Facebook recently reported record quarterly results and a profit of $1.5 billion for 2013. News media have recently fawned over Facebook Chief Operating Officer Sheryl Sandberg after the announcement that she has “joined the super-rich” through having her wealth surpass $1 billion. Sandberg has given many talks and written a book on how to be successful in business as a woman with her mantra to “lean in” becoming globally famous from her book of the same name, the movie rights to which having just been sold. I am sure that she has many skills and qualities that have helped her into her position as one of the youngest female billionaires as have other members of the global tech elite such as Mark Zuckerberg and Sergey Brin. However, they have made their billions of dollars not only though innovation, skill and risk-taking but through the unacknowledged free labour of many millions of people.
The economics on which the wealth of today’s web giants is built are not quite like any which have previously been seen as the corporations do not sell products to us in the traditional sense. Facebook, Twitter and Google derive much of their profit from advertising and do not charge users for the product. There is nothing particularly new about this model, it is one which television has used for decades. With the business model used in television the corporations pay producers to generate content which will attract viewers and sell the space around this content to advertisers. The model used by social networks and some other online businesses, however, is quite different as the ‘audience’ also provide the content. People are attracted to use Facebook by the posts of other users or the chance to make their own posts. The content is provided free of charge.
This model has led to the much repeated assertion that “if you’re not paying for something, you’re not the customer; you’re the product being sold“. Facebook’s clients are not us, the users, but the advertisers to whom they sell information about us. As the accumulated personal data on users is of course Facebook’s most valuable commodity and the source of their wealth we are not only the product but also the workers. We produce the data on ourselves by uploading our personal details to Facebook’s servers, logging our preferences for products or issues through ‘liking’ and mapping our personal networks through connecting with our friends. This is the kind of data which corporations previously had to pay social and market researchers considerable amounts of money to find out and the data they got was nowhere near as extensive or dynamic as what they get today.
In order to understand this situation social and political thinkers have looked back to Karl Marx and Italian autonomist Marxists to understand how this situation has occurred. Scholars of ‘digital labour’ (the website of a conference at the New School in New York provides a good introduction to the concept) have shown how we have been successfully convinced that the productive activities in which we engage online are not work but a form of leisure or self-realisation despite the fact that they collectively produce vast amounts of wealth for some people (for more on this notion which has been called ‘playbour’ see Beer and Burrows (2013) [paywalled] or here). This can be seen as being the ultimate triumph of capitalism; an ideological framework which has the workers so successfully indoctrinated that even they do not think that they deserve to be paid anything at all. Furthermore, this has occurred in times of increasing austerity, job insecurity and suppression of wages.
As jobs become lower paid and more insecure some corporations (and their boards) are becoming massively wealthy on the free labour of their ‘users’. The new boom industries make massive profits but have found a way to largely do so without paid labour. A recent US report found that 60% of marketers expected their budget to increase in 2014 but the majority of these said that they do not plan to take on more data analysts or other marketing staff. This is because the majority of their data collection and even analysis is done largely free of charge. We know this data is of value from the recently leaked Facebook advertising pricing structure in which users’ personal details are organised into differently priced tiers with greater access given the more money paid.
When we read about the achievements of the billionaire owners and board members of the giants of internet business and the genius of the innovations behind their well-earned bank balances it is worth remembering their cleverest trick is one of the oldest there is. If the workers can be convinced to work for nothing then you will make a lot of money. The business model on which Facebook’s $1.5 billion profit is built is ‘to reduce the paid labor force…as close as possible to zero and pay them only in the currency of recognition’ (Wark, 2013: 71).
Beer, D. and Burrows, R. (2013) ‘Digital Culture, Digital Archives and the New Social Life of Data’ Theory, Culture and Society, 30(4) 47-71.
Wark, M. (2013) ‘Considerations on a Hacker Manifesto’ in T. Scholz (ed.) Digital Labor: The Internet as Playground and Factory. London: Routledge. pp 69-75.
This Is Not a Sociology Blog 
As informative as this is, the question I turn over in my mind is: is this a moral disgrace, or are we profiting, for Facebook is something people want? If we aren’t paying, we are working, without much exertion, many can’t see a problem, I am in two minds myself. Is there a moral dilemma here at all? I just can’t answer this, many feel this statistical processing that we are moulded into is something sinister, and sometimes I agree; but on the grounds that it strips away some of our humanity, the emotional constitution that validates existence. But then is Facebook at fault when it is a product that enables us to communicate so efficiently over immense distances with our loved ones, friends and even complete strangers?
As always Chris your blog urges questions and consideration, thank you as always;- would be nice if my blog could do the same.
Very stimulating response as always! I’m not sure whether it is a moral disgrace but I think it is potentially a problem and certainly worth people being aware of. For Marx, economic value is ‘congealed labour’ and really all this means is that value isn’t just made up out of nothing or through clever ideas it is usually the accumulation of the labour of many people (except in exceptional circumstances such as quantitative easing but that can only ever happen in the very short term). So, one point is that it is important to know that the people with the billions are not responsible for the production of this value merely through their genius, they have had to get people to work for it. Perhaps this is not important if people don’t mind doing the this work for nothing but the fact that they do does mean that some people get VERY rich which itself creates large inequalities. As we know from books like “The Spirit Level” inequalities cause all sorts of problems for physical and mental health, social mobility, etc. even if the average standard of living is relatively high. In this piece I concentrated on Facebook because it is a fairly easy way to talk about these issues in about 600 words and because their income has been in the news recently. But there are much more obviously exploitative versions of this which are quite widespread. One of the better known being Amazon’s “Mechanical Turk” in which people are paid very small amounts to do lots of small “creative” tasks and work in a highly precarious and pressurized manner, which is effectively a “digital sweatshop“. I think it is important to demonstrate the structural similarities between those clearly exploitative situations and the other much less so in order to stand against those kinds of labour practices.
PS your blog is good!
As ever, a strong response and a point I agree with. My opinion on social matters, as I am sure you have begun to notice, is one of sitting on the fence, for we seem to be at such an impasse, due to the sheer scale of complexities that exist in the modern, information-heavy world.
Appreciate the blog review. I am in doubt, as no one seems to say anything, just ‘like,’ which it is difficult to regard as having gravity, or ‘follow’. I am not a liker, I prefer to spend a few minutes composing a response, if it merits one. I think that is not a great deal to ask.