Platform Capitalism

Theory Redux (Polity)

by Nick Srnicek

What is the relationship between emerging technology and the future structure of our economy? Is contemporary capitalism unwittingly breeding the technologies that will herald its own downfall? In this cutting-edge new book, rising star of the accelerationist movement Nick Srnicek addresses these questions, showing how contemporary innovations in automation, cybernetics and manufacturing represent a theoretical and practical challenge to the very economic system that bred them.

Historically, thinkers on the left demanded reduced work hours, economic democracy, and freely available abundance. Paradoxically, just as such demands seem as elusive as ever at a political level, they are becoming encoded into the very technological foundations of neoliberalism. Srnicek examines technologies such as automated logistics, cybernetic planning, and additive manufacturing in order to re-interpret older debates about worker control over the means of production, the 'fetters' of capitalist development, and situationist concepts of détournement. In so doing, the foundations and future of neoliberalism are brought under intense scrutiny.

Genres: Economics, Nonfiction, Politics, Technology, Philosophy, Business, History

171 pages, Paperback

First published January 1, 2016

About the author

Nick Srnicek is an American writer and academic. He is currently a lecturer in Digital Economy at King's College London.

Born in 1982, Srnicek took a double major in Psychology and Philosophy before completing an MA at the University of Western Ontario in 2007. He proceeded to a PhD at the London School of Economics, completing his thesis in 2013 on "Representing complexity: the material construction of world politics". He has worked as a Visiting Lecturer at City University and the University of Westminster.

Srnicek is associated with the political theory of accelerationism and a post-scarcity economy.

Reviews

[Always Pouting · Rating 4 out of 5]

The book covers the topic of technology and how the evolution of the biggest technology companies isn't anomalous when put into the context of our economic history. I really appreciated this book because I read a similar business book last year about platforms, and I have to say it was terrible, but this one was much more concise and actually offered information about economics that was new to me. Also I think it's a fitting time to have a book like this which discusses how technology companies like Google and Facebook are just as capitalistic as any other company and look out for their own interests. If I hadn't already been on the trust busting side against them, I would be after this book. A good read for anyone who wants something short and to the point, and also wants to get a better sense of technology companies place in our economic history and the way it may end up playing out as time goes on.

[Trevor · Rating 5 out of 5]

One of the things I liked most about this was that it said it isn’t enough to just tell you what platform capitalism is, but rather how it fits into the recent history of capitalism and therefore the forces that have been driving its rise. So, the first couple of chapters here provide a kind of history of the development of computer networks, and also of finance capital, venture capital and monetary policy. The point being that it is the interrelatedness of these that has made ‘platform capitalism’ necessary, if not also inevitable.

Platforms need to be defined too – and he gives a very broad definition saying they are digital infrastructure that allow two or more groups the ability to interact. So, everything from Microsoft Windows as an operating system that allows developers to create applications to then sell to customers, through to Google that allows searching the web, but also produces bucket loads of data, platforms are themselves locations for interconnection. These platforms have become a growth area for capitalism, not least since traditional manufacturing has become less profitable since the 1970s as oversupply has cut profit margins for manufactured goods. The response of capitalism to this diminished profitability has been to slash wages, first by destroying unions in the advanced capitalist countries, but then also by shifting manufacturing to low-wage countries.

Industrial manufacture, or at least the product of it, had once been an end in itself. A company might produce a motorcar, but once that was sold the interest by the company diminished. I’m going to use an example not found in this book to explain the point being made here. Years ago I read somewhere that Henry Ford sent engineers exploring so as to check all of the cars they could find that had broken down, and were now in junk and wrecker’s yards. He wanted a report on how all of the components of his cars had fared. It turned out that just about every component was found to have failed in one car or other. Except there was a single pin that had never failed in all of the cars investigated. And so, Ford had the pin re-engineered to make it less robust – and not simply because he was an arse, you understand, but because if it never failed, it had to have been over-engineered and so there had to be some room to cut costs by making it more fit for purpose.

What I want you to notice in this story isn’t so much the car part that was made weaker, but rather the effort that went into finding out about that part being too strong. It wasn’t easy for companies to gain data like that in earlier modes of capitalism. However, data (which the author here defines at one point as what happened rather than knowledge which tells us why it happened) is today much more available to companies. He gives the example of Rolls Royce and their policy of leasing their jet engines to airplane companies, rather than selling them. This means that Roll Royce gets to service these engines, which, it turns out, is the most profitable part of their life cycle of engines. They are also able to collect vast amounts of data on every aspect of the engine – the flights it has made, the weather conditions experienced, and so on and on. The point being that with this data they can claim, perhaps even with justification, that they are better able to provide a service to the engine than any third party would be able to. In fact, they might be the only ones capable of ensuring the engine can be properly serviced at all.

As the author points out at one point, sometimes giving away your products is your most economically viable option, since the customer is then trapped on your platform (say Kindle or Apple) and this means the company can then recoup any loss made in bringing the customer onto their platform by charging more for complementary products the customer can then no longer avoid.

In the case of a platform like Google, what is owned by the company is not the content of the internet, Google is a bit like Uber here (the world’s largest taxi company that doesn’t own a car). Rather than Google owning the internet, it owns our search data. But it doesn’t sell this data, but rather it sells the assertion that with this data it will be able to direct company advertisements to those most likely to want to buy their products. Increasingly, the product that is being sold is nebulous, but also difficult to prove whether you have really received the promised service or not.

Google, Facebook and Goodreads all make the vast majority of their profits from collecting out data and packaging it in ways that will allow it to be used to sell products back to us. And as the author says, these companies can be guaranteed to continue to apologies to us for decades to come for constantly stepping over the line in the ethical use of our data. In fact, their business model requires them to constantly test those boundaries.

He ties much of this to a series of events that have occurred in relation to modern capitalism that in their turn have encouraged the development of ‘platforms’. One is that profit margins are incredibly tight in manufacturing and so capitalism does what it has always done, it seeks to reduce wages to the lowest possible level. He quotes Marx at one point saying that the most natural form of wage under capitalism is piecework, and this is pretty much how so much of the world seems to be going – think Uber, for instance, where the driver is paid per ride, and nothing for when there are no customers. But this is not only true of such hyper-aggressive forms of predatory capitalism, the move towards ‘just-in-time’ systems of production are predicated on computer systems with high levels of sophistication and such systems generate large volumes of data which similarly can be used in other ways to generate wealth and to make labour also ‘just in time’. And since interest rates are low, corporations have found ever cleverer ways to off-shore their profits to avoid being taxed. Corporations therefore have lots of money floating around that is trying to find a profit.

Here he discusses the impact of venture capitalism on the development of what would seem otherwise to be very low yield platforms – Uber, for instance. He stresses that while Uber and Airbnb are the much-hyped success stories, other parts of the ‘sharing’ economy have not taken off to nearly the same extent. In fact, he points out that even Uber and Airbnb only survive because they grossly underpay people who effectively work for them and that we have already witnessed moves by drivers to unionise, something he suspects may explode the business model altogether, since he also says this model only currently exists due to its reliance upon venture capital welfare.

What is made all too clear in this book is how precarious employment has become in advanced capitalist economies. He says that virtually all of the new employment added to the US economy between 2005 and 2015 was in ‘alternative arrangement jobs’. These ‘flexible’ jobs are mostly only flexible in terms of all of the security employees miss out on, the difficulties in sustaining a life with no ability to know if or for how long you may be employed from one day to the next is rarely the form of flexibility people are looking for in their life.

This book is remarkably short and yet it gives an interesting overview of the forces that have pushed the economy toward where it is today. It’s an interesting read and worth a look.

[8stitches 9lives · Rating 4 out of 5]

Finally! A book that discusses the emergence of platform capitalism paying particular attention to firms like Google and Facebook and their evolution. All of the controversy that has been around recently regarding users privacy on Facebook certainly highlighted to me that these firms couldn't care less about their users, they are motivated solely by money making. I appreciated that this was concise but considered and really accessible too.

