Communication Theory ISSN 1050-3293

ORIGINAL ARTICLE

Crisis of Command: Theorizing Value

in New Media
Brett Caraway
Institute of Communication, Culture, Information and Technology, University of Toronto, Mississauga, ON,
Canada

Theorists of free labor have argued that users produce value directly for capital through
unwaged participation in online social media platforms. I argue that this interpretation
of value is misguided. I begin with a brief overview of the labor theory of value as it has
been developed by political economists in the context of new media. I then use Marxian
crisis theory to demonstrate the limitations of the concept of free labor. I also elaborate how
value is created within media markets through a complex set of interactions among media
firms, market researchers, advertisers, finance capital, and unwaged content producers. I
conclude with a discussion of the consequences of free labor theory for Marxian politics.

Keywords: Autonomist Marxism, Free Labor, Labor Theory of Value, Exploitation, New
Media, User-Generated Content, Social Media, Political Economy, Advertising, Marx.

doi:10.1111/comt.12057

For some time now, scholars of mass communication have struggled to theorize value
in interactive media and user-generated content systems. Recent scholarship has sug-
gested that the exploitation of the free labor of users represents a new capitalist logic
of accumulation. As I will demonstrate in this article, much of this literature has recast
Marx’s labor theory of value to such an extent as to undermine the political utility of
the theory while obscuring the economics of new media. Alternatively, I argue that:
(a) value is realized in new media through the provision of goods and services by
advertisers, media firms, and market researchers, (b) absent a box-office mechanism,
its creation proceeds only on the basis of the circulation of goods and services in the
economy as a whole, and therefore (c) free labor contributes to value only by reducing
the cost of labor power and the means of production to capital. I begin by surveying
existing treatments of value before proceeding to use Marxian crisis theory to elabo-
rate value in the context of new media. I highlight the limitations of the concept of free
labor while remedying these shortcomings by demonstrating the significance of class
struggle to the production of value. I close with a consideration of the consequences
of this debate for Marxian politics.

Corresponding author: Brett Caraway; e-mail: brett.caraway@utoronto.ca

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B. Caraway Crisis of Command

Value
Early neoclassical economists based their accounts of economic activity on the
assumption that individuals seek to maximize their own narrow self-interest without
regard to the interests of others. By the early 20th century, economists had abandoned
the notion of utility in favor of preference. Both utility and preference constitute
subjective theories of value because they define value in terms of individual judgment.
Conversely, classical economists such as Adam Smith and David Ricardo, arguing
against a previous focus on land, insisted that the source of value was labor. Similarly,
Marx theorized a value-relation based on abstract labor by arguing that within capi-
talism, the source of value was human labor. Just what that means, however, depends
on how we interpret both value and labor. Consequently, Marxists have debated the
meaning of these concepts ever since.
As new forms of work have emerged over time, Marxists have revised and general-
ized their interpretations of Marx’s value theory. Marx’s (1993) “Fragment on Machi-
nes” in the Grundrisse has figured prominently in some of these revisions. According
to Marx, firms are compelled by workers’ struggles to displace labor with fixed capital,
which marginalizes labor as the source of value. Thus, capitalist development pre-
cipitates a crisis in the “law of value” as labor is displaced by science embodied in
machines. Building on this idea, Negri argues that the nature of work has changed
to such a degree that it is no longer possible to distinguish between work and non-
work and that it is impossible to measure abstract labor in distinct, quantifiable units.
Hardt and Negri (2000) characterize Marx’s labor theory of value as a theory of mea-
sure that is no longer viable because it assumes that value is quantifiable. They also
assert that contemporary information technology is a manifestation of Marx’s general
intellect —the general social knowledge embedded in the productive apparatus. As
the production of information commodities becomes ascendant, the general intellect
becomes the primary driver of accumulation. Lazzarato (1996) uses the term immate-
rial labor to describe the activities that produce the cultural and informational aspects
of commodities. Such activities include labor of various stripes: mental, affective, cre-
ative, communicative—waged and unwaged.
These authors can be considered part of the Autonomist Marxist tradition in that
they highlight class struggle as a limit to the imposition of the commodity form.
Other Autonomist Marxists argue (against the notion that measure is impossible)
that despite this ever-expanding subordination of life by capital, capitalists still rec-
ognize the distinction between work and nonwork and therefore struggle to use new
management practices to measure labor, both waged and unwaged (Caffentzis, 2005).
Other scholars of digital labor note that while profits under information capitalism are
increasingly tied to unwaged producers, there is an acceleration of the general tenden-
cies toward falling rates of profit and structural unemployment (Davis & Stack, 1997;
Hirschl, 1997). Cleaver (2000) argues that Marx’s labor theory of value is best under-
stood as a theory of the value of labor to capital. In other words, value is the political
use-value of labor to capitalists as its fundamental means of social control. Thus, the

