Post-Capitalism via the Internet (According to Paul Mason) – Dream or Reality?


The book Postcapitalism: A Guide to our Future by Paul Mason (PM) is creating a lot of interest amongst the political left in general and in particular amongst the anarchist and left-communist milieu. The book tries to identify the forces which have shaped capitalist society in the past and which at present are determining its future. It argues that Internet Technology (IT) is a route to a society beyond capitalism. This central claim is a provocative challenge to Marxism which he condemns as having failed the test of history. The book contains a lot of interesting historical details and facts about the contemporary world together with discussions of ideas of economic and political thinkers. It is written in an accessible journalistic style and so is it easy to read.

Paul Mason’s central thesis can be outlined as follows. Industrial capitalism has evolved, since its inception in the late 18th century, in a series of long term cycles, called Kondratieff cycles(1) or waves, each lasting approximately 50 years. There have been 4 such cycles and we are now entering the 5th cycle. However because neo-liberalism has been so successful in shattering the resistance of the working class, the 4th cycle has been extended beyond the 50 year period. In addition because neo-liberalism has broken the resistance of the working class, the capitalist class cannot develop a new paradigm of exploitation as occurred at the start of the previous cycles. The 5th cycle cannot, therefore, take off and we are in a period of stagnation. Capitalism has reached the limit of its capacity to adapt. In addition capitalism has invented a technology, in the internet and Information Technology (IT), which it cannot control and which is undermining capitalist relations. IT is, PM claims, undermining the working of the capitalist market, leading to social production and so opening the way to a post-capitalist society. We are therefore at the start of a transition period to post-capitalism; a transition in which post-capitalism coexists with capitalism as a parallel system of production; a transition which could take centuries. However, because of a number of existential threats, such as climate change, demographic change in global population and sovereign debt, humanity does not have the time to let this transition run its course. Therefore, although post-capitalism is happening anyway, we need to mobilise the state to speed up the transition.

PM is an ex-Marxist and although he now rejects the central tenets of Marxism, such as class struggle being the motor force of history, the role of the working class in overthrowing capitalism and the Marxist theory of crisis, he still tries to find support for his central thesis in Marx’s writings. In particular he thinks the “Fragment on machines” in the Grundrisse can be used to support his thesis. He also uses Marx’s Labour Theory of Value (LOV) and the Falling Rate of Profit (FROP) to support various elements of his thesis, though his understanding of both is questionable.

He sees the working class as integrated into capitalism and hence no longer a political or social force. The principal division in society is now between “networked individuals” and “hierarchies.” IT has turned the whole world into a factory in which all are exploited by a tiny minority. This fits in with the simple notion of the 99% being exploited by the 1% popularised by the occupy movement. These ideas are not, of course, entirely new. The Italian autonomist school proposed the idea of the global factory and members of the Frankfurt school, for example Marcuse and Adorno, claimed the working class was integrated into capitalism and the revolutionary impulse to change society must be located elsewhere. The odyssey of those, such as PM, who despair of the working class ever rising to the historical tasks which Marxism has attributed to it, leads inevitably to the search for other sectors of society which can take on this task. PM thinks he has found such a section of society in his “networked individuals.”

The book represents a serious attempt to undermine Marxism despite his eclectic use of elements of Marx’s work to give his conclusions some sort of theoretical legitimacy. The question is whether PM thesis is correct. Before dealing with this we need to present his ideas in more detail.

