The Poverty Of Tech And The Tech Of Poverty

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Below, find a new commentary from Notes From Disgraceland’s Bjarne Knausgaard who regular readers will recall pens some of the best political/economic color around. If you like this one, click the banner above to visit the full NFDL archive.

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The poverty of technology and the technology of poverty

14. IV 2018

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It was one of those rainy and damp days, I was finding my way out of the F-train subway on Bergen St. in Brooklyn. On the mezzanine level, in the corner of the stairwell, I noticed a young man, couldn’t have been much older than 30. Rain was slowly cascading into the subway, small puddles forming everywhere forcing him into an uncomfortable squat instead of a sitting position. His appearance was modest; he looked tired and lonely, but not destitute. There were none of the signs of physical neglect usually seen in homeless people – he looked like someone who had access to a bed and sanitary facilities. There was a money tray with a few coins in front of him indicating that he had been there for some time. The man seemed relaxed and disinterested in making eye contact with passersby. He appeared preoccupied with what was happening on his iPhone, most likely Instagram or the traffic on the social networks.

Panhandlers with smartphones are unusual sight – it is not just the price of the accessory that is at odds with their social status, but the entire protocol: the price of connectivity, how they pays their bills, which assumes a checking account; purchases of apps, which requires possession of a credit card suggesting some king of credit history… Things just don’t add up. However, as much as the two were an odd combination, it was difficult to dismiss the thought that, on some level, they shared the same causal connector, and they stand as two representations of the same underlying cause of social degradation. While poverty is a consequence of the system’s inherent urge to cannibalize itself, tech, on the other hand, has become the other face of resistance to change.

The panhandler and the smartphone together unify the worlds of thrift store shoppers and the high tech of Silicon Valley. The following chart brings us closer to the origin of this unstrange connection. It shows three price histories representing roughly three different social segments of the stock market. Dollar Tree is a chain of discount variety stores in the US. It sells an assortment of everyday general merchandise; it is a lower end version of Walmart, with most goods priced at or below $1. It is the place where poor folks buy their stuff. Since 2001 (the perception of) the value of Dollar Tree has increased by 11 times, while during the same time Apple, which needs no introduction, has had a 140-fold rise. For comparison, S&P or other benchmark stock indices have grown “only” 2 times.

The coordination between two histories is not a story of correlations in the sense normally used in statistics, but of a different type of commonality, the most interesting point being not their mutual causation, but the timing they share. Between 2008 and 2009, S&P index –the “social median” of the stock market– lost 50% of its value. It took four years for it to recover. In contrast, Dollar Tree, the poor man’s outlet, starts its big takeoff in 2008 with the stock price practically quadrupling during the subsequent four years. This timing and trend are in synch with all other measures of rise in poverty[1]. This is also the moment when Apple’s explosive rise begins.

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While the middle of the affluent sector of society (S&P world) advanced in “moderate” steps, the wings on both sides have outpaced it by a wide margin. Two seemingly different entities on opposite sides of the social spectrum – the beneficiaries of growing poverty and of the technological boom — register a common inflection point around the time of the deepest financial and social crises in modern history.

Dollar Tree’s success in the last ten years has been a function of demand created by an explosive supply of poverty; Apple’s rise has been an indirect beneficiary of its side effects. As social reality was disintegrating, the void it created was filled by its virtual surrogate with Apple acting as the main subcontractor in the process of digitalization of social relations. This ties the panhandler and the iPhone together as a result of centrifugal forces of social fragmentation and the disappearance of the middle into the extremes.

The poverty of technology: Rent economy cannibalizes itself

As the economy transitions from material to immaterial, innovations become its main focus. If one can come up with a technological innovation that enables him or her to manufacture a product for 10 cents and sell it for over $200 on a sustained basis, all subsequent profits will be reinvested in that direction. In markets with strict intellectual property laws prices are no longer commensurate with production costs, but contain a scarcity premium. In this way, innovation becomes a source of Rent.

Rent is the most irresistible source of income. At the same time it is economically and socially intolerable. If someone somewhere is paid without doing any work, then someone somewhere works without getting paid. Rent economy is a voluntary slavery. Employment becomes the right to be exploited and unemployment is denial of that right. However, when there is no need for labor, and freedom is a constitutional right of every citizen, there are slaves without masters roaming around without anything to do. They become the excess of population.

Irresistible resistance to change

In the past, technology always generated new demand and forced people to reinvent their skills to accommodate for the new needs. This is no longer the case. Modern technology destroys more jobs than it creates. As such, it has become the main destabilizing force. Its basic commodity is immaterial – it costs nothing to produce an idea. If labor is the main cost of production, relocating the production centers to regions with the cheapest labor becomes the dominant mode of profit maximization. In this way, low production costs abroad create precariat at home.

Profit chasing leads to geographic displacement and social and cultural dislocations. Through their deterritorialization the elites lose their social footing. Their riches decouple from the well-being of society. The Keynesian bond, which used to tie the profits of the rich to the wages of the poor is severed, cutting the fate of economic elites loose from that of the masses. The possibility, provided by a global capital market, of rescuing themselves and their families by exiting together with their possessions offers the strongest possible temptation for the rich not to be interested in the social impact of their actions[2].