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Crisis of Command B. Caraway

labor theory of value is essential to the analysis of the relationship between capitalist
efforts to impose work and our efforts to resist them.
Nevertheless, some political economists of communication have marginalized the
significance of class struggle to the elaboration of value. This is evident in the work of
Smythe (1977) who developed the audience commodity theory to argue that advertisers
buy the services of audiences from media firms. According to this perspective, audi-
ences dutifully give up their attention in quantifiable units of time to advertisers. And
because they are purchased as collectivities, audiences are commodities. One effect of
Smythe’s work has been the collapse of the distinction between the spheres of produc-
tion and consumption (Caraway, 2011). For Smythe (1981), all time is work time and
notions of leisure time are “ridiculous” (p. 270). In value terms, this represents a gen-
eralization of exploitation in which all types of human activity become implicitly pro-
ductive. Some theorists have taken a similar approach in their analyses of new media.
Building on the notion of immaterial labor, Terranova (2004) conceptualizes free labor
as “the moment where [the] knowledgeable consumption of culture is translated into
excess productive activities that are pleasurably embraced and at the same time often
shamelessly exploited” (p. 78). Responding to Richard Florida’s notion of the creative
class, Arvidsson (2007) asserts that paid professionals in the culture industries do not
so much produce creativity as they incorporate the free labor of urban artist commu-
nities. Andrejevic (2002, 2008) advances a theory of exploitation in which new media
users work productively for capital both by providing user-generated content and by
providing transactional data. According to Andrejevic (2009), the owners of social
media platforms leverage their control over these systems to forcibly appropriate the
labor power of users: “As a condition of their ‘free’ acquiescence to engage in this pro-
ductive exchange, [users] both construct popular websites and submit to the forms
of monitoring and experimentation that are becoming an integral component of the
interactive economy” (p. 419). Expanding on the work of Smythe, Fuchs (2012a) sub-
stitutes “Internet prosumer commodity” for the audience commodity to argue that
users labor for capital on platforms such as Twitter, Facebook, and YouTube (p. 711).
According to this perspective, users simultaneously provide user-generated content
and the attention that is sold to advertisers. Fuchs describes conditions of extreme
exploitation in which the distinction between work and play collapses.
These theories of generalized exploitation have elicited some critiques. Cultural
industries scholar Hesmondhalgh (2010) argues that the pairing of the concepts of free
labor and exploitation is incoherent and underdeveloped. The cultural industries tra-
dition has long rejected simplified notions of exploitation while emphasizing the com-
plexity and differing modes of cultural production (Garnham, 1990; Miège, 1989).
Arvidsson and Colleoni (2012) also have critiqued Fuchs while expressing skepti-
cism about the continued relevance of Marx’s labor theory of value. Like Hardt and
Negri, they argue that “ … value creation on social media platforms is poorly related
to quanta of productive time” (p. 136) and that “ … the value of intangible resources is
less susceptible to measurement in terms of productivity of time” (p. 140). Arvidsson
and Colleoni allege that value manifests in the connection between affective labor and

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B. Caraway Crisis of Command

finance capital. They propose an affect-based law of value in which market valuations
serve as a proxy for value. That is to say, affective investments such as reputation and
employee motivation are fundamental to the role that finance plays in the appropria-
tion and distribution of value.

Crisis
In his later works, Marx explains capitalist development as a contingent process of
reproducing its social relations on an expanded scale. Marx (1904) sees the relation-
ship between production and consumption as a dialectic in which production com-
pletes itself in the process of consumption. Thus, value exists only through the unity
of production and consumption. However, production and consumption occur as
separate moments. This separation makes crisis possible: “ … but every single sale or
purchase stands as an independent isolated act, whose supplemental act may be sepa-
rated from it in time and place, and therefore does not need to follow it directly as its
continuation” (p. 117). Given that commodities must be transformed into money and
back again into commodities, Marx (1978) defines crisis as “the phase of disturbance
and interruption of the process of reproduction” (p. 446). Marx (1992) schematizes
the transformation that must occur in his circuit of money capital:

LP
/
M—C....P....C’—M’
\
MP

Because workers do not control the means of production (MP), they are compelled
to sell their labor power (LP) to capitalists in exchange for wages (M). Capitalists
combine labor power and means of production in the process of production (P) to
produce new commodities (C ‘). These commodities are exchanged for money either
to the working class as a means of subsistence or to other capitalists as a means of
production in order to realize value (C ‘— M ‘). If the process is successful, capital-
ists maintain control over the means of production and have an increased amount of
money to re-create their kind of social relations on an expanded scale. In other words,
success allows for the imposition of a greater amount of work the next time around.
In order to illuminate the potential for crisis, Bell and Cleaver (2002) break the circuit
into three distinct stages: (a) (M — C ); (b) ( . . . P . . . C ‘ ); and (c) (C ‘— M ‘). I use
these three stages to demonstrate the limitations of the concept of free labor and the
relevance of class struggle to the analysis of value in new media.
M—C
The first stage of the circuit focuses our attention on labor. Consequently, we are
concerned with the mobilization of labor within media markets. Generally speaking,