PM’s Thesis

The key idea behind the book is that capitalism, through its invention of the internet and IT, has produced a technology which is undermining the system itself. IT is undermining capitalism by such things as “open source” or “free” software or collaborative projects such as Wikipedia. These are socially produced information products and therefore socially consumed for free. They therefore undermine the capitalist market. To support this he claims that Wikipedia deprives capitalism of $3bn a year in advertising revenue which Wikipedia could have had if it had been a capitalist concern. Also it prevents a capitalist encyclopaedia concern entering this field as a competitor. He claims the free software is reducing the marginal cost of software towards zero. As software costs approach zero costs of machinery of which this software forms a part also will approach zero. We are moving towards an era of the free machine. If the machine has zero value it passes on zero value to its products, hence the value of consumption goods also tend to zero. This undermines the value of wages and the relationship between wages and work. The whole value system which underlies capitalism is consequently being undermined and becoming irrelevant. The law of value is being eroded and we are approaching “post-capitalism”. The agents who are undermining capitalism are the “networked individuals” engaged in social production and producing cooperative products. They are opposed by the “hierarchy” who want to put fences around their intellectual property to make it function as capital. This is the new axis of conflict around which the struggles in present day society turn. PM sees the attempts to preserve intellectual property as capital are bound to fail in the longer term and the value system will continue to be undermined. He argues that these networked individuals have put the freedoms, which Marx imagined could only be attained in communist society, within reach although capitalist relations of production remain in place. It is significant that PM does not call his new society communism but the more vague “post-capitalism” since it coexists with capitalism in a process of symbiotic change. Whereas Marx clearly understood the communist society required revolution, in other words, a complete break with capitalist production relations, before it could be implemented.

PM is really trying to make sense of the post WW2 period, which in his scheme represent the 4th Kondratieff cycle.(2) His use of Kondratieff cycles provides a framework on which to base his analysis, but it is actually peripheral to his main argument since the 4th cycle does not conform to the pattern he presents for the previous 3 cycles. The general pattern of the cycle he presents is as follows. Before starting the upturn there is a build-up of capital in the financial sector triggering new inventions, new technologies and new business models. During the upswing labour is replaced by machinery leading to a falling profit rate counterbalanced by expanded scale of production. Production stalls due to overinvestment causing a break point leading to the downturn. There is then an attack on wages and benefits. Attempts to adapt to new conditions fail, as in 1830s, 1870’s and 1920’s, and capital retreats from production into the financial sector. Prices fall followed by depression. Working class resistance at this point is an important factor in stimulating the bourgeoisie to develop a new paradigm of exploitation. The 4th cycle starts with Marshall Aid and proceeds under US control. A set of new inventions and technology such as synthetic materials, the transistor, nuclear energy, automation, and a stable currency regime enshrined in the Bretton Woods system, consumer goods and high wages trigger the start of the cycle. The downturn was triggered by the 1973 oil price rise.(3) Now, however, the pattern of the previous waves breaks down. The failure of workers to resist the attack on their wages in the 80s enabled globalisation and a rebalancing of the global economy in favour of capital. Instead of the expected Kondratieff downturn we have two decades (1989 – 2008) of spectacular growth and profits. This, he explains, has been brought about by the use of fiat money, doubling the global workforce and cheap labour. But still we have the shift of capital from production to finance. PM claims the cycles are driven by the falling rate of profit. During the upswing the counter tendencies are strong enough to keep accumulation going but during the downswing the counter tendencies prove ineffective. He does not, however, try to demonstrate this which is surprising in view of his claim that the 5th cycle is stalled. It is even more bewildering in view of his claim that neo-liberalism has solved the problem of profitability(4) though it appears it has not really been solved as he admits that profit rates fell in the period before 2008. If the problem of profitability is solved one wonders why there is any need for a 5th cycle at all. However, let’s follow his argument.

The present fifth cycle which we are now entering should be driven by IT and global markets and a new paradigm of exploitation, but cannot get underway. The two main reasons for this are, firstly because IT is actually undermining capitalism and secondly neo-liberalism has broken the resistance of the working class and the bourgeoisie do not need to develop a new paradigm of exploitation as they did at the start of the previous 4 cycles. Presumably this is because profit rates are high though this is not stated. Hence we are in a period of stagnation with stalled investment despite the problem of profitability having been solved by neo-liberalism. In this situation a post-capitalist economy is being created by IT.

Islands of post-capitalism therefore, co-exist with capitalism but also undermine it. He compares this to the introduction of the money economy to feudalism in the 14th century. The increasing use of money payment for labour, rather than corvée labour of serfs and bondsmen, corroded the links which held feudalism together producing a transition which eventually shattered the system. This took centuries and we are at present in an analogous transition period which will also take centuries to complete. However, as mentioned above, we face existential threats from climate change, an ageing population and the problems of capitalism itself such as sovereign debt.

