Bilic - Instrumental Rationalization WIASNo5
Bilic - Instrumental Rationalization WIASNo5
Issue No. 5
Department for Culture and Communication, Institute for Development and Inter-
national Relations.
Zagreb, Croatia. pasko@[Link]
Department for Culture and Communication, Institute for Development and Inter-
national Relations. Zagreb, Croatia. pasko@[Link]
Abstract: In this article, I argue that the debate about the irrational consequences of
rationality discussed within the tradition of the Frankfurt School, and applied to tech-
nology and machinery in the concept of technological rationality (Marcuse 1941; 1960;
1964; 1965), can help us better understand and criticize contemporary algorithmic cap-
italism. I present the example of Google (Alphabet Inc.) and analyse documents such
as the Securities and Exchange Filling (SEC) Form 10-Ks in the period between 2004
and 2016, as well as Search Quality Rating Guidelines (SQRG) between 2016 and 2017.
I argue that the company developed on the foundation of three different rationalities:
organizational rationality of flexible management values and labour utilization; infor-
mational rationality of generating value from advertising and audience labour; and
technological rationality of surplus value accumulation based on reification of labour
and consciousness. The company produces two main types of commodities: audience
commodity and algorithmic commodity. Reification blurs the contradictions embed-
ded in algorithms, the relations of production, and commodity exchange in the market.
Acknowledgement: I would like to thank Christian Fuchs and the WIAS International Research
Fellows for informed and critical discussions about contemporary capitalism that helped solidify and
sharpen the ideas developed in this article.
1. Introduction
“Along with automation and the introduction of labour saving machinery
and techniques in some parts of the economy, whole new industries have
arisen and may be expected to arise.”
The reference is from a 1955 report to the Congress of the United States by the Sub-
committee on Economic Stabilization titled Automation and Technological Change.
The Subcommittee gathered opinions from witnesses associated with production and
industry, management and labour as well as experts in the field of technology and eco-
nomics. While discussing the introduction of automation in post-war US economy
there is a tone of balanced excitement and caution when it comes to the possible effects
of these technologies on the economy. Automation was introduced during economic
growth and low unemployment. The hearings were analysed in detail by Pollock (1955)
who warned about potential social and economic risks that automation might bring if
introduced without oversight and adequate management.i
In contemporary digital capitalism (Schiller 1999), the proponents of automa-
tion in the form of algorithms promise to bring economic growth and multiple benefits
to society. Algorithmic automation is not only influencing the efficiency of the produc-
tion process but also consumption in digital, online markets of information exchange.
Algorithms are aggressively implemented in areas such as finance, stock-markets,
health, internet of things, public administration, job search, government surveillance,
self-driving cars, social media, and so on. A key difference compared to post-war intro-
duction of automation is the lack of broader institutionalized discussions, regulatory
and policy debates prior to the introduction of such rationalities in society. Instead of
managing the process, the US government is only reactingii to what many companies,
especially in the Silicon Valley and Wall Street, are already doing without oversight and
democratic sense of [Link] Major corporations use automated algorithms under a
cloud of intellectual property rights (Pasquale 2015). Simultaneously, the discourse is
to trust the benevolent nature of corporate oversight and to have faith in the neutrality
and objectivity of technical tools devised for fulfilling our own desires and needs. Al-
gorithms can only bring multiple benefits to [Link] Yet the understanding of hu-
manity and human experience advanced by major companies is reduced to more effi-
cient, or obsolete, workers as well as streamlined consumption in the digital market-
place. Such cost reductions do not benefit citizens, but serve as tools for automated
accumulation of surplus value by processing information and metadata (Pasquinelli
2009; 2015).
This paper offers a critique of the political economy of algorithms by focusing on the
corporate production, dissemination and global management of algorithmic artefacts
by Alphabet Inc., a company that owns Google as one of its flagship corporate seg-
ments. To provide theoretical grounding, I will evoke the concept of technological ra-
tionality developed by Herbert Marcuse (1941; 1960; 1964) and update his ideas to
contemporary capitalism. I also address some of the contemporary readings of the
Frankfurt School (Kellner 1991, 2005; Honneth 2006), especially in the works of Feen-
berg (1999; 2010; 2014), and Fuchs (2016). Alphabet develops a unique type of tech-
nological rationality with the ultimate goal of maintaining global control and domi-
nance over transnational information flows, and internet advertising investments.
