[iDC] From a crisis of value to a crisis of accumulation

Michel Bauwens michelsub2004 at gmail.com
Tue Jul 3 06:13:42 EDT 2007

Dear friends,

I would like to announce that we have put a revised version of Adam's
Arvidsson's (which I consider to be a landmark one), online at


My own reply, to the first version, is available at


Here are some excerpts from Adam's text:

- On the impending crisis of value:

Adam Arvidsson has just sent me his latest essay, and I have no hesitation
to call it a landmark essay because it is the very first really cogent
analysis of the emerging Crisis of Value which is affecting the present
market economy model.

In short, a new second economy is arising, which he calls the Ethical
Economy <http://www.p2pfoundation.net/Ethical_Economy>, which does not run
according to monetary exchange, and can only be very partially monetized and
controlled by the market. There is a crisis of value he says, because this
new economy cannot be measured, either because the right metrics are not yet
in place, but perhaps more fundamentally, because it is largely beyond
measure, and even what can be measured of it, cannot be directly related to
the monetary economy.

This essay is as yet unpublished, but I want to publish some key excerpts,
followed by my own response.

*Excerpt: the impending crisis of value*

"It is becoming ever more obvious, even the mainstream business press is
acknowledging this, that the information economy is split in two; we have
two economies rather than one (or three, if we include the growing criminal
or informal economy which we will not treat in this paper). On the one hand,
there is the traditional capitalist economy that works with monetary
incentives. This economy still handles the main part of material production:
the production of cars, shoes, computer chips, as well as the transportation
and maintenance of these goods. But immaterial production- the production of
the ideas, innovations, experiences and other intangibles that virtually
everybody agrees to be the most important source of value and development-
is increasingly performed by another economy that does not primarily move
according to monetary incentives. Most people who participate in creating
the enormous wealth of content that give MySpace or YouTube their market
values are not in it for the money. Instead they want to build networks,
make friends, show off, be cool or what have you. The same thing goes for
the users who participate in the multitude of smaller, less famous sites
that make up the new productive developments known as Web 2.0. Neither are
the people who participate in the many business initiated user-led
innovation initiatives that now proliferate, like the Nokia Concept Lounge (
450.000 visitors, 4.500 Ideas submitted) or user generated advertising
campaigns like Heinz tv-challenge, primarily there for the money. Indeed the
very business sense behind such initiatives is that they give access to an
enormous resevoir of free creativity that needs not be paid for (to be
deployed either in the actual design of products or advertisements, or, more
importantly perhaps, in brand building, von Hippel, 2006).

The importance of such non-monetary production is however not limited to the
world of on-line initiatives or web 2.0. Within companies it has long been
recognized that the prime source of productivity is not what people get paid
for, but what is more difficult to include in a job description: their
ability to network, share knowledge and support each other, to co-create a
good working environment, a marketable service or a flexible organization.
Managers recognize that the best way to foster such forms of cooperation is
not through monetary incentives, but rather by fostering a solid corporate
culture with strong values, a strong sense of solidarity or commitment, a
particular 'mood' or 'vibe' (cf. Brian & Joyce, 2006). Similarly marketers
have discovered that the autonomous cooperation among consumers is an
important source of brand value (Holt. 2002, Arvidsson, 2006). Finally, the
'creative economy' of the urban music, arts and fashion scenes, which is
growing in importance as a productive externality for the creative
industries proper, is not primarily motivated by monetary incentives. Most
members of the 'creative class' do not live off their creative labour, but
rather accept poor or precarious economic conditions as a (temporary, they
hope) trade off for the ability to realize themselves or pursue their dreams
(Florida, 2002, cf. Arvidsson, 2007).

*We have chosen to call this emerging non-monetary economy an 'ethical'
economy. Not because we necessarily believe that it is inherently better or
nicer than the mainstream corporate economy. Instead, our choice of the term
'ethical' refers to the fact that this economy is largely coordinated by
respect, peer-status, networks, friendships and other forms of
inter-personal recognition. It is geared towards the accumulation of such
forms of interpersonal recognition, what sociologists would call 'social
capital'*. "