Under these circumstances the present situation is critical and this transition must be speeded up. To do this he invokes what he calls “revolutionary reformism” and the force which will implement this is the state. The state should, he tells us, act like the editorial staff of Wikipedia forcing the bourgeoisie to solve the problems of climate change, demography and debt. Once he starts listing the actions which the state must carry out, which he calls “Project Zero”, revolutionary reformism, turns out to be the old social democratic programme of state capitalism, which, of course, has been destroyed by neo-liberalism. PM demands the state do such things as, reversing privatisation and globalisation, nationalising energy production, outlawing monopolies, banning profit from rent, nationalising central banks, bringing finance onshore, fostering green capitalism, peer to peer lending and cooperatives etc. while at the same time encouraging non-profit production and the development of post-capitalism through tax incentives! All this is supposed to happen while capitalism remains in place!

A number of important themes arise from this story which we deal with below. These are:

  • the materialist view of history, and the situation of the world working class,
  • the labour theory of value and Marx’ theory of crisis,
  • the internet and the supposed undermining of capitalism,
  • the use of the state for “project zero” the transition period.

The materialist view of history and the working class

Marx notes in the Preface to a Critique of Political Economy that the guiding thread of his studies was that:

The anatomy of civil society is to be sought in political economy. … In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of the development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation on which rises a legal and political superstructure and to which correspond definite forms of social consciousness.(5)

This remains one of the fundamental tenets of Marxism, and in class society the relations of production are such that the ruling class extracts its wealth from the subject class. The ruling and the subject class have therefore directly conflicting material interests which results in a struggle between them – a class struggle. From this Marx concludes in the words of the Communist Manifesto that:

The history of all existing society is the history of class struggles.

The history of capitalist society is therefore the history of the struggle between the two main classes, the bourgeoisie and the working class. Only if this struggle is won by the working class can humanity progress to a higher order of social production, namely communism. It is this which PM is denying. He tells us:

The main contradiction in modern capitalism is … pervaded by a fight between network and hierarchy.(6)

The main contradiction in capitalism is therefore no longer the conflict between capital and labour and the force for creating socialism is no longer the working class. History is therefore not the history of class struggle. PM claims repeatedly that Marx was wrong about the working class and merely reduced it to a philosophical category.(7) Although the working class, he admits, is larger than ever before and numbers some 3 billion men and women(8), although it is today a more global class than ever before with more weight than other classes making the peasantry much less important than in 1917, it is, we are told, riven with ethnic and religious divisions and solidarity has gone AWOL. In the 200 years of its existence the working class has shown it is preoccupied with living under capitalism not overthrowing it. PM concludes that the first half of the 20th century was the ultimate test bed for the Marxist theory of the working class and it was disproven.(9) These assertions are actually an important link in the analysis he makes because his “networked individuals” who are supposed to be the bearers of a new society are not a class. They are an amorphous mass of individuals. Hence it is necessary to show that class struggle is not the motor force of history and that the smart phone and tablet brigade could accomplish the task of creating a new society. He tells us:

They are wrong … who cling to the belief that the proletariat is the only force that can push society beyond capitalism.(10)

The gravediggers of capitalism, he argues, are now the networked individuals.(11) Yet his dismissal of Marxism rests on a few empirical observations without any theoretical analysis.

If PM were to mount a serious challenge to Marxism he would need to produce an analysis which started from the relations of production. This is where the heart of the capitalist system is located and it is from here that it’s principal contradictions spring. PM does not do this. What analysis there is starts and finishes in the relations of distribution. Classes are, however, defined by their relation to the forces of production and this is a material relationship which no amount of ideology can disguise. Marx argues the working class is revolutionary as a result of its material position in the production process. Similarly it is materially bound to oppose capital because of this relationship. This is what PM needs to disprove if his thesis is to stand up. To argue, as he does, that the working class is preoccupied with living despite capitalism is somewhat ridiculous. All subject classes, throughout history, have tried to live in their position of exploitation until this becomes intolerable, then they become revolutionary.

