Platform capitalism?

Posted: 23 May 2017 in Uncategorized
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I don’t have strong views about the idea of “platform capitalism,” the concept presented and elaborated in a recent book by Nick Srnicek to make sense of the business model of such companies as Google, Amazon, and Uber. I don’t feel I have a dog in that hunt.

What I do like is Srnicek’s critique of other designations—such as tech companies, sharing, and the gig economy—and his focus on the idea that these are, after all, capitalist firms operating in a capitalist economy. Their raison d’être is to make a profit by centralizing and monopolizing access to data and selling data (or services based on those data) to other firms.

In fact, the notion of “platform capitalism” might be extended to other kinds of enterprises. I’m thinking, for example, of sports franchises and universities. They also operate as platforms inasmuch as they generate profits across a range of activities. Nominally, they produce and sell a commodity (e.g., a football match and higher education)—but that only serves as a pretext for generating profits in other activities: in the case of sports franchises, television revenues, shirts and other memorabilia, food and drink concessions, and so on; similarly, in the case of higher education, on-line courses, research-based fees and patents, food and lodging for students and visitors, branded clothing, and of course collegiate sports spectacles. In both cases, sports franchises and universities operate as diverse, profit-making platforms.

So, in my view, the idea of “platform capitalism” might be a useful way of thinking about at least some forms of capitalism that exist today.

What I find odd, though, is some of the commentary on Srnicek’s work. Consider, for example, Daniel Little’s posing of the questions generated by the emergence of “platform capitalism”:

what after all is the source of value and wealth? And who has a valid claim on a share? What principles of justice should govern the distribution of the wealth of society? The labor theory of value had an answer to the question, but it is an answer that didn’t have a lot of validity in 1850 and has none today.

What Little seems not to understand is that the profits of the enterprises operating under the rubric of “platform capitalism” are still based on the surplus labor of workers who produce the commodities that are being sold. Uber, for example, manages to generate its profits by capturing the surplus of its drivers. It doesn’t own the vehicles and doesn’t directly employ the drivers (with all the associated costs savings) but, since it owns the platform that connects drivers to passengers, it secures a “right” to the surplus created by the drivers and paid for by the passengers. The other kinds of platforms analyzed by Srnicek have different ways of generating profits: by selling advertising based on information collected about users (e.g., Facebook and Google), by renting servers used to process data (e.g., Amazon), and so on. But in all these cases, workers are doing the job of writing and modifying software, collecting and processing data, building and maintaining servers, and supplying the ultimate services to other enterprises or final consumers who purchase the commodities. And the members of the boards of directors of platform capitalist enterprises are the ones who ultimately appropriate the surplus.

Capitalism has, of course, changed since the mid-nineteenth century. The technologies, the modes of employment of workers, the ways commodities are marketed and the role users play, the measuring and processing of data—all of those features of the capitalist mode of production have changed radically since industrial capitalism first emerged. But the basic logic—of capitalists and workers, of creating, appropriating, and distributing surplus labor in the form of surplus-value—is the same for capitalist enterprises today just as it was in 1850.

That’s why the Marxian critique of political economy, modified and updated for the twenty-first century, continues to be able to explain the “source of value and wealth”—including and perhaps especially “the soaring inequalities of income and wealth that capitalism has produced” in recent decades.

Comments
  1. Magpie says:

    Thank you very much for this, Prof. Ruccio.

    Decisive, clear, to the point, and highly civil.

  2. VanessaVaile says:

    makes an intriguing match with Jonathon Rees’s (@jhrees) most recent post on the “means of educational production” http://moreorlessbunk.net/technology/the-means-of-educational-production/

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