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Crisis of Command B. Caraway

crisis may result if capitalists are unable to convert their money into labor power
and means of production. For example, high labor prices may drive firms to seek
out cheaper sources of labor, sometimes by setting up shop overseas or by utilizing
immigrant labor. In the most extreme cases, firms may seek out slave labor. This is
the scenario evoked by references to mind slaves and narcotized populations (Smythe,
1978), electronic sweatshops and netslaves (Terranova, 2004), and online slaves (Fuchs,
2012a).
The abundance of such terminology suggests an analytical approach to work
under capitalism that understates working class subjectivity. Smythe (1981)
described his labor commodity as audience power —the work of learning to buy
goods and of spending rather than saving. He asserted that audiences are “intermedi-
ate products . . . .consumed in producing, i.e., selling, the end product … ” as well as
“the systemic end product: they are produced by the system ready to buy consumer
goods..” (p. 13). Smythe’s concern was with the relationship between consumerism
and the reproduction of labor power. However, Smythe failed to adequately address
the contradictions that arise from consumerism. The desire for more consumer
goods resulted in the wage struggles of the late 1960s and contributed to the crisis of
the Keynesian period. Moreover, the cultivation of a consumerist mentality is often
related to absenteeism and the struggle for less waged work. In other words, Smythe
failed to acknowledge a critical dimension of audience power—the power to impose
demands and the power of refusal (Caraway, 2011).
As mentioned previously, Fuchs adopts Smythe’s theoretical outlook in his own
work on new media. Consider then his assertion that the more users a given social
media platform can offer, the higher its potential ad rates can be (Fuchs, 2012a,
p. 714). Fuchs’s reliance on Smythe’s simplistic formulation results in an equally sim-
plistic understanding of media markets. In actuality, advertising rates are determined
by numerous factors including market supply and demand, advertising effectiveness,
positioning, frequency, and size. Moreover, Internet advertising rates can decline
precipitously even when circulation increases. For example, Google may be able to
sustain advertising revenues on sheer volume alone, but it has not posted an increase
in the average cost-per-click since the third quarter of 2011 (Peterson, 2014). And
when we look at the impact of new media on incumbent industries, there are signs of
crisis. The challenges facing journalism are some of the most visible. Levine (2011)
estimates that a print reader is worth $539 in advertising revenue while the online
counterpart is worth only $26 (p. 113). Furthermore, newspaper advertising is likely
to fall to the lowest level on record in 2014 while circulation revenue is also down
when adjusted for inflation (Chittum, 2014).
Following Napoli (2003), I argue instead that media markets are host to a complex
set of interactions among media firms, market researchers, advertisers, and unwaged
content producers.1 Media firms derive revenue from advertising sales and/or
subscriptions fees—the particular mix of which varies among firms and markets.
Market researchers gather and process information on markets and consumers. Their
labor is purchased by media firms—the costs of which are passed on to advertisers.

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B. Caraway Crisis of Command

Advertisers are the same economic constituent as the producers of intermediate and
final goods and services. Those who do the work of advertising include account man-
agers, art directors, copywriters, media buyers, and people in other related positions.
Unwaged content producers include individuals or organizations that utilize new
media platforms for purposes other than the accumulation of money.
Within media markets, advertisers create value by purchasing the labor power of
creative workers. It has been the case that creative workers are often willing to discount
the price of their labor power by accepting nonmonetary rewards as compensation
(Ross, 2000). In other words, employers may exploit the tendency of creative workers
to sacrifice for the sake of their art. However, this type of exploitation is governed by
the supply of discount labor, which in turn is subject to a variety of factors including
the availability of additional part time employment, sources of self-provisioning, the
falling opportunity costs of leisure time, and the presence of organized labor. Adver-
tisers also contribute to value-creation by purchasing ad space from media firms. This
is because market research firms produce ratings data that allow media firms to assign
prices to advertisements. Advertisers are indirectly purchasing the labor power and
means of production that went into producing that data. Crisis may occur in this stage
if workers are able to successfully impose their own demands. If we wish to understand
the particular contributions of workers in advertising, market research, and media
firms to the creation of value, then we must analyze the dynamics of production within
each industry.

...P...C‘

Crises in production result when workers subvert the capitalist use of their labor
power in combination with fixed capital and raw materials, thereby reducing or nul-
lifying the amount of surplus value produced. Class struggle in the first stage of the
circuit (for higher wages) and in the second stage (against work) can result in crisis
(Bell & Cleaver, 2002). For example, as firms are compelled by class struggle to sub-
stitute machinery for workers, a greater quantity of constant capital (machinery, raw
materials) is deployed relative to variable capital (labor). As this process is generalized,
it becomes increasingly difficult to create the jobs necessary to put people to work.
Free labor theory tells us very little about crises in the sphere of production or
the struggles of workers in media markets. For example, Andrejevic’s (2009) use of
the term consumer labor obscures the centrality of knowledge workers to the process
of accumulation and warps our understanding of user subjectivity. In more extreme
forms, theories of free labor slide easily into oversimplified notions of class domina-
tion. Emblematic of this tendency is Fuchs (2010, 2012a) who views all participation
in commercial Internet platforms as infinite exploitation or overexploitation. Fuchs
(2010) states, “The production of surplus value and hence exploitation is not limited
to wage-labor, but reaches society as a whole” (p. 188). Using Marx’s rate of exploita-
tion s / v (where s is surplus value and v is variable capital), Fuchs (2012a) asserts that
all participation on commercial Internet platforms is “an extreme form of exploitation,