PM claims the working class are now integrated into capitalism and are therefore no longer a revolutionary force. Again he offers no theoretical support for this view. However, if we look at the relations of production we can see that this is impossible. The working class owns no property and is exploited through the sale of its labour power at the point of production. Again the material interests of the working class are directly conflicting with those of the capitalist class. If the working really were integrated it would mean class society had been superseded which is certainly not the case. The class struggle is an integral part of class society and must necessarily be so. Empirical evidence shows that globally the working class is far from integrated. Although levels of struggle have been low in Europe and the US there have been massive strikes by workers in China, Bangladesh, Brazil, South Africa and elsewhere; precisely in those countries where the massive new numbers of proletarians are arising.

What is actually happening is that the structure of the working class is changing. In the advanced capitalist countries we are seeing the proletarianisation of many who were previously considered middle class or professional as the junior doctors’ strikes currently illustrate. Previous methods of struggle have not become obsolete but the lesson of the last century is that they are not enough. Strikes have to be accompanied by political actions and political actions on their own need the class who are the real wealth producers to use their power to withdraw their labour. Mason is really lamenting the death of social democracy and its mass trade unions but these are no loss. It was social democracy which saved capitalism (and did more to integrate the working class into the state than anything else) between 1918 and the end of the post-war boom in the 1970s. They were, and are, agents of capital, sabotaging class struggle by taking it onto ground which capitalism could recuperate and represented a significant obstacle in the path of an effective fight-back. It is true that the working class has been on the back foot for decades now but after all the restructuring that has taken place this is not surprising. It is however not as broken and divided as PM makes out. We point to modern struggles like that of the recent telecoms strike in Spain where divisions between many self-employed groups, different skill groups and company employed workers were overcome for a long strike.(12) This strike points to the embryo of future struggle. The economic crisis is forcing capital to attack the conditions of the working class pushing it into ever greater destitution which cannot continue indefinitely.

Labour Theory of Value and Marx’s theory of crisis

The Labour Theory of Value (LOV) is the basis of Marx’s theory of crisis so a rejection of the theory of crisis implies a rejection of LOV. Although, as mentioned above, PM uses sections of Marxist theory eclectically, in particular LOV and the Falling Rate of Profit (FROP), he rejects Marx’s theory of crisis. He tells us:

As a theory of crisis Marxism is flawed.(13)

As mentioned above PM begins his analysis in the sphere of the market not the sphere of production. This allows him to imagine that surplus value is created in circulation which leads to the view that monopolies and finance create profit. Marx, he tells us,

Could not take into account the major phenomena of the 20th century – state capitalism, monopolies, complex financial markets and globalisation.(14)

The view that surplus value is created in circulation leads to a superficial and fundamentally wrong view of contemporary capitalism. He thinks consumption and debt create profit. We read, for example:

A single mum on benefits, forced into the world of payday loans and buying household goods on credit, can be generating a much higher profit rate for capital than an auto industry worker with a steady job.(15)

In contrast Marx’s analysis, which is in no way superseded by state capitalism, monopolies and finance, shows that surplus value is created in the sphere of production by exploiting wage labour. The financial sector only redistributes surplus value created in the productive sphere, which is largely the industrial sphere. Similarly monopolies only appropriate surplus value generated in the sector in which they operate. It is simply a myth that these institutions generate additional profit. The entire financial and also the commercial sectors of capitalism only appropriate surplus generated elsewhere. In fact PM thinks the problem of capitalism is in the market and also states that this is the conclusion of Marx’s analysis. He claims, completely incorrectly, that the FROP is derived from problems in the market.(16) In reality the FROP is derived from problems in the sphere of production which lead to a shortage of surplus value relative to the invested capital. However, his view that the market is the problem for capitalism leads him to an admiration for both Keynes and Rosa Luxemburg’s economics. He agrees with Rosa that capitalism cannot exist without interaction with an outside world which is not capitalist. However he then proceeds to criticise her for not understanding that capitalism was creating markets for such things as cars and gramophones, even while she was writing her book(17), in other words capitalism was creating capitalist markets. He thereby shows he has completely misunderstood her also since the whole point of her book was to prove capitalism’s need for non-capitalist markets. In fact the claim that capitalism needs non-capitalist markets to survive is simply wrong.

