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iCapitalism and the Cybertariat

Contradictions of the Digital Economy

Ursula Huws is Professor of Labour and Globalisation at the University of Hertfordshire in the United Kingdom, and founder of Analytica Social and Economic Research. This article is adapted from the introduction to her book Labor in the Digital Economy: The Cybertariat Comes of Age (Monthly Review Press, 2014).

In 2003, Monthly Review Press published a collection of my essays dating back to the late 1970s under the title The Making of a Cybertariat: Virtual Work in a Real World. This new collection, Labor in the Digital Economy: The Cybertariat Comes of Age, continues where the previous one left off, bringing together essays written between 2006 and 2013, a tumultuous period in the history of capitalism and the organization of labor.

In the earlier collection, one of my central themes was capitalism’s extraordinary ability to survive the crises, that periodically threaten to destroy it, by generating new commodities. Just at the point when its logic of expansion seems destined to generate a saturation of markets and a consequent crisis of profitability, it finds fresh areas of life to bring within its scope, generating new forms of production of new goods and services for which new markets can be created. These phases are often associated with the diffusion of new technologies. In the early twentieth century, for instance, the spread of electricity gave rise to a wave of new commodity development based on domestic labor (such as vacuum cleaners, washing machines, and refrigerators) or entertainment (such as radios, film projectors, or phonographs—and the films and records that provided them with content). This process generated not just novel forms of production, but also novel forms of consumption. While new kinds of paid work were created, domestic labor was increasingly transformed into what I termed “consumption work,” sucking ever more activities out of the private sphere of direct interpersonal interaction and bringing them into a public marketplace. The more workers become dependent on these new commodities to survive from one day to the next, the greater their need for a source of income to pay for them, tightening capitalism’s grasp on their lives still further. Yet such innovations are, on the whole, adopted willingly and enthusiastically. There is an almost irresistible appeal in their novelty, modernity, and convenience, their increasing cheapness, the promise they hold out of saving time and labor, and the lure of possessing something that was previously a luxury only the rich could afford. And those who do resist, positioning themselves thereby as old-fashioned, technologically inept, conservative, or even Luddite, quickly find that so many features of social and economic life are designed on the assumption that everyone now has these new commodities that survival without them becomes ever more difficult. The last volume charted some of the impacts of these developments on labor, both paid and unpaid, in a context in which capitalism was not only expanding in terms of the areas of life it embraced, but also in its geographical scope.

We have now entered a period, I argue here, when new waves of commodification set in motion in earlier periods are reaching maturity. The new commodities have been generated by drawing into the market even more aspects of life that were previously outside the money economy, or at least that part of it that generates a profit for capitalists. Several such fields of accumulation have now emerged, each with a different method of commodity genesis, forming the basis of new economic sectors and exerting distinctive impacts on daily life, including labor and consumption. They include biology, art and culture, public services, and sociality.

I use the term “biology” to refer to the way that life itself, in the form of plants and animals and the DNA that makes them up, is exploited to produce commodities such as new drugs and genetically engineered forms of food. This is a vast and expanding field, with huge implications for many aspects of life. I mention it only in passing and do not go into detail here, because, although I believe it to be very important, I have done no research in this area and have little to add to the interesting debates taking place elsewhere. I concentrate now on three other fields: art and culture, public services, and sociality.

The commodification of art and culture is the continuation of a process with a long history. Artistic work has been paid labor for centuries, and cultural commodities also have a long pedigree, produced under a variety of social and contractual conditions. What has changed in recent years has been the scale of their incorporation into capitalist productive relations, the concentration of capital in these sectors, and the introduction of a global division of labor into the production of cultural commodities. The concentration of ownership among a few transnational companies has been encouraged by technological developments that have enabled a convergence between activities that were formerly dispersed across different industries. Newspaper and book publishing; television, film, record, and games production; and “content-generating” industries have merged seamlessly with each other and with distribution companies and infrastructure providers to create corporate behemoths that bestraddle a wide range of activities, interlinking the efforts of “creative” workers with many other technical, clerical, managerial, and service workers across the globe in ever-changing configurations.1