This is an essential book for anyone wanting to know more about how a capitalistic society works, what is happening at the moment with the growth of huge technology firms such as Uber and Apple and what this predicts for our future. A worthwhile read that is both educational and interesting, more people need to educate themselves on this topic as it impacts everyone. I'm ashamed to say that not a lot of people I know seem to understand what capitalism is. This worries me as it has such a bearing on our lives that everyone should be paying very close attention.

Many thanks to Polity Press for an ARC. I was not required to post a review and all thoughts and opinions expressed are my own.

[muthuvel · Rating 4 out of 5]

"The reduction in inequality after the Second World War was an exception to the general rule of capitalism" - Thomas Piketty

The present book aims to supplement these other perspectives by giving an economic history of capitalism and digital technology while recognizing the diversity of economic forms and the competitive tensions inherent in the contemporary economy. The simple wager of the book is that we can learn a lot about major tech companies by taking them to be economic actors within a capitalist mode of production.

These neo-digital giants reach out further and further into our digital infrastructure and as society becomes increasingly reliant upon them, it is crucial that we understand how they function and what can be done. Building a better future demands it. We continue to live in a capitalist society where competition and profit-seeking provide the general parameters of our world. On the other side of the class relation, some argue that the economy today is dominated by a new class, which does not own the means of production but rather has ownership over information.



Google has around 60,000 direct employees, Facebook has 12,000, while WhatsApp had 55 employees when it was sold to Facebook for $ 19 billion and Instagram had 13 when it was purchased for $ 1 billion. By comparison, in 1962 the most significant companies employed far larger numbers of workers: AT& T had 564,000 employees, Exxon had 150,000 workers, and GM had 605,000 employees.

What are platforms?

At the most general level, platforms are digital infrastructures that enable two or more groups to interact.

What Platforms do?

This is the key to its advantage over traditional business models when it comes to data, since a platform positions itself (1) between users, and (2) as the ground upon which their activities occur, which thus gives it privileged access to record them. In their position as an intermediary, platforms gain not only access to more data but also control and governance over the rules of the game.

If you want to join a platform for socializing, you join the platform where most of your friends and family already are (Like Facebook or twitter). Likewise, the more numerous the users who search on Google, the better their search algorithms become, and the more useful Google becomes to users. But this generates a cycle whereby more users beget more users, which leads to platforms having a natural tendency towards monopolization.

How do Platforms work?

Platform ownership, in turn, is essentially ownership of software (the 2 billion lines of code for Google, or the 20 million lines of code for Facebook) 18 and hardware (servers, data centres, smartphones, etc.), built upon open-source material (e.g. Hadoop’s data management system is used by Facebook).

In spite of its numerous obituaries of Compact Discs and other physical forms of music in the early 2000s, the music industry has been revived in recent years by platforms (Spotify, Pandora) that siphon off fees from music listeners, record labels, and advertisers alike. Between 2010 and 2014 subscription services have seen user numbers rise up from 8 million to 41 million, and subscription revenues are set to overtake download revenues as the highest source of digital music. After years of decline, the music industry is poised to see its revenue grow once again in 2016. While subscription models have been around for centuries, for example in newspapers, what is novel today is their expansion to new realms: housing, cars, toothbrushes, razors, even private jets.

The challenge with maintenance is that it is quite easy for outside competitors to come into the market and take the profits away. This prompted Rolls Royce to introduce the ‘goods as a service’model, whereby airlines do not purchase the jet engine but pay a fee for every hour one is used. In turn, Rolls Royce provides maintenance and replacement parts. The raw material of data remains as central to this platform as to any other. Sensors are placed on all the engines and massive amounts of data are extracted from every flight, combined with weather data and information on air traffic control, and sent to a command centre in the United Kingdom

‘lean’ platforms like Uber, 'the world’s largest taxi company, owns no vehicles' and Airbnb, 'the largest accommodation provider, owns no property’. It would seem that these are asset-less companies; we might call them virtual platforms. Yet the key is that they do own the most important asset: the platform of software and data analytics.

The most notorious part of these firms is their outsourcing of workers. In America, these platforms legally understand their workers as ‘independent contractors’rather than ‘employees’. This enables the companies to save around 30 percent on labor costs by cutting out benefits, overtime, sick days, and other costs. It also means outsourcing training costs, since training is only permitted for employees; and this process has led to alternatives forms of control via reputation systems, which often transmit the gendered and racist biases of society. Outsourcing once primarily took place in manufacturing, administration, and hospitality, today it is extending to a range of new jobs: cabs, haircuts, stylists, cleaning, plumbing, painting, moving, content moderation, and so on. It is even pushing into white-collar jobs – copy-editing, programming and management, for instance. The calculations of one class action lawsuit estimate that Uber would owe its drivers $ 852 million if they were employees (Uber claims it would only be $ 429 million). To fight off one competitor, for instance, Uber took to calling up and cancelling rides with its rival, in an effort to clog up that rival’s supply of drivers.

Will competition survive in the digital era, or are we headed for a new monopoly capitalism?

We give Google access to our email, our calendars, our video histories, our search histories, our locations – and, with each aspect provided to Google, we get better predictive services as a result. Likewise, platforms aim to facilitate complementary products: useful software built for Android leads more users to use Android, which leads more developers to develop for Android, and so on, in a virtuous circle. We can get a sense of how significant these monopolies already are by looking at how they consolidate ad revenue: in 2016 Facebook, Google, and Alibaba alone will take half of the world’s digital advertising.

Yet it is also true that capitalism develops not only greater means for the monopoly but also greater means for competition.

Despite their differences, companies like Facebook, Google, Microsoft, Amazon, Alibaba, Uber, and General Electric (GE) are also direct competitors. IBM, for instance, has moved into the platform business, purchasing Softlayer for cloud computing, and BlueMix for software development. The convergence thesis helps explain why Google is lobbying with Uber on self-driving cars and why Amazon and Microsoft have been discussing partnerships with German automakers on the cloud platform required by self-driving Ultimately, we see convergence – and therefore competition – across the field: smartphones, e-book readers, consumer IoT, cloud platforms, video-chat services, payment services, driverless cars, drones, virtual reality, social networking, interfaces, network provision, search, and probably much more in the future.

The expansion of smartphones has led to more and more users interacting with the internet through apps rather than by visiting websites, and this is a way in which companies can both expand and close off data collection. As more users head into an app, those data are extracted there, while other platforms lose out. Dropbox is spending large amounts of money to separate itself from Amazon Web Services, and Uber is seeking to untie itself from dependency on Google Maps. Even deeper down the stack, platforms are at work building their own network infrastructure. Google, for instance, has been building its own privatized internet –browsers, OSs, fiber networks, and data centers –where information may never have to journey across the public infrastructure. Likewise, Amazon’s cloud network is nothing if not a private internet, and Microsoft and Facebook are collaborating to build their own transatlantic fiber cable.

While most of the other platform types appear to be in a strong enough position to weather any economic crisis and any blow to their business model, advertising platforms remain precariously dependent on ad revenues (e.g. Google at 89.0 percent and Facebook at 96.6 percent). It is, though, unclear whether advertising can thrive in a world of ad blockers, bots causing fake ad views, and routine spam. Even Google’s chief economist, Hal Varian, expects that advertising will decline in importance and that Google will eventually move towards a pay-per-view model, and could be compelled to more into direct payment businesses. Meanwhile, lean platforms dependent on outsourcing costs and on venture capital largesse either go bankrupt or shift into product platforms (as Uber is attempting to do with driverless cars).

"Yet even limiting our attention to user-created data, it is right to call this activity labour?"