All this confusion indicates a superficial and flawed understanding of both LOV and the FROP and calls into question all the conclusions he draws from these concepts. In fact a lot of the conclusions are not drawn from these concepts despite his declared acceptance of them. He tells us that the upswing after WW2, for example, is attributed to a new paradigm of exploitation, namely increases in workers’ pay which solved the problem of demand.(18) This is despite maintaining the Kondratieff cycle is controlled by the FROP. When he does return to the FROP he suggests that the tendency was offset by increased productivity. This, of course, the complete opposite of Marxist theory which shows increased productivity of labour leads to a falling rate of profit.

Marx argues that the principal ways in which the tendency of the FROP can be countered are by devaluation of constant capital or increasing the exploitation of the working class. Although PM declares support for the FROP he does not consider capital devaluation at all. This is an outstanding omission. The 20th century saw two devastating world wars which had an enormous economic impact. Their effect was to devalue or physically destroy constant capital on a global scale not experienced by capitalism before. The devaluation of constant capital in WW2 was, we maintain, the basis for the upswing with followed the war. All the manoeuvres in the sphere of circulation, on which PM places such store, only appeared to be working because the rate of profit had been increased by this devaluation. If the manoeuvres in the sphere of circulation were the cause of the upswing why, one could demand, did they prove ineffective in the 70s.

The Internet and the undermining of capitalist production relations

IT, PM claims, is dissolving capitalism. It is;

Corroding market mechanisms, eroding property rights and destroying the old relationship between wages, work and profit….The old factors of production – land, labour and capital have become secondary to information.(19)

IT will ultimately erode the link between labour and value altogether.(20)

IT is, therefore, undermining capitalism and the LOV. But does the famous knowledge economy really undermine capitalist market relations as claimed?

PM argues that capitalism is becoming qualitatively different and the relationship between physical work and information has changed. For this to be true it would be necessary to prove that IT is qualitatively different from other technologies capitalism has produced. An example PM gives to support this is that of jet engines and aircraft design. Designs can now be done on computers and millions of virtual tests carried out without building a prototype. However, let us compare how such work was done previously. In the past engineers would have used textbooks on aerodynamics, thermodynamics, strength of materials etc. to carry out their design. Past knowledge would be available for free in these books as it is on the internet. Virtual tests would be carried out by calculation on paper before a physical test. Both processes of design are carried out under capitalist relations of production. The difference is that the former is much more efficient and quicker. But this means only that the productivity of labour has been enormously increased by computers and IT. There is a quantitative difference but there is not a qualitative difference between the two processes. A quantitative difference cannot erode capitalist relations in the way suggested.

But what is the real effect of the internet and IT? It is indeed turning the world into one great factory and thereby increasing productivity of labour massively. Home working, flexible working, and reduction in labour costs are the order of the day. It is using programmable logic controllers to automate processes worldwide. It is using this technology to increase profits in the short term. At the same time, however, it is driving labour out of production consequently reducing profits in the long term. The technology which could enhance human life by creating leisure time for self-development is actually threatening human life by creating unemployment and precarious existence for countless millions of wage slaves. What we are seeing with the internet, is an accelerated version of the conflict between the forces of production and the relations of production. It is precisely because the LOV is not being undermined, as PM would have us believe, that this conflict is striking with a vengeance. PM tells us that 40% of all jobs are to vanish through automation in the near future, yet if capitalism is to remain in place this will produce a further 40% of the working class added to the reserve army of labour. This is only sustainable if capitalist relations of production no longer exist.

PM tries to find intellectual support for his thesis that the knowledge economy is undermining capitalism from Marx’s fragment on machines which forms part of the Grundrisse. This is a brief unpublished note Marx made for himself in 1858, a decade before he published Capital Volume 1. PM claims Marx abandoned the views in this note because capitalism stabilised itself after 1858 and they do not reappear in any later work but this is not true. In the note Marx considers the development of productivity through more advanced machinery and sees this as conflicting with the “theft of labour time” on which present wealth is based. He notes that capitalism is a moving contradiction as it tries to reduce labour time while positing it as the source and measure of wealth. He points out that the enormous increases in productivity which machinery produces should enable the free development of individuals. It should lead to disposable labour time for artistic, scientific etc. development of the individual instead of what occurs under capitalism, namely, production of surplus labour time appropriated by the bourgeoisie. Marx further notes that the contradiction between the forces of production which could enable disposable labour time to exist, and the relations of production which prevent its existence, will blow the foundation of capitalism “sky high.”

