Reading :: Cognitive Capitalism

Cognitive Capitalism
By Yann Moulier Boutang

David Guile suggested I read this book, and I owe him a debt for discussing its salient points with me. Moulier Boutang originally published it in 2007; this translation was published in 2011. In it, the author argues that we are undergoing a transition, not to socialism (as Marx and his successors have hoped) but to a new type of capitalism, corresponding with globalism.

In the Introduction, the author characterizes capitalism in three stages: "Marx in Manchester," "Marx in Detroit," and "Marx in California" (p.8). The third stage, AKA "cognitive capitalism," began around 1975 and has "little similarity to industrial capitalism, which at its birth between 1750 and 1820, broke with mercantilist capitalism and slavery" (p.9). He emphasizes: "We are not living in a period of socialist transition" but rather a transition into this new form of capitalism (p.9).

He continues this argument in Chapter 1, where he argues that "From 1975 onwards the pace of economic growth in the developed countries slowed considerably. ... Unemployment became omnipresent and structural." The previous model, which relied on "rapid salarisation of an originally agricultural population, an abundant supply of family dependants and a demand that was driven first by postwar reconstruction, and then by wars taking place in the Third World ... finally ran out of steam" (p.11). Yet there was no collapse. World trade rose and new trans-state organizations were created (p.12). Bases of capital changed repeatedly (see table 1.1, p.18). In the process, "Capitalism has set negative externalities at the centre of its functioning as positives, and they make one of the characteristics of complex systems within which organised human intervention must evolve" (p.20). These negative externalities include our air, water, and other aspects of our ecological system. And they are now interfering with transaction costs (p.30). This fact has an impact on immaterial labor, which characterizes the new production model.

By immaterial labour, the author means that "the essential point" for understanding the economy is "no longer the expenditure of human labour power" as Marx would have it, but rather "invention-power," or "the living know-how that cannot be reduced to machines and the opinions shared in common by the greatest number of human beings" (p.32). For example, the price of a pair of trainers (that's athletic shoes for those of us in the US) relies not just on the manufacturing and transport costs but also on "the value of the brand," which itself results from labor from designers, stylists, and lawyers (p.32). The capacity for innovation becomes a key part of the stock price (p.32). "If the economy is becoming increasingly flexible (a transition that many industries are finding it very hard to make), it is because the central core of value rests now on immaterialities" (p.33). Here, "immaterial labour" is not idealist, but rather an update of Marx's "abstract labour" (p.33). Capitalism now seeks to prioritize "collective intelligence, creativity distributed through the entirety of the population" (p.34).

Capitalism must mutate to survive, partly due to human change: the social accumulation of knowledge, expanded memory, and collective intelligence, due to information technologies (p.36). Thus he calls the new capitalism "'cognitive capitalism', because it has to deal with collective cognitive labour power, living labour, and not simply with muscle-power consumed by machines driven by 'fossil-fuel' energy" (p.37).

In Chapter 2, the author contrasts cognitive capitalism (hereafter CC) with other characterizations, such as the knowledge-based society, the information society, technological capitalism, and the new economy. Chapter 3 defines CC in detail as a coherent system and a dynamic process. The author argues that cognitive capitalism involves "a remarkable return ... to use-value and to the world of human relations" (p.49). CC has 15 markers:

1. The virtualization of the economy, i.e., the "growing role of the immaterial" (p.50)
2. "The weight of the immaterial is an outcome of the new computer technologies" (p.50)
3. The capture of innovation "present in the interactive cognitive processes of social cooperation and of tacit knowledge" (p.51)
4. Thus technological process "takes the form of a socio-technical system" and the critical variables are "the appropriation of knowledge" and "the use of technology" (p.51)
5. The division of labor model has been brought into question; "As for innovation that requires not only the coordination of complex processes but also the active cooperation of agents, it is hampered, indeed blocked, by the division of labour" and thus "productivity gains ... derive from economies in learning"  (pp.51-52)
6. "The growing complexity of markets" is increasingly managed via "learning economies" (p.52)
7. Sequences of production are reversed: "Now deep innovation involves 'flexible production' and 'just-in-time' production" and relies on "the productive nature of consumption"—users become co-producers of innovation (pp.52-53).
8. Traditional dividing lines "between capital and labour and between skilled and unskilled labour" are dissolving (p.53)
9. The digital network yields the network society (p.53)
10. The "hegemony of the paradigm of industrial labour and manual labour power" is coming to an end (p.53)
11. Whereas "dead labour" is crystallized in machines, in CC, living labour "is not consumed and not reduced to dead labour in machinism" (p.54)
12. "Concepts of individual performance within the workplace"are declining, while innovation is no longer solely located within the company (p.54)
13. CC produces immaterial goods (information-goods, knowledge-goods), yielding tensions over intellectual property rights (pp.54-55)
14. Externalities are no longer marginal: "capturing positive externalities becomes the number one problem of value," i.e., "work done outside working hours, and implicit knowledge, and capacities for contextualisation" (p.55)
15. "Whereas industrial capitalism could be characterised as the production of commodities by means of commodities, cognitive capitalism produces knowledge by means of knowledge and produces the living by means of the living. It is immediately production of life, and thus it is bio-production" that can only "take place on the basis of collective brain activity mobilised in interconnected digital networks." This is "bio-production" and its control is "biopower" (pp.55-56). 

