Image conceptualizing the global IT economy taken from the "The Big Picture" think tank.
The Internet has brought about profound changes in how people interact in both the developed and developing world, it has altered how we think, shifted how entertainment is consumed and produced. The Internet has also created massive economic upheaval; hastening globalization, introducing new business models and erasing old practices. It is challenging capitalist assumptions and creating new stratospheres of wealth and inequality. Yet, even as the Internet strengthens and extends the clench of capitalism, it has also acted as a catalyst for conceptualizing alternate approaches to socioeconomic life. The Internet has huge potential and was quickly seen as a way to upend the capitalist framework, however, the Internet was also quickly co-opted into the capitalist system and has resulted in heightened inequality. As a result there has been a reflexive backlash that attempts to reconcile how the Internet settled into its current framework and how that framework should change. In this paper I will discuss how Tiziana Terranova and Jaron Lanier conceptualize the economic agency of Internet and what they think should happen to the stratified hierarchy that they agree the Internet has strengthened and facilitated. I will argue that although the Internet has changed the economy, it has not created a free or gift economy, as argued by Chris Anderson and his ilk, nor that the online economy should be purely capitalist as envisioned by Lanier, I will conclude by agreeing with how Terranova explains the dynamic Internet market place and raise questions about what this means for society and the future.
Capitalism creates inequality. By default the system dictates that there will be winners and losers. Part of this flaw is a result of the impossibility to reconcile a fair exchange of goods and services. Control over necessities swiftly creates divisions with some having more access to goods than others. This leads to the separation of individual means and thus an economically unbalanced system. The inherent inequality in practiced capitalism is by no means exclusive to capitalism, but it is particularly acute, as has been demonstrated by the many and ongoing societal capitalist experiments. Furthermore, as capitalist experiments are ongoing it is possible for the system to improve, decline, collapse, strengthen, and oscillate. Today the extent of capitalisms convolutions are being displayed in the systems evolving relationship with the Internet.
The recent development of the Internet has made an alarming turn towards extreme winner(s) take all capitalism. This has accelerated the fragmentation of the populous, extending and strengthening the preexisting hierarchy. Lanier draws attention to this trend, writing, “while the relative number of desperately poor people is decreasing income differences between the rich and the poor are increasing at an acceleration rate” (Lanier, 77). He proceeds to liken this development to a short of neo- feudalism, where the gatekeepers, architects, and mass manipulators of Internet systems can be likened to new royalty and the scrolling, clicking, producing masses, whose content is controlled by the new royalty, are the new peasants.
Lanier’s high minded analogy may not be shared by other academics exploring the shifting socioeconomic mesh, but the underling reality of his concept has traction as the Internet is creating new global class of ridiculously wealthy elite who owe much of their cash to opportunities facilitated by digital networks. Terranova has a much more nuanced view of the economic dynamics of the Internet then Lanier, but nonetheless recognizes the same short of problematic division of labor that have been created in the already multiple incarnations of Internet capitalism. She identifies how the Internet has created unbalanced labor, in the form of those who work untenable undercompensated hours for Internet companies. Terranova calls these toilers netslaves (Terranova, 73). Additionally, she explores the capture and control aspects of the digital economy, in which capitalist agents gain and determine the fate of online information and in extension online behavior. This means that similar to Lanier’s view of the lords and peasants of online computing, Terranova identifies that Internet capitalism has extended and strengthened capitalist divisions of labor.
Terranova explains that the Internet has already seen evolving models of capitalism. In the early days of the Internet techno-libertarians and Silicon Valley neo-hippies envisioned the Internet as a way to subvert the inequality that the mainstream capitalist system created. Surfacing from the early pools of Internet messiahs, Lanier writes, “one of our essential hopes in the early days of the digital revolution was that a connected world would create more opportunities for personal advancement for everyone” (Lanier, 81). Overwhelmingly, those at the vanguard of digital networks believed the new systems would be liberating and limit inequality by creating new fairer methods for transferring goods and services. Yet as Terranova and others explain, the utopian collectivist casting of the Internet was swiftly co-opted by the heady get rich quick (then use the new wealth to address societal problems) neoliberal ideology of the ‘90’s and early ‘00’s.