Capital Volume 1 does, in fact, contains a clearer statement of these themes but makes clear that disposable labour time can only come into existence is a society of associated production, a society where capitalist production relations have been abolished. PM claims, without supporting textual references, that this note shows that Marx saw the main contradiction in capitalism as between technology and the market, that he saw a knowledge as an independent source of profit, and saw a knowledge based route out of capitalism.(21) There is no justification for these conclusions.

What Marx actually says is that:

The power of the agencies set in motion during labour time depends … on the general state of science and the progress of technology or the application of this science to production.(22)

This is not only obviously true but clearly applies to IT and its application to production. Marx goes on to say:

The development of fixed capital indicates to what degree general social knowledge has become a direct force of production, and to what degree , hence, the conditions of the progress of social life itself have come under the control of the general intellect and been transformed in accordance with it.(23)

It is clear Marx saw the general intellect as manifesting itself in constant capital and this applies to IT. Though knowledge is a force which enables constant capital to be continually improved, and the productivity of labour to be increased, the source of profit is exploitation of living labour not knowledge. To maintain knowledge itself is a source of profit is simply to reject the labour theory of value, which, of course, PM says he supports. Knowledge itself is not the driving force of capitalism. The driving force is profit. The advances of IT are only applied if it is profitable to do so and they certainly do not open the path to a post capitalist society. What they do is to enhance the conflict between the forces of production and the relations of production. The route out of capitalism, as Marx makes clear in subsequent texts, such as the Critique of the Gotha Programme, is socialist production. PM, however, tells us that this route is available through IT while capitalist relations remain in place.

IT we are told:

… Adds information content to physical goods sucking them into the same zero price vortex as pure information goods.(24)

The claim that the marginal cost of physical commodities which contain IT is declining to zero(25), which would represent abolition of the LOV, is simply untrue. The LOV applies to mental production and therefore to the IT. In fact all human labour has a mental element involved in it. Hence software has a value even if this is low, and this value goes into the value of constant capital of which it is part. To produce use values, which humans need to survive, such as food, clothing, shelter and energy conventional machines producing physical forces are required. Software only operates to control and instruct these machines. Such machines necessarily wear out and so pass their value on to the product. IT is only one element of constant capital and the total value of new constant capital provided for an industrial process, even with the cheaper IT element, is generally of greater value than what it replaces. Car production lines, with ever increasing automation and control, are an example of this.

A further development which PM makes much of is the development of “Open Source” or free software and collaborative productions like Wikipedia which have come into existence through the internet.

What these developments represent is a revolt of programmers and software workers against the relations of production which ensure their work is owned by the capital which exploits them. It cannot be said that it represents a new means of production since those who produce it do not survive by this work. It is estimated that 40% of developers in open source software are paid to participate in it.(26) The work needs to be coordinated and coordinators often work for IT firms. It is a lot less revolutionary than PM imagines. While it shows people are cooperative and social, it does not show capitalism is breaking down. Although it is gifted to everyone for free, it still exists within capitalist relations and, as might have been predicted, capitalists immediately appropriate it. On the one hand they use the free software themselves, as for example, IBM use Linux instead of paying to use Microsoft, or Google and Samsung use Android, on the other hand the big capitalist concerns are delighted to have the most talented and brilliant workers worldwide continually improving the software they use for free. This is certainly not a threat to capitalist production. Its effect is to lower the cost of constant capital and enhance profits.

The production of free software, Wikipedia, peer to peer lending, cooperatives etc. are not an alternative means of production to capitalism, any more than the Salvation Army or the friendly societies are. Those who produce free software or Wikipedia are linked to the capitalist system in other ways and through these links derive their means of survival. The utopian socialist communities of the early 19th century are a true example of the attempt to establish an alternative system of production within capitalism. What they found was that the law of value operated on a global scale and the capitalist value system reasserted itself through any trade they carried out with the capitalist world. This led to their collapse. Similarly, for the same reason, Marxists argue that it is impossible to create socialism in a single country and the ultimate fate of the Russian Revolution bears this out.