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Crisis of Command B. Caraway

in which the prosumers work completely for free. Infinite exploitation means that all
or nearly all online activity and time becomes part of commodities and no share of
this time is paid” (p. 714). In other words, because these activities are unpaid work
time (v = 0), Internet users are infinitely exploited as they labor to become obedient
consumers, produce marketing data, and generate content.
This approach is problematic for a number of reasons. First, Fuchs refers to the
exploitation of users as being both infinite and converging toward infinity. In doing
so he confuses two distinct concepts. It is incorrect to say that a number divided by
zero is equal to infinity. Rather, any number divided by zero is undefined. N / 0 has no
defined meaning because there is no number which, when multiplied by zero, results
in a nonzero N. It is correct, however, to say that the curve y = N / x converges toward
infinity as the magnitude of x decreases. Yet y can approach either positive infinity or
negative infinity depending on the values approaching zero in the limit. So the only
way to arrive at the notion of exploitation that Fuchs has in mind is to assert that
social media users were at some point paid a wage (positive x) that was subsequently
decreased. Fuchs’s a priori assumption about exploitation is tied to his desire to treat
unwaged labor in the same manner as waged labor, as productive of surplus value
in the same sense. In the same vein, Andrejevic (2009) refers to the affective labor of
women in drawing a comparison with YouTube users. Yet Andrejevic is careful to note
that these forms of affective labor are only productive to the extent that they contribute
to the production of the labor power commodity. Conversely, Fuchs’s claims are made
irrespective of the total labor implicated in the realization of surplus value by social
media firms. The analysis of exploitation (s/v) must take account of all the s realized
and all the v employed. Free labor in new media enjoys the same status as other forms
of unwaged labor—the more of it, the lower the costs of production. But the lowered
costs stem from the reduction in necessary waged labor and means of production.
To use the above example of domestic housework and the Marxist debates it inspired,
the unpaid labor of housewives plays a crucial role in the reproduction of labor power.
An exclusive focus on waged factory labor obscures the importance of domestic labor.
Conversely, an exclusive focus on domestic labor obscures the importance of waged
labor. Rather, it is essential to understand the relationship between the two and how
it furthers the imposition of work as a means of social control.
This particular approach to free labor engenders generalized notions of exploita-
tion and alienation that undermine the utility of the labor theory of value. It is telling
that Fuchs (2012b) and Fuchs and Sevignani (2013) draw comparisons between social
media users on the one hand and houseworkers, illegal immigrants, the unemployed,
students—even sex workers—on the other. To be sure, there is an overall view in
Marx’s writings that the working class, both waged and unwaged, is exploited. Yet, his
discussion of exploitation with respect to value is very specific. Capital benefits from
whatever unwaged work go into the reproduction of labor power, but it does not follow
that unwaged workers are exploited in the same sense as waged workers. The criti-
cal distinction lies in the relationship between the work of the waged and that of the
unwaged. When waged work is extended according to strategies of absolute surplus

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B. Caraway Crisis of Command

value (working longer hours), more products are produced embodying surplus value
that can be realized at the point of sale. When unwaged work is extended according to
strategies of relative surplus value (lower wages, higher productivity), there is no extra
product to be sold for a profit unless there exists some feedback mechanism whereby
more unwaged work increases the amount of waged work.
There exists the potential for rupture in the complex arrangement of advertisers,
market researchers, and media firms. To understand this potential, we must move
beyond crude notions of audience commodities and Internet prosumer commodi-
ties. Napoli (2003) describes an audience product consisting of three components: the
predicted audience, the measured audience, and the actual audience. Traditionally,
media firms and advertisers contracted over access to audiences based on predicted
audience size and composition. In other words, access to audiences was sold based
on past measurements of audiences and in advance of any present audience’s forma-
tion. Therefore, the measured audience (a statistical abstraction of past audiences) is
the primary commodity produced by market researchers for media firms. Meehan
(1984) argued as much when she asserted that ratings—not audiences—are the rele-
vant commodities. On the other hand, the actual audience is essentially unknowable.
Today, contracts are occasionally based on real-time bidding in which Internet adver-
tising space is sold at the very moment a user visits a site. Potentially, thousands of
advertisers place bids based on the user’s profile. Nevertheless, the common currency
of exchange remains a statistical abstraction—even in the case of real-time bidding.
The data collection and analytical services that produce ratings commodities are
provided by the market research industry. Market research firms sell data on audi-
ence behavior to advertisers and media firms. Despite the enormous potential of the
Internet for consumer data mining, commercial research in the service of advertis-
ing has a long history extending back more than a century (Ward, 2010). Historically,
this industry has produced monopolies in each medium because any duplication of
service tends to introduce uncertainty and drive up transaction costs for media firms
and advertisers alike.2 Consequently, market research firms developed independently
because of the potential for bias, should media firms be allowed to produce their own
ratings data. Lee (2011) notes, however, that this is not the case for Google: “As an
advertising agency, it sells keywords. As a ratings company, it sells statistics of key-
words. As a content provider, it sells search indexes” (p. 434). Market research firms
such as Google, Datalogix, and Acxiom collect and analyze consumer data in an effort
to economize marketing communications. Analysts advise management on pricing
and development strategies to maximize sales while avoiding excessive carrying costs
and inventory shortages. Customized market research services include field research
(pretesting and data collection), analytic services (coding and analysis), and economic
analyses of marketing effectiveness, price elasticity, competition, and sales forecasting.
Today, the market is struggling to cope with media and audience fragmentation,
increased user autonomy, and sabotage—all of which threaten to undermine the
established pricing system. Although contracts based on conventional audience
forecasting are still common, automated sales systems are becoming more frequent.