CC, he concludes, is "a mode of accumulation in which the object of accumulation consists mainly of knowledge, which becomes the basic source of value, as well as the principal location of the process of valorisation" (p.57). Its strategies "are determined by the quest for a spatial, institutional and organisational positioning likely to increase its capacity for engaging in creative processes and for capturing their benefits" (p.57). Its mode of production "is based on the cooperative labour of human brains joined together in networks by means of computers" (p.57). Therefore the new wealth of nations is "the important place of research, of technological advancement, of education (the quality of the population), of information flow, of communication systems, of innovation, of organisational learning and of management organisational strategies" (p.57). "A capitalist society of this kind aims to place at the centre of the sphere of production and to integrate fully into the economic sphere (both market and non-market) resources that had previously been external to them" (p.58). 

CC requires a new division of labor as well. The author provides a table (p.62) demonstrating a shift from industrial to cognitivist DOL in terms of various aspects: function, evolution variables, organizational model, etc. In a nutshell, CC characteristics seem similar to those of Adler and Hecksher's collaborative communities, focusing on cooperation in networks (not markets or hierarchies). Importantly, CC relies on educated, intellectual members, in contrast to the deliberately limited worker requirements of Tayloris, (pp.66-67). 

Yet, as the author argues in Chapter 4, cognitive capitalism is also unstable: it involves omnipresent exploitation and antagonistic social relations and relations of production (p.92). First CC splits living labor into consumed (crystallized) and continuing (skill, know-how). It produces living labor by means of living labor (i.e., knowledge by means of knowledge). Thus re get living capital, a seeming paradox (p.93). CC draws its legitimacy from the nature of its accumulation, mainly exploiting invention-power and ideally maximizing that exploitation (p.94). The author provides a helpful typology, showing different cases in terms of exploitation of labour-power, invention-power, and freedom: on one end is the slave or serf, who is solely exploited in terms of labour-power and has no freedom; at the other end, the creative, who is exploited solely in terms of invention-power and does have freedom (p.96). 

The production of knowledge goods has two problems: First, they are not scarce, and second, they are too public to be produced through a market system—hierarchy and market are inadequate (pp.103-104). The dot-com entrepreneur, he says, can only find a business model by staying on top of the wave of social innovation; we're no longer in the era of Schumpeter and Knight, when entrepreneurs identify the needs of a passive society (p.109). 

In Chapter 5, the author examines the question of social class. CC involves worsening inequalities and precarity (p.122). The latter does not mean poverty but rather vulnerability to poverty: the safety net has holes (p.129). Precarity involves intermittent workers; to exploit invention-power, trades must "develop multi-level capabilities, so that their pollination and nomadic activity may be recaptured" (p.132). "The regime of widespread intermittency is becoming the real form of work," he says, adding that a guaranteed universal income will be needed to underpin CC—people need to eat in order to do cognitive work (p.134). 

In Chapter 6, the author argues that finance is the only way to govern the inherent instability of CC (p.136). Accounting rules are currently inadequate for companies that accumulate and retain immaterial (intangible) capital (p.141). 

In Chapter 7, he presents a manifesto, gathering up the policy recommendations made throughout the book (universal basic income, financial governance, etc.).

And let's stop there. This was a rewarding book, allowing me to draw together some of my previous readings and writings to rethink what is going on with work. I highly recommend it.