PM, however, maintains that islands of post-capitalism can coexist with capitalism and will reduce capitalism to a few niches in the economy.

The state and Project Zero & Transition

PM chides Preobrazhensky(27), the Russian revolutionary, for saying that the socialist system cannot be built up molecularly within the world of capitalism and claims:

It is entirely possible to build elements of the new system molecularly within the old.(28)

This is repeating the dream of the utopian socialists of the early 19th century. At present the free sector survives because it is peripheral to capitalism and the workers in this sector sell their labour power in the capitalist sector in addition to their voluntary work in the free sector. For products to exchange in any economy they must, as Marx shows, have a common element which is commensurable. Under capitalism this is “abstract labour time.” However, in a system of production where some production was free this common element would be lacking. The collaborative products could not be exchanged with those of the capitalist sector. The capitalist sector, however, would appropriate them for free. Workers in the collaborative or free sector of the economy would have to sell their labour power in the capitalist sector to get what they needed to survive, for example food or fuel. However, those in the capitalist sector could simply take what they needed from the free sector. The result would be the collapse of the collaborative sector. This would be because the LOV was still acting. The only way such a mixed system of production could work would be through state control. And only a state controlled by the non-capitalist sector could do this. How could this be brought about? Only through a seizure of power by the free producers and destruction of the LOV, but this is something PM claims is quite unnecessary.

PM considers a transitional economy supervised by a transitional state which acts to create post-capitalism is perfectly possible. This is where “revolutionary reformism” turns to dreaming. PM is proposing a type of absolutist state which acts against the capitalist class while capitalism still exists as the dominant mode of production, and undermines capitalism by fostering free production and distribution. Here we have a hierarchy but this time it is acting in the interests of the networked individuals. We still have capitalism, the market and finance but the state is to nurture the anti-capitalist islands outlaw monopolies etc.

The state represents the interests of the dominant class which in this scheme would be the capitalist class. Why would the bourgeois state act against the interests of the bourgeoisie? Why the bourgeoisie should use the state to abolish capitalist social relations is a mystery PM does not even attempt to answer. This simply illustrates the contradictions in any scheme which imagines capitalism and socialism coexisting. It illustrates not that Preobrazhensky was wrong but that he was dead right! This absolutist state implementing the transition which PM proposes is merely wishful thinking.


The central thesis of the book, that the internet and IT are undermining capitalism, is simply incorrect. The internet provides glimpses of a social structure based on the ending of the LOV but it is an illusion to imagine that open source software, or voluntary collaborative projects like Wikipedia can lead to a radical social change if capitalist production relations remain in place. The internet does not cancel the divide between capital and labour. This is a technology for increasing the productivity of the working class and reducing the value of constant capital. In short, it is a technology for increasing the rate of profit. Post-capitalist production cannot come about without resolving the conflict between the forces of production and the relations of production which in turn cannot be done while capitalism remains the dominant system of production.

The idea that the working class is no longer the subject of history is also incorrect. The working class is not integrated into capitalism and despite the change in its structure is in a materially stronger position than ever before in history. It remains the subject of history and hence the grave digger of capitalism. Its struggles against capitalist exploitation and its attempts to find ways around all the restrictions and divisions which capital imposes on it, as illustrated in the Spanish telecoms strike(29) and the strikes by workers in the peripheral economies, show this is as true as ever. The transition to a socialist form of society where products are distributed for free in accordance to need cannot be made gradually or molecularly as PM advocates. Instead it requires the working class to smash the capitalist state everywhere and institute a dictatorship of the proletariat to carry out the transition to communist society.



(1) Kondratieff was a Russian economist who the Minister of Agriculture in the Provisional Government in 1917. He was not a Marxist and developed his long cycle theory in the 1920s. After 8 years of imprisonment Stalin had him shot in 1938.

