By Dave Elder-Vass

Profit and Gift in the Digital Economy
Editions:Paperback: € 40.00
ISBN: 9781316509388
Pages: 260
ePub: € 25.99
ISBN: 9781316789452
Hardcover: € 90.99
ISBN: 9781107146143

Our economy is neither overwhelmingly capitalist, as Marxist political economists argue, nor overwhelmingly a market economy, as mainstream economists assume. Both approaches ignore vast swathes of the economy, including the gift, collaborative and hybrid forms that coexist with more conventional capitalism in the new digital economy. Drawing on economic sociology, anthropology of the gift and heterodox economics, Profit and Gift in the Digital Economy proposes a groundbreaking framework for analysing diverse economic systems: a political economy of practices. The framework is used to analyse Apple, Wikipedia, Google, YouTube and Facebook, showing how different complexes of appropriative practices bring about radically different economic outcomes. Innovative and topical, Profit and Gift in the Digital Economy focusses on an area of rapid social change while developing a theoretically and politically radical framework that will be of continuing long-term relevance. It will appeal to students, activists and academics in the social sciences.

About Dave Elder-Vass

Dave Elder-VassDave Elder-Vass teaches sociology and digital economies at Loughborough University. Before returning to academic life he was a senior IT technology manager in the private sector. This book brings together his expertise in digital technology and its use in business with his academic work on economic sociology and particularly the relation of gifts to the conventional economy. His previous publications include The Causal Power of Social Structures (Cambridge, 2010) and The Reality of Social Construction (Cambridge, 2012).

How to Think Differently about the Economy

A TEDx talk by Elder-Vass on the topic of the book:

Reviews:Sarah Grace Manski on The British Journal of Sociology wrote:

"By focusing on practices instead of rational actors engaged in market exchange (as per neoclassical economics), Elder-Vass better accounts for the actualities of the global economy. Those unsatisfied with binary debates between neoclassical and Marxist economics will find themselves excited to discover this book, as will any reader looking for a more serious examination of how new digital technologies are challenging our understanding of business practices. [...] We are already surrounded by the kind of human practices we need to create a real utopia, he tells us, we just don’t ‘see’ it empirically. These non-capitalist practices are described as ‘gifts’ in the non-market economy, and include work in the home, volunteering, charity work, carework, and gifting practices in the digital economy. Elder-Vass understands the gift economy as involving the production of things and services for transfer without payment. [...] In rejecting neoclassical economics’ dependence on Pareto optimality, Elder-Vass agrees with Marxist criticisms. Yet he goes a step further, joining J.K. Gibson-Graham in challenging orthodox Marxist political economy’s contention that we live in a social world determined by one market mechanism: a capitalist commodity market economy dependent on the exploitation of wage labour by capital. Instead, he says that capitalism in the digital economy has developed new forms, of which ‘there are some forms of it, suitably regulated, that make a positive contribution overall to our well-being’. As a matter of pragmatism, Elder-Vass warns against what he calls Marxism’s all-or-nothing tendency to view capitalism as simply exploitative."

Dan Little on Understanding Society wrote:

"Elder-Vass's current book offers a new way of thinking about our economic lives and institutions. And he believes that this new way lays a basis for more productive thinking about a more humane future for all of us than is offered by either neoliberalism or Marxism. What Elder-Vass offers is the idea of economic life as a jumble of 'appropriative' practices -- practices that get organized and deployed in different combinations, and that have better and worse implications for human well-being. [...] Capitalism is not a single, unitary 'mode of production,' but rather a concatenation of multiple forms and practices. [...] In particular, E-V considers whether the gift relation familiar from anthropologists like Marcel Mauss and economic sociologists like Karl Polanyi can shed useful light on the digital economy. But the lack of reciprocity and face-to-face community leads him to conclude that the theory is unpersuasive as a way of understanding the digital economy. [...] E-V's vision for creating a better future depends on a selective pruning of the more destructive practices and cultivation of the more positive practices. [...] Or in other words, E-V advocates for innovative social change -- recognizing the potential in new forms and cultivating existing forms of economic activity. [...] E-V shows a remarkable range of expertise in this work. His command of recent Marxian thinking about contemporary capitalism is deep. But he has also gone deeply into the actual practices of the digital economy -- the ways Google makes profits, the incentives and regulations that sustain wikipedia, the handful of distinctive business practices that have made Apple one of the world's largest companies. The book is a work of theory and a work of empirical investigation as well."