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Crisis of Command B. Caraway

This reflects a shift from cost-per-thousand (CPM) models to cost-per-action (CPA)

models. CPM is the traditional exposure-based model. CPA, on the other hand,
is based on some measureable response to advertising. Napoli (2011) asserts that
increasing audience fragmentation across proliferating channels and content has
caused CPM costs to rise. This is because CPM was traditionally based on relatively
small samples taken from large populations. As audiences disperse into smaller
groups, sampling becomes more costly. There is also considerable resistance to CPA
models because they devalue access to audiences. Devaluation occurs when audience
members do not provide the desired response to advertisements. Furthermore,
many firms employ advertising to generate demand. CPA is poorly adapted to
measure demand because of the difficulty in attributing delayed purchases to specific
advertisements. To overcome such difficulties Facebook recently partnered with
Datalogix to link advertisements with offline purchases (Rusli, 2013). Still, these
efforts are regularly disrupted by users with numerous resources at their disposal: (a)
ad filtering software; (b) browser plugins like Ghostery that shut down social widgets
and tracking cookies; (c) fake names and multiple profiles; (d) anonymous search
engines like DuckDuckGo; (e) virtual private networks (VPNs); (f) relay encryption
like TOR; (g) encrypted e-mail like Hushmail; (h) encrypted cloud storage services
like SpiderOak; and (i) simple cash purchases. The question for researchers is how
and when do these individual pockets of disruption constitute a genuine crisis in the
circuits of production?
Even though the economic aim of CPA is to reduce uncertainty for advertisers, it is
still little more than an attempt to quantify and monetize fuzzy concepts such as buzz,
attentiveness, and engagement. Moreover, the relatively high degree of user auton-
omy offered by new media platforms makes it difficult to guarantee firms a reduction
in risk. Andrejevic (2009) describes the reluctance of advertisers to fully embrace
user-generated content as they “ … attempt to shape the media environment in accor-
dance with advertising imperatives” (p. 409). Consider the recent decisions by Nissan
and Nationwide to suspend their Facebook marketing campaigns after their advertise-
ments appeared alongside misogynistic user-generated content. The two firms were
subsequently targeted by almost 100 women’s organizations seeking to pressure Face-
book to better police offensive content. Vodafone endured a similar public relations
nightmare when its ads were shown alongside a YouTube video posted by al-Quaeda
sympathizers calling for jihad (Budden, 2013).
Direct sabotage is also a threat. Peer-based ranking and response systems are
among the primary mechanisms used by media firms to assign prices to advertise-
ments. These include users’ likes, retweets, customer reviews, feedback, thumbs up,
viewcounts, shares, and comments. Because they have a significant impact on the
composition of audiences for media content, they are among the most scrutinized
measures in social media markets. And like any other technology, they are subject
to sabotage. For example, viewcounts measure user-initiated views of social media
content. YouTube (2012) employs viewcounts as a measure of “genuine user interest”
and states that viewcounts “shouldn’t be a gauge of how many people accidentally or

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B. Caraway Crisis of Command

unintentionally” watch a video. Since 2011, YouTube partners have earned revenue
based in part on CPM linked to viewcounts, creating an economic incentive to
obtain high viewcounts. Therefore, YouTube prohibits services that artificially inflate
viewcounts through automated means. Nevertheless, peer-based production services
such as ViewTubeTrain utilize point systems to boost viewcounts by installing a
browser toolbar that allows users to acquire points for initiating views (1 point per
second). As users accumulate points, their own content gets priority queuing among
a pool of fellow users, ensuring that their content receives higher viewcounts. Points
do not directly translate into views, but the most active users have their content
featured first among other users of the service. Additionally, online labor markets
such as fiverr.com regularly feature viewing services for those willing to purchase
views from online laborers (VideoContestNews, 2013). Botting is the practice of
hiring a third party to initiate views through mostly automated means. In January
of 2013, YouTube removed 156 million views from Lady Gaga’s VEVO channel in
what appeared to be a purge of botted views.3 Around the same time, an individual
claiming to be a former employee of YouTube alleged that as far back as 2009, he
had been paid to bot views for VEVO (Eördögh, 2012, 2013). Another intriguing
example of sabotage comes out of the Design and Technology Masters program at
Parsons New School in Manhattan where a 25-year-old graduate student has been
developing a browser extension designed to scramble user information in order to
trick advertisers. Rachel Law created a browser extension called “Vortex” which is
part game, part ad-targeting disruptor. It utilizes a database of cookies gathered by
users to generate misinformation across multiple profiles (Kaye, 2013). Similarly,
NYU Professor Helen Nissenbaum has worked with others to develop an application
called Ad Nauseum for the purpose of data obfuscation. Ad Nauseum automatically
clicks on all the advertisements that an Internet user encounters, effectively rendering
any profile data meaningless.4 These examples are all suggestive of the potential for
crises of production in the complex arrangement between media firms, advertisers,
market researchers, and unwaged content producers.

