The Specter of Information Technology: An Interview with Paul Mason

Capitalism is on its last legs. According to the British journalist, writer and activist, Paul Mason, capitalism develops in cycles of 50 years. For Mason, the 2008 financial crisis was the abrupt end to capitalism’s fourth wave and we are now in the fifth and final wave. Like Marx, Mason claims that capitalism will collapse under the weight of its own internal contradictions – postcapitalism has already begun. But it is neither the left or the proletariat which is the engine of socio-economic transformation; rather, it is information technology and the networked individual. I met Mason at small cafe in South London to hear more about his book PostCapitalism.

Malise Rosbech: In your book, one of your major claims is that we live in a historical anomaly. Could you explain more about why that is and how you got to that conclusion?

Paul Mason: When I was covering the 2008 crisis, it became obvious to me that it was a major disruption. But the theories that emerged over and above the kind of denial theory, which is basically that it’s not a problem, tended to assume that the main problem was a debt overhang, so that we were just going to have long term indebtedness  – that we just needed to pay down the debt mountain. This didn’t satisfy me. To me depressions don’t just happen because you get big build-up of debt in the system. Rather, it’s when you have big build-up of debt in the system and the real economy is not functioning alongside that.

Not only Kondratieff, but also Joseph Schumpeter, is the modern incarnation of this theory. They both point out that there’s regularity to long depressions. They usually coincide with periods where all business models have exhausted and the way of compensating for the exhaustion is also exhausted. Then you get a flat period in which people are obliged to innovate. Once the innovation is done, it’s rolled out and usually you then get an upswing. But what I was observing was that we were no longer in the pure innovation stage. In fact, we were in the rollout stage; Wi-Fi, broadband, 3G, 4G, exponential falls in the price of computing, and yet no upswing.

So I wanted to try to situate the 2008 crisis within a different model than just the one associated with the Keynesians. That’s what led me to start asking first of all ‘how does it fit in to Kondratieff’s’ or the Schumpeterian wave pattern, and if it doesn’t, why not?’ That’s what led me to the conclusion that what we’re experiencing now is beyond a 50 years cycle problem and that we need to stop looking at dynamics of credit and financial markets and financialization purely as problems of neoliberalism. Instead I started asking the question ‘has neoliberalism created a techno paradigm that doesn’t fit with capitalism?’

The whole first part of your book deals with Kondratieff’s work and more specifically his theory of wave patterns. Why do you find Kondratieff helpful in explaining this historical anomaly?

I became aware of Kondratieff’s theory in the 1970s or 1980s via the work of the Trotskyist theoretician Ernest Mandel. I was also aware that nobody within the Marxist context had really engaged with his work because of its obvious problems – that it just doesn’t agree with Marx’s crisis theory. They are two separate things.

Although Kondratieff’s substantial works now exist in English, there’s not many people who’ve bothered to read step by step what he’s actually trying to do which is constructing a theory of development. What I’ve realised is that his wave theory is only part of an overall theory for him trying to quantify inputs and outputs to capitalist development and trying to work out the question ‘at what point do long wave cycles become disrupted or peter out?’ But he could never answer it. His answers to it are perfunctory in the writing. So for me it wasn’t therefore a matter of finding a theory I can stick onto an unusual event. Because the theory of unusual events is also challenged by this unusual event. So the question is, ‘how do we link together business cycle issues, long wave technological innovation issues and then the end of capitalism?’

You could, if you wanted to, just cut out the entire Kondratieff chapter from my book and it would still make sense. In this sense it’s like physics, chemistry and biology – it’s several different ways of looking at the same problem.

Does that mean you’d describe your theory as technologically deterministic?