- On the absense of measure

This absence of a measure points towards a power vacuum within the
information economy. There is no common measure simply because nobody has
been strong enough to impose a common measure, or to put in more Nietzschian
terms, to decide what the values should be. Indeed, the issue is not so much
ontological as it is sociological. It is not that you cannot measure
'ethical things' like love or respect, there are systems that do this as we
will show below. It is rather that the ethical economy presents a problem of
measure for the capitalist monetary economy because it largely unfolds
largely beyond its direct control. The situation was similar, two centuries
ago. The way in which industrial capitalism established itself was by
imposing its own measure of value as the societal standard, as against the
moral economy of peasant tradition Modern management, emerged (with
Taylorist scientific management) as an attempt to break down the complex
networks of craft production into simple units of worker-machine interaction
that cold be measured in terms of labour time. (And modern consumerism was
largely shaped by the need to impose a different conception of the value of
time: that it was better spent productively to acquire more goods than idly
in rest once one had accumulated enough, cf..) Consequently, productivity
could be defined as output per unit of labour time. Although this kind of
measure originated with the situation of material factory production it has
since been extended to various forms of immaterial labour, like the
taylorized production of services at McDonalds restaurants, call-centers and
increasingly, British universities. So the problem of measure is not about
the nature of immaterial production. It is rather about its sociological
relation to 'the (capitalist) machine' that mediates productive interaction
within the factory or organization. Indeed, the further we move from the
original situation in which this philosophy of measurement developed, the
less the quantum of time spent interacting with a machine that also acts as
a disciplining device (whether a material machine or an immaterial,
organizational one), and the more emergent factors like networks, tacit
knowledge and social organization- what Marx called 'General Intellect'-
matters, the less valid this form of measurement becomes. And we can argue
that the main productive contribution of information- and communication
technologies is unleashing of such General Intellect on a societal scale,
which is difficult to control and measure. (And the reason why the relation
between investments in ICTs and productivity growth is tenuous is precisely
that productive contribution of this General Intellect largely unfolds
outside of the monetary economy.) The result is a 'crisis of value': a lot
of the actual wealth produced cannot be measured, or can only be measured
with great difficulty. And what cannot be measured can hardly be managed.

In many ways the contemporary proliferation of Non Financial Performance
Metrics can be read as a response to the crisis of value that confronts
contemporary capitalism. Sometimes these metrics originate with NGOs or
other actors who want to make their particular value agenda prevail. They
are then welcomed by corporations, in part because they offer new and
complimentary ways to estimate their social value. Often such metrics are
developed by consultancies as a way to legitimized increasingly blatant
discrepancies between the market values of companies and their 'book
values', captured by antiquated accounting systems designed to capture the
material realties of industrial production. Most such systems, like brand
valuation for example, are not developed to measure the empirical
performance of a brand, but to provide an explanation for what is chiefly an
accounting problem. The point is that these measurements have no common
origin, but emerge out of a multitude of agendas and concerns, most of which
are not primarily preoccupied with actual measurement."

 - On peer-based measurements systems

" The advantages of such peer based measurement systems are that they are
emergent. They are not imposed by managers, NGOs or other organizations who
might have little knowledge of the actual productive realities of particular
practice, and who tend to impose 'codes of conduct' which easily degenerate
into mere bureaucratic exercises. Instead they are generated by the
community itself, and hence tend to give a more realistic estimate of the
social impact of a product, organization or person. And we can envision that
such peer-based valuation systems will become more efficient with
technological development. With a mobile internet and developed RFID tagging
it could be possible to sweep one's mobile phone over a sweater or another
piece of garment to instantly acquire a quantitative estimate of what
several thousand people, placed all along the production and distribution
chain say about its environmental impact, respect for worker's rights,
adherence to particular religious practices, or what have you. It might also
be possible to use your cell phone to easily acquire products with
alternative currencies, like units of credit earned writing for a blog or
hosting someone on your couch.

The perspective for the immediate future is that the monetary capitalist
economy will continue to loose its monopoly over the measurement, and hence
also the organization of productive processes. This is natural, since that
monopoly has essentially been founded on a monopoly over the means of
organization. It has only been possible to govern complex productive
networks like the modern corporation, by means of efficient information
processing machines like the bureaucracy. Likewise, the central bank with
its large affiliated research institutions was the only organ capable of
determining the price of money with any accuracy. Today such information
monopolies are challenged. Central banks have but a minimal influence over
the price of money, Most is determined by financial markets, which are in
essence mediated real time interaction systems, not very different from
Second Life (Zaloom, 2006).

In the form of Information and Communication technologies the means of
organization have been socialized to the extent that alternative
coordination and measurement systems can and do arise beyond the direct
control of corporate capital.

The outcomes of this are twofold.

On the one hand, such new peer based measurement systems can be integrated
into the value dynamics of corporate capitalism. This is already happening:
the proliferation of non- financial performance metrics is a (generally
inefficient) step in that direction. There are also a number of
consultancies that provide advice on performing such integration, like
Namaste economics, offering to 'integrate economics with social values' or
the Karmainitative, providing 'trust metrics in the market place'.

On the other hand we can predict that corporate capitalism and the
institutions at its control will resist and repress attempts at constructing
alternative valuation and measurement media. Again this is already
happening. We can understand Intellectual Property legislation and Digital
Rights Management systems as attempts not only to enforce property claims,
but also to restrict the circulation of such property to circuits in which
measurable values are created."
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