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ABSTRACT
This article discusses digitalization and its connection with the political economy of transformation. Its point of departure is Karl Polanyi's historical analysis as presented in The Great Transformation. Polanyi analyzed the development of “self-regulating” markets—with transformative and destructive consequences for individuals, nature, and society—and government efforts to contain these consequences. Polanyi's perspective is compared to Marx's theorem of the development of productive forces. Their respective focal points are different but complementary. For Polanyi, the decisive historical and theoretical break (and the cause of the destructive effects) lies in the act of purchasing human labor, whereas for Marx it lies in the act of producing value and in the relations of production as well as the relations of distribution linked to it. Working from this theoretical basis, current developments in digitalization are analyzed not as a further development within productive forces but as a transforming development of distributive forces. Following the logic of The Great Transformation, current developments should thus not be interpreted as a second great transformation but as the augmentation of the first, leading to a “greater” transformation associated with even more destructive potential. This leaves little hope for a smooth transition into any form of post-growth society.
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Notes
1 Digitalization is an often discussed but vaguely defined concept that has long since evolved beyond its original technical meaning—the conversion of analog information to a digital format. In current debates it is most often used to address two separate subjects: first, information technology artefacts and innovations (everything from artificial intelligence, machine learning, and the “internet of things” to new approaches in robotics), and, second, the economic and social changes that are expected to accompany their use. The word “capitalism” reminds us of what many seem to have lost sight of: that economy and capitalism are not synonymous, although capitalism currently seems to be “Capitalism, Alone” (Milanović Citation2019). The term is currently receiving new attention, e.g., as “digital capitalism” (Schiller Citation1999; Betancourt Citation2015) or “surveillance capitalism” (Zuboff Citation2019)—even often without a thorough Marxist analysis. We will see in the further course of the argument that digital capitalism is more than just a capitalism based on digital (production) means.
2 For a more detailed theoretical analysis of the concept of distributive forces and its empirical application to recent phenomena of digital capitalism, see Pfeiffer (Citation2021).
3 The import of Polanyi's “waiting” period reveals itself only by contrasting merchants’ new functions with what they did before. By remaining silent about what happens while they are “waiting,” Polanyi refrains from commenting on the core of Marx's analysis.
4 Polanyi avoids Marxist jargon even when he speaks of the same phenomena and draws the same conclusions. Thus, Polanyi's merchants in commercial society are in fact the same thing as Marx's capitalists in capitalist society in their significance and function. Polanyi also never mentions that while there is no substantial difference between purchasing raw materials and purchasing finished products, there is indeed a major difference between purchasing material goods and purchasing labor capacity.
5 This clearly normative dictum is found not only in Polanyi's work (in fact much of his argumentation is based on it) but also in Marx's insofar as one treats his early work as background to his critique of capitalism rather than, as do some, as “the sins of youth” with no relevance for the later economic analysis (regarding debates over the relevance of the early works; cf. Pfeiffer Citation2014).
6 The presentations of the highly complex considerations of Karl Polanyi and Karl Marx can only be summarized here in their brevity. In addition, the considerations of David Harvey should be mentioned, who takes up the connection of space, time and value realization more systematically than the two historical authors (although these dimensions also play a role in their work—and this also already with a global perspective). For Harvey the “intersecting command of money, time, and space forms a substantial nexus of social power that we cannot afford to ignore” (Citation2011a, 226). In later reflections, space becomes a “key word” for Harvey, whose understanding is not exhausted in philosophical considerations, but is closely connected to human social practices. For example, property relations create something like “absolute spaces” in which “monopoly control can operate” (126).
7 For the Moment, I deliberately follow the terminology of Polanyi, who speaks of “sales” and not, like Marx, of the realization of values on the market. In my view, however, the latter is the more analytically precise and, for my argumentation, also more appropriate form of expression. However, as I argue close to Polanyi's text, I deliberately stay close to Polanyi's way of expression.
8 This does not mean that the analysis of current crisis phenomena is not also of great importance; the importance of an in-depth analysis on the basis of concrete historical situations is currently demonstrated by the first studies on the COVID 19 crisis (cf. Mavroudeas Citation2020).
9 In a world in which economy and society can hardly be distinguished anymore because of the ubiquitous influence of consumption (cf. Bauman Citation2007; Trentmann Citation2016; Logemann Citation2019) and in which even the borders between consumption and production are blurry (cf. O’Neil and Frayssé Citation2015; Lund and Zukerfeld Citation2020), it becomes increasingly irrelevant whether this transformative power is economic or social. Any transformation worth its name is both.
10 Business models that favor permanent continuous payment over a one-time purchase often focus exclusively on digital artifacts like e-books, software, music and video streaming, and computer games. However, these models are applicable to an ever-broader variety of physical wares via the Internet of Things. Examples include build-operate-transfer models in production facilities but also include practices such as software-based limitations on the number of times devices can be recharged and the blocking of repairs by non-authorized persons.
11 To “tilt” in poker means to get so rattled by a string of bad luck that one begins to get frustrated and use a suboptimal strategy, resulting in a catastrophic downward spiral. In pinball, a “tilt” occurs when sensors trigger an end-of-game in reaction to a player bumping or lifting the machine. The concept is used here metaphorically.
12 Heightened acceleration becomes government policy for example when politicians criticize small businesses for their digital backwardness. In the digitalization discourse, moreover, the argument that digitalization develops exponentially is often repeated. The futurist Ray Kurzweil (Citation2005) paints a picture of how all this could end in his religious-sounding thesis of “singularity” as the point at which digital technology becomes self-aware and human technology supersedes human beings on the evolution timeline.
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Sabine Pfeiffer
Sabine Pfeiffer is Professor of sociology with a focus on work and technology. At the interdisciplinary Nuremberg Campus of Technology (NCT) of the University of Erlangen-Nuremberg, she conducts research on the effects of the digital transformation on work, employment and qualifications. In her research, she combines quantitative and qualitative methods with those that help employees to have a greater voice and empower them to better assert their interests in the digital transformation and bring them into design processes. It is important to her to bridge the gap between empirical work and political-economic analysis.