Rather than just regulating corporate platforms, efforts could be made to create public platforms – platforms owned and controlled by the people. (And, importantly, independent of the surveillance state apparatus) is all one could think of the better futuristic world. And all I could feel reading this work is, that at least I can reduce my time spending on these platforms. It's better not to be too much reliant upon these uncertain Platform Capitalists.

Nick Srnicek
He's an American writer and academic, currently a lecturer in Digital Economy at King's College London. One of the very few intellectuals who think "Luxury Communism" will win.

[Philippe · Rating 3 out of 5]

This book takes a slightly wider view of the platform phenomenon. It situates the emergence of platform business models at the intersection of technological and macroeconomic developments. The move to an informational economy is not new. Technology allows to generate and process burgeoning volumes of data. Further, the financial crash of 2008 has resulted in an economic environment that is characterised by low interest rates and large amounts of cash seeking decent rates of return. This has pushed investors energetically to risky bets in the technology sector, fueling the transition to an ever more central role of data extraction and processing in capitalism’s adaptation to the new environment.

As a result, a new business model emerged that is particularly adept at extracting and monopolising data: the platform. Nick Srnicek generically defines a platform as a digital infrastructure that enables two or more groups - say, ‘producers’ and ‘consumers’ - to interact. This mediating position provides the platform with privileged access to the data that are exchanged between these groups.

A platform constitutes a network, and it exhibits the reinforcing characteristics of network effects: the more numerous the users who use a platform, the more valuable that platform becomes for everyone else. Hence platforms have a natural tendency towards monopolisation.

A third key characteristic discussed by Srnicek is the differential pricing strategy that platform owners pursue to make sure that users are attracted to the platform. This amounts to a cross-subsidisation strategy that seeks a delicate balance between the relative costs and returns for all the groups connected to the platform.

Then, rules that govern access and quality control are embedded in the platform’s core architecture. These rules are not neutral and constitute an often overlooked political dimension of platforms.

Finally, platforms, because of their role as integrator and data captor, seem to naturally lead their owners to the strategic high ground in their cross-industry ecosystems.

The author then goes on to discuss five types of platform: advertising, cloud, industrial, product and lean platforms. Clearly, a platform does more than mediate. It can provide all kinds of functionalities and is layered with various types of business models. For instance, a product platform may lease highly specialised machines - say, jet engines - to customers, charging them for performance and maintenance rather than ownership. Monitoring the performance then engenders the data capturing and processing activities that support these added services.

Srnicek’s take on platforms is critical from both a political and business point of view. Particularly ‘lean platforms’, such as Uber and Airbnb, that are vampirising assets they don’t own and have little to show in terms of profitability are drawing fire. He expects these models to fall apart in the coming years.

All in all, in the author’s view platforms emerge as a more or less logical outgrowth of 21st-century capitalism that is unwaveringly pursuing its quest for profit in a landscape that is determined by an evolving set of macroeconomic constraints and technological opportunities.

What does this bode for the future? It lies in the nature of platforms that they will have to intensify their extraction, analysis and control of data to remain competitive. They are bound to consolidate their position as a gatekeeper. Moreover, markets will continue to converge into rhizomatic ecosystems that rely on an expanding mix of technologies such as operating systems, visual and natural language interfaces, payment platforms, and mapping applications. Following the Apple en Facebook models, Srnicek expects these ecosystems to become increasingly siloed, resulting in platform oligopolies. Citizens and consumers are advised to critically contemplate the implications of these developments on livelihood opportunities, consumer choice and democratic rights.

The longer-term future for platforms is, however, unclear. If they are unable, because of regulation or dwindling marginal returns of investments in new technology, to continue to push the frontier in data extraction, they may morph back into more traditional business models.

The author concludes the book with a perfunctory reflection on the possibility of creating ‘public platforms’ that would offer their state-subsidised services as public utilities. Another option to create a slightly more balanced competitive landscape would be to collectivise platforms. Srcinek doesn’t elaborate on this model of platform cooperativism. For that, we have to turn to the work of Trebor Scholz.

Overall I have somewhat mixed feelings about the book. It offers lots of food for thought. However, the discussion of the conceptual architecture of platforms strikes me as rather shallow, and the typology of the five models mentioned is by no means universally accepted. Pity also that Srcinek does not delve deeper into the challenge of regulating platforms.

[melancholinary · Rating 4 out of 5]

There is this 90's utopian dream on building the Internet to become a stateless and corporateless decentralised virtual nirvana. There is also this economy boom that happened in the 90's: commercialisation of Internet. Unfortunately the latter is what shaped our Internet today. Nick Srnicek in this book claims that these venture capitals with financial speculation on 'growth before profit' in the 90's that finally created this new model of business: platform capitalism. For platform capitalist data is a resource. A material to be extracted, refined and used in a variety way. Economy today dominated by the ownership over information and data.

Platform capitalist works as intermediaries that bring together different users: customers, advertisers, service providers, producers, suppliers and even physical objects. What's more terrifying of this model of capitalism is how they monopolised the entire network. You can't use Tinder if you are not on Facebook. The ability of how Facebook generated and monopolised its users is something that we might need to be aware of. Same case with Google, they act like a surveillance capitalist: all of your searching activities being monitored and collected as an algorithm for advertisement interests. In this book, Nick also argues that even in China Uber monitors whether its drivers go to the protest—this model of what Nick says 'lean platform' like Uber, shifted its investment, insurance and maintenance to its workers: driver. If monopoly becomes a key factor of platform capitalism—with the case that many service is free, so data collection is the only key factor of competitiveness—then we must be afraid if one day there will be a privatisation of Internet.

There also an interesting point that Nick raised in his book. Immateriality. The issue of immateriality in platform capitalist is interesting as it shifted the world to be more data-driven less-material culture—beside it also gives us an insight why this model of companies are big very quickly: they don't need factory, they only need servers. Nowadays people who buys CDs are the one who only seeing value in collecting material. Music industry geared toward the digitalisation of music distribution. Platform like iTunes and Spotify is the answer of less material culture—this also happened on the film industry with Netflix and Hulu that being reduced the selling number of Blu-ray and Dvds. The notion of immateriality is also something that has been flourish in the art circulation nowadays. And as an artist, I could not stop thinking how the immateriality impacted the chain economy of art markets—and how platform capitalism contributes to the debate.

The rise of the ad-blocker and government regulation on data might change the current model of advertising platform. However as they are already monopolised our relationship with the Internet and network, if someday in the post-advertising environment that Facebook and Google decided to use the pay-per-view model or direct business, we certainly willing to do it. In his book, Nick offers a solution on what we should do in the end: that platform should be owned and controlled by the people with less surveillance and more collective approach. Platform Capitalism is a great book to see how tech companies today are monopolised the Internet.

Note: If Ray Kurzweil is an influential name in Silicon Valley, maybe after platform capitalism we are going to approach AI-capitalism. Singularity.

[Wendy Liu · Rating 5 out of 5]

A compelling and thoughtful look at some of the largest players in the technology industry from a Marxist perspective. Very short (the endnotes begin on page 130, and the font size is huge) and highly readable. I wish it was longer, actually, but even as it is now I would highly recommend it to anyone who wants to understand the technology industry within the larger context of capitalism.

[Clare O'Beara · Rating 5 out of 5]

The first chapter brings up to date our knowledge of capitalist economies, their tribulations and booms since WW2 and especially the low-interest world since 2008. With no interest, firms increasingly looked for tax avoidance including offshore investment. This doesn't carry a high level of detail.

The second chapter explains data hosting platforms and how companies increasingly put their admin and processes on computer and on the internet. We're told that the net uses 9.2% of the world's electricity today. As companies got no return on cash in banks, they invested in tech, undermined unions and labour rights, sold factories and got goods built cheaply in other nations. With cash in hand they then turned to monetising the platforms with which they interact with the consumer market... Google tracked data at first to improve search efficiency but then to sell advertising. Again it's broad sweep, few individuals named, not too many acronyms such as NASDAQ. I saw just a couple of graphs in the whole book.