If you want binary answers, yes. If you want more complicated answers, yes and no. I do think that at a moment like this, technology is more important that sociology, class structure and international relations. When Francis Bacon said in 1620 that the printed word has changed the face of the world, he didn’t go ‘but Spain is not as good as Britain’. He meant the whole world as we know it. It’s no good asking, how does the rise of banking in 15th and 16th century Genoa change human behaviour. The point is that you’re noticing something. That’s why I’m using Shakespeare in my book. If you could interrogate him and ask ‘what are all these plays about?’ he’d say ‘the way that money will change the way humans behave’. That’s a good insight. What he was seeing was a rise of something there’s no word for yet – capitalism.

That’s why I use the word postcapitalism. It’s only a negative term, like a negative diagnosis. We have no idea what a postcapitalist society dynamics will be. But we can propose or hypothesise that we’re at a moment where technology is straining not just against this kind of capitalism or inequality, but also against all forms of ownership and market distribution. In the sense it’s technologically deterministic. In Marxism it is to say that technological progress will challenge the relationship on which capitalism is built. That’s really all I’m saying. But I’m saying it in a completely different way to what Marxists have done, because they couldn’t imagine information technology.  

But of course there is a role for the subjective historical subject. A big part of my work is to understand the nuances of the way in which people’s brains and their behaviours are changing. And therefore the way that economics react. I mean, if we are prosumers, collaborating in our own exploitation we are making unconscious choices about what happens to externalities. I want to know more about the details of that. I might be a technological determinist, but I don’t believe in the teleology of Marx. There’s no reason mediated by Hegelian dialectics for humanity to go through. Just as Bacon, McKagan, and Galileo were all more important than the rise of capitalism and the early bankers, I’d argue that key information technology will probably be more important than anti-capitalist revolutions.

That’s interesting. So how do you understand the role of the historical subject? Is it similar to the proletariat in Marx?

I don’t think a priori that there has to be a historical subject. It’s just that history sort of makes more sense if there is one. All theories are provisional. As someone who’s walked away from classical Marxism, I still use the labour theory of value and some of post 1970s crisis theory as a way of understanding what was going on. I’d also become aware of these non-orthodox readings of Marxism in the light of new technology. One of these more non-orthodox readings is by Antonio Negri, but an earlier, and I think a more valuable, one was André Gorz.

Gorz notices all the surface factors that were actually very low-scale when he was alive. They are much more obvious now. He says that the move to an information capitalism is a move away from a capitalism based on work. That’s the biggest challenge for Marxism because it removes the proletariat as the subject of historical change. Gorz says about utopian socialism: it’s a good idea and we should strive for it, but there’s neither historical inevitability nor is there a subject carrying the relations of the future within their subjectivity. I thought that was just a bit weak. Even before you get to Manual Castells and to networked individualism you get people like Richard Sennet noticing some of the features of the technological workforces. They seem to embody something close to what a liberated human being would experience.

The early Marx says that we know what human liberation probably looks like. It’s the absence of work and very large amounts of personal freedom to choose in all aspects of life. No form of class society can fulfil that. What we’ve got within the last 20-30 years, is the beginning of this. As long as you have a decent job within a liberal developed society, people can achieve relative amounts of self-liberation. The rapid rise of automation also gives you the possibility of achieving this. In other words, leaping over the stages of scarcity socialism, we’re looking at a transition that goes from a relatively troubled and unequal form of capitalism, to a non-capitalism which liberates people through technological innovation, no work and non-hierarchical forms of interaction.

The proletariat exists for Marx because it slots into a need – if you want communism now,  you need an agency for it. For me the networked individual doesn’t slot in in the same way. Non-work society will come because technological progress will bring it. In his essay Looking Back on the Spanish War, Orwell said that the problem with the proletariat and socialism is not you must have the proletariat to have socialism, but you must have the proletariat to have socialism soon. Because only they want it. The agency aspect of the proletariat is a time based one. The networked individual can already begin to live it whereas the early proletariat saw utopian socialism as a long-term goal for them.

So what does it mean to be a ‘networked individual’?