In the late twentieth century, the income and working conditions of writers, film-makers, and musicians were largely dictated by the terms they could negotiate with vertically organized film companies, record companies, and publishers whose profits were directly linked to the sale or distribution of commodities such as films, records, CDs, books, and magazines. Now the markets are increasingly dominated by companies that produce hardware (such as Amazon’s Kindle or Apple’s iPhone) alongside distributing the content for them (in the form of eBooks or iTunes). In the process of these sectoral shifts of power, creative workers have been reconstituted as “content producers” for products made by other industries. This has several impacts. It links their work more directly with that of other “knowledge workers,” such as software developers, and, increasingly, requires them to take on tasks previously carried out by others (such as copy editors, type-setters, designers, recording technicians, camera operators, and the like). It also loosens their hold on their intellectual property. As in the twentieth-century, vertically integrated companies struggle to adapt to the new market conditions, the main asset they have to exploit—the output of these creative workers—becomes something to be resold in multiple forms on multiple platforms for different audiences. Having lost control, in many cases, of the final delivery of these items to the public, they are forced to sell them to intermediary distributors and settle for a smaller share of the profit, with the financial squeeze transferred to the workers. For companies like Amazon or Apple, if sales of eBooks or iTunes cease to become ends in themselves and become simply means to sell more Kindles or iPhones, then the companies’ interests cease to lie in the maximization of the profit from any given title. Instead, their interest is in increasing the overall quantity of sales across all titles, in order to expand the choice available to hardware users, to encourage more sales of these gadgets. This drastically changes the economics of media industries, removing bargaining power from creative workers and driving down the earnings of the majority (though enabling a minority of stars to flourish). Even those artistic workers who strive to work in traditional ways, outside the market, find themselves in practice increasingly having to beg and brag to large corporations or bureaucracies for the access to the resources that will allow them to do so.2

The commodification of public services has followed a rather different route, although there are strong connections and overlaps between this and the commodification of cultural activities because of the strong cultural content of public services such as education. The development of public services, delivered by a paid workforce of government employees, was an important feature of the twentieth century, both in Communist countries, where it was the normative model for all employment, and in developed capitalist economies. In the latter, welfare states—and the public employment associated with them—arose and expanded, especially in the period following the Second World War, in an accommodation between the demands of labor and the requirements of capital, an accommodation that took different forms in different contexts in its specific features. Though undoubtedly playing a functional role for capital, in terms of reproducing the workforce, these state-provided services can also be seen as representing a victory for organized workers, who had long campaigned for such things as pensions, free education, health services, unemployment, and sickness benefits on behalf of the working class as a whole. As such, public services represent a portion of what labor has managed to claw back from capital, reflected in terminology such as the “social wage.” Opening up these services as a new arena for capital accumulation has far-reaching and multidimensional impacts. In formerly Communist countries after 1989, this reappropriation was often achieved by a simple grab, creating the basis for new kleptocratic oligarchies. Elsewhere, it was a subtler, but equally pernicious, process, achieved partly through outright privatization but increasingly through a creeping process of outsourcing—function by function, department by department, region by region—to a new breed of multinational companies waxing fat on the proceeds, and able to use their global spread not only to draw on cheap sources of labor but also to minimize the amount of tax they pay to the governments that so obligingly provide them with the material from which they make their profits.3

It is perhaps my next category of new commodification, sociality, that is the most mind-boggling in its implications when considered as the basis of new commodities and new industries. The human needs to flirt and talk and share jokes and commiserate and keep in touch with friends and family must have seemed to our ancestors to be as basic as the needs for animals to nuzzle up to one another. Surely, they would have thought, these must be impervious to the hard cold laws of capitalism; how could they possibly provide a source for corporate profit? I suspect that many people still cling to an idea that their personal relationships lie in a private realm of affect and authenticity beyond the reach of the market. Yet the most cursory glance at almost any group of people in almost any social situation in the developed world shows how illusory such notions now are.

Here are just four snapshots drawn, more or less at random, from my own recent observations.

