Platform Capitalism?

“The Google of today is a monopoly gatekeeper for the internet and one of the wealthiest companies on the planet,” states the suit against Google. Filed in October 2020, the lawsuit stipulates Google’s abuse of exclusive deals with companies like Apple and Samsung (to be the primary search engine) to dominate the market. The charges against Google state that it uses unlawful anti-competitive tactics to further its monopoly for search services, search advertising, and general search text advertising. Nick Srnicek in ‘Platform Capitalism’ traces the historical emergence of advertising platforms based on the pivotal role of advertising to prioritise growth over immediate profits. Companies like Google and Facebook earn more than 80% of their revenue through advertisement. This revenue has been possible due to the preciseness and sheer amount of accumulated user data they have. There is a shift from mass production to data dominance, decentralisation of production and fragmentation of labour. Srnicek argues that digital platforms have changed the way the global economy operates. It characterises winner-takes-all dynamics, precarious labour, and a never seen integration of online and offline platforms. Thus, this shows a new era of capitalism by using data as a dominant source of economic growth. Therefore, data collection has become a necessary precursor such that platforms (digital infrastructures enabling two or more groups to interact) like cloud, lean, industrial, etc., aim to collect the most data possible. Srineck argues that raw data has become so valuable that companies are more focused on the volume than the quality of the data. He explores this relationship between dynamic contemporary capitalism and different forms of platforms tracing its historical trajectory. However, due to the briefness of his book, it falls short of answering the various questions which arise while tracing this history. 

Between 1945 – 1970, owing to the War and the following recessions, increased competition, and rising labour costs, there was a decline in manufacturing profitability. Hence, this decline commenced the search for other profitable avenues. He annotates the ‘dot com’ spike in the 90s to asset-price Keynesianism operated with low-interest rates. The dot com eventually gave rise to a privatised internet infrastructure. Srnicek argues that after the 2008 crisis, a similar low interest-rate environment followed. This rate was essentially due to interventionist forces such as World Bank. He asserts that low yield on numerous assets followed this low-rate environment, paving the way for riskier investments, such as upcoming tech companies. These investments gave way to a paradigm shift in the advancement of technology. Many platforms emerged using data for diverse purposes. Srnicek goes deeply into platform typology and identifies five different types of digital platforms. However, his focus on platforms as economic actors alienates how these platforms are transforming and affecting societies globally. 

Srnicek explains his assertions ontologically while respecting historical timelines. He divides his book into three equally thought-provoking parts to discuss the past, present and future. Despite being a valuable introduction to integrating contemporary capitalism into everyday lives, it fails to delve deep into the problems that arise along it. Owing to his focus on economic assessment, social issues that arise become an afterthought. Hence this review will highlight how Srineck obscures the effect of platform capitalism in transforming societies globally due to its narrow approach. He defends his narrow approach by distinguishing his work from existing studies. In his view, other works have neglected economic issues or have not considered the history of capitalism and digital economies. Thus he aims to provide economic yore of platforms while showing the use of digital platforms as profit generators. He believes his approach is necessary as our conceptualisation of history and the future shape our thinking for developing political tactics to transform society. Nevertheless, he doesn’t provide more detailed strategies for the same. This review will focus on how his lack of engagement in what exceeds the parameters of its economy-centric assessment has led to dissociation with broader societal issues. 

‘Platform Capitalism’ focuses on market dependency as precipitating optimisation of labour processes to reduce production costs. This narrative annotates competition as a core capitalist tendency while limiting the role of government and society. Srnicek demonstrates the drive of capital accumulation through the interdependence between technology and finance by tracing history. Corporations are undergoing restructuring to culminate in technology-enabled outsourcing and manage their supply chains through subcontracting. Further, financial markets and instruments are vital in shaping this restructuring. But Srnicek does not pay heed to the effect of financialisation on human resource management. He does not discuss the consequences on labour during shifts in corporations’ core activities from production to rent-seeking.An example of this omission is in the discussion of unions in 1980. While Srnicek acknowledged that unions were under attack in the 1980s, he did not address the role of concerted government efforts that led to these attacks. The Reagan Administration authorised welfare retrenchments and anti-union stances. These authorisations supported flexibility in the market and the expansion of contingent labour markets. Hence showcasing that Srnicek overlooked the interplay between government policies and corporate practices that have shaped labour organisations and working conditions in capitalist economies.

After going back in history, ‘Platform Capitalism’ portrays the present as defined by corporate tax evasion, cash gluts and income insecurity. It challenges neo-liberal thought by portraying how platforms concentrate economic power, commodify data, relies on precarious labour and focus on rent-seeking. Srnicek goes against the views of Christian Fuchs, who argues that the unpaid labour of users of internet services contributes to a company’s value production. He rightfully argues that the users do not follow a Marxist ‘framework of labour,’ which states that labour creates a surplus within a market. He advocates that most data gets filtered through extractive apparatus and not used for valorisation. However, this goes against his previous assertions of companies profiting from the data volume rather than the data quality. If his argument is held true, it purports the understanding that data collection is consensual and ethical. Just because consumers are not ‘free labour’ does not equate to the fact that their data is not taken advantage of. “People think Google Search is great because it’s free, Gmail because it’s free, Google Maps is great because it’s free, but Google didn’t become a trillion-dollar monopolist by giving out freebies all day. This data is valuable,” explained Mike Davis from the Internet Accountability Project. Platforms use the data collected to either generate revenue or attain goals. 

