirvana and working instead towards multiple partial real utopias. This is not a step backwards but a step forwards for progressive politics: we must reject the dogmas of both of the old political economies and instead engage creatively with our diverse economy and its open future.”

[This post reproduces text from pages 228-232 of Elder-Vass, D. (2016) Profit and Gift in the Digital Economy, Cambridge: Cambridge UP.]

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Our first inspiration was Alan Page Fiske’s relational grammar. This year, we discovered Kojin Karatani’s Structure of World History, which gives a very strong coherence to a historical understanding based on such a multi-modal approach.

Yesterday, I discovered the work of Dave Elder-Vass who talks about a ‘complex of appropriative practices’. But we are also inspired by the work of Dmytri Kleiner and Baruch Gottlieb, who formulated a similar approach, but which we did not fully understand until recently.

Part One: Dave Elder-Vass on Complex of Appropriative Practices

Dave Elder Vass writes:

“Wage labour alone is not enough to give us canonical capitalism, since people may work for wages in a variety of non-capitalist contexts such as government deparments. Nor is commodity production enough to give us canonical capitalism, since commodities may also be produced by individuals working alone, in family businesses that do not pay wages, or in co-operatives (Gibson-Graham, 2006b, p. 263; Sayer, 1995, p. 181). We may even have both wage labour and commodity production without canonical capitalism, notably in state-run enterprises. Canonical capitalism is thus defined by a certain complex of appropriative practices rather than by any specific appropriative practice.

This concept of a complex of appropriative practices, I argue, has several advantages over competing understandings of economic form.

Both the neoclassical orientation to markets as the only significant economic form, and the monolithic conception of a mode of production are inadequate for theorising the range of economic forms in diverse economies. This section will examine some of the ways in which the concept of complexes of appropriative practices allows us to theorise social relations more flexibly.

The first is that there is no difficulty in theorising the coexistence of multiple economic forms. There is no longer a conflict, for example, between the belief that capitalism is an important element of the contemporary economy and the recognition that it governs only a minority of productive processes, and thus there is no longer a need to obscure the significance of the gift economy or indeed of other non-capitalist economic forms that coexist relatively stably alongside capitalism. Given this, we can reject the attempt to reduce all contemporary class relations to capitalist appropriation of the product of wage labour that is characteristic of the most vulgar Marxism, and start to theorise the social relations and practices of appropriation that characterise these other complexes. We need not, for example, ignore the appropriation of caring services by children in households because Marxism implies that this would make children exploiters of their parents, but rather examine the complex of processes in which this occurs as an economic form in its own right. We can escape from the hidebound pigeonholing of all social relations into what Folbre and Hartmann have called ‘a formulaic set of class processes’ (1994, p. 59) – those few patterns that Marxists believe have dominated epochs.

As well as examining the coexistence of multiple complexes of appropriative practices within the economy we now have the tools to examine such coexistence within specific sites or social entities. The fact that commercial firms are the site of capitalist practices is no longer a theoretical obstacle to recognising that they may also be the site of other forms of appropriative practice. Nor is the argument that households are the site of gift-forms of appropriative practice compromised by recognising that they may also be the site of wage labour, whether it is capitalist (e.g. when an agency supplies cleaning staff) or not (e.g. when a self-employed cleaner contracts to provide a service). The household, in this perspective, becomes the site of moments of appropriation that operate within the frames of a variety of different complexes of appropriative practices. It is, we may say, a mixed economy of practices in its own right. Struggles within the household over the division and control of domestic labour may then also be theorised as struggles over the mix, struggles over which complex of appropriative practices is to prevail in which circumstances.

Relaxing the requirement that an economic form must correspond to the dominant form of an epoch also makes it easier to theorise varieties of a form.

…

It may also be useful to think of some complexes of appropriative practices as hybrid forms … To get hybridity, we need other types of economic form as well as the capitalist type. Although I have questioned whether there are other coherently identifiable modes of production than capitalism, there can still be other types of complex of appropriative practices. One candidate is suggested by the idea of the gift economy: there is a wide variety of complexes of appropriative practice in which voluntary transfers of goods or services are made without any expectation or obligation to make a return transfer. Some complexes are hybrids of both capitalism and the gift economy because they include both the practice of capital accumulation and the practice of making transfers of goods or services as gifts. Such hybrids are decisively capitalist and yet simultaneously the sites of more progressive practices.”

Part Two: Dmytri Kleiner’s (Telekommunisten) Intermodal Approach

Dmytri Kleiner writes:

“We often say we live in a Capitalist society, but yet this does not mean that all forms of producing and sharing that occur within our society are Capitalist. This is more than evident when looking at social relations in family and personal life, in intentional communities of various kinds, within co-ops and other non-capitalist organizations, the charity and profit sectors, and, of course, the emerging world of peer-production including free software, free culture, etc. It’s quite clear there is a lot more going on than just Capitalism. When we say we live in a Capitalist society what we mean is that Capitalism is the dominant mode of production, and as such, it is able to apply the greatest amount of wealth towards its own expansion and the enforcement of its interests. As a result, our private and public institutions, including our law making and financial institutions are set up according to the interest of this dominant mode.

