Capitalism as a service – capital is going digital

Why digitalisation is not sounding the death knell for capitalism

Foto: Illustration von Susann Massute ©

Timo Daum

is a university professor and focusses on the internet, media and the digital economy. His most recent book "Das Kapital sind wir. Zur Kritik der digitalen Ökonomie" (in German) has been published by Edition Nautilus.

In his 2015 book, Post-Capitalism, Paul Mason concludes that ‘the technologies we’ve created are not compatible with capitalism’. Regarding the 2008 financial crisis Mason writes that ‘although capitalism is a complex, adaptive system’ it has now reached ‘the limits of its capacity to adapt’. This is not crisis as usual, it’s the final one; we’re experiencing the advent of a post capitalist world order.

Digitalisation is forcing capitalism to its limits. As Mason states, ‘An economy based on information, with its tendency to zero-cost products and weak property rights, cannot be a capitalist economy’ (Mason 2015, p. 175). For Mason, therefore, it is increasingly evident that information technologies cannot provide a basis for a new, stable form of capitalism, rather, the digital age is dissolving market mechanisms, eroding property rights and destroying the relationship between income, work and profit.

Paul Mason is not alone with his diagnosis. Jeremy Rifkin too sees the end of capitalism on the horizon. The internet of things, the sharing economy and the general availability of digital goods lead capitalism to mutate more or less automatically into what he calls the zero marginal cost society. And, as Nick Srnicek and Alex Williams write in their passionate manifesto Inventing the future, in which they describe ‘life after capitalism’, ‘neoliberalism isn’t working’.

In a footnote in Capital dedicated to the inventor and entrepreneur Charles Babbage, Marx writes on innovation without actually using the term, ‘Universal labour is all scientific labour, all discovery and all invention. This labour depends partly on the co-operation of the living, and partly on the utilisation of the labours of those who have gone before.’

Competition forces capital to innovate, rationalise and replace living labour by machines, robots and algorithms. The increasing application of technology in the processes of surplus value production leads to the increasing importance of the ‘social co-operative process’. The fruits of this collective process, however, are appropriated privately: ‘It is, therefore, generally the most worthless and miserable sort of money-capitalists who draw the greatest profit out of all new developments of the universal labour of the human spirit and their social application through combined labour.‘ (Capital Vol. III, Part I, Chapter 5)

Both of these processes – the constant increase in the amount of general social knowledge embodied in capitalist production, as well as the permanent drive of capital to privatise the end products of this process – are manifest throughout the history of capitalism.

Capitalist commodity production builds on scientific findings, applies state-of-the-art technologies and relies on the general intellect. Marx coined the term general intellect to describe that knowledge, which, in its social function, develops immediate force of production. What happens, then, when the application of science and technology to the capitalist mode of production ultimately lead to a near to elimination of labour, turning labour into a negligible factor? This is the scenario or extrapolation in Marx’s famous Fragment on Machines in the Grundrisse: Foundations of the Critique of Political Economy.

Under conditions where capital’s productivity constantly increases, i.e., when its organic composition (the relationship between constant and variable capital) shifts ever more in the direction of capital fixe, no living labour is eventually needed any more, no workers are exploited, no surplus value produced, and capital can no longer produce a profit. Capital loses its ground: it cannot realise its life purpose and must therefore perish.

Most likely, as the revolution fails to materialise, we will watch this thought experiment develop. Take Google for example. The company does not require any workers to respond to one billion search queries per day. Nobody needs to process these one billion queries in a set amount of time so allowing their work to materialise in the form of a value-added product, which in this case would be a search result. Once coded, the same algorithm is simply applied billions of times and automatically produces results. A programme only has to be written once, after that, it is used, put to endless productive use, as a processing unit of general intellect. It’s not just companies like Google, but also social media and service platforms, mobility services, and route maps that all function according to this principle. As digital platforms, they basically consist of an automated information processing unit containing data and algorithms and this unit is constantly being fed with new data by the users themselves.

As Christian Fuchs notes, ‘Google works with the results of the work of all internet users who have created the internet’s content. By using Google services, all these users are doing work for free, productively creating added-value.’ The entire web community thereby produces general intellect, publishes this knowledge in the public domain only to find themselves immediately dependant on private businesses that dictate how access to this information is regulated and communication organised. Capital accumulation by Google works by making Google users work in two ways: first, it is users that create the entire content of the internet without which Google could not offer any search facility. Secondly, when they use Google’s service, Google saves this as user activity data.

General intellect technologies become the decisive factor in production, the contribution of living labour is negligible. The sum of human intellectual efforts thereby becomes the immediate motor of history in real-time. ‘It is as if Karl Marx had written a science fiction novel and precisely described our current information economy’, Nick Dyer-Whiteford praised the prognostic qualities of Marx’s techno-futuristic Fragment on Machines.

When companies and organisations outsource their software and IT infrastructure to external service providers they call this software as a service or infrastructure as a service. The sale of scarce commodities to future owners is increasingly becoming replaced by a system where fees or the provision of user data are charged for access to services. More and more aspects of life are organised as a service, on demand: information and culture, transport, housing.

Is this still capitalism? If we define capitalism as ‘capitalists who exploit workers that produce commodities in a factory for sale on the market and that increase the exchange value of these commodities by the work embodied in them etc.’ – then maybe not. In other words: if our criterion is industrial capitalism with its taylorist exploitation of labour power as a commodity, then perhaps not any more.

Mason’s attempt is only the most recent in a long series of attempts to reveal the actual end of capitalism, killed by technological innovation. The most influential interpretations, thereby, of what post-capitalism actually is, stem from neo-conservatives that develop a utopic vision for an information society that more or less naturally solves the contradictions of industrial capitalism, simply by providing more eco-friendly and just solutions.

Marshal McLuhans’ global village, Vilém Flussers universe of technical images, Richard Florida’s post-capitalist creative society, as well as the information and knowledge society of Daniel Bells, they are all different names for the same idea: social antagonisms dissolve, become obsolete and are replaced by a more democratic, egalitarian society. Free floating information and shared knowledge provide the basis for sustainable growth and overall prosperity.

However, the reality is rather a mutation of capitalism towards a form that is based on digital platforms which generates billions in cash from general intellect. Powerful internet corporations appear bent on imposing a new world order, with its own rules, laws and backed by an inexhaustible capital base. The ruling class of the digital world as Nenad Romic called the Silicon Valley digital oligarchy a couple of years ago, is apparently giving rise to a new digital capitalism.

The communist utopia described in the Grundrisse, the global triumph of general intellect, is actually becoming a reality – albeit firmly within a capitalist framework. Capitalism is by no means disappearing, rather, it is intensifying as Jason Williamson from the Sleaford Mods poignantly remarked.


  • Nick Dyer-Whiteford, Cyber-Marxism. Cycles and Circuits of Struggle in High-Technology Capitalism. UI Press, Chicago 1999.
  • Christian Fuchs, Social Media. A Critical Introduction. Sage, London 2014.
  • Paul Mason: PostCapitalism. A Guide to our Future, London 2015, p. Xiii
  • Nick Srnicek, Alex Williams, Inventing the Future: Postcapitalism and a World Without Work. Verso, London 2015.
  • Understanding Digital Capitalism – Series by Timo Daum