Hobby economy

Some inchoate thoughts about paid and unpaid work. One of the primary obstacles to thinking about alternatives to capitalism is the idea of money as a primary motivator. In capitalism, with its liquid labor market, money comes to seem the sole means of legitimizing effort. If you get paid for it, the effort was valuable, socially necessary, useful. If you don’t, your effort was hobby work, leisure, relaxation, a distraction. With money serving as this legitimizing function at the level of individual psychology, it inevitably becomes important people to display their wealth as a means of signaling their professionalism—expensive suits, well polished shows, big watches. These aren’t mere vain ostentation, but a sign of competence and credibility, in the same way elaborate and stolid bank buildings are meant to signify stability. Thus, the barriers to professional advancement become material, and they become encrusted with cultural-capital issues of knowing what to buy, how to display it, how to attain it, and so on. Money then begins to seem like the purpose of productive activity, with the actual social product as a kind of byproduct. This may lead to irrational allocation of resources, that make, for example, the financial sector of the economy far larger in proportion to GDP than it has any business becoming.

If you accept standard economic theory, wages are supposed to be an indicator of what sort of work is socially necessary, and what sort of work needs doing—necessary functions. But, if you accept unorthodox Marxist economics, wages are also bound up with the creation of surplus value and with the theft of workers’ time. We produce value for capitalists over and above the wages we are paid, all the while performing work that is no longer socially necessary and rewarding individually (we are no longer contributing to the health of society) but work that is drudgery, that is exploitative, that produces commodities that don’t fulfill existing needs but serve to stimulate new wants. (We are acclimated to this, regard these new wants, these new desires, as enlarging the possibilities of our lives. Living inside capitalism, it’s hard to even have perspective to judge whether or not that is so.)

But the internet, as a relatively affordable and powerful means of production available to many noncapitalists, has perhaps started to make possible an alternative to wage legitimation of labor. Tyler Cowen, in a post from a month or so ago, responded to BusinessWeek economist Michael Mandel’s theory that the alleged productivity gains from the IT boom of the past decade and a half were illusory. Cowen writes, “My take is this: there was some productivity growth but much of it fell outside of the usual cash and revenue-generating nexus.  Maybe you will live until 83 rather than 81.5 and your pain reliever will work better.  In the meantime you will read blogs and gaze upon beautiful people using your Facebook account.  Those are gains to consumer surplus, but they don’t prop until the revenue-generating sectors of the economy as one might have expected.” In other words, gains in productivity derived from things like the internet aren’t showing up as more money in our pockets, and they are not showing up as corporate profit, but they do exist in a kind of nascent alternative economy. The “consumer surplus” is being generated outside of capitalist structures, outside of the market, though it is still occurring within a capitalist, consumerist society. It’s being made through activity that has in the past been generally dismissed as hobby behavior—collaborative open-source projects, online content production and archiving, tagging information, sharing and organizing useful data, etc., etc. The internet amasses this effort, consolidates it, distributes the example and rewards of it, and draws more people into contributing.

Matt Yglesias makes a similar point about the growth of this productive yet noncapitalistic activity:

the true essence of the “new economy” of the digital era is that there will be lots of activity going on that people enjoy and find useful, but that has very little in the way of economic value that’s captured by profit-making firms. The quintessential enterprises of this era are things like Wikipedia, which [makes] no money, or CraigsList which makes a very modest sum of money, even while they both revolutionize certain spheres of endeavor.

As a result, he argues, “the total amount of money being made off the internet is pretty small considering how ubiquitous internet use has become.” Internet use, as an activity that has become both consumption and production simultaneously, produces value that for various reasons fails to become a reliable revenue stream—it doesn’t professionalize. (Nicholas Carr would probably not agree.)

When I think of all the time I spend at home in front of a screen, writing stuff that I give away fro free, I feel the truth of this. Weirdly, I feel fortunate to be able to be motivated to do all this work for free. The source of that motivation remains obscure to me, but it’s clearly a product of the (perhaps imaginary) audience the internet appears to marshal for my activity. Getting paid might even discourage me. Right now, I keep writing in part because my motives are obscure. They taunt and provoke me, make me restless and frustrated with procrastinating. If there was a cash payment involved, I’d know exactly why I was doing it, and would feel much better about procrastinating and putting in only the amount of time I thought I was being paid for. I suppose there’s a chance that I like not having a price attached to what I am doing here because it frees me from having to see how little it is really worth. But the more ambiguous rewards, those that the internet as a means of production allows for, seem to be more generative—one must keep trying different things to try to secure them.

John Quiggin, writing at Crooked Timber, develops some of the potential implications of this hobby economy: “There has been a huge shift in the location of innovation, with much of it either deriving from, or dependent on, public goods produced outside the market and government sectors, which may be referred to as social production…. If monetary returns are weakly, or even negatively correlated with the value of social production, there’s no reason to expect capital markets to do a good job in allocating resources to supporting innovation.” From Quiggin’s perspective, the internet is yielding public goods, produced voluntarily in a way that no one can make money from them. (Not only that, but online innovation—P2P, open source software, etc.—is stealing away former sources of profit. It threatens to convert the entire culture industry into a hobby economy.) Since no wages are paid to produce them, and they generally don’t cost anything once they are made, they are outside of the market; yet they exist, and innovation is clearly being harvested there. But the use of innovation and productivity to justify income inequality doesn’t hold up—innovation is taking place outside the income-distribution system; the winners in that system are gaming in in some other way—through financial chicanery recently.

Quiggin derives two intriguing, somewhat hopeful conclusions from this:

*  If improvements in welfare are increasingly independent of the market, it would make sense to shift resources out of market production, for example by reducing working hours. The financial crisis seems certain to produce at least a temporary drop in average hours, but the experience of the Depression and the Japanese slowdown of the 1990s suggest that the effect may be permanent.
* Creativity, broadly defined, seems likely to become more important, while markets, particularly financial markets, become less so. Firms that want to survive and prosper will have to behave quite differently from the way the did in the past. Google is an obvious example of a firm that is trying to do this, if not always succeeding.

If our social production in our spare time on the internet is where we experience the true gains in our life—if that is where we notice marginal improvement, if that is where innovations beneficial to society are being developed more or less spontaneously (see Clay Shirky’s book)—a sensible society would permit us to spend more time doing that stuff. The market and wages don’t direct us to do it, but we do it anyway. Theoretically (and this is getting pretty techno-utopian), we will be able forgo wages (work less) in favor of such social production, since the rewards we get from online participation come cheap. Whether or not employers will be so flexible is another question—traditionally, according to Marx, employers must purchase our labor in blocks of time so as to squeeze surplus value out of us.

An important question is whether this nascent hobby economy now developing alongside the capitalist one has become symbiotic with capitalism—is it helping to perpetuate a system that would otherwise become intolerable without the outlet that it provides, while feeding traditional capitalism with innovations to keep it dynamic?

And it’s important to avoid technological determinism with regard to this as well—the internet doesn’t inherently provoke us to meaningful work anymore than it spreads democracy automatically. Even if we find it meaningful to work for nothing, that doesn’t prevent some other entity from exploiting that meaningful labor and expropriating its product. In our ignorance, or in the first rush of enthusiasm we have for these new productive possibilities, we may not care about this, but eventually we could wake up to find it profoundly discouraging. This scenario is easy to imagine: All this time, we were thinking we were undermining capitalism, destroying the cash nexus, restoring human rewards to human efforts, and all that, the capitalists were drawing down our efforts to fortify themselves and retrench for a whole new round of primitive accumulation, only this time in a limitless virtual world.

—Rob Horning