Friday, 3 August 2018

Paul Mason's Postcapitalism - A Detailed Critique - Chapter 5(6)

Exogenous Technological Change

Paul then turns to the work of Paul Romer. I have discussed, in passing, Romer some time ago, in a response to Paul Cockshott. The point that is of significance, here, however, is Romer's concept that technology, or more specifically technological development, cannot be treated as an exogenous variable. It is essentially the same argument I have previously made, and also that flows from both Marx's and Kondratiev's analysis. 

Although technological development goes on all the time, at certain points, it moves forward more rapidly. Why? The point I have made, based upon Marx's analysis in Theories of Surplus Value, and Capital III, is that when existing labour supplies start to get used up, towards the end of a period of extensive accumulation, wages rise, and this squeezes profits. Capital then engages in a splurge of research and development to produce new labour-saving equipment. It takes around ten years for these new base technologies to be developed, and then they begin to be introduced, as a replacement for existing equipment, during a period of intensive accumulation. So, as Romer says, in Endogenous Technological Change, technological development cannot be treated, as Schumpeter does, as being an exogenous factor, which thereby causes conjunctural shifts in the long wave cycle, but is itself a function of market forces, and conjunctural shifts within that cycle. 

But, Romer also concludes that information technology is different from previous technologies. Romer basically defines information as a set of instructions, and as discussed earlier, those instructions, once set down, somewhere, for example, how to produce some new drug, can be freely copied. If the greatest proportion of value comes from the labour of those who produced the initial set of instructions, then this means that the value can never be captured, in the price of all these copies. In fact, this idea was not new. Marx has discussed it a century earlier, in relation to scientific labour

The answer to this, as discussed earlier, has been to try to prevent copying by various means. It was always illegal to record music from the radio to your tape recorder, but impossible to enforce. Instead, the DJ's would talk over part of the track and so on. But, the real issue here, as I will discuss later, is an attempt to maintain monopoly prices, so as to return first mover advantage. It is only the same principle that Marx discusses, in Capital I, whereby a firm introduces a new machine that reduces its unit costs of production/individual value of output, whilst it sells the output at the market value, thereby obtaining surplus profit/rent. Once all producers introduce the machine, the market value itself falls, and the surplus profit/rent disappears. 

Essentially, it comes down to an attempt to maintain rents, including those rents that are shared with high value labour, such as with professional footballers, celebrity chefs, film stars etc. 

Paul sets out a brief history of computers, operating systems and software. The basic antagonism described above, of the attempt to protect rents/surplus profits, from first mover advantage, as opposed to the inevitable attempt of market capitalism to burst apart such monopolies, and to remove those rents, via competition, and an expansion of output, is described in relation to the approach of the big tech companies, on the one hand, and the Open Source movement, on the other. 

Paul writes, 

“A staggering 70% of all smart phones run on Android, which is also technically, Open Source. This is in part due to an overt strategy by Samsung and Google to use Open Source software to undermine Apple's monopoly and maintain their own market position, but it does not alter the fact that the dominant smartphone on the planet runs on software nobody can own.” (P 122) 

But, does this sound familiar in another context? In fact, as Marx wrote, 150 years ago, this itself is the characteristic of socialised capital, whether that socialised capital takes the form of a joint stock company, or a co-operative. These socialised capitals belong to no one. They constitute a legal entity in their own right. The capital belongs to the company itself, which as Marx points out, consists of the associated producers that comprise it, and who can change over time. It is they who should exercise control over it, and yet this should does not automatically become an is. In other words, it should be the workers and managers who exercise control over that capital, but it rarely is the case that they do so. 

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