The first snapshot is of a group of schoolchildren walking down the street together, speaking animatedly and at high volume, not to each other, but to people who are absent. Most obviously, some mobile phone company is gaining a tariff for every minute of their communication which would be free if they chose instead to speak directly to each other. Other companies are no doubt also benefiting from their online activities: social media companies, and the companies that advertise on them, for instance. But there is also the matter of the hardware itself. The child who has the latest smartphone is able to flaunt this badge of social status. Those who do not (the children whose parents are unemployed, single parents, recently arrived immigrants, or otherwise unable or unwilling to provide them) are rendered vulnerable to a sense of inadequacy and exclusion in addition to those that are already present under advanced consumer capitalism (such as having the wrong brand of shoes or clothing). The colonization of their sociality by the market has not only generated a new source of profit-making but has also helped to drive wedges into the fabric of their social lives, undermining the basis for future solidarities.

My second snapshot is of five people sitting together around a café table, two of them expertly texting, one speaking on a phone complaining about the poor quality of the signal, another using his phone to photograph his surroundings, and the fifth looking exasperatedly at the menu. None seem to be enjoying themselves. Instead of using the rich and subtle multi-sensorial potentialities of direct interpersonal contact, they are choosing restricted channels for their communications: the verbally impoverished telegraphese of SMS messages, the mangled signals of shouted words. Once again, the corporate profits are accruing in tandem with deterioration in the quality of interpersonal social interaction.

My third snapshot is of a crowded London bus, with a cacophony of phone conversations in several languages, some loud and confrontational, some revealingly intimate, some so banal as to seem entirely unnecessary, with almost the character of a nervous tic, as though the caller cannot bear to be idle for a moment and being in communication gives an illusion of activity: “I’m on the bus. Yes, the number 73. I left work fifteen minutes ago. Yes, I’ll be there in about twenty minutes. No, nothing special.” Many of those who are not speaking on their phones are seated with earphones clamped to their ears, attached to various electronic devices they are fingering. This enables them to avoid interaction with the frailer people to whom, according to the signs above their heads, they should be offering their seats. The bus is no longer, as it was in the past, a place for unexpected encounters, the sharing of jokes with strangers, or a communication to lighten the spirits of a lonely person for whom this might be the only social contact of the day. While on the one hand the private intimacies of the bedroom or kitchen are yelled out indiscriminately to the world, on the other the strangers who share the same immediate social space are ignored, glared at, or rejected as communication partners. The relationship between the private and the public seems to have been turned inside out. But all the while a stream of income is being generated for the global communications companies.

My fourth and final snapshot is of a conference session, with four people on a platform, from three continents, one of whom is chairing, one speaking, and the other two looking down at their laptops or iPads; most of the audience are doing the same, several obviously working their way through their email, with almost no eye contact between any of them, despite the fact that most have traveled considerable distances (using up a lot of jet fuel in the process) to be together in person. In each case, there is a rejection of free communication by direct voice or touch or glance in favor of electronically mediated conversation. The (no doubt jet-lagged) speakers are dully reading prepared papers, which anyone in the audience could have read elsewhere on paper or from a range of different devices. Some may even be doing precisely that at this moment, giving themselves time to prepare a suitably self-positioning intervention when the speaker has finished. The point of being there seems to be to establish a record for future job applications that a paper has been presented rather than any desire for real dialogue. The expensive charade seems to be producing very little in the way of direct interaction, though of course some of this might take place in the bar later, among those who are not so time-poor that they retreat instead to their hotel rooms to catch up with their emails, call their long-suffering families, or write the next conference paper.

Where is the presence of capitalism in all this? Everywhere! It benefits, most obviously, from the physical devices—the mobile phones, tablets, laptops, iPads, and the accessories that have to be purchased to charge them and connect them to each other or to our persons. The manufacturers whose brands are displayed on them represent the tip of an iceberg of labor encompassing the miners who extract the minerals that are their raw materials, the factory workers who assemble them, transport workers, warehouse workers, service workers, software engineers, call center workers, and many more. Then there is the infrastructure: the (very solid) satellites and cables and Wi-Fi routers that enable all this seemingly evanescent digital content to be accessible so invisibly across the airwaves; and the electrical grid supplying the power without which none of it could run. Again, these require the labor of a large number of workers, employed by a large number of companies to do many things including extract coal and oil, erect windmills, run power stations, make cables, and create channels for them to be laid under our roads and fields and oceans. Not to mention the scientists who design the rockets that are blasted into space to put the satellites into orbit. Some of these industries already existed prior to the development of information and communications technologies, of course, but their markets have grown enormously as a result of the spread of digital communications. In relation to energy, for instance, it was estimated that using Information and Communication Technologies (ICTs) consumed between 930 and 1,500 billion kilowatt hours in 2013.4