C‘ — M‘

The third stage of the circuit redirects our attention to the relationship between
media markets and the economy as a whole. C ‘ is the output of the production process
occurring in stage two. Its surplus value can only be realized if someone is willing
and able to purchase the new commodity with an equivalent amount of money (M ‘).
Generally speaking, there is a potential for crisis if the sellers of goods and services
cannot find buyers with either the means or the will to purchase commodities. It may
be that a commodity fulfills no social use-value or that potential buyers lack sufficient
money. I begin with the analysis of use-value before subsequently returning to the
issue of the availability of money.
Political economists have traditionally treated use-value as something manipu-
lated by capitalists who seek to align the consumptive demands of the working class

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Crisis of Command B. Caraway

with the productive needs of capital. However, Marx insists that to be a commodity, a
product must have both use-value and exchange-value. That is to say, it must be sold
in order to be realized as a commodity and to be sold, it must have a use-value. Thus,
Marx (1991) asserts that use-value is an effective limit to exchange-value:
… its use-value is the precondition of its exchange-value and hence of its value.
It is a point that bears on the relation between necessary and surplus labour only
in as much as an imbalance in this proportion means that the commodity value,
and therefore also the surplus-value contained in it, cannot be realized. (p. 774)
Advertising represents an attempt to overcome this limit and avert crisis. Broadly
speaking, advertising provides information about the price and quality of the goods
and services available in a given market. Advertising may function at 1) the level
of demand by redistributing existing demand among suppliers or across different
markets or 2) the level of aggregate demand by increasing the level of aggregate con-
sumption expenditures. First, from a microeconomic perspective, advertising may
function as a form of nonprice competition wherein the goal is to increase demand
for a given firm.5 It can also redistribute demand among groups of firms operating in
different markets. Advertising can be either efficient or inefficient depending on the
market structure. If the market is characterized by perfect competition, there may be
a decrease in both prices and pricing disparities. Conversely, if the market is charac-
terized by imperfect competition, advertising may create barriers to entry and reduce
competition. However, for any given market, advertising is just one of a number of
interrelated factors of demand that include the total number of buyers, income lev-
els, price of substitute products, consumer preferences, and consumer expectations.
Each one of these factors is conditioned by worker struggles to secure higher wages,
financial security, leisure time, as well as workers’ understandings of the use-values of
commodities.
Second, from a macroeconomic perspective, advertising influences the relation-
ship between general price levels and real gross domestic product. This is something
Smythe (1977) recognized in his analysis when he assumed that the media firms
of his day operated under conditions that Baran and Sweezy (1966) referred to as
monopoly capital. According to Baran and Sweezy, this meant that, “ … the economic
importance of advertising lies not primarily in its causing a reallocation of con-
sumers’ expenditures among different commodities but in its effect on the magnitude
of aggregate effective demand and thus on the level of income and employment”
(p. 124). Baran and Sweezy believed that corporations and monopoly pricing had
largely displaced individual entrepreneurs and price competition. Thus, corpora-
tions were price-makers—not price-takers—and the function of advertising was to
increase aggregate demand. Free from the price constraints of competition, the new
crisis of monopoly capital was one of surplus absorption wherein large corporations
scrambled to find profitable uses for their surplus. As this limit to accumulation
was approached, advertising emerged as a means to impact the balance between
spending and saving. Nonetheless, any program of demand management would

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B. Caraway Crisis of Command

still be conditioned by a variety of interrelated aggregate factors of demand. These

