The digital age represents an epochal shift in the operation of global capitalism, in which the driving logic of accumulation is dictated by the control of data. Profits are accrued by generating, capturing, storing, analyzing, and commodifying data, and the biggest firms are those that can use their control of data to layer themselves atop all other sectors. The data processing services they offer have become essential, and tech firms use their market power to influence politics, obliging states to allow them to operate with low regulation, taxes, and oversight, as evident in the influence wielded by Uber in France. Market power also allows tech firms to squeeze every other stage in the production process, forcing precarious conditions upon everyone from drivers on apps, to content reviewers and miners of raw materials. In short, neither rival capitalists, nor states, nor working classes can balance the power of Big Tech. This is what defines our current moment.
The digital age forces a reconsideration of two concepts key to issues of justice, equity, and prosperity: development and labor. Several decades of neoliberalism have compromised developing countries’ state capacities, and they struggle to reach the technology frontier. They lack the necessary capital and innovative infrastructures (or have been forced to abandon them by developed countries and Big Tech pressure). Such moments of rapid technological advance expose more than ever the dependence of developing countries on external sources of capital and technology.
When it comes to labor, several decades of neoliberalism had already weakened the capacity to organize, and digitalization has accelerated the degree to which work is conducted on a temporary, informalized, and even invisibilized fashion. Further, work itself has become more difficult to define – digitalization transfers increasing areas of daily life online, turning normal activities into opportunities for platforms to capture data. This data comes at no price, yet it becomes the property of platforms to analyze and commercialize. Work and working-class organization have been upended in the digital age. Together, the concepts of labor and development require a rethink in a digital age. Developing countries are carving out the policy space to secure a share of the fantastic wealth being generated by digitalization, and working classes are finding new ways to join together to reclaim control over the data, algorithms, platforms, and uses of technology that define their lives. This essay considers the concepts of labor and development, and reviews some of the ways in which developing countries and working classes carve out room for themselves in a digital age.
Development in the Digital Age
It is important to place the concept of development in its historical context. World development can be understood in terms of the epochal shifts in the way capitalism, geopolitics, and societies operate and interact. From early beginnings in long-distance trade within a relatively circumscribed and Eurasian territory of limited political organization, centralized nation-states competed to establish mercantilist colonial relations with distant regions of the globe. Imperial competition gradually evolved into industrial capitalism, starting first in the Global North, and eventually extending into parts of the Global South. In recent decades, in response to the multiple crises of the 1960s and 1970s, globally integrated chains of value reorganized production, distribution, and consumption across multiple jurisdictions, reshaping the political, economic, and social context of national jurisdictions and upsetting global balances of power. At the turn of the millennium, these value chains increasingly came to be dominated and controlled by factions of capital whose main strategy of accumulation is finance, exacerbating inequality, undermining democracy, accelerating the destruction of the environment, and since 2009 facing crises on multiple levels.
At each phase, the ways different geographies fit into the world system of accumulation dictates patterns of growth, distribution, and consumption. The digital age is no different. While access to the rents captured by those who can control data eludes most developing countries, they cannot opt-out of the value chains led by digital firms. Thus, they are relegated to generating the raw materials that go into digital products and generating the data those products collect, analyze, and commodify.
The onset of the digital age opens the possibility for developing countries to participate in setting rules for accumulation under a more inclusive social contract.
This has generated certain crises for development. The digital age reshapes the structural conditions of surplus – the way surplus is produced, distributed, and redeployed. Yet, the epoch of digitalization cannot obscure the fact that capitalism is always about accumulating surplus, in which new technologies are the accumulation of surplus extracted from workers and invested in fixed capital, experienced as technological innovations. Some of these innovations raise levels of productivity, releasing an ever greater surplus available for distribution and consumption. Further, new technologies and their incorporation into production processes undermine some of the political, social, and economic mechanisms that dictated control over surplus during the period of finance-dominated neoliberal globalization. Digital technologies have created new ways to establish and extract rents at the same time as they disrupt older rentier relations.
This combination – the introduction of new technologies, the associated increases in productivity, and the uncertainty over rules governing the surplus – reopens the social and political possibilities for promoting development. Great powers, financial interests, and dominant corporations are rapidly erecting the scaffolding that will allow them to accelerate the production of surplus, control its distribution, and direct its redeployment according to their interests. These interests have been successful in stifling developing countries’ access to surplus in prior epochs, perhaps most severely under the most recent period of finance-dominated global integration. Yet, the onset of the digital age also opens the possibility for developing countries to participate in setting rules for accumulation under a more inclusive social contract.