One example is the case of Cambridge Analytica, which allegedly exploited and unethically used personal data to influence electoral results. Although some people value the personalisation of content, they aren’t aware of how their data gets used to manipulate their preferences. Srineck touches upon new privacy controls to be imposed by the state to regulate data use. A study at Wharton showcases that even with options to ‘opt-out,’ one’s browser size, screen resolution, etc., can be tracked to create a unique identification. This identification gets formed because inaccurate or insufficient data can reduce the bottom line of platforms. Evidently, ‘Platform Capitalism’ fails to delve deeper and showcase the dangers of collecting raw data even in light of government-prodded regulations. This question needs to be raised and investigated further. Effectively now, with the rise of A.I., whose potential is concretely unknown.

Marx wrote – the wage most harmonious with capitalism is the piece wage (based on output, as opposed to the time wage). Outsourcing labour and contracting out services has been the cornerstone of capitalist growth since the 1970s. Today, independent contracts have gone one step further. A frequent occurrence is the use of Uber. People can use the digital platform to call a taxi and get information about the destination. Also, one can order food with the same platform. Such lean platforms, driven by diversified amenities, digital intermediary technologies, and venture capitalism, have considerable social impact and illustrate platform capitals prevalent today. Srnicek elucidates the rise of independent workers with the example of Uber. He examines the high cost that drivers incur but doesn’t delve into the subject further. His analysis highlights the expansion of labour supply on a global level due to lean platforms. However, he does not explore gig economies and the exploitation of labour that occurred due to them. Platforms such as Uber and Airbnb rely on independent contractors, who are not considered labourers. ‘Platform Capitalism’ briefly touches upon the subject but does not explore it further. Worldwide worker resistance to regulations against encroachments by platforms such as Uber posits an essential dimension to explore. 

A thought-provoking assertion of Platform Capitalism is the contrast between Fordism and the contemporary economic paradigm of post-Fordism. He highlights the shift from Fordism to a contemporary capitalistic model. Data, globalisation, flexibility and monopolistic tendencies drive this model in contrast to nation-oriented, rigid production lines and traditional employment contracts. Mergers now are not horizontal (homogenous companies), vertical (same supply chain) or conglomerate (complementary) but more rhizomatic, driven by competition. An intriguing example of rhizomatic mergers is Alibaba. Alibaba is violating anti-trust laws through mergers and acquisitions to further its monopolistic ambitions. It is using M&A to create limited competition, inevitably harming smaller businesses. The gravity of the methods used by Alibaba is evident in the Chinese Communis Pary feeling threatened by its influence. Thus bringing to light the importance and the sway of digital platforms over society now and potentially in the future as well.

Srnicek’s theory of left accelerationism mirrors his book ‘Platform Capitalism’. He proposes to use the acceleration of technology for the collective good and tries to break away from the link between technological growth and capitalism. He stipulates that in the future, the platform will see a ‘post-advertisement environment’ where there is a shift from consumer ownership to access. Most analyses poetically take a data-driven economy to be insatiable. But Srnicek is amongst the few to highlight that the data bubble will burst, and companies will search for other monetisation methods. For this, he explores different alternatives, such as stricter regulation and collectively owned platforms. But he stops short of exploring the kind of post-capitalist platforms necessary. He is lucid on how a state’s resources will mobilise to build postcapitalist platforms. Additional analysis necessitates how these platform co-ops will differ from private platforms. Niels van Doorn also expresses concerns about using state resources to create postcapitalist platforms without them becoming part of the surveillance state apparatus. Platforms are shifting from exploiting legal loopholes to actively seeking influence over governmental policymaking. Thus platforms are not only based on competition but are also gaining influence over regulations and policies. Thus it is necessary to move from considering platforms as a mode of production to a way of social reproduction.  

The elephant in the room in ‘Platform Capitalism’ is the lack of mention of climate change. Digital fast fashion platforms like Shien exploit labour and produce copious amounts of CO2. Climate change is a very immediate issue of concern. With the emergence of the digital market, climate degradation has only increased. The consumption of electricity, hardware material for the platforms and the manufacturing of products are detrimental to the environment. In 2019, e-waste rose by 21% in 5 years to 56.3 million tons. With a global online market ready for companies like Shien, it is meaningful to consider its environmental impact. This climate effect is of immediate social importance. It necessitates finding a patch through which digital platforms can contribute to this cause. Srnicek does not address how global platforms affect the environment, what can undergo to make them more sustainable and their societal implications. 

To fully understand the impact of platforms on our lives, it is necessary to expand the parameters of Nick Srnicek’s Platform Capitalism to consider how platforms as new institutional forms are reshaping the relationships between the market, the state, and civil society. By doing so, one can develop more comprehensive political tactics to address the challenges and opportunities presented by ‘Platform Capitalism’. 

– Ananya Goyal

Bibliography 

  • McMorrow, Ryan, et al. “How China’s Big Tech Companies Upset Beijing.” Financial Times, 17 Nov. 2020.

Published by magazineunscripted

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