Furthermore, each of these electronically mediated interactions is generating income for the multinational corporations that run the telecommunications services. Social communication now involves, in effect, the payment of a tithe to these companies by every person around the world with a mobile phone contract or an Internet connection in the home—a number that continues to grow exponentially. In addition to generating income from call and broadband charges, communicating over a telecommunications network using a digital device also produces revenue for many other corporations, large and small, such as those that design operating systems or applications or charge users for playing online games. This is not all. When human sociality is mediated by telecommunications systems, it leaves digital traces wherever it goes, traces that can be mined to generate data that enable advertising to be targeted with ever-greater accuracy. The Internet is thus constituted as a vast virtual shopping mall, with its users bombarded with a constant stream of advertising, preying on their most personal vulnerabilities. So accustomed are most of us to these ever-present advertising messages that it is easy to forget how deeply damaging they are. From early childhood, most people are now told, hundreds of times a day, that they are fat, ugly, undesirable, vile-smelling, laughably old-fashioned, endowed with breasts or penises that are the wrong size or of the wrong degree of firmness, and that they are never likely to be popular unless they purchase whatever commodity is on offer to provide the magic fix for this problem. By such means even companies producing the most non-virtual of material products are able to intensify their sales, managing to sell more of their products even when the markets for them might be thought already saturated. This is partly achieved by persuading people to use more of them, for instance to take several showers a day, using even more shower gel and shampoo, partly by encouraging a kind of collective bulimia of consumption, whereby products are obsessively bought, then quickly discarded and replaced, and partly by developing new products. This is, of course, in addition to the traditional forms of expansion based on finding virgin consumers to sell to in developing economies.

Online advertising is more intense, and better targeted, than anything that went before, but there is nothing intrinsically new about this form of selling, though it is undoubtedly the case that the Internet has enabled some multinational corporations to grow, consolidate, and extend their global reach to a remarkable degree. A less expected development of the commodification of sociality has been the phenomenal rise of companies that make their profits by extracting rent both from these commodity-producing companies and from their customers online, on the one hand providing the means for web users to communicate with each other (for instance using Facebook or Googlemail) and on the other persuading them to deliver up their most intimate secrets to the advertisers to enable their vulnerabilities to be exploited.5 Taking into account the vast new fields of commodification I have summarized here, and others I have not described in detail, it is not surprising that capitalism does not only survive its periodic crises, but emerges from each with renewed vigor, and a new armory of resources to bring to reestablishing its relationship with labor on fresh terms.

To understand what is changing in this relationship between capital and labor it is perhaps useful to look back to earlier periods. Any attempt to periodize history is of course fraught with risk. Focusing attention on a moment of rupture usually involves ignoring the many continuities that remain constant in the background and, since the seeds of each new phenomenon lie in the preceding period, it is rare for the exact moment of its birth to be datable precisely. Nevertheless, it is hard to deny that there are certain moments when new phenomena reach a critical mass that brings qualitative, as well as quantitative, change. Social and economic changes, and the technological innovations with which they are so often intimately entangled, tend to follow a similar path. Rare experiments by pioneers or elites are followed by broader voluntary uptake, which is in turn followed by mass adoption leading ultimately to a situation where the usage of whatever it is (school attendance, electricity, the telephone, pre-packaged food) is so taken for granted that social institutions and policies are designed on the basis that they are universal practices.

