Edwin Bendyk
THE CONTRADICTIONS OF COGNITIVE CAPITALISM

Things were supposed to be good and getting better with every day, as declared by prominent American futurologists Peter Schwartz and Peter Leyden in their powerful text "The Long Boom: A History of the Future, 1980-2020", which was qiuckly expanded into a book under the same title. The authors argued that the world is facing a unique opportunity of permanent growth and sketched an optimistic perspective of the future up to the year 2020.
Premises on which they based their optimistic scenarios were simple and self-evident. The 1980s began a new era in history; personal computers appeared on the scene, while the enlightened US government decided to break the AT&T monopoly. A new era of decentralized industry and information-processing commenced.
Although few understood consequences of these decisions at the time, they served - according to Schwartz and Leyden - as fundaments for a new socio-economic revolution, which triggered the birth of network society and networked economy. Paired with the geopolitical processes of the time (i.e. the fall of communism in 1989), these phenomena accelerated world integration. The fall of the Iron Curtain opened wide the gates of capitalist paradise to the billions of ravenous barbarians from the East.
In consequence, many pro-growth factors became miraculously intertwined. Firstly, a digital technological breakthrough that had occured provided new tools for increasing productivity of intellectual labor. Thus, the innovative potential of information societies grew, and more innovations means bigger economic efficiency and quicker progress. Secondly, the growth of telecommunication networks stemming from their deregulation and demonopolization enabled easily and cheaply shared information, which has greatly expedited the process of diffusion of innovations and knowledge. Global integration has finally opened the market to free flow of capital, goods, jobs and services.
Actually, something much more significant had happened, as the authors of the 1994 manifesto, "Magna Carta for the Knowledge Age" had pointed out: "The central event of the 20th century is the overthrow of matter. In technology, economics, and the politics of nations, wealth - in the form of physical resources - has been losing value and significance. The powers of mind are everywhere ascendant over the brute force of things." A matter of superior importance is that these very words opened the declaration of the Republican Party in their election campaign centered around dematieralization, which led to their historical triumph in the 1994 Congressional elections. Very soon reality confirmed the power of Republican Magna Carta's political-cilizational vision. Just one year later, Netscape's stock-market debut ushered the era of the New Economy, whose immaterial character would possess traits other than that in classical industrial economy. By definition, economy of goods is limited by the availability of resources, while immaterial economy is virtually unlimited, as it relies on the supply of ideas. The only potential obstacles are posed by the demand for the growing supply of symbolic goods and financing capacities of the demand desired.
Innovations adress all of these problems. Financial innovations involve creating new instruments that are able to fulfill consumers' wishes through evermore subtle mechanisms of credit and debt. Marketing innovations involve eroticizing the demand and linking consumer wishes to insatiable desire. In his works on the hyperconsumption society, French philosopher Pascal Bruckner argues that Marquis de Sade prefigures the model participant of the contemporary market. The interminable acts of ejaculation delivered in more and more perverse manners are nothing else but a vision of an ever-consuming society. The whole innovative energy is invested into the search for "uniqueness", or mass production of unique sensations that would satisfy the successive whims.
Not everyone was deceived by the new gnosis that heralded ultimate victory over matter and the possibility to create an earthly paradise. At the time when "Magna Carta for the Knowledge Age" was being drafted, more skeptical analyses on immaterial economic growth hit the bookstores. According to these, growth that goes hand-in-hand with deindustrialization in developed countries will inevitably involve the dawn of a 20/80 world, in which only a fraction of the population capable of work will be professionally active. Jeremy Rifkin is heralding "the end of work", but proponents of the new gnosis refuse to give in to this pessimism.
The "end of work" thesis is nonsense, they argue. True, restructuring is necessary, just as it was in the times of transition from agrarian to industrial societies, when throngs of peasants moved to cities to take their place at factory conveyor belts. It is now high time to leave conveyor belts behind and move to the services and creative industry sectors. The power of innovation and unlimited supply will help replace and outnumber job offers connected with material by with job opportunities in immaterial labor.