Policy Space for Developing Countries
Development in a digital age will require agency from the Global South, and state sovereignty has been both, enhanced and jeopardized in the digital age. While savvy bureaucrats and other officials can use new technologies to finetune their policies, lack of capacity in many developing contexts turns polities into sitting ducks facing new forms of rapacity from global capital. Digital technologies not only allow for territorial protection and vigilance, but also for extraterritorial reach and predation. Apart from large powers like China, India, and Brazil, most developing countries lack the capacity to pursue digital statecraft and protect their security and economic interests.
For developing countries, the impact of digitalization remains ambiguous. Some technologies open space for new economic actors by lowering transaction costs, but dominant firms can also raise entry barriers to keep out competitors. Digital technologies can increase the possibility of effective participation in the democratic sphere, but some states choose, instead, to use digital technology to defend authoritarian arrangements. For digital technology to contribute to more equitable, democratic, and sustainable patterns of development, states have a few options to secure a degree of autonomous policy space:
- Regulation is one of the ways in which developing countries can protect their sovereignty. Data localization requirements and data protection appear in the toolkit of actions that serve goals from security to serving local economic activities and popular interests. There is a slow international diffusion of Europe’s data privacy and security law (GDPR), in which Brazil offers a particular case. As in the European case, Brazilian legislation attempts to establish individual rights to control their own data and its uses. In the process, the legislation comes to define national data as that produced within the Brazilian territory, making possible future steps to localize data and manage it in the public interest. In other instances, Brazilian agencies sought to regulate the content and dissemination of data, as when the electoral court (TSE) sought to protect the integrity of elections by regulating the operations of apps such as WhatsApp and Telegram. More generally, accessing and amassing data has acquired new importance for political competition and administrative statecraft. The digital age elevates to an unprecedented level what has been a historical task in the formation of states – efforts to organize society into legible parts. Yet, extractive corporate practices and broader digital colonialism threaten third world sovereignty and indigenous development of tools to gather and digitize data on society. In response, there are calls for data nationalization, aggregating data at the national level to facilitate the creation of markets and productive activity where the data is obtained.
- In negotiating with external actors, regional coordination of market access could also serve developing countries. For now, we see more regional coordination taking place among European countries than in developing countries. If nationalizing data could help to lock-in wealth and sovereignty locally, regionalizing data could be a strategy especially for smaller countries, whose lower income and smaller markets present obstacles to unilaterally enforcing regulation, and there have been some moves in this direction in East Asia. By contrast, some countries are seeking to go it alone, but even larger developing countries, such as Brazil, have unrealistic expectations about the extraterritorial reach of regulations and enforcement. For all developing countries, international coordination is important, especially in terms of South-South partnership to force rich countries and their firms to facilitate domestic development and more inclusive futures.
- Beyond mere regulation, state subsidy and investments in the activities that generate wealth and power in digital capitalism will be an important part of third world developmentalism. Investments in education, digital infrastructure, and R&D remain at the center of policies to enhance development in a digital age, especially as economic activities increasingly cross borders. Core-periphery dynamics are now more functionally-oriented than territorially-oriented and organized, producing unbalanced growth and accumulation within territories. Clusters of technology, such as Silicon Valley and Shenzhen, are more integrated to each other than to nearby regions not in the same global value chains (GVC). The challenge to developing countries is to form clusters and capture the productivity gains of agglomeration, and to extend the developmental impact of these clusters to other areas and sectors.
- A critical issue in which the digitalization of the economy affects development is in terms of taxation. After decades of a globalized race to the bottom, the decision by a coalition of OECD and G20 countries to support a minimum global corporate tax rate changes calculations of digital capitalism. Universally applied tax rates may help developed countries capture some of the rents of their digital firms, but existing international division of profits means that developing countries will require additional tools to secure revenues.
For all developing countries, international coordination is important, especially in terms of South-South partnership to force rich countries and their firms to facilitate domestic development and more inclusive futures.
Digital capitalism asymmetrically concentrates power in the hands of a few firms and a few states, mostly in the Global North. There are opportunities for developing countries to access some of the rents generated by technology innovations, but they require specific policy steps in regulation, regional coordination, investment, and taxation.
Labor in a Digital Age
For lower classes to participate in the benefits of the digital age, setting limits on exploitation, and securing a livable future for them and the planet, they must organize, and they must engage in struggle. Yet, who is a worker and what is their relation to the production process changes under digital capitalism, even as alienation continues in the Marxian sense of being alienated from the product of their labor.