I contend that we are now living in a period in which a series of mutually reinforcing economic, political, and technological factors have brought about just such a sea change in the character of work. I do not wish to suggest here that all work has changed. Far from it. My argument is, rather, that a range of features of work that were regarded in previous periods as exceptional or unusual are now taken for granted by a growing proportion of the population and, in the process, expectations of what “normal” working behavior should be have also been transformed. This situation has not come about overnight. Its origins can be traced back to earlier periods, when the dominant models were different. Oversimplifying considerably (there are, of course, many exceptions and counter-examples), I argue here that there have been three such periods since the end of the Second World War and that we are now in a fourth.6

The first of these periods, extending approximately from 1945 to 1973, saw the creation of what has been variously termed the “post-war Keynesian welfare state,” “the Golden Age of Capitalism,” “Fordism,” or “Les Trente Glorieuses.”7 In the developed capitalist economies of the West, and some developing ones, this was a period of national economic plans, often developed within tripartite structures between national governments, employers, and trade unions. Although some firms were already multinationals during this period, economies were dominated by national (sometimes nationalized) corporations willing to negotiate compromises at a national level. This enabled governments, at least in some countries, to use early twentieth-century antitrust laws to exercise some sort of control over corporate behavior. Many industries were still dependent on sector-specific or company-specific skills, which gave labor a degree of bargaining power in particular industries or regions. Even more important, the Cold War created a strong incentive for special deals with labor to be struck. Hovering in the background, in North America, Western Europe, and elsewhere, was a real fear that if concessions were not made to the trade unions, then workers would turn to Communism. It was during this period that certain expectations were established, at least for skilled white male workers, that employers should provide continuous, contractually formalized employment, offering regular holidays, sick pay, pensions, and prospects of advancement. This was by no means a reality for many workers, particularly women, people from ethnic minorities, and those in low-skilled occupations. But even if it was not a universal reality, it was seen as a legitimate aspiration not only in developed economies but in developing ones, where “development” was often imagined in terms of achieving a formal labor market characterized by full-time, permanent jobs, just like those in the West. Implicit in this labor market model was a family model, equally at variance with reality for many workers: the full-time worker was conceived as a male breadwinner, the head of a dependent household where others carried out the unpaid reproductive labor.

The oil crisis of 1973 can be seen as marking the end of this period and the beginning of the next, dating approximately from the mid-1970s to the end of the 1980s. Now, in a context of declining profitability, conflicts between employers and labor were sharpened and employers made increasing use of migrant workers and women (many working part-time) to fill lower-paid positions. Waves of mergers and acquisitions brought an increasing concentration of capital, and the multinational companies that resulted began to relocate manufacturing work to lower-wage countries, sometimes to specially designated Export Processing Zones where they were protected from environmental and safety legislation and offered certain tax advantages. National and regional governments, with dwindling power to regulate these companies, increasingly found themselves forced into competition to attract foreign direct investment, offering subsidies and other inducements to lure such prizes as a major auto plant to their territory. Meanwhile, the development of information technologies made it possible to simplify and standardize many labor processes, including in-service industries, undermining the bargaining power of some traditionally well-organized groups of workers, while also opening up new areas of employment for others. Deindustrialization brought structural unemployment to some regions, but the model of the “job for life” was still in contention. In the global West, unions remained strong in many regions, with losses in some fields offset by gains in others, particularly in the public sector and in service industries employing large numbers of women and minorities, who were increasingly vocal in pursuit of equality and new rights. Although a discourse about “atypical” employment began to emerge, jobs were, on the whole, still regarded as subject to formal regulation and contractual negotiation.

The symbolic beginning of the next phase can be dated to the fall of the Berlin Wall in 1989, but this highly charged moment coincided with a number of other political, economic, and technological developments that taken together brought about a scale of change justifying the designation of the next period, running approximately from 1990 to the mid-2000s, as another distinct era in employment relations. It was not just that the ending of the Cold War opened up the whole world as a potential field of accumulation for capital (while removing the fear that workers would abscond en masse to communism). This was buttressed by a general wave of deregulation, opening up free trade in goods and services and enabling unhindered flows of capital, intellectual property, and information across national borders throughout the world. Deregulation did not only apply to trade restrictions. Neoliberal regimes went on the offensive against trade unions, reducing employment protection and embarking on a process of privatization that began to open up the public sector as a new field of profitmaking.8 Meanwhile, the information technologies that had begun to be introduced in the previous period reached critical mass, becoming cheaper and more ubiquitous. The productive potential opened up by digitization had been limited when its scope was mainly confined to particular computers in particular locations, but this was greatly enhanced when Information Technology (IT) was harnessed to telecommunications, constituting information and communications technology (ICT), enabling these individual computers to be linked to one another in increasingly seamless ways and their contents exchanged as rapidly as the capacity of the telecommunications infrastructure would allow. In 1992, the International Telecommunications Union (ITU) was formed, initiating an era of rapid deregulation and upgrading of telecommunications networks around the world, with a lowering of prices for some services and the launch of new ones, such as mobile telephony. The same year marked the first use of SMS messaging and the launch of the World Wide Web, which grew from fifty web servers in January 1992 to over 500 by October of that year.9 In 1992 India removed the barriers that had prevented it from exporting software, opening up the potential for large-scale remote processing of digitized information.