Up until the crisis of 2008, statistics seemed to validate this thesis. In the United States, world's most avant-garde economy, the economic machine functioned in the state of virtually full employment. No matter that its structure as compared to that of the industrial period had changed drastically; well-paid industry jobs were replaced by poorly paid positions in commerce and simple services. Other developing areas included the advanced services and creative sectors, which offered high incomes and even higher risk connected with the market's fluidity.
Closer inspection of the US economy in the first decade of the 21st century clearly shows that it grew mainly thanks to two of its sectors - namely finance and the so-called copyright industries, which is a branch of creative economy (with the software manufacturing sector) - which accounted for ca. 80% of the dynamics of growth in American GDP. The remaining sectors, such as air, chemistry and vehicle industries have managed to remain above-surface at best. One could hardly ask for better validation of the thesis that the time of New Immaterial Economy has come.
So what started to happen in 2008 after the 2007 prelude connected with the US mortgage crisis? Or, to put it differently, how come the menacing gnosis endured for so long and is still holding strong, despite the fact that its foundations completely failed the reality check? How did so many serious people occupying key positions in public life worldwide become lured by the capitalist vision of an earthly paradise?
The question deserves all the books that have been devoted to it. However, any sensible answer must acknowledge that the final decades of the 20th century created a systematic conjugation of the political, economic and functional interests of actors in the global alignment of powers, which was further justified theoretically and ideologically by the neo-classical economic doctrine and the "new spirit of capitalism" respectively.
Political interest resulted from the necessity to pay the debts connected with the US-Vietnam war. This could be done only in one way, which had already been tested by the likes of emperor Charles V, i.e. through inflation. "Dematerializing" the financial system by taking US dollar off the gold standard was enough - and this decision was made by Richard Nixon in August, 1971. The 1970s were a period of hyperinflation and two oil crises. On the one hand, hyperinflation helped relieve US debt, but also as a social phenomenon it bluntly legitimized the monetary approach to public finance, which aimed at fighting inflation at any cost, even that of economic growth and employment.
This view of inflation results more from the group interest of the baby-boomer than from wisdom. In the 1970s they were still too young to care about inflation. However, in the 1980s they were mature enough to realize that inflation poses the biggest threat to their retirement plans. And thanks to its size, this generation holds enough power to turn their worries into political reality.
Additionally, this is also the generation that lived through the 1968 revolution and implemented its values, which were to be soon discovered by new capitalism. French sociologists Luc Boltanski and Eve Chiapello present how that which had been an expression of capitalist criticism in the 1960s, has become an integral part of the capitalist spirit from the late 1980s onwards. Marketing textbooks were soon employing the language of individualism, opportunities for self-fulfillment and creative spirit. Full-time employment? Isn't it better to be "an artist of one's self" and an entrepreneur of one's destiny, uninhibited by the shameful employee-employer relationship?
1968 slogans served as a basis for neoliberal ideology, which promotes full privatization of assets, risks and liabilities. Hence, retirement systems were privatized and individual assets diffused so that the existing class division would disappear to form a single class consisting of rentiers and owners who would live less from manual labor and more from either the capital accumulated on their private investment accounts, growth in real estate value and work of the creative mind.
Naturally, these would be merely theoretical speculations were it not for the structural change after the fall of the Iron Curtain that involved the aforementioned global integration. A theoretical possibility became a tempting reality - manual labor migrated to the developing countries, following the shifting capital that roams the world in search of highest investment returns, or places where work is cheap, while the quality of the human capital relatively high and involves no outside costs such as those connected with environmental protection.
Inhabitants of the developed countries felt a three-fold positive impulse caused by the opening of the global economy: prices of material goods went down, the value of investment accounts in their capital and retirement funds went up and - as a consequence - so did the value of real estate. An ideal situation to take up creative and immaterial work, which is to a large extent - as Karl Marx would argue - unproductive. However, Marx's comments pertained to a value theory that becomes meaningless in a postindustrial network economy. Manuel Castells, network society's most prominent theorist, explains: "the old question of industrial society - indeed, the cornerstone of classical political economy - namely, 'what is value?' has no definite answer in the network society. Value is what is processed in every dominant network at every moment in every space according to the hierarchy programmed into the network by the actors acting upon the network. Capitalism has not disappeared, but it is not - against ideologically inspired perception - the only source of value in the global town."
