<nettime> joxe's digest [henwood, snelson x2]

["nettime's_empiricist" <nettime@bbs.thing.net>]

Doug Henwood <dhenwood@panix.com>
     Re: <nettime> re: joxe's empire of disorder (etc)
"Kermit Snelson" <ksnelson@subjectivity.com>
     intellectual property and economics (was joxe's empire)
"Kermit Snelson" <ksnelson@subjectivity.com>
     abstraction and materialism (was joxe's empire)

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Date: Sat, 7 Dec 2002 15:44:54 -0500
From: Doug Henwood <dhenwood@panix.com>
Subject: Re: <nettime> re: joxe's empire of disorder (etc)

McKenzie Wark wrote:

>3. The abstraction of information from the thing, which is the basis 
>of the current phase of the commodification of information and, i 
>argue, a new fraction of the ruling class, the vectoralist class.

What does this mean? Just what share of an advanced economy's 
production does this apply to? Software and entertainment products, 
for sure, but after that, the list gets harder to make. 
Pharmaceuticals, chip designs, avionics - the IP is inseparable from 
complex manufacturing processes and highly skilled labor. Sometimes I 
think a bunch of intellectuals have self-interestedly talked 
themselves into believing that ideas in themselves are of monetary 
value.

-- 

Doug Henwood
Left Business Observer
Village Station - PO Box 953
New York NY 10014-0704 USA
voice  +1-212-741-9852  
fax    +1-212-807-9152
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email  <mailto:dhenwood@panix.com>
web    <http://www.leftbusinessobserver.com>

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From: "Kermit Snelson" <ksnelson@subjectivity.com>
Subject: intellectual property and economics (was joxe's empire)
Date: Sat, 7 Dec 2002 12:56:01 -0800

In response to my:

> >I disagree with Ken here.  Knowledge-based parts of the
> >economy (aerospace, pharmaceuticals, software, telecoms,
> >etc.) are characterized by increasing returns on the margin,
> >not by the decreasing returns characteristic of resource-
> >based industries (agriculture, mining, etc.)

Doug Henwood writes:

> Yeah that was the line during the boom, but how true is it?
> Boeing has a profit margin of 3%, which is five times better
> than GM's, but only a fifth Merck's, and not all that great.
[snip]

Profit and increasing returns aren't the same thing.  It consequently isn't
possible to disprove the existence of increasing returns using profit data.
And it must be remembered that most intellectual property has no economic
value at all.  My personal favorite example is US Patent #1,087,186, a
spring-like device intended for use in classrooms to demonstrate the
existence of God.

Scientifically or technologically valuable intellectual property doesn't
necessarily translate into economic value, either.  The Windows example
proves this.  Nearly anybody with a computer science degree could have come
up with a better API than Windows, and indeed thousands have.  But
increasing returns take place only when IP becomes a widely adopted
standard, leading to "network effects."  The Windows API became such a
standard because of Microsoft business practices that were later found to be
illegal, but long after the damage had already been done.  And because of
the perceived benefits to the US economy accruing from the US ownership of
yet another world standard (the US dollar itself is another such standard),
US courts have so far allowed Microsoft to continue reaping the resulting
monopoly rents.

This is not discredited "New Economy" hype, as Doug seems to be saying.
It's an economic fact, and increasing returns have been recognized by
economists for many decades.  Pre-bubble examples have included the QWERTY
keyboard layout and the VHS victory over Betamax, the loser considered by
many engineers to have been the technically superior standard.  The only
reason increasing returns have not received as much attention in the
mainstream economics literature is that the presence of increasing returns
implies equations with multi-equilibrium solutions, making problematic the
predictive value of such models (and hence their value to one's academic
career.)  The final equilibrium selected depends simply too much on chance
events and other factors beyond the reach of economic theory.  An important
example of such a non-economic factor is Microsoft's political ability to
break with law with relative impunity.

Increasing returns are also the economic fact that explains branding, the
reason why people will pay many times as much for the exactly same thing if
it happens to bear the logo of a trusted or prestigious brand.  Software
types once wondered why Bill Gates, in the very early days of Microsoft,
hired a marketing executive from Procter and Gamble (a US giant that markets
cosmetics, toothpaste, soap, and other consumer goods.)  Now they don't.  It
is now recognized that most of the world's largest companies, including
Microsoft, are primarily marketing organizations that trade on the economic
value of established brands and other forms of intellectual property.  The
real work is increasingly done by anonymous subcontractors.  Trademarks,
legally a form of intellectual property, often seem to be overlooked in the
activist clamor over copyrights and patents (an important exception, of
course, is Naomi Klein's "No Logo" battle cry.)  I also consider trademarks
to be the form of IP that best illustrates the difficulty of equating IP
with labor, as Ken Wark seems to do.  But that's part of an argument better
left to another post, perhaps forthcoming.

The point here is simply to argue that profit, increasing returns and
intellectual property are all different things.  Therefore, I don't believe
that Doug's profit figures themselves can do much to discredit economic
theories that attempt to model how the three are interrelated.  I've also
hinted in the preceding paragraph at my belief that the present worldwide
metastasis of IP law is in fact inimical to labor's interests.  I therefore
believe that to base revolutionary politics on a form of metaphysical
idealism that would equate labor with intellectual property, with the
implication that information is something that may be bought and sold as
legitimately as physical space (real property) and time (labor), can
objectively serve only the cause of the neoliberals.