The networked individual is a very unfortunate term. It was invented by sociologists to document an earlier phenomenon – the suburbanization of work. They didn’t mean digital networked individuals. With Castells’ work it comes to mean the individual newly empowered by networked technology and that’s what I mean by it. I think one of the only virtues of being a 56-year-old theorist is having seen this change. I know that my own persona is effectively a product of hierarchy, and everything about it was formed by hierarchical society. Now people’s personas are formed very differently. I would imagine this is a bigger change than the one between 19th century and 20th century human beings, or at least as big.

In my previous book Why It’s Kicking off Everywhere, I used that whole epoch as a model of personality changes. We ought to do more on this. Quantitative analysis rather than qualitative analysis work would be what we need to do. It’s literally about saying ‘what choices are presented to people by the technological networks everyday?’. Say, for my grandmother’s generation it was walking down this street, go back to this mine, come back up, go to this pub or this pub – those were the choices. For my dad’s generation, there are a lot more: watch TV, choose channels, read a book, go to the library. Now, for you, you press that [Ipad] and you go ‘boom’. So noticing that the networked individual exists and behaves in new ways, thinks in new ways, has a new concept of the self, is essential. And of course this is changing constantly because there are reactions – wave upon wave of reactions from people as they realise new behaviours settle down.

I want to come back to the more economic aspects of your argument. According to your book, neoliberal capitalism has been digging its own grave of sorts for the last two decades because capitalism cannot capture the value generated by the new technology. Can you unpack that a bit?

I think that neoliberalism has created its own grave in several ways. Let’s remember the most fundamental one is to suppress the wage share of the economy. There’s a famous graph where productivity is growing and wages follow it. When we get to the 1970ies, it detaches from it and simply stagnates. That’s a picture of a capitalism whose dynamism is suddenly transferred from productivity to suppressing wages. This works for about 15 years and then because you’re just replacing wages by credit, the credit piles bigger. All we need for that to go wrong is for the market to be given a signal that there’s not enough value for the future economy to repay the credit pile. So the fundamental dysfunction of neoliberalism as a model, is the idea of endless leverage and wage stagnation. And if we want to imagine neoliberalism being replaced by a form of capitalism, it has to be a form of capitalism that reverses that.

But once you do that, you’re then aware of the fact that the previously highly functioning version of capitalism, Keynesianism, also didn’t work. The reason it broke down is because its productivity model couldn’t keep up with wages. Now, given you’ve smashed the working class, financialised consumption, made sure all prosumers are taking part in their own exploitation in way that didn’t exist in the Keynesian era, you could squeeze out another 20-30 years of growth of Keynesianism.

However, the fundamental problem you’d still face is that information technology drains value out of system. Whether you use marginalist terms or Marxist terms, the inputs and outputs lead to rapid cheapening of many things, not just information products but real products. By cheapening products you create a situation where price becomes an artificial maintenance, which has wholly reliance on large unscrutinised monopolies. When you look at the valuations of Samsung, Amazon, Apple, Facebook and Google, they imply that one day one corporation owns everything. But that’s not possible exactly because InfoTech is draining value out of the system – it’s draining activity, if you understand the book correctly, from the market sector to a Quasi voluntary co-operative sector that economists doesn’t see

That’s the beauty of the OECD 2013 report. That it was the first time any major agency had said that the main impact of information technology is that it’s creating a non-market sector. When I saw that I was quite some way into the writing of Postcapitalism and that’s absolutely a validation of what I’m saying here.

But surely the new technology has also ‘helped’ neoliberal capitalism because it has enhanced people’s ability to exploit. In this sense, technology is not unbiased.

Yes, of course. It’s there in the Marxist model and it’s there in the Schumpeterian model. You can list all of the great things it’s done. First of all it allows the global distribution of production, without advanced communication systems you can’t have global production networks. That means you can immediately take advantage of cheaper work in places that didn’t really matter before.

