Misunderstanding capitalism and OER

David Wiley has just posted about Openness, Socialism and Capitalism. Comments are turned off on his blog, so I thought I’d reply here.

David’s post makes a good point: tax payer’s money that funds research, teaching and learning, should correspond to the tax payer being one of the recipients of the outcomes of research, teaching and learning; in other words, Open Access and Open Educational Resources. He refers to this as BOGO (‘Buy One, Get One’). To most readers, I think this will appear to be common-sense.

The problem I have with David’s post is this common-sense view that ‘capitalism’ and ‘markets’ are synonymous and that if the ‘flaws’ in the market were fixed, capitalism would serve tax payers well. David makes a common error in confusing capitalism with commerce. Capitalism is a historically specific method of organising social relations among people while commerce, which sometimes takes place in markets, existed prior to the development of capitalism in the 16th century.  I found Ellen Meiksins Wood’s book on the Origins of Capitalism very useful in understanding this point. The Monthly Review published a relevant chapter from the book which is a quick read. My point here is that in simple commerce or trade in non-capitalist societies, you might have expected to get a fair return on your money, but under capitalism, you should always expect to receive something worth less than you paid for it. I paid £400 for a TV, but I know that the cost of producing and selling that TV did not cost £400. Profit is extracted at every step in the production and exchange process, making my TV cost more to me than the actual cost of that TV. Under capitalism, we accept this for the private sector, but I think that David’s point is that publicly funded goods and services, such as educational outputs should be treated differently. I agree that seems fair.

David writes about a ‘fundamental social contract that allows markets to function’, giving the example of buying a pizza. A discussion around this ‘social contract’ can tell us more about capitalism than simply referring to ‘markets’. The ‘social contract’ refers to our shared understanding of the role of private property in society and an acknowledgement of the laws in place which protect private property. When the enforcement of social order breaks down in society or when someone exists in absolute poverty, this ‘social contract’ is often ignored and we call it looting or theft. In short, the ‘social contract’, although not an explicit written contract at the time of transaction, is underwritten in law and enforced through the role of the police and to a lesser extent other social institutions, such as education. Mark Neocleous has written a nice book about this called The Fabrication of Social Order, where he discusses the historical role of the police in enforcing ‘order’ (the functioning of private property and waged labour) in capitalist society.

The main point where I think David is mistaken is the expectation that under capitalism, epitomised by the functioning of markets, tax payers should expect to receive goods and services equal to the amount that is paid in taxes: you pay for a pizza and you get the whole damn pizza; you pay for education and you get full access to education. This makes sense but in my view is a naive view of the functioning of capitalism.

One of the defining features of capitalism is the extraction of ‘surplus value‘ from the work or labour that we are forced to undertake. The basic idea is that I work 8hrs/day but the value of the output of that work is worth more to my employer than the wage I am paid for 8hrs work. This is the basis for exploitation in capitalist society, which most of us participate in. We’re all aware that capitalism relies heavily on technology to improve the creation of surplus value out of labour (Meiksins Wood writes about the word ‘improve’ – very interesting and relevant to this discussion). Marx wrote about the shift from the formal subordination of labour to capital (the creation of a labour market in early stage capitalism) to the real subordination of labour to capital: the discipline of technology on labour and the transformation of the role of labour in the production process, which in turn effects a chain of social relations throughout society, from worker to shareholder. The important point here is to recognise that capitalism is not isolated to private trade or the markets but impacts all aspects of a capitalist society. It is a social totality subservient to the production of value.

Marx referred to two forms of surplus value. Absolute surplus value is basically the value created by extending the working day or cutting rest time, forcing people to work harder and other methods of discipline such as increased supervision. A situation of high unemployment can also lead to the creation of absolute surplus value because people are forced to work for less as wages are squeezed and workers have less bargaining power. However, there are obvious limits to the production of absolute surplus value: e.g. there are only 24hrs in the day, people get sick and even die if you work them too hard, workers organise into unions and can resist downwards pressure on wages. Relative surplus value is basically value created through efficiencies and innovation. Rather than extend the working day, efficiencies are introduced into the production process which ensure that labour does more work in the same time. These efficiencies can come about through better organisation of the production process and innovation through the use of technology, for example.

