Contemporary Capitalism and Knowledge Monopolization
Paper Session
Saturday, Jan. 7, 2023 8:00 AM - 10:00 AM (CST)
- Chair: Özgür Orhangazi, Kadir Has University
Platform Capitalism and Monopolization
Abstract
This paper addresses the questions of corporate power represented by digital platforms. We conceptualize platform power and use it to understand the driving forces and tactics for monopolization. We argue that as the pursuit of platform power increasingly depends on massive capital from the financial market, the hierarchical structure in the platform economy renders platforms to become new frontiers of financialization. Drawing theoretical insights from the monopoly capital school and using empirical evidence from leading platforms in China, this paper further explores the macroeconomic implications of platform monopolization. It demonstrates that big tech in the hierarchical platform economy may increase income inequality, exacerbate overcapacity, and generate financial bubbles, thus intensifying the tendency of economic stagnation.Rethinking Monopoly Theory: From a Market Typology to What is Being Monopolized
Abstract
Monopoly capital authors define monopolies as “market monopolies”. However, the very definition of the extent of the market can always be contested and, on a more fundamental basis, monopolies are incompatible with Marx’s (and others like Shaikh) inter-industries equalization of profit rates. Turning the coin, the emergence of interindustry hierarchies and unequal exchanges, such as Global Value Chains and platforms, point to sustained interindustry profit rate differentials. It seems that Marxism is trapped between keeping a general law that does not allow to explain contemporary dynamics of value creation and appropriation or relegating theory to focus on empirical analysis of individual firms as price-makers and their markets.To solve this crossroad, I focus on an overlooked question: what is being monopolized in capitalism? A first response could be that capitalists have monopolized the means of production. Yet, since means of production differ, I explain that some firms have developed greater absorptive capacities to systematically monopolize knowledge and data (intangibles) that are essential for organizing labour and controlling demand. These firms hold intellectual monopolies while firms from other industries subordinate due to their lack of technical autonomy to organize their own production processes. Therefore, changing the question -from what a monopoly is to what is being monopolized- allows to think of monopolization as a power relation and not a state or entity and to conceive firms holding (intellectual) monopoly power -that will often do not operate as single suppliers in a market- as intrinsic to capitalism’s normal unfolding.
Accounting for Intangibles: Power, Production and Profit in Haskel and Westlake
Abstract
Haskel and Westlake’s Capitalism without Capital and Restarting the Future are among the most influential policy-oriented books on the ‘knowledge’ or intangibles economy. Capitalism without Capital proposed four ‘S’s – spillovers, scalability, sunken-ness, and synergies – as unique features of the knowledge economy. Restarting the Future built on this to explain secular stagnation since 2008 and highlight barriers to further expansion of the knowledge economy. This paper critiques Haskel and Westlake in order to make a positive argument about the nature of an economy in which firms with robust intellectual property rights (IPRs) disproportionately capture profits. Haskel and Westlake’s technologically determinist arguments fetishize intangibility and ignore two important issues. They ignore the actual organization or mode of production, focusing only on firms producing intangibles. They miss how IPRs transform intangibles like information into capital, that is, into a social relation yielding a stream of income. In short, their arguments lack both capitalism – a system of accumulation driven by profits – and capital in its sense of a social relation. I argue instead that vertical disintegration and IPRs allow a small set of firms to exercise de facto control over their value chains while capturing the bulk of profit from those chains. The unequal distribution of profits affects investment behavior and thence growth. Rather than older incumbents and institutions generating stagnation by inhibiting expansion of the knowledge economy, ‘the call is coming from inside the house’: secular stagnation is endogenous to an economy in which a few IPR firms capture the bulk of profit.JEL Classifications
- L1 - Market Structure, Firm Strategy, and Market Performance
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights