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Why Intellectual Property Rights Matter

A review of Roberto Unger’s 'The Knowledge Economy'

In his most recent book, The Knowledge Economy (2019), Brazilian philosopher and politician Roberto Mangabeira Unger asserts we have entered a new era of productivity. With the increasing imbrication of algorithms, code, platforms, and digital devices into the everyday, the interconnected practices of work, life, distribution, and consumption have been altered. In the vein of Adam Smith and Karl Marx, who “believed the best way to discover the deepest truths of economics was to study the most advanced practice of production” (p. 3) Unger sets out, first, to chart the productive basis of the knowledge economy, and second, to provide a practical solution to alleviate the economic maladies this productive era inspires.

The structure of The Knowledge Economy roughly mirrors this dual ambition. The 287-page work of pure theory is organized into digestible, cumulative micro-chapters. The first seven theorize the structure of the knowledge economy. Chapters eight and nine turn to the issues of inequality and precarity. The following eight chapters look at solutions to assuage these systemic issues. The text closes with a brief discussion of political economy’s lack of conceptual tools to describe the knowledge economy, followed by a manifesto-esque declaration of the “higher purpose” of making this productive order more inclusive.

Notably, in these nearly 300 pages Unger spends ample time theorizing what the knowledge economy is and where it ought to be going, but little to no time addressing how the knowledge economy came to be. This oversight includes the knowledge economy’s imbrication in histories of imperialism, financialization, and globalization. In this context, it not surprising that intellectual property (IP) makes no entree into the text. But IP is a uniquely glaring omission.

Intellectual property rights (IPRs) are the litigious foundation on which the tech industry has, historically, not only built and policed its monopolistic commercial empires, but also legitimized its exploitative labor practices. In the 1960s and 1970s, with the rise of the computer industry, tech firms began leasing out designs for products, such as printers and disk packs, to be manufactured remotely for a fee. This process, original equipment manufacturing (OEM), was propelled by the prospects of cheap labor and untapped markets.

From the 1980s onwards, tech’s relationship to intellectual property rights (IPRs) deepened. First, hardware IPRs did not go away. Intellectual monopolies over tech products and parts continued to help firms consolidate consumer markets and scout out cheaper labor, particularly in the Global South. The OEM of the 1960s and 1970s gave way to things like Apple’s relationship with Foxconn.

Second, software became eligible for copyright in the US in 1981. Firms began not only copyrighting their own code but buying up other companies solely for access to their IPRs. These acquisitions not only assisted firms with saving on research and development (R&D) costs, but also consolidated markets through absorbing competition. This practice, which McKenzie Wark might call “an intellectual landgrab”, is clearly monopolistic in its aims. Take Alphabet’s recent quest to monopolize AI.

These commercial strategies would not exist if they were not nationally and internationally green lighted. It was the US Supreme Court that first ruled that code was eligible for copyrights, overturning a 1972 decision. Furthermore, in 1995 the Trade-Related Aspects of Intellectual Property Rights (TRIPs) was ratified by the World Trade Organization (WTO). This treaty outlined a ‘strong’ minimum standard for the treatment of IP as well as enforcement mechanisms and dispute-resolution procedures in the event of non-compliance. In other words, without the state and international communities’ sanction, firms like Qualcomm, with its monopoly over chip designs, or Facebook, with its growing empire of software-based social interactions (and now monetary ones), would simply not be as large or as exploitative.

Thus, if someone was seriously interested in the structure of the knowledge economy, they would pay attention to IP. Unger is interested in the structure of the knowledge economy. But the philosopher’s disregard for this legal institution leads his theory to misreport, and his solutions to fall short.

Unger’s theory of the knowledge economy revolves around two subjects: labor and market composition. While the philosopher sees labor in the knowledge economy as good, he sees the knowledge economy’s market composition as not so good. Unger has a special term for this market composition, “insular vanguardism,” which he defines as “oligopolies surrounded by a periphery of unthreatening start-ups” (p. 66). The problem with insular vanguardism is that it discourages innovation while inspiring inequality and precarity.

Funny thing is, insular vanguardism is a direct expression of Big Tech’s intellectual monopolies. IPRs are not only a legal institution protecting against the theft of legitimate creative products, they are also legal tools that can be leveraged to defend, consolidate, and make markets. Meaning, without IPRs, these oligopolies would not be oligopolies. The start-ups would not be an “unthreatening” source of raw code.

Thus, one could mitigate insular vanguardism by weakening the currently strong regimes of IPRs. But the philosopher chooses another path. Unger’s big fix is a tax. More specifically, Unger advocates for the steeply progressive Kaldor tax, which taxes the difference between a person’s annual income and the amount they spend on themselves. Unger envisions this fiscal measure will mitigate inequality and precarity by redistributing wealth as social benefits through a “Scandinavian”- or “Swedish”-style welfare state.

The primary tension in the text is that Unger recognizes, implicitly, that insular vanguardism is integral to, if not constitutive of, the knowledge economy: Big Tech, with its “economies of scale,” are this productive arrangement’s dominant institution. Yet Unger calls for insular vanguardism not to be overturned, but managed indirectly. This conservative approach is undergird by a belief that upending the oligopolistic structure of the knowledge economy risks annihilating knowledge work itself.

Knowledge worker as cyborg

Unger sees the knowledge economy as ushering a new era of Imagination. Like Kant, Unger defines imagination as the seat of judgment. Ineffable and introspective, imagination brings decision-making, i.e. the will, into being. But unlike Kant, Unger’s concept of the imagination is a cyborg: With the aid of digital devices, computing better and faster, the cyborg imagination allows for a surveying of field, testing of hypotheses, tactical positioning, and weighing of ends and means. The cyborg imagination is goal-oriented and calculative. Moreover, it is “creative.”

Unger’s cyborg opens up the possibility of a cyborg theory of value. What makes the cyborg theory of value so special is not that the cyborg imagination determines the general “value”, or price, of goods or products, as it would in a conventional theory of value, but that it exhibits the productive power to alter the structure of the economy itself. The cyborg theory of value is productive in two ways. Firstly, because computer-based knowledge work exists in direct contrast to the rote and monotonous factory work, the philosopher argues knowledge work is akin to freedom. Secondly, the philosopher argues that because innovation in the knowledge economy is continuous, not episodic, productivity is held at an artificial high. This hyper-productivity means endless productive growth (p. 28).

It is true that knowledge work exhibits a break from the rote, repetitive tasks of industrial capitalism. But knowledge work is not the only work in the knowledge economy. There are a set of less visible jobs in manufacturing hardware which look a lot less like freedom and lot more like industrial labor: minerals and ores need to be extracted from the ground; parts and components must be manufactured; tech products need to be package and assembled. Most of this work is not automated. And thanks to global supply chains falling from Big Tech’s intellectual monopolies, most of this labor is not well-remunerated.

Furthermore, when it comes to the work that does look closer to the knowledge work Unger describes, one has to ask: how free is it really? This question extends beyond asking whether the person sitting next to me at Starbucks coding at 11pm on a Wednesday feels like they’re not doing grunt work, to the question: who owns the code?

Unger’s suggestion to treat the symptoms of the knowledge economy (i.e. inequity and precarity) and not the problem (i.e. insular vanguardism) is in the hope that simply through increasing people’s material conditions, the ills inspired by insular vanguardism will go away. And maybe, just maybe, Unger also even envisions, drawing on the plasticity of institutions, that this will over time double-back and loosen the stranglehold of insular vanguardism itself.

But as appealing as the gains of this hypothetical renaissance of the welfare state may be, at its core the Kaldor tax is a national solution to a transnational problem. By implicating firms indirectly, not directly, in this fiscal fix, Unger preserves the productive arrangements that were made through the construction of intellectual monopolies. The knowledge economy is not contained within the nation state, but transcends its borders. One would need a globally redistributive mechanism, an international welfare system, in order to achieve the kind of dissemination and coordination of benefits the philosopher envisions.

Instead, we should just focus on breaking up Big Tech’s intellectual monopolies enshrined by intellectual property rights.

Ella Coon is the incoming Richard Hofstadter Fellow in Columbia University’s doctoral program in History. Her areas of interest include recent US history, history of technology, and international political economy.

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