value is always relative, always a relation; never an absolute, static. Competing logics of value coexist and drive social policy in different directions, often simultaneously. Underlies the problem of liquidity crisis vs. solvency crisis. These are different ways of looking at how to define value -- as static and referring back to some absolute fundamental of some tangible thins (solvency) or as being an expression of the control of flows (liquidity) -- the most important of which is the flow of ideological conceptions of what is "worth something to society" -- this is played out at a microlevel in struggles for positional goods, which is a way to give apparent solid meaning to playing the scoreboard game over ultimately intangible, arbitrary values.
As Arvidsson argues, as value gets detached from meeting "real needs" we see an increasing financialization of the economy.
The flight of capital away from the productive economy and into the financial economy is a manifestation of the inability of the present economic regime to put the wealth it produces to productive use. This is an important point. It is not that there are no more needs to be met in the world. It is simply that the prevailing techno-political paradigm is unable to open up the markets by means of which capital could be productively deployed in meeting such needs. Although there are a number of attempts in this direction, like venture capital investing in alternative energy systems, or companies cultivating the 'bottom of the pyramid', the market of the global poor (Prahalad, 2006), these are the isolated results of mostly private enterprise, and not the coordinated outcome of systemic initiatives. Such a co-existence of unmet needs and excess capital, and the financial expansion that results from this combination is a classic symptom of the immanent transition form one system to another.
There are no productive uses to put capital, so it circulates for its own sake in bubbles and schemes -- as fictitious capital, enriching capitalists nominally (unless positional goods are used to substantiate the gains in physically reality). Arvidsson: "there is a general sensation that a lot of the real values that circulate in our economy cannot be adequately represented."But there are no "real" values -- the basis for value is always in the process of being negotiated socially, or administered by fiat by state power (under guise of property law, e.g.). "Value is essentially a shared convention," Arvidsson notes. (Arvidsson thinks the socialization of value means "ethical" values get embedded -- value = density of ethically binding relations -- but what is deemed ethical is an expression the power dynamics in play.)
Status production is theoretically limitless -- always can function as a "real" need to direct economic resources toward if certain ethical battles and debates are lost in the sociopolitical sphere. This is where competition among firms is moving -- as goods become more easily duplicatable, can't compete on product quality. Must compete on symbolic level of brand and the pretensions of exclusive experiences.
The I drink your milkshake problem -- rival goods vs. nonrival goods -- cultural deflation and piracy -- is enough of our consumption of nonrival goods for immaterial labor to yield a deflationary wave? Arvidsson connects this to the "organic composition of capital" concept from Marx:
The reason behind the declining profitability of investment in the productive economy is the growing productivity of labour across most sectors of the economy (excluding some kinds of personal services). In part, this growing productivity depends on what Marxists call the rising 'organic composition of capital', that is, the rate of machines and other 'stuff' to workers. In particular robots and information technology has rendered workers in factories and offices immensely more productive, drastically reducing the time needed to produce stuff or do things. The result is a supply of 'more stuff' and declining prices, which reduces levels of profits. However, the rising organic composition of capital is per se not the only factor behind the recent profit squeeze (after all this has been going on for a long time). Rather, the rising ‘organic composition of capital' has also caused the emergence of a new mode of production within the capitalist economy itself. This new mode of production has a shadowy presence on the balance sheets of companies, where it figures as what is known as 'intangible assets'.
But wasn't the "law of declining rate of profit" disproven? Productivity doesn't itself decrease the wealth of society -- that makes no sense. It increases the amount of product we get from resources, increasing the total (which could in theory be distributed in such a way as to improve gneral social welfare). But it can change what society values in such away to revalue currencies and instigate a nominal devaluation of existing property and goods.
Not sure profits are being squeezed either. The better way of framing this is in terms of bubbles -- asset values seem completely unmoored from fundamentals, revealing the whole idea of "fundamentals" to be meaningless.