In general, complexity equals safety as long as you regulate it and make sure everyone is playing by the rules. In this country you used to have a monetary policy where interest rates would be set by half per cent changes in interest rates. People didn’t even realise or understand that changes less that half per cent were important. Once you got into inflation where the interest rate was actually used to fine-tune with a real time model all kinds of accumulation rates and profit rates in society you needed quarter per cents. Without technology you could never have done that unless banks are daily calculating and recalculating millions of interest rates marginally calculated against the base one. It doesn’t really matter if you move it a quarter and a half but once you do you can have an amazing control over economic management. It begins to automate.

My claim is that we’re now in the third industrial revolution. But it’s not just about automation of physical tasks but also about artificial intelligence. For the last 15 years we’ve been able to automate a 3.5 thousand year old process – apple production. Now you’ve got drones that can pick apples, plant seeds, graft one thing to another, you can genetically design the apple if you want. Artificial intelligence allows us to just show an apple to a computer and tell it to work out how to produce 10 million of them. You won’t see the orchard. We’re the clasp of that – that is the amazing thing. Once we do that, why would anybody imagine that a society based on inequality and class is functional? When the computer can design the way of making the apples, why would you need orchard workers and orchard owners? I’m so frustrated with the failure of economics to embrace these 500-year change questions. Economics as a discipline has just become about marginal changes and detail.

But isn’t there a danger here of having too much faith in technology’s ability to  automatically dissolve hierarchies, class structures and challenge oppression. If we’re talking about human liberation surely this needs to be a part of the postcapitalist project?

Once we understand that the outcome is going to be free human beings, relatively free of economic necessity with a lot of time, that’s a new problem. To get there obviously there is a transition period in which many aspects of what capitalism is right now survives. And the subjective factor consists in understanding that that’s going to happen and consciously navigating your way through it.

And there’ll be choices. There is a perfectly logical de-growth strategy which is not very well known in Britain. I think it’s there in Denmark and it’s definitely there in Germany. It claims that solar power is bad because it encourages us to use energy. According to this strategy, human prosperity is less important than for the planet to survive. At the other end, you can have almost a neo-neoliberalist strategy, which says that we want the maximum wellbeing and personal freedom and choice for everybody. So of course that’s where the argument begins.

I want to associate the postcapitalist project with an intelligent decision on this. But at the same time my project is a first world project. Something I probably inherited from classical Marxism. I believe that if you can accelerate the process towards relative abundance you should. In my book I present this four-silo model of the economy – labour, machines, energy and raw materials. If you think of it that way you see that labour and machines are the easy bits. We can already automate the production of machines so much that the cost of reproducing labour becomes really small. That reduces the list to energy and raw materials. Energy is solvable, because we have renewables. Of course it takes energy and raw materials to make new renewables too. But once you switch off carbon energy, you’re really improving the sustainability of human life on the planet. It’s an absolute given that every developed country should be pursue this. So what you’re the left with is raw materials. Just within the 5 years I’ve been thinking about this it’s gone from way out there at the end of the radar to quite central business thinking. Now all four silos have got dynamics going on within them moving at different rates towards abundance.

Now that the proletariat no longer take centre stage, perhaps the problem of social justice is more specifically the role of the left in the postcapitalist project?

I think the left is still recovering from the proletarian restructure that took place in the 70ies and 80ies. Although that tradition was smashed up it wasn’t completely destroyed. This is a good thing because it still creates levels of class-consciousness and progressivity that helps us do the fight we’ve got to do. On the other hand it also means that it’s full of people who don’t see the needs of things I’ve just said. Their view of a social transformation is essentially state-led and problems of abundance have never even occurred to them. They believe the proletariat still exists and is waiting to leap out again. An important part of my book is to say that in next 2-3 years the left must try to understand the much more rapid transformation that’s likely to take place and the possibilities of this transformation. The left must begin to adapt their programmes and their forms of action to that. That’s what I think Podemos have done well. In Madrid, Podemos do participatory budgeting – 60 million euros under the complete control of the population. This encourages networks and compromising. The things they’ve come up with are nearly always urinals, parks, nurseries and old people’s centres. None of it is revolutionary, but to Podemos it’s revolutionary because it’s creating a network. The postcapitalist network needs the whole of the left to start thinking about opportunities like this and less about big state projects.