Kermit Snelson

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From: "Kermit Snelson" <ksnelson@subjectivity.com>
Subject: abstraction and materialism (was joxe's empire)
Date: Sat, 7 Dec 2002 19:45:49 -0800

McKenzie Wark:

> What distinguishes these three dispossessed classes is
> really just a degree of abstraction, a spatial dislocation,
> if you will, that proceeds progressively from the
> alienation of land from the earth, of the thing from
> the land, of information from the thing.

What's missing from Ken's application of Marxian analysis to the class
struggle within today's neoliberal "information economy" is the very essence
of Marx's answer to the ontological problem of abstraction:  materialism.
The centrality of materialism to Marx's thought was already evident in his
1841 doctoral dissertation.  It concerned the ancient Greek atomists,
specifically Epicurus and Democritus [1].

Ken's post does emphasize that information cannot be abstracted from
materiality in general.  Negri does too, although in the mystically
impressionistic and obscure manner to which he is prone.  He speaks
repeatedly of "immaterial labor" [2] and even states explicitly that "our
economic and social reality is defined less by the material objects that are
made and consumed than by co-produced services and relationships" [3].  Yet,
confusingly, he also speaks of this supposedly immaterial, "virtual" mode of
production as one that will lead to a "materialist teleology" [4], a process
in which the "virtual" becomes "real" through "possibility."  The "ontology
of the possible" therefore becomes the "central terrain of analysis" [5].

We are in very deep waters here, because the concept of "possibility"
referred to here isn't readily accessible to those who haven't studied
medieval scholasticism and the theological role of its modal logic in some
detail.  But what Negri is getting at is made clear enough by his reference
to Plotinus, the founder of neo-Platonism, and by the immediately following
statement that "The teleology of the multitude is theurgical" [6].  The
dictionary definition of "theurgy" is "Magic performed with the aid of
beneficent spirits, as formerly practiced by the Neo-Platonists" [7].

What Negri is doing, disguised only slightly by his fashionable jargon, is
nothing less than proclaiming the revival of primitive word magic, and
recommending it to us as a guide to revolutionary political action.  He's
saying, along with the neo-Platonists and other magicians, that language
creates reality.  Or as he puts it, "All the elements of corruption and
exploitation are imposed on us by the linguistic and communicative regimes
of production:  destroying them in words is as urgent as doing so in deeds"
[8].  It wouldn't be so surprising to find this praise of incantation and
conjuration in a New Age bookstore, but I find it absolutely incredible that
it's in a best-selling political book issued by Harvard University Press and
reviewed seriously in all of the world's major media outlets, including some
of the most prestigious.  We are in the "twilight of modernity" [9] indeed.

Marx's answer to the relationship between matter and form, forged in the
same historical crucible and period that led to modern science and modern
liberal nation-states, was the exact opposite of Negri's.  Like the ancient
Greek atomists to which he dedicated his doctoral dissertation, Marx was a
materialist.  Materialism, in a nutshell, is a method that assumes the
reality of matter, not form.  Matter is prior to form and hence to
information.  Platonism, and neo-Platonism, assume the exact opposite.  They
say that form is what's real, not matter.  Reality, as Yeats summarized
Plato, is "but a spume that plays upon a ghostly paradigm of things" [10].

That is why Marx saw a political program based on materialism and scientific
method as the key to the liberation of humanity.  It is also why the
priesthood has been busily promoting in universities and elsewhere for about
a century precisely the opposite teaching, desperate to undo the nightmare
of nineteenth century liberalism that cost them their power.  And the sad
result is that every third post to nettime these days seems to be arguing
that language creates reality, that modern science is an outmoded and racist
illusion, that parliamentary democracy and the rule of law are merely wastes
of time and tools of oppression, and that the way forward for physics is the
I Ching.

I don't mean to include Ken Wark in this sadly misled and used company.  I
largely agree with him, especially about the need to organize politically
against the current metastasis of IP law.  However, I do think his assertion
that "knowledge is labor" is wrong, and represents a dangerous step down the
slippery, reactionary Platonic slope that Negri and Hardt have already
ridden all the way down to the bottom.  Nietzsche once wrote that "it has
proven to be impossible to build a culture upon knowledge" [11], and the
same is true of building a revolutionary class upon knowledge workers.  Just
as artifice and coercion are the only ways to create scarcity around
information, they are also the only ways to create a class out of
informational laborers.

Fortunately, the first task will prove to be just as impossible as the
second, and for precisely the same reason: the ontological precedence of
matter over form and consequently over information.  So, my counter-
proposal to Ken's is that we focus our political efforts on working _with_
the practical impossibility of imposing artificial scarcities on
information, not _against_ the practical impossibility of organizing a
"hacker" class.

Kermit Snelson

Notes:
[1] http://www.marxists.org/archive/marx/works/1841/dr-theses/
[2] Negri and Hardt, _Empire_, p.29, 53, 289-94
[3] _ibid._, p.302
[4] _ibid._, p.63-6, 403-407
[5] _ibid._, p.368
[6] _ibid._, p.395-6
[7] http://www.bartleby.com/61/20/T0162000.html
[8] Negri and Hardt, _op.cit._, p.404
[9] _ibid._, p.368
[10] http://www.web-books.com/Classics/Poetry/Anthology/Yeats/Among.htm
[11] Nietzsche, Friedrich, _Philosophy and truth:  Nietzsche's
     notebooks of the early 1870s_ (Breazeale, ed.), Humanities
     Press, 1990, p.29

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