(2) The long wave cycle theory was taken up by the bourgeois economist Schumpeter of the Austrian school who saw the development of technology as a driver of the upturn of the cycles The first cycle starting in 1790 was driven by steam power, the factory system and canals, the second starting 1848 by railways, telegraph, ocean steamers and stable currency, the third in the 1890s by electricity, telephone, mass production and Taylorism.

(3) See “Postcapitalism” p.48 (The oil price quadrupled)

(4) See “Postcapitalism” p.71 “Michel Husson argues correctly that neo-liberalism solves the problem of profitability both for individual firms and the system as a whole.”

(5) K Marx Preface to A critique of political economy.

(6) See “Postcapitalism” p.144

(7) See “Postcapitalism” p.185

(8) He quotes the study by Richard Freeman of Harvard “The global labour market” Focus Volume 26

(9) See “Postcapitalism” p.197

(10) See “Postcapitalism” p.178

(11) See “Postcapitalism” p.212


(13) See “Postcapitalism” p.49

(14) See “Postcapitalism” p.54

(15) See “Postcapitalism” p.20

(16) See “Postcapitalism” p.159

(17) Rosa Luxemburg “The Accumulation of Capital”. For our critique see

(18) This is the theory of the French Regulation School.

(19) See “Postcapitalism” p.112. This is a quote from P Drucker of the Austrian School a pupil of Schumpeter. PM endorses this on p.217.

(20) See “Postcapitalism” p.179

(21) See “Postcapitalism” p.137

(22) Grundrisse p.705

(23) Grundrisse p.706

(24) See “Postcapitalism” p.142

(25) See “Postcapitalism” p. 26

(26) See G. Carchedi “Old Wine, New Bottles”

(27) Preobrazhensky was initially a left communist but later supported the Trotskyist Left Opposition during the NEP period by demanding that Russia industrialise rapidly. When the Five Year Plans began in 1928 he considered Stalin had adopted the programme of the Left Opposition. This, of course, did not prevent him being shot by Stalin in 1937.

(28) See “Postcapitalism” p.244

(29) See

Sunday, February 21, 2016


This most stimulating and clearly presented article. I copy here my favourite bit.

It is clear Marx saw the general intellect as manifesting itself in constant capital and this applies to IT. Though knowledge is a force which enables constant capital to be continually improved, and the productivity of labour to be increased, the source of profit is exploitation of living labour not knowledge. To maintain knowledge itself is a source of profit is simply to reject the labour theory of value, which, of course, PM says he supports. Knowledge itself is not the driving force of capitalism. The driving force is profit. The advances of IT are only applied if it is profitable to do so and they certainly do not open the path to a post capitalist society. What they do is to enhance the conflict between the forces of production and the relations of production. The route out of capitalism, as Marx makes clear in subsequent texts, such as the Critique of the Gotha Programme, is socialist production. PM, however, tells us that this route is available through IT while capitalist relations remain in place.

Isnt it marvellously said? Paul Mason (PM)

Unfortunately I posted my comment before finishing it. I was just wondering however, what kind of dreamer it was that goes on insisting that socialism can be built inside capitalist relations of production? And that IT is the solution to all our problems. Wouldn't Marshall McCluhan - remember him: "The medium is the Message" - probably think similarly?

From so many articles, including this long carefully argued one, there are likely to be two 'so what?' questions, re what is being recommended by the author and, in any case, what is actually likely to happen. Whilst by no means discounting any of the rest of the article, two paragraphs are probably very notable for readers trying to weigh up some key concepts. Within the section headed 'The Materalist view of history and the working class', the paragraph starting with "What is actually happening .." can be considered in combination with the final one of the conclusion, on the working class as now described, and as it is now required to do by revolutionaries, for what they regard as necessary and presumably inevitable. OK, so how fast are the technical means of production developing, and how fast is revolutionary consciousness developing in the working class, taking the latter as being more than being angry on localised and world scales ? How many workers do you know who want and are prepared to become revolutionary, and, then, how many of those want communism ? It won't just be somewhere else, as some Stalinists seem to imagine, but world wide, in other words where you and future generations actually live, if so lucky. So it won't just be on the net. Time flies.

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