include levels of disposable income and wealth, consumer and business expectations,
interest rates, investment, economic policy, exchange rates, and foreign incomes—all
of which are important terrains of class struggle.
As I mentioned previously, crisis in the third stage of the circuit may also result if
there is a shortage in the availability of money. Marx (1991) discusses finance capital
as an attempt to offset crisis in the sphere of circulation. Loanable money may enter
into the circuit in order to mediate the circulation of both variable capital (wages)
and fixed capital (means of production and raw materials). Arvidsson and Colleoni
(2012) use their critique of Fuchs to propose that affective labor generates value for
new media firms through the realization of value in financial markets. In other words,
social media platforms generate value to the extent that they can attract the affective
investments necessary to build their brands. In his response to the authors, Fuchs
(2012b) criticizes Arvidsson and Colleoni for failing to differentiate between price and
value by asserting that financial valuations of social media firms are examples of what
Marx called fictitious capital. Marx (1991) considered the value of securities fictitious
in that their value could fluctuate quite independently of the underlying real capital.
Therefore, Fuchs makes a sharp distinction between profit rates and stock prices by
using the example of Facebook’s market capitalization.6 He is correct in that investors
often rely on related measures such as price-to-earnings ratio to assess stocks.7 And
it is true that Facebook’s P/E ratio signals a severe overvaluation. I would also add
that stocks are exchanged in secondary markets that are distinct from the primary
markets in which initial public offerings (IPOs) occur. Hence, the prices paid for Face-
book shares today do not have a direct bearing on the creation of value. Having said
that, Fuchs limits his discussion of financial valuation largely to liabilities. Yet, valua-
tion also may be based on assets such as physical capital, intellectual properties, and
investment. Moreover, the valuation of liabilities and assets does more than allow a
firm to command a high stock price; it impacts a firm’s access to money capital—the
use value of which is the production of profit. I see nothing in the analysis by Arvids-
son and Colleoni that precludes the use of money capital for the mobilization of labor
power. Rather, the weakness of their theory is their seemingly arbitrary decision to
single out affective investment as the primary determinant of financial valuation. The
authors provide no real justification for ignoring more traditional determinants such
as earnings performance, IPO value, the number of available shares, and the ability
and willingness of other buyers in the market.
Arvidsson and Colleoni were influenced by Marazzi (2008) who argues that the
spheres of work and finance are intimately linked. Specifically, Marazzi claims that
language and communication are central to the production and distribution of goods
and services in finance markets. However, Marazzi also highlights the relationship
between finance capital and class struggle. In a similar way, Lazzarato (2012) has
explored the debtor-creditor relationship as it relates to accumulation and class strug-
gle. Lazzarato argues that analyses of finance capital limited to speculation blind us
to its productive capacity. He argues that debt is simultaneously an attempt to diffuse

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Crisis of Command B. Caraway

class antagonism and an attempt to produce a new form of subjectivity—that of the

indebted man.
With industrialization in the 18th and 19th centuries, the financial sector began
diversifying its investments to manufacturing. Borrowing allowed industries to min-
imize the impact of periodic crises in the availability of money. But it also allowed
speculation in unregulated debt securities. After the stock market crash of 1929, finan-
cial regulation separated investment and commercial banking to prevent banks from
speculating with depositors’ money. These regulations were concomitant with Key-
nesian policies directed at stemming recurrent crises by shaping investment through
fiscal and labor policies and by using the Fed to manipulate the aggregate money sup-
ply to help keep inflation and real wages in line with productivity increases. These
policies helped to mitigate the most antagonistic aspects of class struggle during the
Great Depression. Thus, investment was structured to accommodate the wage and
benefit increases that had been won by newly recognized labor unions (Negri, 1968).
The capitalist response to the crisis of the Keynesian period brought on an inter-
national cycle of class struggle in the late 1960s and early 1970s. The neoliberal coun-
terattack consisted of the devaluation of labor power through an acceleration in the
relocation of the means of production, the deterritorialization of the firm, the expan-
sion of the labor market, and the attempts to dismantle the welfare state. Finance
capital in the form of securities and derivatives and consumer credit were introduced
to mitigate this next crisis of accumulation. Nevertheless, working-class demands for
access to the means of subsistence continued despite falling real wages. The crisis of
wage-push inflation ended the Keynesian era and ushered in the capitalist counterat-
tack of austerity characterized by falling real wages and high levels of unemployment.
According to Cleaver (1995), finance capital emerged as a means of steering “money
away from the contested terrain of production and onto the terrain of speculation”
(p. 175). Yet, it would be misguided to overlook value-creation on this terrain sim-
ply because of the speculative nature of these services. Speculation is little more than
the fetishistic pursuit of profit without regard to real investment (Cleaver, 1995). But
to the extent that new media firms facilitate the imposition of work in the financial
sector, value is created through commercial and investment banking services, foreign
exchange, asset management and investment services, insurance, and credit.
At this point, some general observations about the realization of value in new
media are in order. Ceteris paribus, if revenue—whether from subscriptions, market
research, advertising, or finance—allows firms operating in new media markets
to increase employment or achieve higher rates of productivity, value is created
as more work is imposed, or a higher percentage of that work is surplus. Within
media markets, value is produced when workers in media firms create and maintain
the platforms through which communication takes place. Value is also produced
when workers in marketing research firms perform data aggregation and analytical
services. Any evaluation of changes in surplus value requires analysis of every link in
the circuits of capital invested in this industry. Unwaged content producers provide
user-generated content for new media systems. They do not create value in the

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B. Caraway Crisis of Command

