[OC] A Breif Marxist Analysis of Information Commodities

I also wrote on information commodities last semester and I think the intersection of these two essays is pretty interesting. I have some comments on yours that I will put in a different top-level post & maybe /r/criticaltheory can help us pick apart the topic.


On Information Commodities & Online Advertising

The Information Commodity

Situated as we are at the beginning of the Third Millennium as the first generation of the Digital Age, there is a certain pressing need to evaluate that which we call the commodity, bringing our understanding of it into line with the realities of digital distribution. We now engage not just with material goods, but hyper-material goods: products which are not formed from atoms but from information, itself. While there is a strong inclination to appeal to the whole material infrastructure that digital access requires (processors, fiber-optic cables, etc., along with the innumerable sites of their manufacture) as the true substrate of digital goods, such a view prevents us from taking a close look at how these good actually behave within hyperspace, itself. Though one ought not forget that the Internet relies upon the material world and cannot be entirely separated from it, this essay will examine what might be called the ‘information commodity’ or ‘info-commodity’ with the presupposition that a set of information which is robustly communicable and can be consistently resolved into a particular form (by a display driver, a video codec, a web browser, etc.) is, itself, a thing.

This understanding of a digital good is not unfamiliar to us. An everyday good which has been central to the digital market is the MP3 audio file, which can be distributed via the Internet or physical storage devices such as a compact disc, and then be decoded and listened to in precisely the same way no matter what device it is being played on. In essence, we can treat the MP3 file like an object to be used, which is exactly Marx’s definition of the commodity: “The commodity is, first of all, an external object, a thing which through its qualities satisfies human needs of whatever kind” (Marx 125). And it is true: MP3s are brought to the market, bought and sold, much like the favored pedagogical examples of linen or tea. Insofar as the MP3 is a commodity, we can examine its forms of value using the traditional Marxian distinction between ‘use-value’ and ‘exchange-value.’

For Marx, the use-value of the commodity is the thing as such. He writes, “The usefulness of a thing makes it a use-value … It is conditioned by the physical properties of the commodity, and has no existence apart from the latter. It is therefore the physical body of the commodity itself … which is the use-value or useful thing” (Marx 126). It is, then, the set of information and its manifest forms, in our example the MP3 file sitting on the desktop, or perhaps as an attachment in an email, which are the use-value of the information commodity. We double-click the MP3, it loads in our preferred music player, and our need for aural stimulation is satisfied. The useful character or qualitative value of the info-commodity is really no different from the useful character of any physical object. What is much more difficult to apply to the info-commodity is the quantitative form of value, which Marx calls exchange-value or, “the proportion in which use-values of one kind exchange for use-values of another kind” (Marx 126). While we need not explore Marx’s derivation of money as the ‘universal equivalent’ of use-values, we can understand the need to determine where the exchange-value of a commodity comes from -- a fundamental economic question -- and it is here that the difficulty arises.

For Marx’s intellectual predecessor David Ricardo, value was the ‘labor embodied’ in a commodity; that is, the commodity contains within itself some amount of work that was needed to turn raw materials into a final product which guides the quantitative measure of that commodity’s exchange-value, its price. What is so curious about the information commodity is that it takes roughly the same amount of labor to produce one unit of a particular information commodity as it does one hundred units, insofar as copying an info-commodity takes a negligible amount of work. Applying Ricardo’s theory to the MP3, though the original useful thing (perhaps the final mix or ‘Gold master’ of a particular song) may have some amount of work contained within it, each time the file is replicated the total amount of labor embodied by any particular copy decreases. The exchange-value of an information commodity, understood through the embodied labor theory of value, should thus always approach zero and, given enough copies, be considered zero for all practical purposes. Marx offered a slightly different theory of value, namely that the value of a commodity is its ‘socially necessary labor-time’ -- the labor-time it would take to produce the object at the moment of sale -- yet it too must consider the exchange-value of an info-commodity to be zero. The moment any particular MP3 is created, the socially necessary labor-time for its (re-)production becomes negligible, and so too does its exchange-value. More broadly, the moment any set of information is created is the moment its becomes valueless.

While such definitions of value from classical economics may be out of fashion today, insofar as the debate over the ontological character of value has become passe, the info-commodity is a prime example of what is called a ‘nonscarce good’ which is widely understood as, “a thing in demand that can be replicated without limit” (Tucker 2010). While scarce goods function according to market logics of supply and demand, the function of which is to distribute a limited amount of goods given a potentially infinite number of human wants, nonscarce goods have a character such that, “there can be no contest over ownership … [and] no need for norms governing their ownership and use” (Tucker 2010). A nonscarce good is thus valueless and so, without relying on any particular theory but rather a general economic principle, we can consider information commodities to be without exchange-value.

Now, despite this quality of everything from MP3s to ebooks to software being valueless, we know that they are commonly sold for a cost, though one far lower than when these goods required some physical medium for distribution (a vinyl record, paper, or a CD-ROM). This is due to the imposition of an artificial constraint, namely that of ‘intellectual property’ (the history of which is fascinating, c.f. Hesse, “The rise of intellectual property, 700 b.c. - a.d. 2000” (2009)). Intellectual property law confers upon the original producer of any info-commodity the right of reproduction, thus preventing the infinite replication of the good and denying it its nonscarce character. This is, however, merely a legal constraint, not an ontological property innate to the information commodity. As music piracy has shown, intellectual property does little to prevent the spread of info-commodities; though there are rare cases of retribution through channels of state power, this constraint does not actually change the nature of the object, itself.

The Advertising Model

In his recent essay, “The Internet’s Original Sin,” Internet start-up veteran Ethan Zuckerman discussed his tenure at Tripod.com, an early “proto-social network,” and the difficulties that he and his team had in monetizing their product:

Over the course of five years, we tried dozens of revenue models, printing out shiny new business plans to sell each one. We’d run as a subscription service! Take a share of revenue when our users bought mutual funds after reading our investment advice! Get paid to bundle a magazine with textbook publishers! Sell T-shirts and other branded merch! At the end of the day, the business model that got us funded was advertising.

While his essay is mostly an apology for the ever-infuriating ‘pop-up ad’ which he invented, it is important because it notes just how early advertising became the “economic foundation of [the Internet] industry.” Indeed, this is because advertising is able to monetize what should really have no value, insofar as webpages are information commodities just like an MP3 or an ebook. While there are certainly material costs of webpages, such as the electricity and storage space it takes to host them, they still fit the definition of a nonscarce good. When loading a webpage, the page “is copied into a memory buffer and sent to another part of the computer, copied again into RAM and sent to the graphics card where it is copied again, and so on;” in essence, “they exist to be copied and can only ever exist as copies” (Warwick 9). What Zuckerman and his team discovered was that it is far easier to monetize something that is actually scarce, namely space on their websites.

Today it is difficult to think of an Internet without ads, with 2014 revenues reaching nearly $45 billion, due in no small part to Zuckerman’s discovery (Interactive Advertising Bureau 2014). By selling a part of the useful thing itself -- a part of the set of information which is nonscarce -- the difficulties of the information commodity’s lack of exchange-value were resolved. What is so fascinating, however, is that the advertising model fundamentally alters the role of the information commodity. Much like how capital investment (M-C-M’) changes the commodity from a good solely meant to fulfill a need into a thing which can produce more money than it took to make, the embedding of advertising into the very form of the info-commodity turns it from a thing which fulfills a need into something which will potentially generate a future sale. By first understanding how online advertising works, we will perhaps be able to more fully understand this transformation in its fullest effects.

/r/CriticalTheory Thread