Having a basic understanding of surplus value, essential to capitalist accumulation, we can now situate the role of the tax payer and public services, such as education, in the production of surplus value. Marx made the distinction between productive and unproductive labour. This is a fairly simple distinction with widespread implications: Labour employed to produce surplus value directly is productive (i.e. labour directly involved in the production of commodities). All other labour is unproductive. This includes most government employees, managers in both private and public sectors, people involved in sales, finance, etc. In this view, most of my work for a publicly funded university is considered unproductive. However, unproductive labour, although not a direct source of surplus value, is still exploited by being paid less than the value of their wage. As Fine and Saad-Filho write in their excellent introduction to Marx’s Capital,

From the point of view of capital, unproductive sectors, for example retailing or banking, capture part of the surplus value produced in the economy (and, therefore, obtain the wherewithal to pay wages, other expenses and their own profits) through transfers from the value-producing sectors, via the pricing mechanism.

Although unproductive in the sense that this work is not directly involved in the production of commodities, it is still essential work in the economic reproduction of capitalist society, e.g. educating and training workers, keeping us in relatively good health so we remain productive, loaning us money to buy a house (because we are property-less) and selling us essential and non-essential commodities.

So, in this view, the publicly-funded education sector captures part of the surplus value produced in the economy (i.e. through taxes), and uses this value to maintain institutions for research, teaching and learning. What is of interest to me (and probably David), is that since Marx’s time, the appearance (though not the fundamental attributes) of a ‘commodity‘ has changed and the term now encapsulated a much broader range of ‘things’ than it did 150 years ago. I’ll leave a decent discussion about what a commodity really is for another day, but I want to note that Marx began Capital with that discussion and it forms the basic reference for much of his work on value and labour. Research papers and books sold by commercial academic publishers are commodities and I have argued elsewhere that OERs are being treated as commodities that may or may not create value for universities. So far, I am not aware of the production of OERs (involving the application of technology to labour) actually creating surplus value for an institution (MIT appear to be breaking even with the help of philanthropic grants). When we refer to ‘sustainability’ or the ‘business case’ for OERs, I think we’re talking about the potential to create value.

What’s particularly interesting to me is that the production of OERs through institutional means seems to be very much in line with capitalist production elsewhere and I agree with David that what Martin calls ‘big OERs‘, are ‘completely compatible with capitalism’. However, I don’t agree that OERs, because they are open, are ‘completely compatible with capitalism’. I don’t think openness has anything to do with it. The institutional production of OER is compatible with capitalism because it is clearly being situated within the overall production of surplus value for the institution. When we talk about the sustainability of OERs or business cases for the production of OERs, we’re talking about how to measure the value of this endeavour and usually this is through attracting external grants and raising the profile of the institution in some way.

So, where I disagree with David is the ‘common-sense’ expectation that tax payers should expect an equal return on the taxes we pay. From the point of view of capital, those taxes are potential surplus value that has been captured and transferred away from the direct capital accumulation process (M-C-M’ : Money is invested to produce Commodities that are sold in order to create Money and so on). From the point of view of capital, taxes are captured surplus value that are reinvested into the perpetuation of capitalist society, into educating workers, keeping us healthy and so on. Once these basic responsibilities are performed through the welfare state, capital will inevitably seek a return on this surplus value captured in taxation and seek to encourage the production of more surplus value wherever possible. e.g. selling publicly funded research outputs.

So, if David and I think it’s unfair that we don’t get a fair return on our taxes, it is no surprise really. It’s just a continuation of the exploitation that most of us are forced into under capitalism, where private property and waged labour are the organising principles of subsistence. In my view, a fair return on our taxes (or BOGO, as David calls it) through openness doesn’t ‘fix a disfunction in the market'; it is completely incompatible with a society where there is an imperative (partly through competition in the markets) to accumulate capital undertaken through the exploitation of working people, be they academics, housewives, students or car mechanics.