The growth of the Q-sectors reflects a change in the structure of the economy i.e., a change in the way 21st century capitalism works. This change is a consequence of digitalization that is providing the means of commoditizing indirect effects arising from the way a particular context-of-use is organized.
In my blog on the dialectics implied by the Q-sectors, I addressed the need to address both the producer/consumer dialectic (1 below) and the exchange value/use-value dialectic (2 below), the result of reading Keen’s work (Keen 1990, Keen 1993b, Keen 1993a, Cunningham 2008). Below I have added detail to the table in that blog:
| 1. The dialectic between supply-side and demand-side | ||||
| Producer | Producer as Consumer[1] | Citizen-Consumer | ||
| 2. The dialectic between ‘value’ in relation to the other and ‘use-value’ | Exchange value of ‘inputs’ | What is bought for the purposes of the means of production | What is bought for the purposes of consumption | What is bought for the purposes of consumption |
| Use-value | The use to which that which is bought is put, subject to the organization of the means of production. | The use to which that which is bought is put, subject to the organization of the producer’s means of production. | The use to which that which is bought is put, subject to the organization of the citizen’s means of consumption. | |
| Context-of-use | Producer’s means of production. | Consumer’s means of production. | Consumer’s means of consumption. | |
| Exchange value of ‘outputs’ | What the outputs of the means of production can be sold for in the market for those outputs. | The profitability experienced by the producer-consumer emerging from its means of production. | The well-being experienced by the citizen-consumer emerging from the experience of his or her means of consumption.[2] | |
These dialectics mean distinguishing the organization of the means of production of an enterprise from the organization of the means of consumption. They also mean understanding the dynamics of how the organization of each ‘means’ changes over time. Note, however, that a Producer is also a Consumer (hence the added column), so that it is only the end-user in a chain of producer-consumer relations that is a citizen-consumer, for whom the context-of-use is going to be some form of household within some kind of community.
The critique of 19th century capitalism was that it commoditized labor. It did this by separating the exchange value to be derived from the direct use of labor (purchased at a market exchange value) from its indirect effects emerging from the way its use is embedded within the organization of a particular means of production qua context-of-use.[3]
A critique of 20th century capitalism (Boltanski and Chiapello 2005, Spencer 2016) is that it commoditized consumption. It did this by separating the exchange value to be derived from the direct use of whatever-is-bought (purchased at a market exchange value) from its indirect effects emerging from the way its use is embedded within the organization of a particular means of consumption, which is also a context-of-use. This was done by thinking of demand solely in terms of ‘markets’.
Economic externalities[4] arise from the use of a commodity. These externalities arise in the contexts-of-use of those commodities, one such externality being the shadow work (Illich 1981) that a producer or consumer engages in to render the context-of-use effective through the way the indirect effects of use are managed/ménaged. It is in this context of commoditizing indirect effects that digitalization (Strukhoff 2016) and the commoditization of living spaces can be understood (Lefebvre 1991[1974]). It is this commoditization of how indirect effects are organized within a given context-of-use that forms the basis of the changed nature of 21st century capitalism.
To commoditize indirect effects in a one-to-one relation to customers, therefore, we need to be able to speak about the way a particular customer’s context-of-use is organized and to do this in a way that enables us to abstract/generalize across different one-to-one relations. It’s a third kind of asymmetry that ‘market’ thinking forecloses.
Managers at the edge are of course already suffering from the realities of these one-to-one relations, whether they lead to burn-out and/or to individual performance bonuses. It’s just that the Faustian pact between the enterprise and the individuals-at-the-edge enables the governance of an enterprise to turn a blind eye to the learning that those individuals are acquiring at the edges in the face of growing turbulence and complexity. If these Faustian pacts are to be changed, it will be through changing the basis of competition being pursued by the governance of the enterprise because it can be profitable pursuing economies of alignment. From this follows the different nature of edge-driven horizontally-dominant forms of governance that are able to learn from the individuals-at-the-edge.
Notes
[1] One way in which a consumer becomes a producer is by selling his or her time as ‘labor’ (see footnote [3]). Another way is by running a business of some kind, the profitability of which provides income enabling her or him to act as a citizen-consumer.
[2] A reader asked: “what about all the choices an individual is asked to make as a consumer and how much it affects the producer to have to think about how the consumer will edit and combine products and services to create his or her own compilations and compositions that reflect his or her identity and taste”. Having to think in this way as a producer means going beyond ‘market’ thinking to think about the consumer and/or the consumer’s household as a context-of-use. Effects ladders provide a way of thinking about the organization of a means of consumption – whether of a producer or of a consumer – in terms of relations between the direct and indirect effects of a consumer’s purchasing behavior. This offers the producer with the opportunity to capture value from offering not only economies of scale and scope but also of economies of alignment.
[3] ‘Labor’ represents a consumer acting as a producer of his or her ‘output’ behaviors, providing income enabling her or him to act as a citizen-consumer. The exchange value of those ‘outputs’ will determine what s/he is paid, but the more the indirect effects of those behaviors are of value within the context-of-use of the producer-as-consumer, the higher that exchange value is likely to be.
[4] In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party’s (or parties’) activity. Externalities can be considered as unpriced goods involved in either consumer or producer market transactions. Air pollution from motor vehicles is one example. See ‘externality‘.
References
Boltanski, L. and E. Chiapello (2005). The New Spirit of Capitalism. London, Verso.
Cunningham, D. (2008). “Spacing Abstraction: Capitalism, Law and Metropolis.” Griffith Law Review 17(2): 454-469.
Illich, I. (1981). Shadow Work. New York, Marion Boyars.
Keen, S. (1990). Use, value and exchange: the misinterpretation of Marx. Master of Commerce (Honours), University of New South Wales.
Keen, S. (1993a). “The Misinterpretation of Marx’s Theory of Value.” Journal of History of Economic Thought 15(Fall): 282-300.
Keen, S. (1993b). “Use-value, Exchange-value and the demise of Marx’s Labor Theory of Value.” Journal of the History of Economic Thought 15(Spring): 107-121.
Lefebvre, H. (1991[1974]). The Production of Space, Blackwell Publishing.
Spencer, D. (2016). The Architecture of Neoliberalism: how contemporaary architecture became an instrument of control and dominance, Bloomsbury.
Strukhoff, R. (2016). “”Q Sectors”: Global Digital Transformation Leads to Economic Growth.” Altoros 2021.