The stage was thus set for the development of a global division of labor in information-processing work, echoing that which had begun to appear in manufacturing work in the previous period. This did not develop overnight, of course. There were many hiccups along the way. Early adopters of ICT-enabled offshore outsourcing encountered many problems, including those created by technical incompatibilities between different systems, inadequate infrastructure, communication problems, cultural differences, resistance by workers and managers, and the difficulty of standardizing complex processes that drew strongly on workers’ tacit knowledge. Although the teaching of global languages and computer skills was actively pushed by a range of national and international bodies, it took time for these to spread. Nevertheless, the 1990s saw a steady growth in offshore outsourcing to developing regions in India and other parts of Asia and Latin America, helped not only by a general growth in delocalizable services, such as call centers, but also by the need for large-scale routine software engineering associated with such activities as the conversion of European currencies to the euro, the explosive expansion of the Internet, and the much-hyped “Millennium Bug.”10

Meanwhile, this was a period both of frenetic growth and of economic instability. The “Asian Tiger” economies rose and crashed in the mid-1990s and at the end of the decade the dot-com bubble ballooned and burst. Nevertheless, use of ICTs spread inexorably around the globe and new industries and companies emerged based on their use. These included the “new breed of multinationals,” as they were described by UNCTAD in 2004,11 specializing in the provision of outsourced business services, global telecommunications providers, media conglomerates, and the beginnings of the giant corporations that now dominate the Internet.12

It was toward the end of this period that telemediated digital communications became part of the taken-for-granted normality of daily life (just as using the telephone had become normalized a half century earlier). While consumers got used to ordering goods online and accessing support via call centers, managers began to be asked by their directors why they had not considered outsourcing as a solution to reducing their costs. More subtly, the idea of work as something unbounded and “virtual” began to take root. With the increasing use of email (which could be checked from any location), the fixed boundaries between home and work were eroded. And with workers increasingly paid, and managed, by results and requirements for “flexibility” ever more likely to be written into job descriptions, the hours spent formally working were less likely to be counted. Young people were increasingly expected to undertake unpaid “work experience” before entering the labor market. Others began to use the Internet for activities that hovered ambiguously between “work” and “play.” Almost invisibly, many of the parameters that had defined a job in earlier periods were dissolving away.

This period can be thought of as ending abruptly with the global financial crisis of 2007–2008. In its aftermath the employment landscape was suddenly very different. The combination of draconian austerity measures with unemployment levels higher than at any time since the Great Depression of the 1930s now presented young people with few options but to accept whatever was on offer to them in the labor market. This was a generation that had grown up taking ICTs for granted as an everyday part of life, as familiar with social media, online games, and SMS messaging as their grandparents were with pen and paper. And, even if the work they were applying for was manual or face-to-face, they were expected to use ICTs for such things as filling in application forms and communicating with employers. ICTs had, in other words, become part of the taken-for-granted environment of all work. The dissolution of clear boundaries between work and non-work and the erosion of formal rules governing work, while still not universal in existing jobs, was becoming ever more prevalent in those that were newly created. This blurriness of boundaries was by no means exclusive to online work, but a generation already primed to accept the interpenetration of “fun,” “education,” and the normal business of life online was ill-equipped to dispute such slippages in relation to boundaries between these activities and work in other spheres.