The platforms come in five types, says the author, from those that sell goods to those that offer services, and really lean ones may be renting the servers, data bank space, cloud storage and tech services. All they own is the computer code... and the data they can extract. They can then sell the data. RFIDs that are supposed to track goods can provide further reports; Uber can sell data about its cab riders. One major effect is that with low wages or no jobs and no incentive to save, people rent homes, goods and services like computer programs or music rather than pay a large sum to own. Another is that with no large tax incomes, countries are stuck in austerity.

The next chapter looks at competition, surveillance by smart homes and IOT, and privacy laws. I am amused by the way that the author now uses the term ecosystem without once referring to living plants and animals, except humans. Other terms used are mergers being horizontal, vertical or conglomerate - and sometimes tech mergers are none of those. As the author was writing, Microsoft had bought Linked In. (Main results, they made it look like facebook, which I never use, made the groups less useful, so less used, and took away our ability to report spam.)

For the future, the author considers the shift in global trade, driverless cars, ruthless competition and whether online advertising can work given ad blockers, bots and spam. Again no huge level of detail, just general warnings. If all this sounds like a useful read - with no alphabet soup of initials and with most economic jargon terms explained in the text - I recommend grabbing this short book as a good intro and overview of economics and IS platforms. Even first year economics students should get on fine, provided they are interested in IS. I have read most of the content elsewhere but scattered over several longer books.

Personally I strongly recommend combining this read with Green Capital by Christian de Perthuis and Pierre-André Jouvet; because the Earth's resources are finite, not mentioned in this economics text, and Earth Overshoot Day, the day each year by which humans have consumed all the resources the planet can renew in a year, comes earlier each year, on Aug 2nd in 2017. We need to assign economic values to clean air and water, fertile land, oxygen production, carbon storage.

Notes P 130 - 174 of my e-ARC. I counted 24 names which I could be sure were female.
I downloaded a copy from Net Galley and the publisher. This is an unbiased review.

[Tara Brabazon · Rating 5 out of 5]

An outstanding book that understands how and why Google, Air bnb and Uber are successful. The private commercialization of public innovations - like the internet - in the 1990s has fed platform capitalism. The marketing of privacy and the individualization of risk has resulted in anti-statist under-regulation of the public good.

A powerful and intriguing book. A great interpretation of digitization and capitalism, and digitization in capitalism.

[Bertrand · Rating 3 out of 5]

This book is just what I was after: a short and crystal-clear look at the digital economy and the new business models that have emerged from it. The author provides a cool-headed and strictly economic assessment of a field that is plagued with hyperbolic futurologists, whether of the utopian or apocalyptic kind. Though the author does mean business, he has a lively style, avoids jargon and offers abundant examples to illustrate each of his assertions: it’s great if like me you have only a very basic understanding of economics, and next-to-none of the tech sector.
The book is divided in three parts: the first deals with the economic circumstances which saw the rise of the digital economy and the platforms. The second examine what exactly is a platform and proposes a typology. The third discusses what are the prospects of those companies in the near future.
Srnicek starts with a quick outline of post-WW2 economic history, the Fordist model of boom leading to unionisation and the consolidation of workers’ rights in the West, as well as overproduction. It is followed by a Brennerian long-downturn which, which, along with shifts of monetary policies, brought the progressive adoption of lean production models in the West and in the US in particular. The nineties and the commercialisation of the internet – until then a largely non-commercial network – saw the formation of an enormous dot-com bubble fed by artificially low interest-rates and high corporate profits, with more than 50 000 companies created to spread the internet and its gospel before 2000 (21). Unwarranted enthusiasm and the speed at which the sector developed prompted a ‘growth before profit’ business model, which tried to capture a maximum market-share at the expense of immediate profits. The bubble deflated in the 2000 but exuberance has since returned, with investment in tech stocks currently reaching more than half of the levels it attained at the peak of the dot-com bubble in 2000.
This new growth is, according to the author, fuelled by what he calls a ‘natural resource’, data. Data are the record of an action having taken place, and as such need to be capture through a sensor of sort, and to be stored. The development of the digital economy in the nineties multiplied exponentially the amount of data available, allegedly opening new vista for market prediction and usage analysis. They are used for optimising production processes, predict consumer preferences, create new products and services (Google maps, self-driving cars, Siri…), to guarantee relevant advertising space for clients, and finally to control workers (41). They are perceived as giving a crucial competitive advantage and enable the ‘flexibility’ of companies, be it in terms of services provided or that of the treatment of their employees.
Platforms are companies which are constructed for the optimal exploitation of data: at one level, they are “digital infrastructures that enable two or more groups to interact. They therefore position themselves as intermediaries that bring together different users.” (43) This is of course the ideal place to be to extract information on the interaction between those people. They present themselves as neutral public spaces (or market places) and often tend toward transparency. One of the reasons for the rapid development of this model is the exponential character of user growth: something Srnicek calls ‘network effect’. The value of a platform (say, social media) for a user is dependant on the number of users already present. This points to an inbuilt tendency toward monopolisation to which he returns in his conclusion. To attract users and make use of this ‘network effect’ the platforms provides free services, or at a loss, hoping to cut back their costs through advertising, data sales or something else.
The five-parts typology of platforms is as follow: Advertising platforms often provide a service (i.e. Google) and create profits through data-driven targeted advertising. Cloud platforms offer long-distance services from hosting, servers to computing power, generally for other companies, they collect a fee and the data. Industrial platforms are only outlined, but basically develop the standardised online basis for ‘smart’ production equipment, which apparently moves toward customisation and ultra-lean models. Product platforms are maybe the more traditional ones, offering specific products on a subscription-based model, while cutting the costs on storage or staff, from scooters, bikes or cars to housing or jet-engines. This allows them to collect again the data, but also to bank on the profitable maintenance business. And finally lean platforms, which are premised on outsourcing to the maximum, as with Uber’s infamous treatment of its drivers as ‘independent contractors’. Where the product platform owns the goods (i.e. ZipCars) the lean platforms doesn’t (i.e. Uber).
The third section deals with the future of those platforms, which, like that of the economy in general, looks fairly unpromising to the author’s eyes. Throughout the book Srnicek’s leitmotiv is the increasing monopolisation of the platforms, which here he shows to be quite inherent in their business model. The competition is not only for investment or returns, since many services offered are free, but for usage and data: “Unlike in manufacturing, in platforms competitiveness is not judged solely by the criterion of maximal difference between costs and prices; data collection and analysis also contribute to how competitiveness is judged and raked.” (97) This leads to four tendencies widespread among platforms. First is the expansion of extraction, which means the companies are driven to record and analyse ever more information. Next is their positioning as gatekeepers, third is the convergence of markets, meaning that platforms tend to look increasingly alike, and finally comes the enclosure of ecosystem, maybe his most convincing point: with the internet accessed increasingly through apps rather than sites, the creators of the app can control what is accessed and monopolise the data.
I am no specialist, but on the whole, Srnicek’s argument seems fairly solid: my only regret is that he does not extrapolate much, staying on stable ground.
Srnicek mentions the analogy between Uber’s ‘independent contractors’ and day-labourers. I find it is rather tempting to think instead of so-called proto-capitalism when looking at platforms, with the putting-out system where piece-meal work was spread across various households, and the entrepreneur took care of carrying the goods at each stage of the production process from one household to the next.
Though it survived well into the XIXth century, it is generally considered to have been superseded by the development of hydraulic and later steam power, enabling equipment such as the spinning-jenny or the water-frame. In other words, departure from cottage industries was motivated (at least in part) by economies of scale, and the comparatively massive costs of the tools.
Srnicek mentions the loss incurred, for example by Uber drivers, who no longer benefit of such economies of scale when purchasing their cars individually. The costs, here as elsewhere, are weathered by the platform in good part because it is transferred onto the ‘independent contractor’. The contractor in turn stomachs it because s/he is used to consumer costs, possibly also still thrilled to be able to expense it.
But he does not tackle the question of the availability of the tools to the ‘independent’ worker: in the context of the cottage industry, the loom and the spinning wheel for example were artisanal contraptions which were either heirlooms or gradual investments. In our own days, I think an important enabling factor of the lean platforms is the accessibility of, and enthusiasm for, tools which twenty years ago were the preserve of professionals. Services such as Fiverr, which offer a global marketplace for graphic design services (pricing out most Western graphic designers in the process) is only possible because both the Adobe suit and the skills it demands have spread like wildfire, driven in turn by social media and a digital culture of retouch. Uber is only possible because of the sales of consumer cars, and so on. The current idiotic mania for 3d printing points to another breakdown of the frontier between industry and home-tech.
My point is that if lean platforms seek to blur the frontier between consumer and producer, they rely in that search on a pre-existing democratisation of the tools of production, of which the unforeseen success of ‘personal computing’ was a forerunner.

