The Digital Economy

commodities or gifts?

The Net is now the iconic technology of our age. From California, Wired magazine has achieved global notoriety through its claims that the Net will create the sort of free market capitalism until now only found in neo-classical economics textbooks. Everyone will be able to buy and sell in cyberspace without restrictions. States will no longer be able to control electronic commerce which can cross national borders without hinderance. The Net will allow the whole world to realise the American dream of material riches. Coming from California, this neo-liberal fantasy has even acquired a mystical dimension. By releasing the supposed laws of nature immanent in unregulated capitalism, the information technologies will allegedly lead to the birth of a new race of 'post-humans': cyborg capitalists freed of the restrictions of the flesh. Like Victorian factory-owners, hi-tech neo-liberals believe that their narrow self-interest represents the pinnacle of Darwinian evolution.
The Californian ideology is the fantasy of the 'virtual class': the West Coast entrepreneurs and engineers who hope to make their fortunes out of the Net. Yet, Europeans are not immune from the influence of this Californian dreaming. With the collapse of Stalinism, many intellectuals have adopted a stance of post-modern nihilism which offers no alternative to neo-liberalism. Some on the Left even take a masochistic pleasure in seeing all forms of technological innovation as the triumph of capitalist domination. According to these pessimists, the cause of labour is lost in cyberspace. Yet, the hi-tech neo-liberalism championed by the Californian ideologues is itself an attempt to control the Promethean power of human creativity. As global communications have improved, the wider availability of capital and materials has undermined social power based solely on the monopoly control of wealth. Above all, constant technological innovation makes success in the marketplace increasingly dependant on the skills and enthusiasm of the workforce. In the emerging digital economy, nothing is more precious than human ingenuity.
For over two hundred years, the boredom and discipline of the factory system were accepted as the only possible methods of increasing our material wealth. Under Fordism, workers could live better than medieval aristocrats. However, once the consumer society was no longer a novelty, many people started looking for something beyond money. Ever since the '60s, workers have been seeking more autonomy in their jobs and more freedom in their personal lives. Abandoning traditional conservatism, neo-liberals have used marketisation and privatisation to recuperate these aspirations. For instance, talented workers within the hi-tech industries are promised the possibility of running their own companies and enjoying the independence bought by great wealth. If you have a good idea and lots of luck, you too can become a member of the 'virtual class'.
However, this hi-tech neo-liberalism is a false dream for most people. In the USA, average wages have been falling for twenty years. In the EU, mass unemployment has become a permanent phenomenon. Even the lucky few of the 'virtual class' cannot completely isolate themselves by hiding in their gated suburbs and encrypted cyberspace from the social and ecological problems exacerbated by neo-liberalism. Above all, free market solutions cannot remove alienation within the workplace. Under neo-liberalism, individual autonomy is only expressed through deal-making rather than making useful and beautiful artifacts. The history of computing and hypermedia is filled with sad tales of engineers and artists who have sacrificed their creativity to the demands of paper-shuffling. In place of the Californian ideology, what is now needed is a more profound understanding of the impact of the Net on our society. For, instead of being the technological expression of neo-liberalism, the emergence of the digital economy demonstrates the need to create a twenty-first century form of social democracy.
The origins of the Net itself exposes the fairy tale quality of the Californian ideology. Far from being the product of the free market, it was created as one part of a huge military research programme funded by American tax-payers to counter the threat posed by the launch of the Sputnik satellite by the Soviet Union. Like many Cold War inventions, the Net could have remained a official secret. However, when it was being developed within the universities, academics and students hijacked the new technology for their own purposes. From on-line discussion groups through electronic mail to the Web, the most popular features of the Net were developed by enthusiasts. This non-commercial ethos attracted others who began to develop the Net as a new form of community media. Even today, the majority of the material available on the Net is made by amateurs. Although they have produced much of the hardware, it is the entrepreneurs who were the last people to comprehend the potential of the Net. The reason that Microsoft and other corporations are pouring billions of dollars into cyberspace is precisely because they have to catch up with the widespread use of the Net by state-funded institutions and by DIY culture.