After the crisis, it was as though the world had woken up to a fundamentally changed reality, one in which a range of trends that had been evident, though not dominant, in the previous period had, almost overnight, become the new normality. The new landscape is dominated by transnational corporations to an unprecedented degree. But these corporations differ in several respects from earlier periods. A glance at the rankings of the world’s top companies gives evidence of some of these trends. First, the global corporate environment is no longer almost exclusively dominated by the United States, Europe, and Japan. Companies based in economies formerly classed as developing play an increasingly important role in shaping the contours of the global economy, and hence global labor markets. No less than sixty-one of the Fortune 500 countries are now based in China.13 The Fortune 500 ranking is based on revenues, which might be regarded as overstating their importance. However, even in the Financial Times ranking, which is based on market value, twenty-three of the top 500 companies are based in China, twelve in India, ten in Brazil, eight in Russia, and five in Mexico.14 Forbes ranked three Chinese companies in the global top ten in 2013.15

Furthermore, many of these international companies operate in fields that were formerly seen as national in scope. These include formerly nationalized utilities (including telecoms, energy, water, and postal services) and public services such as health, education, and back-office services supplied to public administration. They also include the mass media, formerly the preserve of national broadcasting companies, nationally or regionally based newspapers, and small or medium-sized publishing companies. All of these fields, and many others, including retail chains, are now dominated by huge conglomerates. The Financial Times’s top 500 companies include seventeen global mobile telephone companies and fifteen fixed-line ones, fifteen giant media companies, fifteen software and computing companies, and eleven health care companies, all global in scope. Companies providing outsourced services or labor-only subcontracting have also made it into the top rankings. Accenture is number 385 in the Fortune 500 list and Addeco is number 443.

Young people entering the labor market are not only much more likely than in the past to find themselves working for one of these global behemoths; they also do so in direct competition with similarly qualified workers from across the globe. Regardless of where they are located, they have been reconstituted as part of a global reserve army of labor, which can be accessed by footloose employers in two distinct ways: offshoring or migration.16 The bargaining power of these workers vis-à-vis these employers is thereby dramatically reduced in comparison to their predecessors in earlier periods, and their lives, both as workers and as consumers, are increasingly shaped by these corporations, often in ways that the local state has little power to intervene in.

These developments are not, of course, without their contradictions. It would be far too simplistic to suggest a single universal trend—a global race to the bottom unmediated by any contrary trends. Such contradictions can be found at work at many levels: between nation-states, between companies, between states and companies, between companies and workers, and within each of these constituencies. Here I summarize just a few examples.

At the level of national governments, the mobility of capital has introduced new forms of competition between countries to attract foreign direct investment. It is also clear that the internationalization of capital and globalization of markets has brought about a dramatic reduction in the ability of any given national government to exercise the kinds of control over capital that were in place, at least in the more powerful imperialist nations, at the beginning of the twentieth century. I refer here to things like the antitrust laws that enabled states to break up monopolies, and the ability of governments to tax corporations. Since then a number of supranational bodies have been set up to manage the global economy, including the World Trade Organization, International Monetary Fund, World Bank, and the executive bodies of the large trading blocs such as the European Union, North American Free Trade Area (NAFTA), Association of Southeast Asian Nations (ASEAN), and Mercado Común del Sur (MERCOSUR, the Common Market of South America). These have succeeded in driving through regulations that force open national markets and enable the free flow of capital, intellectual property, and trade in goods and social services. However, they have markedly failed either to control the development of global monopolies or to prevent transnational corporations from basing their holding companies in tax havens and using transfer pricing and other mechanisms to avoid the payment of tax in the countries in which they operate. The willingness of national governments to privatize their assets and outsource their public services to profit-making corporations has also resulted in a loss of control of the management of these state services, not only allowing the profits to leak outside national borders but also making it possible for these companies to make use of a global division of labor to provide them, resulting in the loss of jobs for national citizens, with a resulting drain on national resources. These developments taken together are producing a crisis of legitimacy for governments in at least some states, in the process opening up a space for alternative political demands.