The empirical material consists of Securities and Exchange Commission (SEC)
Fillings such as Form 10-Ks in the period between the Initial Public Offering (IPO) of
the company in 2004 until 2016. In total, 13 market reports (10-K) were analysed and
coded to make sense of Alphabet’s corporate development. Selected economic indica-
tors published in these reports were also gathered, systematized and presented to pro-
vide key indicators of corporate growth. Other supplementary documents published by
the company are also used. Most importantly, the Search Quality Rating Guidelines
(SQRG) describe the construction of search engine quality, utility and relevance in
global markets.
that regard is that critical social theory should analyse containment and stabilization
as well as contestation and struggle. The global internet is currently at a tipping point
where corporate consolidation and containment by major global players are causing
more and more regulatory struggles and contestations. The resolution of these contra-
dictions is yet to be determined.
To contribute to these developments, a revision of certain ideas developed
within the tradition of the Frankfurt School Critical Theory is needed. In particular, the
central debate about the “irrational” tendencies of the rationalization process can pro-
vide a broad conceptual apparatus for a critique of the type of technological domination
promoted in algorithmic capitalism. Untangling the web of corporate control of choices
in everyday life requires an understanding of the underlying logic of technological ra-
tionality (Marcuse 1941; 1964) of algorithmic capitalism. To revisit the dialectic be-
tween humans and oppressive rationality in algorithmic capitalism three major ideas
developed in the tradition of the Frankfurt School need to be revisited and updated
(Honneth 2006, 357): normative motif of a rational universal, the idea of a social pa-
thology of reason and the concept of emancipatory interest.
The contemporary dominating rationality in technical artefacts such as soft-
ware, code, algorithms, devices and gadgets is presented as a rational universal whose
production process and commodity nature are reified behind smooth technical de-
signs. The rationality provides a biased and skewed, quantifiedviii representation of hu-
mans. Pathologies are becoming increasingly evident in surveillance, privacy abuse,
fake news, and other negative effects on culture, economy, and democracy. The eman-
cipatory potentials for conceiving alternatives need different types of rationalities that
will abide to democratic procedures and oversight. The following section explains in
more detail how Marcuse understands technological rationality and why it is relevant
for contemporary relations between technology, labour and ideology in algorithmic
capitalism.
ject of production ultimately fragments its own subject. Human qualities and idiosyn-
crasies appear as sources of error when contrasted to abstract laws. Man becomes a
mechanical part incorporated into a mechanical system:
“Reification requires that a society should learn to satisfy all its needs
in terms of commodity exchange. The separation of the producer from
his means of production, the dissolution and destruction of all natural’
production units, etc., and all the social and economic conditions nec-
essary for the emergence of modern capitalism tend to replace natural
relations which exhibit human relations more plainly by rationally re-
ified relations.”
Marcuse (1964, 172) took this line of thought one-step further and introduced the role
of technology as the “great vehicle of reification”. Reality becomes defined as a reality
without substance, or rather, a reality in which substance is represented by its technical
form which becomes its content. Every signification and proposition is validated within
the framework of men and things - “a one-dimensional context of efficient, theoretical,
and practical operations” (Marcuse 1960, 135). There is nothing controversial in the
technical artefacts of machinery (Marcuse 1941, 41), for they are the result of the social
conditions from which they emerge: “[t]echnics by itself can promote authoritarianism
as well as liberty, scarcity as well as abundance, the extension as well as the abolition
of toil.” Technics becomes a tool for control and domination under a rationality that
favours commodity exchange, and high profit rates. Machinery, therefore, has a double
social role for Marcuse. On the one hand, it is a product of human society and social
conditions. On the other hand, its objectified existence exerts a specific form of influ-
ence over behaviour and consciousness of humans.
black box (Pasquale 2015) of algorithmic technics and demands more transparency
and accountability (Diakopoulous 2016) of the social power of algorithms (Beer 2017).
The grounding in the ideas of the Marcuse helps further develop the debate by focusing
on two additional problems: the hidden relations of algorithmic production and reified
consciousness of the commodity exchange of information commodities. It is precisely
within the unconsciousness of the cultural horizon under which technology is de-
signed, that technology exerts its complete legitimizing effectiveness (Feenberg, 2010:
18). Uncovering the material foundations of search engine algorithms is the task of the
following section.
company started in 1998 and six years later made its initial public offering (IPO). It
sold 19 million shares and raised 1.67 billion USD in capital, setting the company mar-
ket value at over 20 billion USD. Over time, the complexity of the algorithmic solutions
xi
grew to a point where it now uses several hundred “signals” other than the number of
receiving links to determine relevance and utility and to rank websites based on search
queries and other [Link]
The 2004 revenues were 3.189 billion USD with 99% of the revenue coming
from [Link] The revenues continue to rise steadily based on the scale of global
operations and dominant presence in capturing internet advertising investments
worldwide. The year 2015 was a benchmark for corporate development as the name of
the company changed from Google to Alphabet inc. to enable more independence of
different company [Link] Google is still one of the most important ones and al-
gorithmic production remains the key business strategy for the company. In 2016, the
recorded revenues were at 90.272 billion USD with advertising comprising an 88%
[Link] Market capitalisation of the company in 2017 was 661 billion [Link] Despite
enormous growth, the legitimating digital discourse (Fisher, 2010) still promotes the
“rags to riches” story of corporate [Link]
Alphabet did not invent algorithms. There is a longer history within computer sci-
ence and engineering, as well as a lineage within philosophy and mathematics. In con-
temporary capitalism, Alphabet’s algorithmic model is supported by three rationali-
ties: organizational rationality of specific management values and labour utilization;
informational rationality of generating value from advertising and audience labour
(Smythe, 1981; Jhally and Livant, 1986); and technological rationality increasing sur-
plus value, reifying labour and commodity exchange.
in the highly centralized capital accumulation strategy. The aura of the start-up, aca-
demic roots and forward-thinking insights of its founders legitimize a disproportionate
distribution of wealth within the organizational structure of the [Link] The dy-
namic balancing act needs a steady flow of knowledge and labour to sustain corporate
growth and dominance.
There is a continuous demand for new knowledge, communication and experi-
ence in the production of search algorithms. “Immaterial labour” (Lazzaratto 1996) is
the driving force behind the creation of the informational and cultural commodities of
web search. Alphabet’s research teams are armed with skills in areas such as: security
and privacy, information retrieval, machine intelligence, data mining, machine percep-
tion, human-computer interaction, education, natural language processing, speech
recognition, machine translation, network architecture, distributed systems, and so
[Link] In addition to complex skills, an alignment with the mission of the company is
necessary to perform the spirit of flexible, creative and networked management struc-
ture and ensure surplus value. Such an organizational rationality creates a “common
framework of experience” and extends corporate control from the objective to the sub-
jective world ensuring the material reproduction of society (Marcuse 1941, 56). In other
words, “the argument that Google is changing the world and changing it for the better
encourages employees to align their sense of personal mission with that of the com-
pany’ (Turner 2009, 80).xx The organizational rationality is based on “the hegemony
of knowledges, by a diffuse intellectuality, and by the driving role of the production of
knowledges by means of knowledge connected to the increasingly immaterial and cog-
nitive character of labour.” (Vercellone 2007, 16).xxi
30000
25000
20000
15000
10000
5000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
The above figure shows the change in the structure of labour power between 2004 and
2016. At the time of the Initial Public Offering (IPO), the company structure was the
following: 1.003 employees in research and development, 1.463 in sales and marketing,
555 general and administrative staff and no recorded staff in operations. The number xxii
of R&D staff compared to the sales and marketing staff was relatively equal up until
2012. In August 2011, Google made one of its biggest acquisitions by purchasing
Motorola Mobility Holdings Inc. for a reported 12.6 billion USD. The Motorola oper-
xxiii
ating results and staff (16.317) were incorporated into Google’s 2012 market results
which is displayed as a significant increase in headcount of R&D and operations staff. xxiv
The purchase was made for at least three different reasons. First, to increase the highly
skilled labour power. Second, to obtain a large number of intellectual property rights,
especially patents owned by Motorola. Third, to expand into the rising mobile tele-
phone market, update Google’s Android OS and mobile search services, and increase
capital accumulation. Since 2012 R&D staff continues to outnumber other organiza-
xxv
tional staff. In 2016, the R&D staff count was 27.169, followed by sales and marketing
with 20.902, general and administrative with 14.287 and operations with 9.695. xxvi
16.000
13.948
14.000
12.000
10.000
8.000
6.000
4.000
2.000
0.000
The company maintains its global dominance through continuous acquisitionsxxvii but
also through substantial internal research and development investments. In 2016, the
total R&D costs were 13.948 billion USD. The main costs of R&D include compensation
and related costs for personnel responsible for the research and development of new
products and services, as well as significant improvements to existing products and
services. The outward image Google promotes is a well know dimension of workplace
creativity and innovation. It forms an integral part of the organizational rationality in-
cluded in every market report since 2004. It serves to solidify the image of the “non-
conventional” company (whatever that means) among its shareholders. Simultane-
ously, in the context of social media and the internet, there is an increase in non-wage
labour contributing to the value of social media companies (Fuchs 2010, 2012; Fisher
2015). The commodities, which the company produces, create a relationship between
internet users seeking information and content, and information producers seeking
users and audiences. Alphabet mediates this relationship by producing two main types
of commodities discussed in the following section.
The advertising model is based on what the company calls “performance advertising”
of delivering relevant ads that users will click on and engage directly with the advertis-
[Link] AdWordsxxx is the primary auction-based advertising program, which allows ads
to appear on Google services and services of Google Network Members – partner web-
sites and third-party websites across the internet. Alphabet collects a complex array of
information based on search queries, geographic location, language, device (PC, mo-
bile phone, or tablet), and other parameters that may be of interest to advertisers. As
the most visited global websitexxxi with a highly dominant and monopolistic position in
the search engine market, the incentive for advertisers to place their ads through the
Google system is highly attractive. In 2016, Google held a 71.41% market share of global
desktop search and 91.61% of the global mobile and tablet web [Link] The largest
share of Google’s revenues (Figure 3) comes from advertising. The maintenance of a
close-relation with users is the main corporate strategy for attracting advertising in-
vestments and accumulating capital. The position is evident throughout the history of
the company: in the 1998 academic article by Brin and Page, 2004 IPO letter, market
xxxiii
99%
99%
99%
99%
97%
97%
97%
96%
96%
95%
94%
90.6%
91%
89.5%
87.9%
Figure 3: Share of advertising revenue within total revenue (2002-2016).
Source: author’s analysis based on Form 10-K (2004-2016)
The free service strategy attracts users while the audience commodity (Fuchs, 2012,
Fisher, 2015) attracts advertisers. This social relationship would not be possible with-
out automated machines that process information input/output. I argue there are two
main types of commodities that Alphabet produces. First, the audience commodity for
the online advertising market. Second, the algorithmic machine for the search engine
market. Intellectual property rights (IPR) ensure the scarcity of search services in the
market. In July 2017, there were 15.073 patents assigned under the old company name
Google and additional 18 under the new company name Alphabet. Paid labour of xxxv
company engineers as well as continuous usage and unpaid labour by internet users
produce the machine. Paid and unpaid labour create the audience commodity and al-
gorithmic commodity. The first is profitable through its exchange value in the adver-
tising market; the second is profitable through stock trading and financial capital. The
first commodity is the source of control over nature and humans, audiences and their
labour. The second commodity is the source of control over information through IPR. xxxvi
and more pleasant forms of social control and social cohesion” (Marcuse 1964, xlvi).
Reification blurs the consciousness of contradictions embedded in corporate technol-
ogies, as well as the relations of production necessary for their maintenance and com-
modity exchange within the political economy of algorithmic capitalism.
Google’s search engine is dominant worldwide. More usage creates more audience
commodities and improves the algorithmic machine. Localisation, languages and geo-
graphical barriers are no match for the adaptability and global information control of
the algorithm. The machine captures “living time and living labour time and trans-
forms the common intellect into network value” (Pasquinelli 2009). The machine does
not produce surplus value but serves to accumulate and augment surplus value based
on the exploitation of the general intellect (Pasquinelli 2015). Google’s search algo-
rithm provides and captures information flows and controls relevant information.
Moreover, by providing dominant solutions to web search Alphabet routinizes the pro-
cess of information dependence and steers the development of human needs and ca-
pacities. It closes alternatives to the availability of information and situates itself in a
position of great power to define contemporary social reality. The table below shows
xxxvii
Alphabet uses worldwide search quality tests (Bilić 2016) to determine if search algo-
rithms actually find what the company defines as local search relevance and utility. The
highest quality standards are set for the so-called Your Money or Your Life (YMYL)
websites. The above table shows that Google systematically favoured exchange-value
xxxviii
Only after the outbreak of fake news in 2016 and the subsequent public outrage did the
company introduce “news articles or public/official information pages”. There is a
xl
Changes to algorithmic relevance also show the limits of technical solutions for inter-
preting nuances of human behaviour. Nonetheless, after the breakout of fake news,
search engine usage and audience labour, transformed the algorithm into a more effi-
cient machine. Algorithms are reified objects in a double sense. First, they hide the
labour process necessary for their production. Second, algorithms hide the exchange
value of the audience commodity (Fuchs 2012; Fisher 2015) as well as surplus value
accumulation of the exploited labour of the general intellect (Pasquinelli 2009, 2015).