The Net, therefore, is not the harbinger of a globalised unregulated marketplace. On the contrary, its profane history exemplifies the miscegenation of state, commercial and community interests within the emerging digital economy. Each sector will have its part to play and each cannot exist without the other. For example, public intervention is needed to ensure that a broadband network linking all households and businesses is built. If left to unregulated market forces, universal access to the new information services will be very slow in arriving. Yet, the commercial potential of the Net can only be fully realised through the construction of the fibre-optic grid which covers the whole population. As with earlier types of utilities, profitable on-line businesses will only flourish through state regulation - and even ownership - of the digital infrastructure.
Similarly, the further development of DIY culture is also necessary. As the history of the Net demonstrates, hacking, piracy, shareware and open architecture systems all helped to overcome the limitations of both state and commercial interests. Whether for political or profit-making reasons, large institutions are still trying to impose their own proprietary controls over cyberspace. Yet, one of the major attractions of the Net for its users is that it is not tightly controlled by any major public or private bureaucracy. Already, a minority of the population can use the Net to inform, educate and play together outside both the state and the market. Once a broadband network is built, everyone will have the opportunity to join this hi-tech gift economy. Most current Net users don't simply download other people's products. They also want to express themselves through their own web sites or within on-line conferences. Unlike traditional media, the Net is not just a spectacle for passive consumption but also a participatory activity.
Ironically, this DIY culture is also one of the essential preconditions for the development of a successful commercial sector within the Net. By allowing people to acquire some basic knowledge of making hypermedia, the hi-tech gift economy is helping to create a skilled and innovative digital labour force. However, it is very difficult to adapt the traditional factory system to managing these new workers. The rapid spread of personal computing and now the Net are the technological expressions of the desire of many people to escape from the petty controls of the shopfloor and the office. Despite the insecurity of short-term contracts, they want to recover the independence of craft labour which was lost during the process of industrialisation. Because of rapid technological innovation, skilled workers within the hypermedia and computing industries are precisely those best able to assert this desire for autonomy.
While neo-liberals can only can promise success to a privileged few, the reemergence of artisanal methods offers a way of working within the commercial sector which most creative labourers can adopt. Already, digital artisans are the people pushing the cultural and technical limits of hypermedia as far forward as possible. Crucially, their virtual artifacts can be easily reproduced and distributed through the Net. For the first time, artisans can take advantage of the economies of scale up to now only enjoyed by factory-owners. Far from being a return to a low-tech and impoverished past, the contemporary revival of artisanship is therefore at the 'cutting edge' of the development of post-Fordism.
The evolution of capitalism has been reflected through the process of technological advance. While classical liberalism depended on coal-mining and metal-working, Fordism produced electro-magnetic and chemical technologies. At the end of the twentieth century, it is now claimed that the Net is creating a new economic paradigm. However, the full benefit of an innovative technology can only be realised by changing the ways of working. The rise of Fordism didn't just depend on the invention of the motor car and other mass consumer goods. Above all, this form of capitalism relied on the adoption of assembly-line methods of production. Even the Californian ideologues argue that the expansion of the Net depends upon the subordination or cooption of workers by unregulated markets. Despite their overt technological determinism, they implicitly accept that the organisation of labour is at the centre of the emerging digital economy.
However, in practice, hi-tech neo-liberalism is hindering the development of a thriving digital economy. For instance, only a small minority can be lucky enough to become members of the 'virtual class'. The creative potential of most makers of hypermedia will still be limited by Fordist methods of production. This is why we should not be intimidated by simple-minded slogans from California. Instead, we need to comprehend the complexity of the mixed economy being produced by post-Fordism. Above all, we have to recognise that human ingenuity is the most important feature of this emerging digital economy. The state, commercial companies and DIY culture are all different ways of realising the Promethean spirit of human creativity. Under Fordism, the factory worker was seen as a heroic figure - the embodiment of hope of a better future. In contemporary society, the digital artisan has taken over this role. Whether producing inside the public, money-commodity or gift economies, digital artisans represent a future centred on skilled, creative and autonomous labour. The promise of the digital economy lies not just in the practical potential of the new information technologies, but, more importantly, in the emergence of this new type of worker. This is why the digital artisans are pioneers of a social democracy fit for the twenty-first century.
A translated version of this article appeared in Freitag, 18th July 1997.