Friday, January 9, 2015

Initial thoughts having watched American Sniper

The best parts of the film are those addressing PTSD; although the resolution via Personal Mission Accomplished is a bit too much 'Murica ra-ra. Bradley Coopers' acting was phenomenal. Not my cup of ideology, but a better film than anticipated.

If the film stays with me perhaps I'll flesh this out. 

Saturday, January 3, 2015

Technical Change and The Digital Mode of Production

Minor technical change can have significant social ramifications. For example, once they have legal and cultural acceptance it will be a matter of time until automated vehicles displace professional freight drivers. Additionally if urban car users move from direct ownership to subscription based models it is likely that one will see job losses in satellite support services sectors like small mechanics, auto parts stores, car washes, dealerships, administrative positions in government licencing departments and insurance companies.

With its internet enabled dissemination and open source collaborative culture, combined with the ease of digital piracy, local additive manufacturing such as 3D printing could make certain kinds of batch manufacturing processes and supply chains practices obsolete. Its relative cost efficiencies could price certain inventory, shipping, and assembly models out of the market (Bernstein and Farrington, 2014.) Again, there are real prospects of the reduction of labour associated with current manufacturing activities.

Similarly, the ramifications of massive online education displacing residential and commuter higher education are not limited to tenured professors. Rather they include administrators, librarians, secretaries, education technology support staff, maintenance workers, health and recreation staff, dining hall workers, and so on. All of these positions depend upon undergraduates to attend universities in person.

These three cases point to some of the perennial problems of labour, which are a reduced labour demand, efforts to induce labour docility, and the creation of a reserve army of labour. At the same time, companies are using this technological development to hold an axe over the head of their workers, claiming the need to reduce wages. In short, persons are exploited until rendered surplus. Based upon orthodox assumptions about unemployment these developments will only aid in the proliferation of social problems. This proletarianisation arises from credible predications and potential outcomes as known consumer level technological developments influence the workplace.[i] It excludes the potential impact of budding research programs such as quantum computing and the kinds of developments hidden in military and corporate research programs.

Likewise, digital communication with its low transaction costs enabled global financial speculation. Herein the infrastructure of money became decentralized and global, transforming not only economic sectors but whole economies. Initially Wall Street sought to capitalise on these possibilities through twenty four hour day trading, improved records management, investment into emerging markets due to the ability to keep tabs on operations, and premature investment into new technologies which eventually lead to the dot com crash of 2000.

Following the dot com crash, there developed a new regime of low interest rates. Bankers took advantage of these conditions and invested into property speculation and debt. Returns on investments were high because of a high interest rate on the debt. And should defaults occur, and asserts could be seized or refinanced, thus yielding better returns. In the wake of investigation into 2008 financial crisis, it was found that banks deliberately financed those unable to hold onto the asserts. This is now known as sub-prime mortgages, and they were bundled with other loans and packaged as investment funds. While selling these products to clients, banks themselves insured against these, but when strain was put on these banks and financial institutions who were over-exposed to these risks.

The digital market itself is a de facto rent economy; contracts are used to ensure that product tampering or modification voids use, and that rights of resale do not exist for certain items. This is the business model when you sell copies of things. For example digital rights management limit how people use the items they purchase. In this sense the relationship between the producer and the consumer has shifted. The effects of this re-orientation were anticipated by Adam Smith. He wrote that,

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.

In digital capitalism the rights of the producers trump the rights of the consumer, and economic power asymmetry favours producers. It manifests in continual extraction of labour time from a population. The economy is in service of the power elite, not in service of distributing goods and services in an efficient manner for reasonable profit.

In an era characterised by digital production and 3D printing the key conflict is over intellectual property. The battle for ownership over the means of production now occurs with ideas and the processes that facilitate that production and exchange. For digital items it makes little sense to say that theft applies. The sanction and badness of theft rests on depriving a person of the means to reproduce their life, and this is particularly acute in circumstances where the person earned the item. But such judgment cannot apply with digital items because it could be easily reproduced and thus no person is deprived. It hardly makes sense to say that a digital production has exclusive rights.

By no means does digital production overshadow types of extraction and production activities, but it nevertheless is a moment in which divisions of labour are clearly visible. On the one hand, as development economists have noted, there is a digital divide between along a north-south axis, there is a divide within northern countries and overlays and is indicative of other types of inequality, but we also see a divide between digital creators, producers, and digital consumers, where the rich continue to enrich themselves.

Facebook claims that although it directly employed 3,000 workers, it indirectly created 232,000 jobs in Europe in 2011 (Naughton 2012.) Apple claims nearly 600’000 jobs “created or supported” (Apple 2014.) This is excessively vague, and they do not show how they calculate this figure. But we can be suspicious about the quality of work of this figure. Apple claims nearly 300’000 iOS app economy jobs. But reports show that 1.6% of app developers make more than the other 98.4% combined (Bradshaw 2014.) And approximately half of these developers earn less than $100 per app per month (Bradshaw 2014.) Granted, a developer could have more than one app, but given the aforementioned figures there is little reason to think that the vast majority of Apple’s 300’000 developers are making a livelihood from this work. With regard to other jobs, at Amazon warehouses workers are monitored and directed by tracking devices, and are simply there to push trolleys (see O’Conner, 2013.) It is not decent work. By contrast, the founders, executives, engineers, and shareholders of Apple, Amazon, Google, and Facebook et el are making money incredible amounts of money, but these persons constitute a tiny percentage of the workers who work in or support this economic activity.

This is clear when one examines the role of tax havens in international system. As one study found, in the early 1990s, tax havens accounts held “more than 20 percent of US foreign direct investment, and nearly a third of the foreign profits of U.S. firms.” (Hines and Rice, 1994.) The digital economy has put this into overdrive. As The Telegraph reports

Amazon’s UK operation generated £4.2bn of sales last year, but it used a subsidiary in Luxembourg to help it reduce its corporation tax bill in the country to just £2.4m in 2012. According to documents filed at Companies House, the company received £2.5m in government handouts over the same period (Rushton 2013.)

Amazon’s response was the company “pays all applicable taxes in every jurisdiction that it operates within. Like many companies, Amazon has received assistance in relation to major investments in the UK.” Google’s filling show on the other hand how they, “avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before” (Drucker 2012.)

These tax havens are little more than the commercialisation of the sovereignty of fairly fragile or welcoming minnow states; in short deliberate attempts to withhold money from redistributive exercises. The money is periodically repatriated under tax amnesties but without significant penalty. Corporations act without regard for society, and the state ‘won’t control’ either the practice or these minnow states. This is but a rigged system, which are pure abuse, serving the rich and powerful.
So these technological developments are not equalizers; they amplify the inequalities we already know too well. So it is likely that there will be severe economic restructuring as the digital mode of production becomes the basis of society.

[i] An adequate political response to proletarianisation does single the person not rest with telling people that they need to find low-wage easy-entry work, in part because this kind of work is hard to come by as it is, with little to indicate that this might change. And if there are insufficient jobs, there are insufficient jobs. So it is morally callus to simply tell people to work harder or longer hours. Lastly, not everyone can perform difficult, high skill, high demand jobs. So it seems contrary to human flourishing to enrol people in meaningless make-work projects as it wastes valuable human potential and time that a person could use to enrich their life.