The algorithmic machinery becomes a mediating factor between labour, value and sur-
plus value in algorithmic capitalism. Labour power and audience labour produce the
audience commodity and the algorithmic machine, while the algorithmic machine ac-
cumulates surplus value for company owners.
rationality imply, is largely missing in academic and policy debates. Class divisions or
international relations do not form the only struggles against technological rationality.
Efficient, calculated and largely automated systems of technology, markets, and ad-
ministration affect humanity as a whole.
5. Conclusion
Drawing on Marcuse (1941; 1960; 1964), algorithms can be conceived as a product of
human society and social conditions. In addition, the objectified existence of algo-
rithms exerts influence over behaviour and consciousness of humans. Alphabet’s algo-
rithmic model is supported by three rationalities: organizational rationality of flexible
management values and labour utilization; informational rationality of generating
value from advertising and audience labour (Smythe 1981; Jhally and Livant 1986);
and technological rationality increasing surplus value, reifying labour and commodity
exchange. The company produces two main types of commodities. First, the audience
commodity (Fuchs 2010; 2012; Fisher 2015) for the advertising market. Second, the
algorithmic machine for the search engine market. Company engineers and internet
users produce the audience commodity and the algorithmic commodity. Reification
(Lukács 1929; Marcuse 1964) blurs the consciousness of contradictions embedded in
algorithms, as well as the relations of production necessary for their maintenance and
commodity exchange in the market. The algorithmic machinery mediates labour, value
and surplus value. Labour power and audience labour produce the audience commod-
ity and the algorithmic machine, while the algorithmic machine accumulates surplus
value (Pasquinelli 2009; 2015) for company owners. Re-claiming algorithms under so-
cial and democratic control requires a combination of policy, practice and praxis—a
raised consciousness of the contradictions and struggles embedded within corporate
technologies. Algorithms will continue to expand in multiple areas and continue to cre-
ate struggles and contradictions between human values, judgements and corporate
control and dominance. It is important to remember that technologies are not neutral
or objective (Marcuse 1965)—they are either good or bad for humanity depending on
who is in control.
References
Beer, David. 2017. The Social Power of Algorithms. Information, Communication &
Society 20(1): 1-13.
Bilić, Paško. 2016. Search Algorithms, Hidden Labour and Information Control. Big
Data & Society 3(1): 1-9.
Bilić, Paško. 2018. The Production of Algorithms and the Cultural Politics of Web
Search: Towards a Marcusean Approach. In P. Bilić, J. Primorac, B. Valtysson
(Eds.), Technologies of Labour and the Politics of Contradiction. Basingstoke: Pal-
grave Macmillan (forthcoming).
Boltanski, Luc and Chiapello, Ève. 2007. The New Spirit of Capitalism. London, New
York: Verso.
Diakopulous, Nikos. 2014. Algorithmic Accountability: On the Investigation of Black
Boxes. Available at: [Link]
the-investigation-of-black-boxes-2/#endnotes
Feenberg, Andrew. 1999. Marcuse or Habermas: Two Critiques of Technology. In-
quiry 39: 45-70.
Mager, Astrid. 2012. Algorithmic Ideology: How Capitalist Society Shapes Search En-
gines. Information, Communication & Society 15(5): 769–787.
Marcuse, Herbert. 1941. Some Social Implications of Modern Technology. In D.
Kellner (Ed.) Technology, War, Fascism: Collected Papers of Herbert Marcuse
(pp. 41-65). London and New York: Routledge.
Marcuse, Herbert. 1960. From Ontology to Technology. In D. Kellner and P. Clayton
(Eds.) Philosophy, Psychoanalysis and Emancipation (132-140), London and New
York: Routledge.
Marcuse, Herbert. 1962/2013. Four Manuscripts on Value Theory, Humanism and
Socialism. In C. Reitz (Ed.) Crisis and Commonwealth: Marcuse, Marx, McLaren
(pp. 287-309). Plymouth: Lexington Books.
Marcuse, Herbert. 1964/2007. One-Dimensional Man: Studies in the Ideology of Ad-
vanced Industrial Society. London and New York: Routledge.