One view of the lower class comes from Hardt and Negri – a “multitude” – a relatively undifferentiated mass in terms of their relation to capital and exploitation. Indeed, one can observe a division of the 1% who own platforms and the largest digital firms capturing surplus from everyone else, evident in the incredible wealth accumulating in the hands of the very few, and rising inequality across the globe. Yet, these evident contradictions do not yet organize the 99% as a class, nor does it identify the relationship of workers to the production process in a systematic way. Even worse, inside the 99%, various divisions are enhanced, created, and exploited, opening space for anti-popular and anti-worker feelings and practices, even among classes that do not own the means of production.
One complication of class in a digital age is the blurring of boundaries. Between the proletariat and the reserve army of unemployed labor, some have identified the precariat, harder to organize and in a more tenuous relation to capital. Additional blurring occurs between work and non-work, as digital platforms make use of data from leisure time in “playbor” and “microlabor” in the form of “crowd-work” and “crowd-sourcing”, breaking work into miniscule per-click tasks, and data from consumption in “prosumption”. One of the more striking innovations of digitalization is precisely this illusion, incorporating into the production process the data generated from the unpaid but productive “free labor” of people spending time online. In the process of consuming, traveling, using social media, registering for government programs, learning, staying healthy, and simply living, people perform “biolabor” that generates data, and opportunities for profit, for capital to accumulate surplus.
Ursula Huws understands this category of “free labor” in the context of a categorization according to two dimensions, productive/reproductive and paid/unpaid labor. Free labor of generating data simply by living includes other kinds of unpaid and productive work, sometimes called “co-creation”, in which users insert their own data into algorithms for what might have otherwise been work done by a paid service worker – for example, a travel agent or taxi dispatch.
In many ways, work in a digital age poses the labor-capital antagonism just as starkly as ever, as long as we know where to look. Work that is paid and directly productive for individual firms in commodity production was assumed by Marx and others to be the dominant and inevitable form of labor under capitalism. Many workers remain in this relation to capital, but the characteristic smokescreen of the digital age is to make such work invisible – extracting minerals from distant sources, assembling devices in dispersed factories, providing back-office and customer services in offshore call centers, using armies of workers to turn online content into data on a per click basis, hiding warehouses in rural areas, and delivering products with gig worker contractors covering the last mile. Often the workers who fulfil these roles are women, people of color and in developing countries, making it that much easier to invisibilize their work. To make it visible once again will require particular attention to the workers of the Global South, as well as the traditionally-excluded, racialized, gendered, and minoritized groups of the Global North.
Other workers are paid and perform tasks essential to the reproduction of labor. They make possible the survival of workers, and therefore capitalism, even if they are not directly in the act of producing commodities. State workers, teachers, and providers of social programs continue their reproductive labor, and the most significant impact of digitalization is to subcontract much of this work, as private providers of data analysis insert themselves in reproductive work in part to capture the data of beneficiaries and in part because they can use digitalization to target beneficiaries and make a more efficient, leaner, but often meaner, welfare state. This form of privatization, coming in the context of several decades of neoliberal attempts to privatize and cut the state, shifts paid reproductive work towards paid productive work, posing antagonisms more clearly between labor and capital.
Neoliberal cutbacks also shift paid reproductive work into unpaid reproductive work, forcing families and communities to undertake the work necessary to reproduce workers. Feminist economics has long emphasized the oft ignored unpaid reproductive labor of household maintenance, childcare, and many other activities essential to worker subsistence but often relegated to excluded groups, especially women, and kept out of the market. Digitalization, coming as it does in the aftermath of neoliberalism, shifts many of these activities back into the market, creating a “sharing economy” for what might have previously been the affective work of driving a friend to the airport (Uber), offering a couch to sleep on (Airbnb), or courting and dating (Match). In the process, we once again see the increasing antagonism of capital and labor.
While the status of work under digitalization might seem blurrier, it continues to depend on social relations of coerced labor under the control of capitalists and worker dependence on a wage for subsistence. This places labor in direct antagonism to capital, and it is precisely at those points in the production process where labor and capital dispute over the distribution of the surplus where labor can remove its consent and engage in struggle. Most people occupy several of these paid and unpaid, productive and reproductive forms of labor during the course of their lives, sometimes in a single day. All people live with or depend on others in each of the categories. It is by building understanding of these categories and solidarities across them that workers as a class under a digital age can take shape.
Working Class Organizing Power
The dominant firm structure and narrative under digitalization has been investor control, in which capital, often high-risk venture capital, claims an outsized degree of control and share of the surplus in exchange for investment in tech start-ups. The prototypical narrative in the digital age appears hyper-individualized, rooted in bootstrap stories of garage inventors, rather than the more accurate stories such as the trajectory of Elon Musk. While he appears to know little about cars or transportation, he applied his significant inherited wealth, after much public subsidy and bank bailouts, to revolutionize the automobile sector by layering digital technology atop traditional automobile engineering, engaging in a not insignificant amount of self-promotion in the process.