There’s a really important mental shift to be made here. The old statist mode with nationalised industries was efficient because they were not sources of profit. They suppressed the market and compressed it into other sectors and although they sometimes did the opposite, they could be pressured to deliver social justice. In the post capitalist project, however, a nationalised or state-run industry does something much more fundamental. Its aim is to reduce the input prices to labour – to make water, electricity, sewage, transport and education as cheap as possible. Why? Because we don’t expect there to be lots of jobs. That’s where the idea of a universal basic income comes in. Basic income is the answer to work scarcity. But just as importantly is the use of state services to reduce input costs to labour. Leftism has to reorder its priorities very fundamentally and do things that look like old things but for different reasons.

This leads me onto the role of the state. Of course we have to bear in mind is that the state creates neoliberalism everyday. This is the big ideological illusion of neoliberal capitalism. Firstly, the state underpins the profit rate at the lowest possible level and everything else is financial profit stacked up on base rates. Secondly, it massively enhances the profitability of the private sector by shovelling more and more functional public assets into the hands of private companies to exploit for profit. In other words, the neoliberal state has created an entire sector. Banks, Serco, G4S and all the big consulting companies make their businesses with the state. Don’t underestimate the size of the state in neoliberalism. The question is therefore not, ‘is there still a role of the state’. Rather it is, in the postcapitalist transition, how do you shrink the market and grow the non-market, this third extra sector that economists don’t really see.

The state is important in a purely economic sense. I argue that the state has to intervene to create postcapitalism. This is something the left really needs to get its head around. The state needs to provide basic services as cheap as possible. On top of that there’s the aging population, migration and the climate. All three of those will need quite dramatic and big scale state action. In a way the 21st century leftism will have to have almost a dual personality. They need a peer-to-peer mentality and horizontalism when it comes to the economic transformation. But when it comes to the big things that need to be done, I think 21st leftism might surprise itself in how much it uses the state.

Recently Labour Party Shadow Chancellor, John McDonnell wrote that the rule of free market ideology had now ended in Britain with the rise of a Corbyn-led Labour Party. What do you make of these changes in British politics? Can we employ these changes for the postcapitalist project?

In regards to the British Labour Party, it’s too soon to tell. But across the world what you’re seeing is the changes. Over the last 6-7 years we’ve seen the eruption of networked activity. Second, we’ve also seen the emergence of a generation unencumbered by the Thatcher/Reagan era and their desire to achieve change from below as well as from above. I think that’s the shaping influence of the left. Then the left seemed to realise that protest alone didn’t work and that they had to at least engage with hierarchies in order to defeat them. And so they tried various forms of non-hierarchical politics to work against the hierarchical ones and then we’re now in a phase where the limits of that are being tested. Podemos reaches 20% of the vote but can’t go any further. Therefore they can’t govern. Then what do you do?

In this sense, that naive network leftism of 2010/2011 has made the right move and gone into mainstream politics in form of the Sanders movement, the Corbyn movement and Syriza. But then what do you do if the speed of the collapse of the global order doesn’t match the speed of your own development. That’s what’s really interesting. And I think that’s what 2016 is all about – it’s now that the problematic really opens up. It means that you’re again faced with more inter-bourgeois questions like ‘what are we going to do about Brexit?’ or ‘what are we going to do about the German migration crisis?’ Network politics has no special answers to any of these things. Because of this, I now expect a left that spends a lot of time constituting itself, having to evolve 20th century style of alliances, just to defeat the kind of reaction forces that are emerging. That’s exactly what the European and American left had to do in the 1930ies. They both had to ally with the liberal sections of the upper class against fascism of the far right, and it looks like we’re going to have to do that again.

Interview originally published in Danish by Slagmark.