Marcuse, Herbert. 1965/2009. Industrialization and Capitalism in the work of Max
Weber. In H. Marcuse. Negations: Essays: Essays in Critical Theory (pp. 151-
169). London: MayFLyBooks
Marcuse, Herbert. 1969. An Essay on Liberation. Boston: Beacon Press.
Marx, Karl. 1867/2004. Capital, Volume 1. London: Penguin Books.
Murdock, Graham and Golding, Peter. 1973. For a political economy of mass commu-
nications. The Socialist Register 10: 205-234.
Pasquale, Frank. 2015. The Black Box Society: The Secret Algorithms that Control
Money and Information. Harvard University Press.
Pasquinelli, Matteo. 2009. Google’s PageRank Algorithm: A Diagram of the Cognitive
Capitalism and the Rentier of the Common Intellect. In: K. Becker and F. Stalder
(Eds.) Deep Search: The Politics of Search Beyond Google (pp. 152-162). London:
Transaction Publishers.
Pasquinelli, Matteo. 2015. Italian Operaismo and the Information Machine. Theory,
Culture & Society 32(3): 49-68.
Pfeifer, Sabine. 2014. Digital Labour and the Use-value of Human Work. On the Im-
portance of Labouring Capacity for Understanding Digital Capitalism. Triple C:
Communication, Capitalism & Critique 12(2): 559-619.
Pollock, Frederick. 1955. Automation: A Study of its Economic and Social Conse-
quences. New York: Frederick A. Praeger
Rigi, Jakob and Prey, Robert. 2015. Value, Rent, and the Political Economy of Social
Media. The Information Society 31(5): 392-406.
Rigi, Jakob. 2015. The Demise of the Marxian Law of Value? A Critique of Michael
Hardt and Antonio Negri. In E. Fisher and C. Fuchs (Eds.) Reconsidering Value
and Labour in the Digital Age (pp. 188-204). Basingstoke: Palgrave Macmillan.
Schiller, Dan. 1999. Digital Capitalism: Networking the Global Market System. MIT
Press.
Smythe, Dallas Walker. 1981/2006. On the Audience Commodity and its Work. In:
M.G. Durham and D. Kellner (Eds.) Media and Cultural Studies: Key Works (pp.
230-256), Revised edition. Malden, USA; Oxford, UK; Victoria, Australia: Black-
well Publishing.
Turner, Fred 2009. Burning Man at Google: A Cultural Infrastructure for New Media
Production. New Media & Society 11(1&2): 73–94.
Vercellone, Carlo. 2007. From Formal Subsumption to General Intellect: Elements
for a Marxist Reading of the Thesis of Cognitive Capitalism. Historical Material-
ism, 15(1), 13-36.
Paško Bilić is a Research Associate at the Department for Culture and Communication, Insti-
tute for Development and International Relations in Zagreb, Croatia. He worked on research
projects funded by the European Commission, COST, Seventh Framework Programme (FP7)
and Croatian Science Foundation. He is co-editing the forthcoming book Technologies of La-
bour and the Politics of Contradiction (Palgrave Macmillan, 2018). His main research interest
is a critical analysis of social relations mediated through digital technologies, public policies
and markets.
i First, automation could lead to the creation of an “automation hierarchy” and a new social and eco-
nomic “elite”. The elite would gain power from being able to implement and control technical man-
agement processes within industry settings. Second, increased productivity can lead to an overabun-
dance of products in the market as well as an artificial increase of consumption which can ultimately
lead to economic crises. Third, checks and balances from trade unions and government policy are
needed to reduce technological unemployment.
ii See for example Artificial intelligence, automation, and the economy (2016). Available at
[Link]
economy
iii Simultaneously, there are reports by consultancy firms and research institutions that offer opinions
and research on the effects of algorithms and automation on contemporary economy and society. In a
report published by the McKinsey Global Institute in May 2017 titled What’s now and next in AI, ana-
lytics and automation it is stated that about a half of the current work activities have the potential to
be automated. It also states: “[a]t a macroeconomic level, based on our scenario modelling, we esti-
mate automation alone could raise productivity growth on a global basis by 0.8 to 1.4 percent annually.