[Shreya · Rating 5 out of 5]

Exceptional book! So concise for such exhaustively researched work, and so imaginative. Essential reading to understand how platforms grow and stutter and are fragmenting the vast wild internet as we know it into smaller joyless enclosures.

[Roman Novotný · Rating 4 out of 5]

Srnicek má dobrý vhled do dat a zdrojuje jak o život. Zároveň dobře popisuje mechanismy proplétání digitálních platforem a jejich konvergenci s původně ne-cloudovými institucemi.
Jako slabinu vidím jednoznačně dosti omezený pohled na samotný pojem platformy, který Srnicek přijímá jako důsledek kapitalistické ekonomiky, narozdíl třeba od Brattona, pro něhož platformy v jakékoliv podobě předchází i státům a trhům a kapitalismus je do nich až "kooptovaný". Právě kvůli negativnímu přídechu platforem jako kapitalistickému business modelu Srnicek úplně opomíjí jejich emancipační potenciál.
Jinak ale jako dobrá kniha přispívající do právě začínající debaty :)

[Fathermocker · Rating 4 out of 5]

Un análisis económico necesario sobre las empresas de tecnología y su modo de funcionamiento, en un contexto histórico y geopolítico actualizado. Un bienvenido complemento a otras perspectivas que han intentado nombrar a esta época, que trae aire fresco al campo.

[سید محمّدمهدی · Rating 5 out of 5]

خیلی خوب بود و به شخصه از خوندن‌ش لذت بردم. نویسنده به خوبی این که اقتصاد آمریکا به بحران وابسته است رو نشون می‌ده و البته می‌گه که چجوری از دل همین بحران‌ها شکل جدیدی از سرمایه‌داری به وجود میاد و خودش رو گسترش می‌ده. فکت‌های اقتصادی و تاریخی جالبی هم داره!

[Helen · Rating 2 out of 5]

Interesting but rather jargon-y - technical. Mostly about the influence of powerful internet platforms like Amazon on the capitalist economy. He views giant platforms such as Amazon as the key to the new digital economy, but rues their outsize influence on the economy. Little did he know that their influence and importance would get even more outsize with the pandemic shutdown. I had no idea either since I finished reading the book before the covid shutdown hit later in March 2020. I never completed the review back then because I got utterly distracted with the covid news and then came down with a relatively mild case of covid myself around the 3rd week of March 2020, which lasted around a month and a half. All of 2020 seemed consumed with covid news, and then the social disintegration with the police killings, ensuing protests, then riots -- all in the setting of the economic distress caused by the shutdown. The book is interesting in showing how influential platforms are, but given that it was written before the stampede to online shopping, working remotely, and going to movies no longer being an option (for just 3 examples of the pro-digital changes that occurred with the covid lock down) in retrospect it is not really telling us anything we don´t already know. The author says that the only way to control the influence of platforms is for people, rather than businesses, to be their owners but that is unlikely to occur in our capitalist society.

The quotes from the book:

¨...capitalism demands that firms constantly seek out new avenues for profit, new markets, new commodities, and new means of exploitation.¨

¨As the digital economy is an increasingly pervasive infrastructure for the contemporary economy, its collapse would be economically devastating."

¨The digital economy is becoming a hegemonic model: cities are to become smart, businesses must be disruptive, workers are to become flexible, and governments must be lean and intelligent.¨

¨The argument of this book is that, with a long decline in manufacturing profitability, capitalism has turned to data as one way to maintain economic growth and vitality in the face of a sluggish production sector."

¨Capitalism, uniquely among all modes of production to date, is immensely successful at raising productivity levels."

¨In the wake of the crisis, offshore wealth grew by 25 per cent between 2008 and 2014, which resulted in an estimated $7.6 trillion of household financial wealth being held in tax havens.¨

¨With the collapse of communism, there has been a long-term trend towards both greater proletarianisation and greater numbers of surplus populations. Much of the world today receives a market-mediated income through precarious and informal work.¨

¨...the story of how Google and Facebook generate profit has been a simple one: users are unwaged laborers who produce goods (data and content) that are then taken and sold by the companies to advertisers and other interested parties.¨

¨With advertising platforms in particular, revenue is generated through the extraction of data from users´ activities online, from the analysis of those data, and from the auctioning of ad space to advertisers.¨

¨Given the reduction in labor costs provided by such an approach [i.e. gig work], it is no wonder that Marx wrote that the ´piece-wage is the form of wages most in harmony with the capitalist mode of production.´¨

¨Apple ... directly employs less than 10 per cent of the workers who contribute to the production of its products."

¨...a major reason why mobile phones have become essential in developing countries is that hey are now indispensable in the process of finding work on informal labor markets. The gig economy simply moves these sites online and adds a layer of pervasive surveillance. A tool of survival is being marketed by Silicon Valley as a tool of liberation.¨

¨Building on the trends towards more precarious work... the [2008] crisis caused unemployment in the United States to double, while long-term unemployment nearly tripled. Moreover, the aftermath of the crisis was a jobless recovery - a phenomenon where economic growth returns, but job growth does not."

¨Broadly speaking, [the tech boom represents] ... surplus capital seeking higher rates of return in a low interest rate environment. ...low interest rates have depressed the returns on traditional financial investments, forcing investors to seek out new avenues for yield. Rather than a finance boom or housing boom, surplus capital today appears to be building a technology boom."

¨...lean platforms appear s the product of a few tendencies and moments: the tendencies towards outsourcing, surplus populations, and the digitization of life, along with the post-2008 surge in unemployment and rise of an accommodative monetary policy, surplus capital, and cloud platforms that enable rapid scaling."

¨...Amazon has a notoriously low-paid work-force of warehouse workers who are subject to incredibly comprehensive systems of surveillance and control."

¨...all of the post 2008 net employment gains in America have come from workers in non-traditional employment, such as contractors and on-call workers.¨

¨...the lean platform economy ultimately appears as an outlet for surplus capital in an era of ultra-low interest rates and dire investment opportunities rather than the vanguard destined to revive capitalism.¨

¨[Platforms] ... have enabled a shift from products to services in a variety of new industries, leading some to declare that the age of ownership is over. Let us be clear, though: this is not the end of ownership, but rather the concentration of ownership.¨

¨Calls for privacy miss how the suppression of privacy is at the heart of this business model. This tendency involves constantly pressing against the limits of what is socially and legally acceptable in terms of data collection."

¨...platform expansion is driven by the need for more data, which leads to what we might call the convergence thesis: the tendency for different platform companies to become increasingly similar as they encroach upon the same market and data areas."