We can not change our society, neither the public or private institutions that make it up, nor the laws and financial constraints that are imposed without first building the capacity to overcome the capacity of those who resist such change.

Only when the commons based economy exceeds the market based economy can we achieve a society that is organized around the interests of creating wealth for the many instead of creating profit for the few.

Starting with the Kaleckian model, Y = Cw + Cp + I that introduces classes on the consumption side, by dividing consumption into consumption of workers (Cw) and consumption of capital (Cp), Kalecki is able to isolate profit as P = Cp + I. Reasoning that Cw = W, In other words, reasoning that workers spend whatever they earn. This assumption is of course true within capitalism. However, if we understand that Capitalism itself, while dominant, exists among several other modes occurring simultaneously, we need to take this into a different direction. If the commons-based economy must become the dominant economic mode, then instead of understanding the level of profit within the capitalist sector, we need look at relative growth between the capitalist and communist sector, in other words between the sectors that produce for private profit and the sectors that produce for public wealth, the predatory sector and the co-operative sector.

To do so, we move Kalecki’s class division to the investment side, since with capitalism, workers spend everything they earn, but in the more complex social context that capitalism exists within worker’s also invest. So our starting point becomes Y = C + Ip + Iw. With Ip representing Capital’s capacity to invest, and Iw representing workers’ capacity to invest, as result as both classes have the capacity to invest in production.

We now divide C, not on classes, but on mode, creating Cm and Cc, market based consumption that returns profit to it’s investors privately, and Cc, commons based consumption that does not capture profit privately, and returns wealth to society collectively. This gives us Y = Cm + Cc + Iw + Ip.

This now allows to us divide these two sectors as Capitalism, Ym = Cm + Ip and Yp and Communism, Yc = Cc + Iw. So, from a macroeconomic view, you could say that the revolutionary aspiration of May 1 is to make Yc > Ym, and thereby overcome the dominance of Capital on our society.

In order to understand how this might be possible, we need to look at the flows of value between the two modes. We can not assume that workers will only invest in the commons and consume from it, nor can we assume that Capital will only consume and invest inversely.
We started to include this last week by drawing on the way import and export between nations is included in macroeconomic identities, adding “net imports” to the model, so to expand what we have above with N, Ym = Cm + Ip + Nm and Yc = Cc + Ow + Nc. Nm and Nc representing the net relative imports of each mode. Being net imports, Nm + Nc would equal zero as these would balance out by definition.

If, in balance, workers consumed the products of capitalist controlled production more than capitalists consumed the products of workers controlled production, then they would have a trade deficit with the capitalist sector and thus have relative reduced economic power as a result, capital would increase it’s dominance, conversely, if worker’s could create a intermodal trade surplus with capital, then then would decrease, and perhaps eventually overcome the dominance of capital.

Likewise, investment can also flow between the sectors, for instance workers buy shares on the stock market, and capitalists may, for instance, finance the development of free software.

It’s hard to identify such intermodal capital flows as investment, since from a class perspective they don’t directly reproduce the wealth that was used, as returns aren’t recaptured according to the relative mode, thus such investment is not directly “valorized.”
Production in capitalism is driven by exchange value, a capitalist commodity can not properly be considered produced until it consumed in such a way that creates more capital. As Capitalism is not directly concerned with producing things because they are useful, but because it is profitable. When the commodity is just given away the “productivity” of the producers who made it is calculated as zero, since zero capital was recaptured.

Therefore, I propose to call such capital flows “Sustentation,” where value creation within one mode is sustained by inflows from another. Individual capitalists may benefit from such sustentation, and often do, such as the capital cost reduction that free software provides to business that use it. However despite the benefit to some specific businesses, such flows represent a drainage of capital from the point of view of the class as whole, as this expenditure is not directly valorized, and even replaces potential valorized consumption, such as expenditures on commercial software made unneeded by using free software.

Likewise, workers’ using their retained earnings to buy stocks can be be understood as a similar sustentation. This drains wealth from the commons-based economy as to sustain capital finance, even though individual workers may privately benefit, by essentially becoming tiny capitalists.

We can add net sustentation to the model as follows. Ym = Cm + Ip + Nm + Sm and Yc = Cc + Iw + Nc + Sc. Excluding taxation, which is not intermodal, so activity in both modes is subject to the same government, we have a complete macroeconomic picture of class struggle and can start discussing how venture communism, counterpolitics and insurrectionist finance can be employed in the struggle.”

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