In short, businesses and the economy need the productivity boost from automation.” Available at
[Link]
and-automation.
iv As stated in one of Alphabet Inc. market reports: “We’ve been building the best AI team and tools for
years, and recent breakthroughs will allow us to do even more. This past March, DeepMind’s AlphaGo
took on Lee Sedol, a legendary Go master, becoming the first program to beat a professional at the
most complex game mankind ever devised. The implications for this victory are, literally, game chang-
ing—and the ultimate winner is humanity. This is another important step toward creating artificial in-
telligence that can help us in everything from accomplishing our daily tasks and travels, to eventually
tackling even bigger challenges like climate change and cancer diagnosis.” Available at
[Link]
[Link]#s8185FEF9802022EB31082B6542DD4F73
v Take for example the letter written by the founders of Google, Larry Page and Sergey Brin, from 2004
at the time when the company made its Initial Public Offering: “Google is not a conventional company.
We do not intend to become one. Throughout Google’s evolution as a privately held company, we have
managed Google differently. We have also emphasized an atmosphere of creativity and challenge,
which has helped us provide unbiased, accurate and free access to information for those who rely on us
around the world.” Available at [Link]
vi Top five US companies in terms of market capitalisation (in b USD) in July 2017 were Apple (777),
Alphabet (661), Microsoft (561), Amazon (478) and Facebook (463). Available at
[Link]
try=United%20States&marketcap=Mega-cap
vii Elsewhere (Bilić, 2018), I argued that the ideas developed by Herbert Marcuse can be useful for the
analysis of algorithmic capitalism from at least four different standpoints. First, he offers a critique of
commodification and consumer culture. Second, Marcuse develops a dialectical relation between tech-
nological domination and human values, interests and liberation. He is not dismissive of technology in
itself, only about technological control and domination within the capitalist system. Third, algorithms
can be conceived as the expression of the Enlightenment project with the goal of rationalization, calcu-
lability, neutrality, objectivity and effectiveness in handling social affairs. They are reified forms of so-
cially established technological control (Marcuse, 1964). Finally, algorithms can be analysed as tools
for global dominance and control embedded in the labour intensive production process within the
global division of search engine labour.
viii See for example the Quantified Self movement: [Link]
ix See for example a list of Critical Algorithm Studies: [Link]
lists/critical-algorithm-studies/
x See Brin and Page (1998). Available at [Link]
xi Available at [Link]/2004/BUSINESS/08/19/[Link]/
xii See a list of major algorithmic changes here [Link]
xiii Available at
[Link]
xiv “ What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is
Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our
main internet products contained in Alphabet instead. What do we mean by far afield? Good examples
are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (fo-
cused on longevity). Fundamentally, we believe this allows us more management scale, as we can run
things independently that aren’t very related.” Available at [Link]
letters/2015/[Link]#2015-larry-alphabet-letter
xv Available at
[Link]
[Link]#s9FFFC4C562B4028925242B6543354A33
xvi Available at [Link]
ica&country=United%20States&marketcap=Mega-cap
xvii “Despite our rapid growth, we still cherish our roots as a startup and wherever possible empower
employees to act on great ideas regardless of their role or function within the company. We strive to
hire great employees, with backgrounds and perspectives as diverse as those of our global users. We
work to provide an environment where these talented people can have fulfilling careers addressing
some of the biggest challenges in technology and society.” Available at
[Link]
[Link]#s9FFFC4C562B4028925242B6543354A33
xviii Sergey Brin, Larry Page and Eric Schmidt hold significant control over Alphabet operations. As of
December 31, 2016, Larry, Sergey, and Eric beneficially owned approximately 92.4% of Alphabet’s
outstanding Class B common stock, which represented approximately 56.8% of the voting power of
outstanding capital stock. Larry, Sergey, and Eric therefore have significant influence over manage-
ment and affairs and over all matters requiring stockholder approval, including the election of direc-
tors and significant corporate transactions, such as a merger or sale of company or assets. See 2016
Form 10-K for more details:
[Link]
[Link]#s9FFFC4C562B4028925242B6543354A33
xix Available at [Link]
xx Here the concept of living labour capacity is also essential: ˝Just as the dialectical pairing of use-
value and exchange-value forms the dualistic character of goods, labouring capacity and labour
power are the dialectical expressions of the dualistic character of the subjects that offer their labour
power in the marketplace. The dialectical juxtaposition of labouring capacity and labour power con-
nects it to the ‘political economy of labour power’: Namely, through the contrast of subjective pro-
duction of labour power on the one hand and its objectification as a function of the wage labour pro-
cess on the other.˝ (Pfeiffer, 2014)
xxi Vercellone (2007: 32, 33) further explains: “we pass from the static management of resources to the
dynamic management of knowledges. Productive science is no longer “encapsulated” in the rigid
logic incorporated in machines.’ On the other hand, inside the enterprise just as in society, the mobi-
lisation and the co-operation of collective knowledges is increasingly fundamental, the only elements
able to release and to control a dynamic of accelerated change.”
