INFORMATION, SOCIAL RELATIONS AND THE ECONOMICS OF HIGH TECHNOLOGY

INFORMATION, SOCIAL RELATIONS AND THE ECONOMICS OF HIGH TECHNOLOGY

Also by Michael Perelman KARL MARX'S CRISIS THEORY: Labor, Scarcity and Fictitious Capital CLASSICAL POLITICAL ECONOMY, PRIMITIVE ACCUMULATION AND THE SOCIAL DIVISION OF LABOR FARMING FOR PROFIT IN A HUNGRY WORLD: Capital and Crisis in Agriculture KEYNES, INVESTMENT THEORY AND THE ECONOMIC SLOWDOWN

Information, Social Relations and the Economics of High Technology Michael Perelman Professor of Economics California State University, Chico Palgrave Macmillan

ISBN 978-1-349-11163-3 ISBN 978-1-349-11161-9 (ebook) DOI 10.1007/978-1-349-11161-9 Michael A. Perelman, 1991 Softcover reprint of the hardcover 1st edition 1991 All rights reserved. For Information, write: Scholarly and Reference Division, St. Martin's Press, Inc., 175 Fifth Avenue, New York, N.Y. 10010 First published in the United States of America in 1991 ISBN 978-0-312-05676-6 Library of Congress Cataloging-in-Publication Data Perelman, Michael. Information, social relations, and the economics of high technology /Michael Perelman. p. em. Includes Bibliographical references and index. ISBN 978-0-312-05676-6 l. Capitalism. 2. Markets. 3. Microeconomics. 4. Information technology. 5. Computer software industry. I. Title. HB50l.P3842 1991 338.4'762-dc20 90-48959 CIP

Contents Introduction: Three Vignettes of Market Societies 1 1 The Evolution of Markets 6 On the Pre-History of Commodity Production 6 The Importance of Coercion in the Creation of a Market Society 10 Circuits of Capital and the Transition to a Commodity Based Social Formation 15 Penny Capitalism: Hyper Capitalism or Lumpencapitalism? 18 Penny Capitalism and the Accumulation Process 21 On the Distinction between Capitalists and Penny Capitalists 23 On the Evolution of Penny Capitalism 24 On the Possibility that Penny Capitalism Can Launch Economic Growth 26 Penny Capitalism, Usury and the Purely Monetary Circuit of Capital 28 Proto-Capitalism and the Circuit of Merchant Capital 30 Capital Accumulation and the Emergence of Capitalist Social Relations 33 A Digression on Institutional Entrepreneurialism, Convergence and Hysteresis 36 Information in Penny Capitalism 41 On Time and Traditional Societies 44 2 The Firm, Conflict and the Labour Process 47 Information in the First Stage in the Simplified Circuit of Capital 47 The Neglect of the Firm in Economic Literature 48 The Neglect of Entrepreneurship in Economic Literature 51 Political Economy, Economics and the Theory of the Firm 53 On the 'Science' of Economics 57 The Neglect of Class Conflict in a Model of Abstract Maximizing 59 v

Vl Contents Marx's Theory of the Firm 61 The Discovery of the Firm: Preliminaries 63 Frank Knight's Contribution 65 Friedrich von Hayek and the Austrian Approach 68 Ronald Coase and the Firm as an Alternative to the Market 70 The Social Division of Labour 73 The Neo-Classical Theory of the Firms, Again 81 3 The Firm in the Context of Class Conflict 90 The Theory of the Firm in the Absence of the Labour Process 90 The Firm, Conflict, and the Labour Process 94 The Coercive Nature of the Capitalist Employment Relationship 103 The Social Relations of Authority and Exploitation 104 The Consequences of Capitalist Attitudes 107 Information and Control of the Labour Process 108 Resistance within the Labour Process 112 Marx's Analysis of the Difficulty of Controlling Labour 121 The Potential for Reform 123 On the Evolution of Production Relations 124 Hints for the Future 129 Macroeconomic Perspective to the Theory of the Firm 131 Information in the Second Phase of the Simplified Circuit of Capital 135 Markets and Informational Efficiency 138 4 Markets as an Impediment to Economic Progress 141 The Changing Nature of Economic Planning 141 The Theory of Marginal Cost Pricing 145 The Irrelevance of Marginal Costs 147 The Tenuous Hold of Laissez-Faire 148 David Wells and the Initial Retreat from Laissez-Faire Theory 150 The Corporatist School of Political Economy 153 The Corporatist Call for Consolidation 156 Railroad Economics as a Refutation of Neo-Classical Economics 159 The Case of John Bates Clark 161

Contents vii The Vision of Corporatist Economics 164 Corporatism cum Imperialism 165 The Legacy of the Corporatists 167 The Reluctance to Invest in Capital Intensive Projects 174 The Bias against Public Goods 178 The Increasing Importance of Quasi-Public Goods 180 The Implications of the Pervasiveness of Quasi-Public Goods 182 5 Information, Computer Software, and the Evolution of Relations of Production 186 The Increasing Importance of Information 186 Information as a Public Good 189 The Puzzle of Software Pricing 190 Computer Software as a Public Good 194 Software as a Meta-Public Good 198 Other Options for Software Creation 201 Conclusion 208 References 211 Index 236