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before Ford’s assembly‐line production, Karl Marx was analyzing the mechanisms of capitalist production, particularly toward the latter years of the Industrial Revolution from roughly the 1840s to the 1880s. His task was a critique of existing political economic thought, while specifically focusing on the consequences of capitalist production for the growing numbers of laborers who were joining the working class. Focusing on industrial factories in the mid‐1800s, Marx determined that labor was being exploited in at least two primary ways. First, surplus value was being extracted from labor through the prolongation of the working day, which Marx referred to as absolute surplus value. Second, and perhaps most important for the present discussion, was the extraction of what Marx referred to as relative surplus value, which drew attention to the ways the “technical processes of labor and the composition of society” were being revolutionized (Marx, 1906, p. 559). In other words, ongoing changes in the technical processes involved in production constantly placed pressure on workers, especially as they were subject to deskilling (i.e., reduction in the skills necessary for performing certain tasks), reskilling (i.e., learning how to operate new technologies), or automating jobs that were previously performed by humans.
These trends would continue into the 20th Century, as global capitalism began to take shape. What emerged was a complex division of labor and an increasingly globalized capitalist economy. These developments also gave rise to a large pool of working‐class labor with common interests. As a result, workers in the Global North organized into trade unions to struggle against capital for fair wages, the eight‐hour work day, the end of child labor, and other labor rights. As the trade union movement grew, it ensured a certain degree of welfare for workers and created a shared identity among the working class.
As the 20th century wore on, World War II, and particularly its aftermath, significantly reshaped the geopolitical landscape.1 The United States’ competitors in the global market were devastated by World War II, as their infrastructures were decimated by bombing campaigns, which caused manufacturing to decrease significantly. By comparison, the centers of American manufacturing remained basically untouched, which gave the United States an advantage in the immediate aftermath of the war. As a result, American firms greatly increased their exports, particularly to Western Europe through the Marshall Plan, which was a boon to the American economy. The United States was keenly interested in exporting its products as well as capitalist ideology around the globe during this time, as it was embroiled in the Cold War with the Soviet Union, and the two countries sought to expand their influence around the globe. The United States represented the “first world,” which was capitalist and developed, the Soviet Union represented the “second world,” which was socialist, and those countries that were not aligned with either capitalism or socialism were referred to as the “third world.” While the struggle between the United States and Soviet Union generally frames the dominant narratives of this period, there were also strong political movements within the non‐aligned nations (see Prashad, 2007). However, the United States also faced increasing pressure from other “first world” countries during this time frame. In the 1950s and 1960s, Japanese and German manufacturing grew rapidly and, as the global market grew, these competitors began to cut into American market share. The increased production and supply placed downward pressure on prices and, by the 1960s, Japan and Germany were able to undercut American prices, which had higher fixed costs. Exacerbating the pressure felt by the United States was the increased war spending during the Vietnam Era. All of these structural pressures set the stage for the global economic crisis of the 1970s.
3 Response to the Crisis of the 1970s
The crisis of the 1970s placed significant pressure on the profits of US capital. In response, policymakers and shareholders sought measures of restoring profitable capital accumulation. These measures essentially unfolded along two axes. First, policymakers began to cut away at policies designed to protect worker rights. These efforts began in the late 1970s, but really ramped up after leaders like Ronald Reagan, Margaret Thatcher, and Deng Xiaoping took office. These leaders ushered in an era of deregulation and the privatization of national industries, which also cut away at protections for labor (see Harvey, 2005). The upshot of these regulatory changes was a reduction in wages and the outsourcing of jobs, thereby reducing the fixed costs of firms. Second, shareholders and business owners also sought ways of reducing the fixed costs associated with their business operations. This was made possible by new developments in information and communication technologies, most notably software, which allowed owners to track their production processes in a more sophisticated way. The result was a further disciplining of labor and the maximization of efficiency throughout commodity supply chains. Furthermore, commodity supply chains could now be networked across geographic boundaries to take advantage of cost savings wherever they existed. This allowed for what Harvey (1989) refers to as flexible accumulation, which is “characterized by the emergence of entirely new sectors of production, new ways of providing financial services, new markets, and, above all, greatly intensified rates of commercial, technological, and organizational innovation” (p. 147). In effect, this new model of production no longer relied on mass production, which was the hallmark of Fordism. Rather, it made possible on‐demand production, which reduced stockpiles of mass‐produced inventory while simultaneously allowing firms to adapt to ever‐changing demands from consumers.
One of the critical elements enabling this type of business model was the development of networked communication technologies, which could be put into the service of capital. It was during this time that information and communication technologies became viewed as a new vehicle for reinvigorating capital accumulation, and the sector saw massive capital investment, especially in the 1990s, while US manufacturing remained stagnant. Indeed, the massive surge in venture capital investment into the so‐called “dot‐com” companies during the 1990s fueled the financial bubble that eventually burst in the early 2000s (Cassidy, 2002). The investment in digital technologies continues today, as similar investments can be seen in a number of digital services that promise to reinvigorate capital accumulation, whether they are digital platforms like Uber, Lyft, Spotify, or cryptocurrency technologies like Blockchain.
Accompanying these economic changes was also an ideological shift, particularly in the ways in which participation in capitalism was justified. Boltanski and Chiapello (2005) refer to the “spirit of capitalism” as the “ideology that justifies engagement in capitalism” (p. 8). They argue that the spirit of capitalism shifted from the 1970s onwards. During this time, business culture – in the form of management texts – began to abandon the rigidities of hierarchical Fordist production in favor of flexible and network‐based forms of organization. In doing so, capitalism effectively assimilated the artistic critique of capitalism of the 1960s and 1970s by touting individual autonomy and emphasizing employee initiative as a path to self‐fulfillment, whilst marginalizing its social critique, embodied in trade unions and more concerned with wage inequality. In short, employment was not simply something necessary for earning a living, but it was also a way to achieve creative freedom through self‐expression. The espousal of these new forms of freedom and autonomy for workers proved to be an effective way of reducing the fixed costs of corporations. As more workers embraced flexible work routines, they carried the burden of funding their own benefits like insurance, retirement plans, etc. Indeed, this trend can also be viewed today in a number of industries where freelance work has become prevalent, but the trend is particularly pronounced in the media and journalism industries as well as so‐called “creative” industries that employ artists, fashion designers, and stylists (see Deuze, 2007; McRobbie, 2016; Cohen, 2016).
4 The Transformation of the Internet and Web‐Based Business Models
The structural changes of capitalism throughout the 20th century laid the foundation for the emergence of the Internet as a vehicle for intensifying capital accumulation. Furthermore, this process really began to ramp up toward the end of the 20th century when Internet service provision was privatized. In the wake of its privatization, Internet‐ and web‐based businesses went through a relatively rapid boom‐and‐bust cycle. While these years were somewhat tumultuous for speculative financial capital, the general tendency