This New Economy, which ruled during the dotcom era, was notable for its opportunistic conceptions of access, the way it subverted labor and crashed into the reality of demand. Terranova argues that the Internet economy has since transitioned into the digital economy, which is marked by a paradigm of a mutant offshoot of the gift economy and extreme capitalism. Terranova stresses that the forms of Internet capitalism that have risen should not be considered anomalies, but should instead be seen a stages in the evolution of the capitalist economy. From this it follows that the foundations and trappings of the earlier incarnations remain, Terranova explains,
The high-tech gift economy is a pioneering moment which transcends both the purism of the New Left do-it-yourself culture and the neoliberalism of the free-market ideologues: money- commodity and gift relations are not just in conflict with each other, but also co-exist in symbiosis (Terranova,77).
In other words not only does the digital economy have aspects of the New Economy, but it also maintains aspects of the early libertarian semi-communist gift economy. Individuals can use a site like “Craig’s List” to find free goods, and have access to thousands of academic articles without paying for them, yet a click away is the biggest shopping mall in the known universe which extends the now classic consume/ control dichotomy that defines contemporary capitalism. According to Terranova, these two seemingly paradoxical systems can and do co-exist. Regardless of the long term feasibility of this dichotomy, it is currently causing massive tension.
Many have tried to reconcile the divergent aspects of the Internet economy. Terranova unhappily settles on co-existence, while others, perhaps still wearing the rose tinted glasses of the early Internet years, struggle to marry the different branches of the Internet economy. Chris Anderson thinks the Internet has created, and is continuing to facilitate the implementation of an entirely free economy. In Anderson’s mind, on the Internet, everything can, should, will, and is free. Anderson argues that the Internet provides the means for commodities to be exchanged for free as auxiliary exchanges can account for the value of the desired content or object. Anderson writes, “it’s now clear that practically everything web technology touches starts down the path to gratis, at least as far as we consumers are concerned (Anderson, 3).” Anderson draws on the massive and infinitely expanding amount of ‘free’ content accessible online to argue that the Internet has and will continue to create a system in which consumers no longer need to pay for the goods and services they are attempting to acquire.
However, Anderson’s attempt to clutch the early gift-economy models of the Internet begins to shred when market realities are accounted for. Anderson fails to fully conceptualize the distinction between written and unwritten cost. He associates monetary cost with total cost and discounts the value of cost benefit rationalizations that consumers are forced to make in the type of barter economy he is inadvertently describing. Trading personal information for the privilege to create a Facebook page is a cost, having to view advertisements while viewing that personal information on Facebook is also a cost. It may be hard to trace some Internet charges that cost time and non-monetary informational commodities, but the difficulty of detangling said relative costs, which are sacrificed in exchange for Internet content, is by no means a free exchange as there is no mediator balancing the cost in relation to the benefit. This view could be critiqued, as it implies the even a pure gift economy would inevitably create tradeoffs that could disadvantage those engaged in the exchange.
In a ‘free economy’ capital generating opportunities on the Internet would be limited, as there would be no direct connection between the provider and consumer, but Anderson says he is not stupid enough to think this is a reality. He writes, “just because products are free doesn’t mean that someone, somewhere, isn’t making huge gobs of money” (Anderson, 5). Anderson uses Google as an example of how a company can be profitable without charging anything. Google allows anyone to use its search engine. Anderson argues that this means the system is free. In reality, to use Google one must sacrifice information to machine algorithms while also viewing ads constructed to sway behavior. This is by no means free, but some argue that the avenue of capital generation opened by online advertising is a good way for capitalism to exist online.