¨...the long downturn and the problem of global manufacturing overcapacity.¨

¨...the massive overcapacity of manufacturing that China has built up. To take but one example, China is the main producer of steel in the world, responsible for over half of global production in 2015. China currently requires about 700 million tons of steel domestically and 100 million tons for export. Yet, despite continuing efforts to reduce capacity, China is expected to still have a capacity for 1.1 billion tons of steel in 2020. The result of overcapacity and overproduction has been the dumping of steel across the globe at very low prices, which drove down the prices in other countries and pushed companies like Tata Steel in Britain to the brink.¨

¨The industrial internet will undoubtedly give rise to some successful firms who may be able for a time to derive extra profit... The key question... is whether or not this is in the long-term overcomes the lack of profitability and the overcapacity of global manufacturing. This seems unlikely, as nothing in the industrial internet program appears to radically transform manufacturing, but rather simply to reduce costs and downtime. ... the industrial internet appears to drive prices still further down and to increase ... competition for market share... ¨

¨Combined with stagnant wages and rising inequality, this [platform monopoly] future depicts a world with a massively increased digital divide.¨

¨...existing inequalities in income and wealth would come to be replicated in access inequalities.¨

¨...all the traditional problems of coops...are made even worse by the monopolistic nature of platforms, the dominance of network effects, and the vast resources behind these companies. Even if all its software were made open-source, a platform like Facebook would still have the weight of its existing data, network effects, and financial resources to fight off any coop rival.¨

¨Rather than just regulating corporate platforms, efforts could be made to create public platforms - platforms owned and controlled by the people.¨

¨More radically, we can push for post-capitalist platforms that make use of the data collected by these platforms in order to distribute resources, enable democratic participation, and generate further technological development. Perhaps today we must collectivize the platforms.¨

[Cardenio · Rating 4 out of 5]

Agradezco la aparición de libros como este dentro del panorama de la crítica intelectual izquierdista. Pienso que, por lo general, los análisis de las implicancias derivadas del modelo capitalista son realizados desde la sociología, lo que genera cierta redundancia en los discursos y en los modos de relatar la crisis neoliberal. La propuesta de Srnicek, por el contrario, se nutre de la teoría económica y del dato duro. Su escritura se sitúa desde lo fáctico, desde el lenguaje del capital. Este ejercicio me parece relevante por dos motivos: primero, porque forja literacidad en el lector. Lo acostumbra al léxico de la economía y lo hace competente en terminologías y burocracias del universo financiero. Segundo, porque permite disputar el relato neoliberal desde dentro de sus códigos, lo que lo hace novedoso en su crítica.

Me gustó. Aprendí bastante y, lamentablemente, me vi representado. Es bastante pedagógico e ilustrativo, pero al mismo tiempo original. El concepto de 'plataforma' explica de manera sencilla e inteligente la última de las mutaciones del neoliberalismo. Con el tiempo veremos si este diagnóstico persiste o si el modelo económico que nos rige busca nuevas formas de reinventarse.

[Alberto · Rating 4 out of 5]

Sumamente interesante. Ofrece una perspectiva histórica de las plataformas digitales y las inserta en un contexto económico de largo desarrollo, no acude a excepcionalismos ni a una excesiva teorización sobre la infraestructura económica de la esfera digital. Una lectura, repito, sumamente interesante para conocer el funcionamiento y las características de las plataformas digitales, no como el advenimiento de una nueva época sino como una nueva forma de organización y concentración del capital.

[Chantal · Rating 4 out of 5]

Excellent book. Very informative and concise while offering a lot of new information and delivering a point of view on platforms not found in other discussions.

[Mags C.]

I really enjoyed this read because it was quick, accessible, and packed with interesting information! I’m horrible with number & math heavy nonfiction, but within this work there were blessedly few numbers and statistics used, and the ones that were employed were presented in an easy to conceptualize format. Would recommend to anyone with the vague notion that capitalism ruins everything who wants practical information then need to back that notion up.

[Evangelos Krikelis · Rating 5 out of 5]

Επίκαιρο. Άνθρωποι της τεχνολογίας θα βρουν πολλά κοινά με το business κομμάτι ακόμα και των εταιρειών που εργάζονται. Βιβλίο γραμμένο πριν 9 χρόνια, άρα δεν εμπεριέχει το καυτό θέμα του AI αλλά σε όλα τα υπόλοιπα είναι αρκετά ξεκάθαρο και διεισδυτικό. Ειναι εξαιρετικό βιβλίο εισαγωγής καθώς τα τρία μέρη του δίνουν μια συνεκτικότητα. Το επίμετρο επίσης είναι ενδιαφέρον καθώς συνδέει κάπως τα κενά με το σημερινό τεχνολογικό τοπίο.

[Iman · Rating 4 out of 5]

super informative take on platforms, the conditions leading up to their creation and their internal logics. made for a good read to procrastinate working on my paper with by convincing myself that reading this will help me write it

[Niklas Pivic · Rating 4 out of 5]

"The argument of this book is that, with a long decline in manufacturing profitability, capitalism has turned to data as one way to maintain economic growth and vitality in the face of a sluggish production sector."

The above quote from the book is true, in a roundabout way. I'm quite certain - without verifying it - that Nick Srnicek does not really like capitalism; I'm completely with him, if that is the case. You've already guessed my stance on the matter, that it's likable to me much as somebody feeling you up without getting an OK, albeit while nabbing my pension and making damn sure my potential offspring won't survive me because of the climate kills on the planet (courtesy of capitalists).

The book concentrates on how "low-level jobs"(N.B. not the author's words, but those of Alan Greenspan), or really, any jobs that won't hurt your mates in high-level management:

"Early outsourcing involved jobs with goods that could be shipped (e.g. small consumer goods), while non-tradable services (e.g. administration) and non-tradable goods (e.g. houses) remained. Yet in the 1990s information and communications technologies enabled a number of those services to be offshored, and the relevant distinction came to be the one between services that required face-to-face encounters (e.g. haircuts, care work) and impersonal services that did not (e.g. data entry, customer service, radiologists, etc.).

"The former were contracted out domestically where possible, while the latter were under increasing pressure from global labour markets. Hospitality provides one illuminating example of this general trend: the percentage of franchised hotels in the United States raised from a marginal figure in the 1960s to over 76 per cent by 2006. Alongside this, there was a move towards contracting all other work associated with hospitality: cleaning, management, maintenance, and janitorial services. The drivers behind this shift were to reduce benefits and liability costs, in an effort to maintain profitability levels. These changes inaugurated the secular trends we have seen since, with employment being increasingly flexible, low wage, and subject to pressures from management."

On how states resolve the critical and horrific problems caused by banks and corporations:

"The immediate response was quick and massive. The US Federal Reserve moved to bail out banks to the tune of $700 billion, provided liquidity assistance, extended the scope of deposit insurance, and even took partial ownership of key banks. Through massive bailouts, support for faltering companies, emergency tax cuts, and a series of automatic stabilisers, governments undertook the burden of increasing their deficits in order to ward off the worst of the crisis. As a result, the high levels of private debt before the crisis were transformed into high levels of public debt after the crisis."

On how the biggest tech companies today have more money than most others:

"Google’s total is enough to purchase Uber or Goldman Sachs, while Apple’s reserves are enough to buy Samsung, Pfizer, or Shell."

...and, most importantly, how the new tech companies, like the aforementioned, get their monies:

"The activities of users and institutions, if they are recorded and transformed into data, become a raw material that can be refined and used in a variety of ways by platforms. With advertising platforms in particular, revenue is generated through the extraction of data from users’ activities online, from the analysis of those data, and from the auctioning of ad space to advertisers. This involves achieving two processes. First, advertising platforms need to monitor and record online activities. The more users interact with a site, the more information can be collected and used. Equally, as users wander around the internet, they are tracked via cookies and other means, and these data become ever more extensive and valuable to advertisers. There is a convergence of surveillance and profit making in the digital economy, which leads some to speak of ‘surveillance capitalism’."