Workers are increasingly turning to platform cooperativism to reclaim control over data, algorithms, and platforms.
Yet, outsized and exaggerated views of individual entrepreneurs within investor control are not the only forms in which digitalization can occur. Working classes are experimenting with alternative responses to the imperative of digitalization. Two examples to be discussed below are democratic control over the production and distribution of surplus, as in the case of platform cooperatives, and daily acts of working-class resistance, such as reclaiming the significance and definition of utility from digital innovations.
Digital cooperatives have targeted platforms as a particularly opportune site in which to reassert worker power. By connecting consumers to service providers in a seemingly smooth and frictionless transaction, platforms have replaced traditional hotel markets (Airbnb), delivery (Instacart), transportation (Uber), and other sectors. Platforms make their profits through fees extracted from both consumers and service providers, made possible by the almost complete control of data, algorithms, and apps. The lack of transparency within algorithms means that racist and exploitative practices can be reproduced within platform apps. Drivers of color receive systematically worse evaluations, with resultant impacts on income, on driver apps like Uber and Lyft. Delivery workers receive pay only for successful deliveries but have no claim to compensation for all the time they wait for their next job, nor do they have protections if a delivery is too heavy, to dangerous locations, or in strenuous conditions such as multiple flights of stairs. While workers are putatively independent contractors, the data embedded in the apps offers omnipresent tools for monitoring and control, easily mobilized by algorithms to speed up work, cut pay, and otherwise increase rates of exploitation. Further, unregulated platforms can have devastating externalities for communities, as in the case of rental markets undermined by short-term rental apps, like Airbnb.
Yet, workers are increasingly turning to platform cooperativism to reclaim control over data, algorithms, and platforms. Platform cooperatives are “democratically owned and governed by workers, customers, and other stakeholders; they adhere to principles of equity in the distribution of revenues; and they strive to be good citizens in their communities.” Fairbnb, for example, sets a cap on investment returns, keeps lodging prices lower, and returns half of all fees to community projects. Cooperatives face challenges, as they must raise capital to compete with investor-controlled firms, but there is nothing standing in the way of collectivities of workers and consumers developing algorithms to drive apps that collect, analyze, and commodify data in ways that are more responsive to worker and community needs.
A second way in which working classes reclaim control over digitalization occurs in daily acts of resistance to “mundane technology”, in which users recast the utility of technology to secure a degree of dignity. Most technology is designed in the Global North with an eye towards concentrating profit and maintaining rights to intellectual property, either excluding the poor from consideration (haves and have-nots), especially from the Global South, or constraining them in biased and incomplete fashion – criminal, uneducated, exploitable. Technology can be a source of oppression, “exploitation, marginalization, powerlessness, cultural imperialism, and violence as centrally driving inequities of the information age”.
A second way in which working classes reclaim control over digitalization occurs in daily acts of resistance to “mundane technology”, in which users recast the utility of technology to secure a degree of dignity.
When lower classes encounter technology, however, they engage in acts of resistance, appropriating technologies, demonstrating agency and consciousness of their relationship to technology, the relationship of technology to oppression, and the ways technology can be reinvented to achieve liberation. In Brazilian favelas, the unregulated slums occupied by the poor, mostly black, marginalized working classes, users turned public and private local computer banks, community technology centers, into sites of appropriation. The technology centers “represented safe spaces” in which community members shared information, figured out new devices, repurposed old devices, and pursued training and education on the topics they considered valuable. Further, rather than a business model planned by those hoping to franchise technology centers as sites solely of access to computing, operators quickly expanded their role to repair shops, neighborhood internet providers, and video game console providers, especially when nearby homes eventually got their own computers.
Digitalization has changed the way in which we produce, govern ourselves, and live our lives. These shifts, as in other epochal moments in history, such as industrialization and globalization, alter critical concepts of development and labor. In the midst of such rapid changes, dominant firms, largely from the Global North, attempt to define the ways developing countries and working classes encounter new technologies, but opportunities for resistance exist. In response to digitalization, developing countries can find opportunities to capture some of the rents from digitalization through strategies of regulation, regional bargaining with external actors, investments in education, infrastructure, research and development, and taxation. Further, working classes are articulating their own relationships to new technologies. Examples include platform cooperatives that democratize the application of new technologies and mundane technologies in which lower classes turn technologies into spaces of liberation rather than oppression.