xxii Available at [Link]
gar/data/1288776/000119312505065298/[Link]#toc10062_2
xxiii Available at [Link]
gar/data/1288776/000119312512025336/[Link]#toc260164_2
xxiv Available at [Link]
gar/data/1288776/000119312513028362/[Link]#toc1452134_2
xxv The cognitive capitalism perspective is useful for explaining this acquisition: “In cognitive-labour-
producing knowledge, the result of labour remains incorporated in the brain of the worker and is
thus inseparable from her person. That helps explain, together with other factors, the pressure exer-
cised by enterprises in order to attain a strengthening of the rights of intellectual property and to re-
enclose, in a new phase of the primitive accumulation of capital, the social mechanisms at the base of
the circulation of knowledge.” (Vercellone, 2007: 33)
xxvi Available at [Link]
[Link]#s9FFFC4C562B4028925242B6543354A33
xxvii See a list of major acquisitions made by 2015 here [Link]
biggest-acquisitions-2015-1
xxviii “In general, it could be argued from the consumer point of view that the better the search engine
is, the fewer advertisements will be needed for the consumer to find what they want. This of course
erodes the advertising supported business model of the existing search engines. However, there will
always be money from advertisers who want a customer to switch products, or have something that is
genuinely new. But we believe the issue of advertising causes enough mixed incentives that it is cru-
cial to have a competitive search engine that is transparent and in the academic realm.” (Brin and
Page, 1998)
xxix Available at [Link]
[Link]#s9FFFC4C562B4028925242B6543354A33
xxx Available at [Link]
xxxi Available at [Link]
xxxii Available at [Link]
[Link]?qprid=4&qpsp=2016&qpnp=1&qptimeframe=Y&qpcustomd=1
xxxiii Available at [Link]
xxxiv Available at [Link]
xxxv Available at [Link]
ser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-
[Link]&r=0&f=S&l=50&TERM1=Google&FIELD1=ASNM&co1=AND&TERM2=&FIELD2=&d=PT
XT
xxxvi IPR protection has a prominent position in all market reports between 2004 and 2016. Alphabet
is under a continuous legal struggle to maintain its dominant position. From the 2016 market report:
“We rely on various intellectual property laws, confidentiality procedures and contractual provisions
to protect our proprietary technology and our brand. We have registered, and applied for the regis-
tration of, U.S. and international trademarks service marks, domain names and copyrights. We have
also filed patent applications in the U.S. and foreign countries covering certain of our technology,
and acquired patent assets to supplement our portfolio.” In another example: “Our patents, trade-
marks, trade secrets, copyrights, and other intellectual property rights are important assets for us.
Various events outside of our control pose a threat to our intellectual property rights, as well as to
our products, services and technologies.” Available at
[Link]
[Link]#s9FFFC4C562B4028925242B6543354A33
xxxvii“…the machine process imposes upon men the patterns of mechanical behaviour, and the stand-
ards of competitive efficiency are the more enforced from outside the less independent the individual
competitor becomes. But man does not experience this loss of his freedom as the work of some hos-
tile and foreign force; he relinquishes his liberty to the dictum of reason itself. The point is that today
the apparatus to which the individual is to adjust and adapt himself is so rational that individual pro-
test and liberation appear not only as hopeless but as utterly irrational” (Marcuse 1941, 48).
The latest version of search quality rating guidelines is available here
xxxviii
[Link]
xxxix Top industries contributing to Internet advertising in 2015 and 2016 were retail, financial services,
automobile industry, telecom industry, leisure and travel, consumer packaged goods, consumer elec-
tronics and computers, pharmacy and healthcare and so on. Available at [Link]
sights/iab-internet-advertising-revenue-report-conducted-by-pricewaterhousecoopers-pwc-2/
xl See an article about the process of re-writing the algorithm to combat fake news
[Link]
ings-to-bury-fake-news
xli Available at [Link]
rithm-age/
xlii Fuchs (2016, 121) argues that Marcuse understood Hegelian dialectics as a) the dialectic between
the subject and the object, b) the dialectic of the individual and society, c) the dialectic of the subjective
and the objective dialectics of capitalism, d) the dialectic of chance and necessity, e) the dialectic of es-
sence and appearance, f) the dialectic of essence and existence.
xliii Available at [Link]
xliv For example, the Association of Computer Machinery (ACM) recently issued a statement on algo-