This is not sustainable in the long run. Once the exploitation becomes global and all alternatives are exhausted, the system has to collapse. The main question is: Who can act as an agent of change? Who represents the new social archetype of post-capitalism — a descendent of the medieval knight in feudalism or bourgeoisie in industrial capitalism?

Paul Mason has argued that a composite picture of that type would correspond to a Universal Educated Person. Their skill set is a fusion of managerial and intellectual abilities. Such a person needs to be a bearer of the new social relations inside the old, interested in engaging in political discourse with the intention of triggering change on the social level, and appear in large numbers. Currently, the “T-shirted bourgeoisie”, although fitting the description of a universal educated person with the right skills, does not want to reconfigure the system – rather, they favor a monopolistic structure and extraction of Rent[3], without much regard for the long-term consequences. Instead of being guardians of the future and sustainability, Silicon Valley billionaires prefer to invest in doomsday bunkers and property in New Zealand.

The technology of poverty and society of tiredness

When production is immaterial, everyone already owns the means of production. This is the main difference with respect to industrial age when material production defined the tensions between capital and labor. In cognitive capitalism, we are talking about, what B. C. Han calls the Achievement society, where everyone is entrepreneur of themselves, the exploiter and the exploited, the master and the slave, at the same time. Everyone is trapped in the auto-exploitation out of which there is no escape through resistance or uprising, but through internalizing his or her discontent through withdrawal and depression[4]. Zygmunt Bauman sees this as a social death spiral: The uncertainty of the Achievement society is a powerful individualizing force. It divides instead of uniting, and since there is no telling who will wake up the next day in what division, the idea of ‘common interests’ grows ever more nebulous and loses all pragmatic value. Contemporary fears, anxieties and grievances are made to be suffered alone[5].

The society of achievement is generating tiredness and exhaustion. This is a solitary and divisive tiredness with separating effect[6]. Digitalization of social relations is a response to this state of affairs. It fills the vacuum created by achievement society by providing a virtual supplement that makes isolation bearable by satisfying our ontological resistance to isolation. Social digitalization creates contours of a community; it transposes, to use Peter Handke’s terminology, I-tiredness into We-tiredness[7] while, at the same time, reinforcing isolation by creating a phantasmatic layer and illusion of self-sufficiency. Infinite plasticity of the digital society – ability to be shaped at our will — is intrusive and invasive: One can be anything one desires by creating an avatar and digital persona of any shape, form, and ability. This is virtual doping: It makes possible to achieve without achieving[8].

Social digitalization makes it possible to conceive of a community that requires neither belonging nor relation. The existence of a community, albeit virtual, results in an immanent religion of tiredness, one that needs no kinship. This is where smartphones come in. Here is Frankfurt School and B. C. Han, one more time:

Every technology or technique of domination brings forth characteristic devotional objects that are employed in order to subjugate. Such objects naturalize and stabilize domination. Devotion means submission to obedience. Smartphones represent devotion – indeed, they are the devotional objects of the Digital. They work like a rosary, which, because of its ready availability, represents a handheld device too. Both (the smartphones and rosary) serve the purpose of self-monitoring and control. The smartphone is not just an effective surveillance apparatus; it is also a mobile confessional. Facebook is the church – the global synagogue of the Digital. “Like” is the digital “Amen”[9].

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[1]Since 2008, the number of people on food stamps has almost doubled – there is currently around 50 million people on food stamps in the US. During the same period, the fraction of the population living below poverty level has increased from 12% to 15%. These are just continuation of the long term secular trends underscoring the social fragmentation of the late 20th century. For the bottom 90% of Americans, living standards have not changed since 1970s. In contrast, for the top 1% they have risen 5 times and for the top 0.01% by 10 times in the last 50 years.

[2] Wolfgang Streeck, How Will Capitalism End?: Essays on a Failing System, Verso (2016)

[3] Paul Mason, Postcapitalism: A Guide to Our Future, Farrar, Straus and Giroux (2016)

[4] B. C. Han, Psychopolitik: Müdigkeitsgesellschaft Burnoutgesellschaft Hoch-Zeit, Matthes & Seitz Berlin (2016)

[5] Zygmunt Bauman, Wasted Lives: Modernity and Its Outcasts, Polity (2003)

[6] Peter Handke, Versuch über die Müdigkeit (in Die drei Versuche), Suhrkamp (1998)

[7] Peter Handke, ibid.

[8] B. C. Han, Psychopolitik: Neoliberalismus und die neuen Machttechniken, Fischer (2015)

[9] B. C. Han, ibid.

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One thought on “The Poverty Of Tech And The Tech Of Poverty

  1. I’m not sure whether to feel relief or puzzlement at finding the Frankfort School still employable to speak to the mess we’re in. Either the texts themselves are infinitely malleable (as I suppose they would be to a Universal Educated Person) or the trends I first saw these concepts attributed to have accelerated in the last several decades. Most probably both hold some truth.

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