What does capital do in the digital economy? This is the question posed by Phil in an important post. He says:

Capital is proving itself surplus to the requirements of social production and is therefore assuming ever more parasitical, rentier forms...How long can these parasitic relations last? When will Uber drivers call time on the very visible deductions made from their fares and replace the app with a cooperative effort? Is the time coming when Silicon Valley can no longer ponce off ad revenues generated from other people's content?

I certainly agree that a feature of modern capital is parasitism. Perhaps the most egregious examples of this are not so much social media firms using the free content provided by its users to generate ad revenue for themselves but the way in which bookies and doorstep lenders (the latter with mixed success) use their low cost of capital to exploit the desperate.

However, I'm not so sure that labour can yet be as autonomous as Phil claims.

Compare my job to the classic old-style industrial capitalist. The latter not only provided machinery and working capital but also in many cases the production process itself, as he had invented it. The IC gives me none of these things. I have all the physical capital I need at home. All the IC provides is a content management system which sometimes works.

But this does not mean the IC has little power over me. What it has is brand power. This allows it to extract money from readers, some of which comes to me. Its brand allows me to monetize my work in a way I can't so easily do from blogging. From my point of view, the IC is a reliable and efficient alternative to Patreon. To get access to this, I must perform some mildly oppressive, exploited and alienating work.

Much the same is true for other immaterial workers. Working for a top accounting, law or advertising firm gives you a means of monetizing skills that are otherwise harder to monetize. (Not impossible, because workers do leave to set up on their own account. But the fact that many don't tells us that they are bound to the brand.)

A similar thing answers Phil's question: why don't Uber drivers leave to join a coop?

Some do. But there's a big barrier here. Uber has a brand presence which links cabbies to millions of potential customers. Potential rivals lack this. And as David Evans and Richard Schmalensee show, it's hugely expensive and risky to create good platform businesses: you suffer massive costs before getting the platform to sufficient critical mass - with people on both sell and buy sides - to be viable.

The fact that labour is immaterial is only part of the story of the new economy. Capital has become immaterial too. Intangible capital such as brand power ties us to capitalism. I need the IC's brand to make a living, just as my ancestors needed cotton gins.

Perhaps, therefore, the shift to immaterial labour (insofar as it is happening) doesn't much increase the autonomy of workers. Yes, the glue that binds us to capital has changed, but the social relationship is similar.

There's a paradox here, and a question.

The paradox is that one early hope for the internet was that it would cut out the middleman by removing the information advantage he traditionally had. And yet it has enabled capital to become the middleman in more ways. The power of Uber, Facebook and brands generally come from being middlemen between workers and customers or writers and readers.

The question is: is intangible capital a social good or just a private one? Traditional machines are a social good; they increase aggregate output. But this is not so true of intangible capital. Coca-Cola's brand is certainly an asset for Coca-Cola shareholders (and workers). But it's a liability for Pepsi. Likewise, Uber's brand is a barrier to entry for rivals. It's what Warren Buffett calls an economic moat: it increases Uber's value, but at the expense of making the economy less competitive. In this sense, perhaps Phil is very right: the new capitalism is parasitic.

It might be no accident that the growing importance of intangible capital has led to increased monopoly and less competition (in the US if not elsewhere) and hence to a strong stock market but weak economy and stagnant wages for most workers.

It might, therefore, be that capitalist stagnation and the shift to immaterial labour are related.

Another thing: Phil draws upon the work (pdf) of Hardt and Negri, but I suspect it can be translated into bourgeois social science. Years ago, Luigi Zingales was pondering (pdf) what the new economy and growing importance of human capital meant for the nature of the firm, for example.