At the level of companies, globalization also opens up huge contradictions. The simplification of labor processes and procedures, leading to the production of highly standardized products in locations with low regulation, dubious attitudes to intellectual property, and cheap labor, opens up access to the market to new companies, unencumbered with any legacy costs or commitments to the development of new products. This produces a competitive environment in which profits are dramatically squeezed. Even though they may benefit from outsourcing some of their production to backstreet sweatshops, large corporations have an interest in regulating them when their use leads to this sort of cheap competition. In order to survive, they therefore have to protect their intellectual property and seek constantly to develop new, more complex products that cannot be easily imitated and can be sold on the basis that they are of high quality. In order to do so, they need skilled and creative workers who cannot only help them innovate but will also be loyal to their employers. This in turn produces another contradiction: though on the one hand seeking to discipline their highly skilled and creative workers, extract their intellectual property, simplify their labor processes, and standardize them in the interests of “knowledge management” and “quality management,” corporations also need to keep their skilled, creative workers motivated and encourage a flow of new ideas and a high quality of work. This gives some knowledge workers and skilled craft workers access to privileged positions in the labor market, with some bargaining power, even as others are being ousted from such positions.

These, then, are some of the contradictory features of the new landscape in which labor confronts capital in the twenty-first century. I hope that the essays in this collection will not only contribute to better understandings of this relationship but also point to some of the ways that labor can improve its ability to navigate it and identify new routes toward alternative destinations.


Some parts of this chapter are drawn from the introduction to my article “Working Online, Living Offline: Labor in the Internet Age,” Work Organisation, Labour and Globalisation 7, no. 1 (2013): 1–11.

  1. Creative work is analyzed at greater length in my book Labor in the Digital Economy (New York: Monthly Review, 2014), chapter 5.
  2. This culture of begging and bragging is discussed in Labor in the Digital Economy, chapter 3.
  3. Chapter 6 of Labor and the Digital Economy traces the development of the commodification of public services, linking it to the global restructuring of value chains that is described in the book’s earlier chapters.
  4. For the low and high figures in this range, respectively, see Bart Lannoo,, Overview of ICT Energy Consumption, Network of Excellence in Internet Science, 2013,, and Mark P. Mills, The Cloud Begins with Coal: Big Data, Big Networks, Big Infrastructure, Big Power, report to the National Mining Association and American Coalition for Clean Coal Energy (Digital Power Group, August 2013),
  5. The ways that value is generated online in discussed in greater detail in Labor in the Digital Economy, chapter 7.
  6. Some of the changes that took place over this period are further discussed in Labor in the Digital Economy, chapter 1.
  7. See for example, respectively, Bob Jessop, State Theory: Putting the Capitalist State in Its Place (Cambridge: Polity, 1990); Stephen A. Marglin and Juliet B. Schor, The Golden Age of Capitalism: Reinterpreting the Postwar Experience (Oxford: Oxford University Press, 1992); Alain Lipietz and David Macey, Mirages and Miracles: Crisis in Global Fordism (London: Verso, 1987); and Jean Fourastie, Les Trente Glorieuses, ou la révolution invisible de 1946 à 1975 (Paris: Fayard, 1979).
  8. In the European Union, for instance, the first Utilities Directive (90/351) removed market access barriers to energy, telecommunications, transport, and water, and in 1992 the Services Directive established the principle that public services should be procured openly on the market.
  9. Dave Raggett, Jenny Lam, and Ian Alexander, HTML 3: Electronic Publishing on the World Wide Web (Boston: Addison-Wesley, 1996).
  10. Some of these developments and their implications for city life are explored in Labor and the Digital Economy, chapter 2.
  11. UNCTAD, World Investment Report 2004: The Shift Toward Services (New York and Geneva: UNCTAD, 2004).
  12. Chapter 4 sets out an explanatory framework for the development of this new global division of labor, rooted in classical political economy.
  13. CNN, “Global 500,” CNN Money, July 30, 2013,
  14. FT 500,” Financial Times, 2013,
  15. World’s 500 Largest Corporations: In 2013 the Chinese Are Rising,” Forbes, July 17, 2013,
  16. The complex interrelationship between off shoring and migration was explored in my “Bridges and Barriers: Globalisation and the Mobility of Work and Workers,” Work Organisation, Labour and Globalisation 6, no. 2 (Fall 2012): 1–7,
2015, Volume 66, Issue 08 (January)
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