Marxian sense although user-generated content is critical for both media and market
research firms through the reduction of costs. That is to say, user-generated content
is implicated in value-creation only to the extent that by keeping down costs, it
increases surplus value by making the imposition of more waged labor possible.
Moreover, new media is tied to the production of value in the larger economy
through its relationship to the circulation of goods and services in other markets.
Advertising can: (a) redistribute demand among firms in a single market; (b) redis-
tribute demand across multiple markets; or (c) increase aggregate demand. In any of
these three cases, value-creation must be analyzed with respect to the associated pro-
cesses of production. In the first case, advertising redistributes market share. Ceteris
paribus, if advertising shifts demand among competing firms using the exact same
production process with the same rate of surplus value, there is no immediate change
in value. If demand shifts from a firm obtaining a high rate of surplus value to a firm
obtaining a low rate of surplus value, the result would be an overall decrease in the
total amount of surplus value. In the second case, advertising redistributes demand
across different markets. If demand shifts from markets characterized by lower rates
of surplus value to markets characterized by higher rates of surplus value, surplus
value increases by some amount. In either case, when advertising impacts demand,
social media firms contribute to the creation of value elsewhere. In the third case, if
advertising contributes to an increase in total spending by consumers, firms, and the
government on final goods and services, market researchers and media firms con-
tribute to the creation of value independent of the redistribution of demand. If this
occurs in the context of a politically effective working class, there may be an overall
increase in the rate of surplus-value generation without a concomitant increase in the
rate of exploitation. Conversely, if economic expansion is achieved via low wages or
unstable employment, a very large amount of surplus value may be extracted. Finally,
ceteris paribus, to the extent that lending services facilitate the mobilization of waged
labor in emerging industries, finance capital is a source of value-creation.
I am not arguing that researchers of new media should limit their analyses
to waged workers. Rather, I am arguing that value-creation cannot result from
the so-called free labor independent of waged labor. It is true that the activities
of unwaged content producers allow firms to decrease costs (c + v) of new media
commodities (content and market research), thus raising the rate of profit (s / c + v)
and the rate of surplus value (s / v). To the extent that free labor contributes to this
process, it should inform our analysis of value.

Conclusion
Hesmondhalgh (2010) has rightly questioned the political demands that seemingly
flow from the a priori assumption that leisure activity is productive labor. Wages for
music practice? Wages for coaching little league? Fuchs (2008, 2010) has previously
endorsed both wages for free labor and a redistributive, guaranteed basic income
derived from taxes targeting informational capitalists. More recently, Fuchs and

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Crisis of Command B. Caraway

Sevignani (2013) explain that they are not in favor of wages for free labor. I am
inclined to agree with the latter conclusion—but for reasons consistent with my
rejection of the logic of their theory of exploitation. Paying wages to Internet users
would entail a proliferation of intellectual property rights, a greater reliance on
technologies of authentication and authorization, higher prices for consumers, and
the displacement of free services by subscription services. These are the inevitable
costs of emphasizing commercial rights over civil rights. Moreover, it should come
as no surprise that there is support for the monetization of personal data within the
advertising and software industries (Caruso, 1999; Hill, 2010).
A priori assumptions about the productivity of free labor obscure the contingent
character of reproduction while severely limiting the political utility of the labor
theory of value. What forms of political articulation are possible in the context of
infinite exploitation and collective disempowerment through technological means?
Fuchs and Sevignani (2013) have proposed a communist Internet to be built by
“establishing and nourishing the existing alternative Internet platforms by user
support, donations and public funding . . . .” with the goal of a “collective exodus
from Facebook … ” (p. 272). It is unclear how such a project constitutes a genuine
alternative to the regime of infinite exploitation theorized by the authors. Fuchs
(2012a) differentiates between “reproductive activities that recreate labour power, but
produces no commodity that is sold,” and “reproductive activities that recreate labour
power and at the same time create an audience or Internet prosumer commodity”
(p. 731). He asserts that activities occurring on noncommercial, nonprofit sites
such as Wikipedia and Alternet cannot be exploited (p. 725). Yet, Fuchs ignores the
obvious ways in which the provision of noncommercial content increases the overall
value of the network by generating demand for ISPs, search engines, critical Internet
infrastructure, and computer hardware. Such a position downplays the significance
of class struggles utilizing existing commercial platforms while arbitrarily privileging
discourse occurring on nonprofit platforms.
Analyses of new media should instead commence from the struggle against value
because inasmuch as new media platforms are means of class domination, they are
also terrains for class struggle. We must account for the variety of ways in which new
media platforms are utilized not only by the capitalist class but also by those of us who
struggle against them. Furthermore, we must recognize how free labor in new media
is tied to potential crises in the capitalist system as a whole. Free labor is useful to
capital only to the extent that labor somewhere else is not free. And whether we are
speaking of labor power or audience power, we should never take the imposition of
the commodity form as given.

Notes

1 There are also significant peripheral market actors including ICT manufacturers,
government agencies, consumer groups, and standards organizations.
2 Mediamark for print, Arbitron for radio, Nielsen for television.
3 VEVO is a joint venture music video content provider.

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B. Caraway Crisis of Command

4 http://dhowe.github.io/AdNauseam/
5 Rigi and Prey (2013) make a similar argument in their shrewd critique of the recent
audience commodity debates—namely that branding and advertising function to
redistribute demand.
6 The total value of the shares of a publicly traded company.
7 The price per share divided by yearly earnings per share.

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