This is where the book intensifies in interesting-ness:

"While the data extraction model has been prominent in the online world, it has also migrated into the offline world. Tesco, one of the world’s largest retailers, owns Dunnhumby, a UK-based ‘consumer insights’ business valued at around $2 billion. (The US arm of the company was recently sold to Kroger, one of America’s largest employers.) The company is premised upon tracking consumers both online and offline and using that information to sell to clients such as Coca-Cola, Macy’s, and Office Depot."

That's not the limit on that:

"Siemens has spent over €4 billion to acquire smart manufacturing capabilities and to build its industrial platform MindSphere, while GE has been working rapidly to develop its own platform, Predix. The field has so far been dominated by these established companies rather than being subject to an influx of new start-ups."

Also:

"Simultaneously, more and more diverse information about customers is being tracked (to the point where the company is even suggesting using wearables as a source of customer health data)."

The biggest companies can afford to lose money like hell and still make a major profit, due to how capitalism works, with little risk:

"By all accounts, the Amazon Prime delivery service loses money on every order, and the Kindle e-book reader is sold at cost. On traditional metrics for lean businesses, this is unintelligible: unprofitable ventures should be cut off. Yet rapid and cheap delivery is one of the main ways in which Amazon entices users onto its platform in order to make revenues elsewhere. "

Nike set the bar early:

"In the 1990s Nike became a corporate ideal for contracting out, in that it contracted much of its labour to others. Rather than adopting vertical integration, Nike was premised upon the existence of a small core of designers and branders, who then outsourced the manufacturing of their goods to other companies. As a result, by 1996 people were already voicing concerns that we were transitioning to ‘a “just-in-time” age of “disposable” workers’."

"Self employment" is a precarious word that'll pop up more and more; women already know what it's like, but us white males (I'm one) feel the flames, which is funny, although there's nothing funny about capitalism at all:

"Advantages in data collection mean that the more activities a firm has access to, the more data it can extract and the more value it can generate from those data, and therefore the more activities it can gain access to. Equally, access to a multitude of data from different areas of our life makes prediction more useful, and this stimulates the centralisation of data within one platform. We give Google access to our email, our calendars, our video histories, our search histories, our locations – and, with each aspect provided to Google, we get better predictive services as a result. Likewise, platforms aim to facilitate complementary products: useful software built for Android leads more users to use Android, which leads more developers to develop for Android, and so on, in a virtuous circle."

"We can get a sense of how significant these monopolies already are by looking at how they consolidate ad revenue: in 2016 Facebook, Google, and Alibaba alone will take half of the world’s digital advertising. In the United States, Facebook and Google receive 76 per cent of online advertising revenue and are taking 85 per cent of every new advertising dollar."

Pushback is a lovely word:

"The calculations of one class action lawsuit estimate that Uber would owe its drivers $852 million if they were employees (Uber claims it would only be $429 million). The result of pushback is likely to be an economically unsustainable business, once basic worker rights are given to employees."

"But any efforts to transform our condition must take the existence of platforms into account. Having a proper understanding of the current conjuncture is essential to creating strategies and tactics adequate to our moment. While platforms do not look set to overcome the fundamental conditions of the long downturn, they do appear to be consolidating monopoly power within their grasp, as they collect immense wealth. As they reach out further and further into our digital infrastructure and as society becomes increasingly reliant upon them, it is crucial that we understand how they function and what can be done. Building a better future demands it."

I'd love to have seen more of Noam Chomsky's positivism in here, on how individuals who band together can and do actually change the future, á la how the people of Armenia recently toppled "their" horrifically corrupt government and did this without severe bloodshed.

There are simple ways. Companies won't win without the workers, and there's always some low-level being who needs to tend to the robots, regardless of Google, Amazon, and Apple's willingness to start up their own Skynets while reaping the monetary benefits. From Mars.

[Kayli · Rating 4 out of 5]

The quintessential read for any media studies student. Although I've read this a few times now, I always appreciate the accessible language it's written in.

[Stephen · Rating 3 out of 5]

I was a bit sceptical of this book to begin with, but I think that I have been won round after all. The premise of the book - that capitalism isn't coming to an end, it is simply transforming into something else - is one that I am sympathetic towards. However, if this is so, then what is it transforming into, and what evidence is there to support the notion of transformation?

One answer to these questions is supplied by this book. The author takes the view that we have moved beyond the realms of production and into the realms of delivery. Formerly, value was to be extracted from the production of goods and services. Currently, the goods and servcies are produced at the lowest cost possible, on a global scale, and value resides (and is extracted from) the vehicles by which they are delivered - the platforms. Platform capitalism is the process by which value is created and extracted by the means - usually some form of web site or app - by which the consumer is connected to the producer. It's not what you deliver but how it is delivered.

I find this an appealing argument. I can see evidence of it all around me, so it isn't really futuristic but a better description of the present. That being the case, the author then goes on to identify five different types of platform:
1. The advertising platform, such as Google or Facebook, that extracts value from user information.
2. The cloud platform, such a Dropbox, which provides an enabling back office service.
3. The industrial platform, such as Siemens, where the technology is used to integrate industrial processes.
4. Product platforms, such as Spotify, where there is direct contact with the consumer to provide the service.
5. Lean platforms, such as Uber, which extract value through not owning assets and cutting costs to the bare minimum.
The author argues, quite cogently, that all of these platforms are likely to be around for some time to come, except for lean platforms. These, it is argued, are the product of ultra low interest rates and a slow labour market. As the labour market tightens, and as interest rates start to rise, this business model will start to lose its appeal. The workforce will find more lucrative things to do and the capital employed will find more productive outlets. The jury is out on this contention.

The book is not exactly an easy read. It does pre-suppose a certain degree of prior knowledge and an acquaintance with contemporary technologies. I did wonder if the argument would prove to be a bit dated with the onset of AI, robotics, and the internet of things. This was touched upon in the book, but could have been developed further. For example, the question of Uber and autonomous cars is an interesting dilemma. Autonomus cars create the potential to do away with the workforce. However, it will require an influx of capital because the current workforce owns the assets used by the business. The book doesn't take the opportunity to consider how that dliemma might be solved in the lean platform model.

I enjoyed reading the book. I found it a challenge, and I found the challenge refreshing. The book makes several valid points, and has a strong clue about the way forward. It also need to be treated with a pinch of salt. Since the book was written, the techlash against the corporates has started and has yet to run it's course. If we take the view that GDPR is the opening phase rathet than the closing phase, then this issue is set to run for a while yet. This is something the author misses, and that weakens his case. For that reason, I only have lukewarm feelings about the book.

[Marks54 · Rating 3 out of 5]

In recent years, the strategies of some of the major Internet sector firms have been converging so that there is an increasingly concentrated set of large firms - Google, Facebook, Apple, Amazon, and even Microsoft that have some strategic activities in common. In addition, relatively newer actors are pioneering aggressive and scalable market-making business models (Uber, Lyft, AirBnB)) with similar characteristics. These are all examples of “Network Platform” firms that serve multiple sets of customers/users along their value chains and gain their dominance by an ability to grow large and serves differing large customer population at the same time. Without the networked internet platform possessed by these firms, established players and even leaders (Wal-Mart) can find themselves at a disadvantage. Very few established firms (DeBeers?) have been able to act even close to these firms and the advent of the network platform strategy struck me as the maturing of a truly dominant business strategy on the web. It was with this background that I put “Platform Capitalism” in my queue. There are other accounts of network platforms - some theoretical and others more practitioner in orientation.

In spite of my anticipation, I was disappointed by the book. Nick Srnicek makes some good points and his distinction of five different types of platform approaches is interesting, although it is not persuasive as a useful way to look at these firms. Srnicek focuses on the negative aspects of these firms - their urge to market dominance, their poor treatment of workers in terms of pay and employment conditions, and the more general move towards market dominance perhaps at the expense of competition. This negative take on Internet firms is not really new and there have recently appeared a number of books shining light on the darker sides of the technology sector, such as Eric Posner’s discussion in “Radical Markets”.