Arvidsson wonders about intangibles -- brand equity mainly -- that aren't accounted for in capitalist ledgers. Or rather, which can show up on balance sheets but nowhere else definitively. Another way to look at this is through lens of Marx's chapter on cooperation in first volume of Capital. Organizational capital (to use Arnold Kling's preferred term for this, not sure where he derives it from) provides the competitive edge. Arvidsson: "Knowledge, innovation and intellectual capital management is about constructing a environment that is particularly conducive to creativity or where tacit knowledge connects and comes out in the open as ‘collective intelligence'. In some cases this environment can become more important than the actual knowledge produced." This process is often outside of the firm's hierarchical control -- it instead harvests immaterial labor of the social factory:
This way the role of the company is changing, from primarily relying on resources that it can command, to attracting value from resources that it cannot command. This means that the company increasingly ‘swims' in a sea of productive externalities, that it tries to translate into measurable value. This allows us to conclude that the growing importance of intangibles in the information economy is a reflection of a growing importance of external resources in the production process. Since present accounting systems are organized to adequately represent value creation that derives from proprietary resources they have no way of dealing with such external resources.
I don't follow this -- the value is captured but not compensated; it registers as an intangible on the balance sheet because the labor needed for its production is plucked from society.
It makes more sense to wonder about the value being produced outside of capitalist relations (freely, for no wages) that is not harvested by corporations but is servicing needs nonetheless. Is this deflating the proprietary content/goods by competing with it? That is the crisis faced by capital -- that they face market competition of a sort from goods produced noncapitalistically via what Benkler calls social production.
Here's a scary formulation about producing brand equity: "Brand management can similarly be seen as a sort of logistics of meaning and affect, the ability to organize and give direction to largely autonomous flows of public opinion and sentiment." A logistics of meaning and affect -- a rationalization of the inherently nonrational, the administered culture that Adorno warned of.
Arvidsson's "ethcical capital" is basically a firms's ability to compel love and encourage immaterial labor without controlling it hierarchically.
alue is primarily produced by the ability to construct affectively significant ties: ties that bind a brand or a company to its consumers, employees or other stake-holders in ways that go beyond contractual obligations. You cannot order an employee to be creative or a consumer to share his or her ideas about product improvements. Such offers need to be voluntary; they need to be motivated by some form of affective affiliation. Such relations are not free, they require time and energy to build. In fact, the fastest growing intangible asset in the figure above, 'ethical capital', stands precisely for investments in such relation building: Essentially this comprises investments in brand equity, in corporate culture and in employee training in teamwork and other social skills.The term seems misleading to me, though the concept itself is important. Nothing ethical about it; it is more an ideologically oriented abuse of power. Firms can encourage immaterial production for their benefit by working to control the outlets for individuals' "creative expression" -- by seizing the social networks that have become the forum for self-development.
The main problem is that immaterial labor appears to the laborer as self-fashioning, and the self produced by it is the consumerist self required by exisiting social relations -- only such a self can harvest the "benefits" of identity in the social sphere circa 2009. The superficial recognition in social networks; the reified, measurable influence on has; the personal brand's impact, the mastery of cultural trivia as a status marker; "reputational capital" etc. (Arvidsson thinks if we quanitfy this stuff, somehow it can work to the consumer's benefit -- making us all entrepreneurs of the self. Sounds awful to me.) The production of the self now occurs in a globalized media setting with a much richer set of culture-industry product to serve as resources for it. The use of that product for self-fashioning enhances its value for its owners to the rest of the selves in the process of making themselves. Piracy and intellectual property devaluation hits at capital here; the real problem, though, is the self-fashioning out of that stuff (what Arvidsson unironically equtes to Marx's "General Intellect" -- a debasement, as it limits intellect mostly to the facility to embrace and manipulate popular culture). That reproduces the consumerist self, not a possibly better alternative that I admittedly have not yet theorized very clearly.
To reiterate, immaterial labor seems to promise a new paradigm of value, but it's limited in our current set of relations to self-fashioning, the reproduction of the consumerist self, not the smashing of capitalist relations.