Copyright and patents are a form of manufactured scarcity—this enclosure of resources towards profit for the ruling class sustains capitalism

Hannes, Professor of Geography at the University of West Georgia. “Theorizing Capitalism and its Demise.” From Capital to Commons: Exploring the Promise of a World Beyond Capitalism. University of Bristol. Pp 20-22. // QUEERMAID

In terms of scarcity, controlling material supply, where this is competitively feasible and legal, has long been a capitalist strategy to boost prices, as in the production of oil. Yet, the pursuit of imposed, manufactured scarcity has become most critical in the realm of immaterial, and theoretically infinite, (digital) value, which now comprises the brunt of the post-industrial economy. Consider, for instance, that intangible assets, which include research and development, code, data, and other intellectual property are estimated to make up 90 per cent of the S&P 500’s value (Durden, 2020). These assets are intentionally kept scarce, mostly through the use of copyrights and patents, to preserve their profit value for the capitalist owner. In some instances, as with technical know-how, these protections are meant to keep certain competitive advantages secret, while in other cases, as in end-user products (consumer goods), the aim is to extract royalties and rents. The process of making scarce is also directly related to the strategy of enclosure. Here value is captured from currently non- or under-monetized assets within communities and nature with the intent to privatize and repackage them as something in short supply that needs to be purchased. Since the turn to neoliberalism, which entailed the ratcheting back of the state to allow capital greater control of the economy, this process has taken the form of a renewed ‘accumulation by dispossession’ (Harvey, 2013). This is often done by disempowering targeted populations, largely through monetary and financial means, at which point capital swoops in to control and privatize critical resources and services. Examples include the continuous expansion of resource extraction into Indigenous lands, the privatization of essential services, and the copyrighting of biological genetic code. Now, digital technologies are being developed to expand this enclosure. For instance, blockchain-enabled smart-contracts, which are executed when if then conditionalities are met, can be used to commoditize urban resources that were previously considered ‘public’, such as establishing microcharges for the individual usage of roads, parks, bridges and other urban infrastructure (Garrod, 2016). Yet, the enclosure of resources goes beyond just the physical realm; it also encompasses social and cultural productions, interactions, and information/ knowledge, much of which is being facilitated and captured in digital form. This is essentially the general intellect that exists as commons. Here too capital is continuously on the march to capture and transform anything innovative or useful into profit (Hardt and Negri, 2009). This can include, for instance, copyrighting and patenting work that has been communally produced, or using commons-sourced labour and data on digital platforms to garner advertising revenue (Vercellone et al, 2019). Capital has also begun to incorporate and profit from commons-based forms of organization, such as crowdsourcing innovation and engaging in other peer-production methods (Papadimitropoulos, 2018; Birkinbine, 2021). In this sense, the digital commons serve as an increasingly important area of growth potential, offering a wellspring of value to be harnessed and enclosed in the form of carefully managed commodities. A final way in which capital has responded to its current predicament of mounting, yet difficult-to-achieve growth demands, has been the expansion of the finance and banking sector, which have evolved far beyond the role of simply greasing the wheels of productive capitalist endeavours. Going back to the work of Magdoff and Sweezy (1987), financialization is seen as the process of using banking/finance to counteract the diminishing rates of profit in production. One obvious opening for capital here pertains to the profitability of interest-bearing credit, the need for which increases as carefully managed scarcity pushes prices higher. Beyond banking, however, another key opening pertains to the widespread adoption of financial instruments, referred to by Marx (1993) as fictitious capital. What Marx meant is that these paper assets, such as stocks, are not productive, they are merely claims on the wealth of future production. In creating such financial instruments, then, opportunities are not only created to raise capital, but an entirely new financial realm of speculation and risk management is brought about with its own significant prospects for accruing profit without actually having to produce anything. Yet, an important development worth noting here has been that the claim to revenue generating future production, generally associated with fictitious capital, has itself been increasingly replaced by a claim on the ability of specific corporations to simply manage scarcity and manipulate demand to profitable ends (Gorz, 2010). This situation is well captured in the concept of an ‘asset-based economy’ where power and wealth are not measured in terms of actual productive capabilities, but on the capacity – denoted in financial assets – to garner profit through such extractive, yet ultimately nonproductive strategies (Adkins et al, 2020). Indeed, the growing disconnect between stock-market capitalization and GDP appears to be indicative of this trend (World Bank, 2021). Clearly, the establishment of such an asset-based economy represents the complete neglect of use-value in the economy. In other words, if the actual production of goods/services is not the path to greatest profit, it will not be pursued, even if these goods and services are needed. The ultimate consequence of this predicament is a massive misallocation of resources and the ossifying of wealth differentials within society (Adkins et al, 2020). Nonetheless, despite the increasingly abstract and ephemeral qualities that characterize contemporary capitalism, as just laid out, it is important that we do not completely dismiss the role being played by the traditional capitalist exploitation of labour in actual production. Indeed, the continued use of22 sweatshops in the Majority World and the rise of low-paying service-sector jobs in the Minority World; the related emergence of easily exploitable gig workers; and the enclosure of the general intellect via a highly skilled, white-collar workforce are all a testament to labour’s continuing importance, even if this importance is slowly eroding. More specifically, it is essential to acknowledge here that engineering scarcity and subsequently capturing higher prices, rents, fees, interest and royalties are still rooted in actual material things and services. The point being made, therefore, is not that traditional capitalism, and its foundational ability to exploit labour, has ceased to exist, rather it is that this capitalism, which has begun to reach certain internal limits, now depends on a massive superstructure of scarcity, enclosure, and finance to keep profits flowing.