Srnicek does a good job at tying the history of ecommerce and internet strategy to the broader destructive side of the history of capitalism. The big tech firms are not always your friends and this book is consistent with much recent criticism of the tech sector and such issues.

I did not appreciate the neo-Marxist orientation to the book. Marx continues to receive plaudits from some for his piercing economic analysis, but it did not quite work out, and whatever one thinks of the Soviet or Chinese experiences, it seems that Marx did not quite call the Internet and the book strains a bit much in turning a potentially fascinating story of the maturation of Silicon Valley firms into a more tortured read and a somewhat bizarre effort at matching high technology and largely irrelevant ideology. I have found Gramsci interesting enough sometimes, but I do not see what is gained by importing “hegemonic” story lines and applying them to Silicon Valley firms. I do not need the ideology to work with the industrial critique.

While the book was published in 2016, it already seems a bit dated. Uber is not in China any more (and is not really in favor either). By the way, Didi is still going strong and due to its IPO if it has not already occurred. The various scandals occasioned by the 2016 election and the abdication of responsibility by the platform firms are not covered but dominate many discussions today. This happens, of course, since the tech world is always in motion. But it is incongruous with the maintenance of a dated ideology and an unconvincing set of conclusions about the positive role of government or cooperative arrangements in solving capitalist dilemmas. I sorry, but it just seems that the ideology gets in the way, adds unnecessary syllables, and makes a fairly short book seem as though it was quite a bit longer. That is not a good outcome for me.

[JC · Rating 4 out of 5]

4.5 Stars

This was a really interesting book, particularly if you’re interested in technology or work to some extent in the STEM fields. A significant proportion of the book is tightly focused on the period between 2015 and 2017 when it was published. So it’s a fairly good book to understand the current moment in the unfolding tech landscape, particularly its relationship to the larger context of austerity measures and loose monetary policy. There are also so many fascinating facts and numbers around particular tech companies.

I first encountered Srnicek’s work when he co-authored a book put out by Verso that was part of this emerging discussion about the possibilities and concerns surrounding future automation, and its relationship with adding universal basic income to the array of social securities to ensure a dignified and viable existence for everyone. I never did get around to reading it, and it was only recently that I heard Srnicek speak on an episode of CBC Ideas about the extreme concentrations in power that are unfolding in the tech landscape today.

There is a common stereotype that neatly divides the tech field from the industrialist one, fitting them into their own respective corners of the political spectrum. Jonathan Haidt, in his book “The Righteous Mind”, alluded to this tendency in his discussion about self-interest’s poor role in predicting political orientations:

“Political theorists since Marx had long assumed that people chose ideologies to further their self-interest. The rich and powerful want to preserve and conserve; the peasants and workers want to change things (or at least they would if their consciousness could be raised and they could see their self-interest properly, said the Marxists). But even though social class may once have been a good predictor of ideology, that link has been largely broken in modern times, when the rich go both ways (industrialists mostly right, tech billionaires mostly left) and so do the poor (rural poor mostly right, urban poor mostly left). And when political scientists looked into it, they found that self-interest does a remarkably poor job of predicting political attitudes.”

What’s fascinating is that what Srinicek calls platform capitalism has largely gone unchallenged from both the tech and industrialist camps, as both are involved in constructing comprehensive monopolistic empires that are beginning to converge and compete for the same market space. A lot of this has unfolded under the guise of the so-called “sharing economy” when the underlying platform or enormous troves of data extracted by such a platform are anything but ‘shared’. Srinicek near the end of the book writes:

“Enabled by digital technology, platforms emerge as the means to lead and control industries. At their pinnacle, they have prominence over manufacturing, logistics, and design, by providing the basic landscape upon which the rest of the industry operates. They have enabled a shift from products to services in a variety of new industries, leading some to declare that the age of ownership is over. Let us be clear, though: this is not the end of ownership, but rather the concentration of ownership. Pieties about an ‘age of access’ are just empty rhetoric that obscures the realities of the situation. ”

One of the most fascinating examples he gives of such a dynamic is the current business model for the three giant jet engine companies that dominate the market today. Rolls Royce exemplifies this notion that they are no longer in the business of selling jet engines as much as they are in ‘renting thrust’. That is, airlines don’t really own the engines of their aircrafts, but they are rented and airlines pay according to the number of hours they use them. This business model largely emerged from the realization that the maintenance of these engines was around seven times more profitable than the selling of them. These jet engines are now equipped with a multitude of sensors which collect enormous amounts of data, all sent to a central command centre in the UK. All this being a part of the way Rolls Royce is securing the monopolization of its own market space.

Amazon Web Services (AWS) was also a fascinating example, being the fastest growing and most profitable part of Amazon. It's basically Amazon renting out cloud-computing services and on-demand access to servers. And so the central dynamic of capitalist ownership has changed little, whether you call it ‘sharing’ or not. Even Facebook and Microsoft are collaborating on laying their own transatlantic fibre cable, which I thought was just unreal.

There are also fascinating numbers for gaining a sense of the magnitude of money being stocked offshore by these tech giants. Srnicek also thinks many of these companies have a precarious dependence on ad revenues, which are simply not sustainable, and also goes into how dependent some like Uber have been on what Srnicek called venture capital welfare. If many of these companies do collapse or retreat to their ‘core competencies’ Srnicek doesn’t see much in the way of valuable technology they will have left behind, especially in the case of exploitive platforms like Uber.

He briefly alludes near the end of the book to leveraging options like antitrust cases to break up monopolies, government regulations for privacy controls, and public pressure regarding tax avoidance, which he thinks can better orient the tech field towards the public interest. Srnicek also mentions how the collectivization of some of these platforms into something resembling public utilities (with the proper constraints on state surveillance, and a far more transparent use of data for the purposes of distributing resources, enabling democratic participation, and making technological improvements) can help this tech bubble leave something useful behind in its wake. However, I get the sense that a few tech companies will come through as even larger hegemons than they are today. Amazon looks like a likely candidate. How ironic then that this very review I'm writing will be finding its way onto AWS servers, processed through sophisticated data algorithms, and monetized through God knows what and for God knows what purposes.

[Meghana · Rating 4 out of 5]

-1 star solely because the first 2 chapters didn't provide much new information to me on their own.

Still, a great and important read. A quick one too. Highly recommend. 5 stars for the 3rd chapter. Learning about how the global post-war economy set the stage for the dot-com and current tech boom was the highlight of this book. It was nice having everything laid out so clearly in one place. It also explains a lot of the current trends in Tech from an economics point of view. Especially handy for techies like me who don't understand/study/work in the business side of the industry.

[Patrick Sauriol · Rating 4 out of 5]

Platforms are a new kind of economic firm based around extracting, analyzing, and selling data generated by the activities of users. In this book Srnicek points out how this behavior in capitalism has been driven by prior economic crises and the deindustralization of major Western economies, creating an incentive for capitalists to not own anything, but control and extract our data created by using their services for their own means. As usual, leaves the worrying question about what is to be done

[Javier Alemán · Rating 4 out of 5]

Un ensayo conciso y potente sobre cómo hemos llegado hasta el momento actual del capitalismo. A veces algo árido para el lego en economía, hace un recorrido desde los 70 hasta el boom de 2008 para explicar cómo la coincidencia de masas cada vez más pobres y de dinero barato disponible ha lanzado la plataforma como ente de extracción de rentas y datos. Básico para entender dónde estamos y qué deberíamos hacer para no acabar peor.

[Theanoe Christos · Rating 3 out of 5]

Short and concise read. Reading this book in 2024 feels like studying the notes of an experiment thats already happened. to understand that big tech leeches off assets they dont own or act as 3rd parties to solve problems they created is important to understanding our current economy. I appreciate the raw numbers that Srnicek laid out to help understand just how much money revolves around massive companies like Google, Amazon, Apple, etc.