In simpler terms, value is an expression of power. Added value that Apple receives for its iPads and iPhones does not stem from innovative genius of the late Steve Jobs, but is derivative of the company's position in the global division of labor, the latter being mainly derivative of the hegemonic role of the United States. The few hundred dollars that Apple gets from selling each device cover the cost of immaterial labor conducted by creative sector employees who are responsible for the design, software, etc., and still leave something to put into the cash register. In Lexus and the Olive Tree, Thomas L. Friedman explains what makes this kind of game possible (in my loose interpretation): we live in the new world order called globalization, whose ideology is the free market, where the visible fist of the US Army armed with McDonell-Douglas aircrafts hides behind McDonald's corporation.
Here we can already find the first clue to the answer on the question of sources of the current crisis: when power wanes, so does the ability of collecting surplus added value from the position occupied in the global system. The 2008 crisis resulted from miscalculations of American political elites. To jog your memory, in response to the recession of the early 2000s after 9/11 attacks and the burst of the Internet bubble, Bush encouraged Americans to increase their consumer spending and thus stimulate the economy. And in order to increase Americans' purchasing power, Bush decided to prove that the United States is still a hegemon wielding global power and bonuses connected with this title. The war in Iraq disproved this claim. Furthermore, Bush could not resort to the cure for horrendous debt used by his predecessor Nixon - paying debts through inflation was impossible. Moreover, we see the emergence of another gloomy truth, as described by Andre Gorz, one of the most important theorists of economy and immaterial labor. "Knowledge provides perspective for evolution of the economy towards the economy of plenty, that is towards an economy that requires less and less direct labor and distributes less and less legal tender. The exchange value of goods decreases and sooner or later must lead to a decrease in monetary value of the produced wealth and thus to a decrease in profit. The economy of wealth is steering itself toward freebie economy and forms of production, cooperation, exchange and consumption that base on reciprocity, community and new forms of money. 'Cognitive capitalism' is a crisis of capitalism par excellence."
In other words, cognitive capitalism founded on exploitation of immaterial cognitive labor cannot exist as capitalism, because the form of exploiting live labor that commodifies intellect, affects, creativity and human communication acts is unsustainable for macroeconomic as well as psychological reasons. Precarization of labor, proletarization of cognitive vocations resulting from standarization and automatization are just symptoms of a disease that is eating away the socio-economic system at the turn of the centuries. The crisis that began in 2007 and 2008 has revealed that the disease is in its end-stage, which was proclaimed by the likes of Immanuel Wallerstein. However, we are still afraid of the diagnosis, which is why mainstream solutions will not cure the situation. Problems of precarization will not be solved through changes in the labor law, as it seems that sustaining the system in this shape can only lead to further decrease in labor supply and chronic lack of labor.
In this light, neoindustrialization ideas that are now sprouting up in Great Britain and Germany seem more reasonable. According to these, neoliberal gnosis must be abandoned in order to return to real economy that would serve as basis for a new, green capitalism funded on a new dispersed energy infrastructure and more extensive use of social capital and local resources. However, regardless of the ideas for the future, the price for the gnostic predilection of the last few decades will be very high.

translated by Gosia Nowicka

EDWIN BENDYK (1965) - a publicist dealing with the impact of technology on social life. He writes for the weekly "Polityka". He is a member and co-founder of the Association of Stanisław Brzozowski. He lectures at Collegium Civitas and the Centre for Social Studies of the Polish Academy of Science. Director of the Research Centre of the Future at the Collegium Civitis. Member of the Council of the Modern Poland Foundation. Author of books: The poisoned well. On power and freedom (2002); the Antimatrix - man in the labyrinth of the web (2004); Love, War, Revolution. Sketches for the times of the crisis (2009).