Lanier, who is locked in a capitalist framework, dislikes online advertising, but admits it is a great step towards the capital driven content approach he advocates. Lanier thinks that the free content and hive mind approach to the Internet is a massive and imminent threat to humanity. Lanier worries that the remix, repost nature of the Internet, and the reduced lack of incentive to create when there is no monetary incentive, will turn humans into intellectually mute slaves to the mainframe. He writes that within the current framework, “human creativity and understanding, especially one’s own creativity and understanding, are treated as worthless. Instead, one trusts in the crowd...the algorithms remove the risk of creativity…” (Lanier, 99). Lanier’s paranoia of the loss or even potential loss of creativity rests on extremely tenuous ground. Under every form of modern and pre-modern governance, that has existed and been implemented for more than a few years, creative masterpieces have been produced. There is no reason that the spectacle of the current economic transition Lanier and his peers helped usher in will change the deeply rooted human desire to create.
Regardless, Lanier tosses around examples of free creative content like illegally downloaded music and “Youtube” videos to claim creativity is on its deathbed. He argues there is no longer mass incentive to create. Lanier maintains that we are in the extraordinary position to head off the end of creativity. He believes this can be done by re-incentivizing creative human produced content like magazine articles and his music by creating a pay to play system in which all content is accessible for a price, he believes that if a stronger capitalist system were adopted, “creative expression could then become the most valuable resource in a future world of material abundance created through the triumphs of technologies” (Lanier, 103). In his ideal system artist and other content producers –like writers- would become rich. Lanier thinks that re-incentivizing real original content, rather than rehashed noise, would help offset the new elite rulers of the Internet economy. Lanier neglects class access problems and thus knowledge fragmentation that could proliferate under his system.
Lanier also makes several good points about the problem of putting too much faith in machines, drawing, for example, on the 2008 finical crisis. Unfortunately, he also puts too much credence in the alleged democratizing nature of capitalism. Terranova, who brushes on a Marxist approach to the internet economy stresses the increasingly problematic nature of digital capitalism, she writes, “the digital economy cares only tangentially about morality” (Terranova, 96) instead the economy cares about mass production, here she over laps with Jodi Dean who argues that the Internet is creating meaningless loops of reflexivity. Terranova worries about the increasing capture and control aspect of the Internet. She draws attention to the uncomfortable reality that both the gift exchange aspects of the Internet, which have netslaves engaged in unbalanced labor, and the capitalist functions of the system, which are creating new levels of societal segmentation, are problematic. People are increasingly devoting themselves to this flawed system.
The mass adoption of the Internet has been exciting to many who actively consider the socioeconomic dynamics of life as the new communication system provided alternate ways to approach the exchange of goods and services. However, as I have argued in this paper the Internet cannot be conceptualized a homogenous economic system, but instead needs to be viewed, as explained by Terranova, as an evolving dynamic system. The system is constantly changing and has yet to become locked in to a concrete form. It is unclear if a cohesive economic system will emerge on or through the Internet. Some aspects of the system that are currently divergent, yet still coexist and seem to have already been locked in. Yet it is hubris to believe that once in place a system cannot be changed, or if necessary be overthrown. None of the proposed Internet economic frameworks explored in this paper are optimal, nor would they do much to shift the current expanding hierarchy of wealth. This means people need to actively engage in finding ways the system can improve. The Internet it is here to stay.
Works Cited
Anderson, Chris. "Free! Why $0.00 Is the Future of Business." Wired Magazine. Conde Nast, 25 Feb. 2008. Web.
Dean, Jodi. "Hive Meltdown Imminent (from Fractal Ontology)." LocationS11. <http://locations11.blogspot.com/2011/03/ask-about-autonomous-university-5-exam.html
Dean, Jodi. Blog Theory. Cambrigde: John Wiley And Sons, 2010. Print.
Lanier, Jaron. You Are Not a Gadget. New York: Alfred A. Knopf, 2010. Print.
Shirky, Clay. "Shirky: Power Laws, Weblogs, and Inequality." Clay Shirky's Writings About the Internet. 8 Feb. 2008. Web. 08 Mar. 2011. <http://www.shirky.com/writings/powerlaw_weblog.html>.
Terranova, Tiziana. Network Culture: Politics for the Information Age. London: Pluto, 2004. Print.
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