Jon Dean on Sociological Research Online wrote:

"The book is slightly mistitled: about half is not about the digital economy at all, with the first section meticulously examining why the Marxist and mainstream approaches to economic thinking are severely lacking, especially in relation to the gift economy, which is surveyed in great detail. Rather, in terms of the text’s structure, the digital economy is used as a case study, or a series of case studies, in the second half of the book, in which Elder-Vass explores the limitations of current political economy in understanding the realities of how the economy actually functions. [...] he offers a new model, a political economy of appropriative practices where we consider ‘those practices that significantly, systematically and more or less directly influence the allocation of the benefits of production’ (p. 102), focused on the diverse activities wrapped around provisioning and how the benefits, and resultant harms, are allocated. Will this new model catch on? It does feel a bit clunky, lacks the simplicity of the (rightly critiqued) ideological approaches to political economy, and to the non-economist reader it occasionally feels that the word ‘appropriative’ is applied in rather random ways throughout the argument. But this is a book that has big ideas, is dealing with monumental shifts in how our society is organised, how our economy works, and how we fundamentally relate to each other. It is at times a difficult argument to grasp, but there is so much content that can be used to explain digital and economic phenomena and theory that this deserves to be a widely discussed and thought about text"

William Waller on Journal of Economic Issues wrote:

"Many authors, most notably Tony Lawson (2003), have argued for both explicit ontology and critical realist perspectives in institutional economics. Elder-Vass provides a compelling example of this approach. In demonstrating the efficacy of his own analytic approach, the author uses well-constructed, detailed case studies that illustrate the role of profit and gifts in the digital economy. [...] The conclusions Elder-Vass reaches flow directly from his analysis. He begins with a conclusion emanating from his conceptual framework. He argues that, in order to theorize about the economy, we must embrace the diversity of practices that characterize all of the world’s economies and reject monolithic views of the economy as either strictly market systems or made up of singular modes of production. Elder-Vass restates his view that the economy should be defined as a provisioning process, wherein economic activity (i.e., practices directed at providing goods and services) are directed at meeting human needs. He argues that we should conceptualize economic activity in terms of appropriative practices — practices that significantly affect 'the allocation of benefits and/or disbenefits from the processes of provisioning' (p. 220). This is crucial, according to the author, because this approach allows us to focus on ethical and political concerns and the analysis of complexes of appropriative practices that are central to constructing explanations of economic actions and interactions. Elder-Vass goes on to state that this approach permits the construction of a political economy that is both scientific and ethical. [...] Elder-Vass’s book makes an important contribution to institutional analysis and theory that is worthy of institutionalists’ careful attention. The author is ambitious in the aims and scope of his book. He makes major contributions to how we substantively consider modern industrial economies, critiques earlier approaches in innovative ways, and demonstrates his alternative approach with multiple insightful case studies. [...] In the process, he incorporates much that is congruent with institutional analysis."

Jens Beckert on European Journal of Sociology wrote:

"Capitalism is a social formation undergoing constant transformation. Much of this transformation is driven by technological development, and the currently ongoing digital revolution is such a transformation. [...] The merit of Dave Elder-Vass’ new book is its contribution to the systematic understanding of these ongoing transformations, which it achieves by discussing them from the perspective of theories of capitalism and market society, asking whether the conceptual frames provided by these theories actually allow us to grasp analytically the 'appropriative practices' characteristic of the digital era. 'Appropriative practices' is the core term of the book. It refers, as Elder-Vass defines it, to the 'social practices that influence the allocation of benefits from the process of production'. [...] Practices are distinguished neither along the lines of nation states, nor along institutional differences on the supply side of the economy. Rather, it is a perspective that looks on the micro level at existing practices for the provisioning of economic goods and services, and analyses these practices from a bottom-up perspective. That analysis involves strong normative elements. [...] Elder-Vass makes a very convincing case in the first part of the book as to why neither Marxism nor standard economics do justice to the multiple forms of provisioning that exist in the economy, and why these approaches do not allow for the recognition of the ethical ambiguities that contemporary economies entail. This first part of the book is followed by a second part which discusses the digital economy empirically. [...] Profit and Gift has two parts that are each very well informed, and theoretically and empirically interesting. My reservation regarding the book is the following: it is my impression that the two parts do not support each other well. The claim of Part One of the book is that a more pluralistic perspective on different appropriative practices within capitalism allows us not only to take a more nuanced political stance toward capitalism, but also to identify economic forms which are normatively especially attractive. Normatively attractive means for Elder-Vass that they foster benefits to the members of society by increasing their wellbeing. Elder-Vass repeatedly makes reference to Eric Olin Wright’s project of real utopias [...] However, by alluding to it, the reader is set to expect to find examples in the empirical analyses of the digital economy which actually entail this utopian element and do indeed increase the well-being of those engaged in the appropriation practices described. With the possible exception of Wikipedia, however, the reader of Profit and Gift does not get the impression that Apple, Google, Facebook, or YouTube could possibly be 'real utopias' as understood by Eric Olin Wright. [...] Just following Elder-Vass’ descriptions of the business models of these companies provokes the impression in the reader that the digital economy is not so much a more pluralistic form of provisioning that can at least in part be seen as a 'real utopia' in Eric Olin Wright’s sense. Instead it appears to me rather to be an especially wicked form of the logic of capitalist accumulation, where profits are made from intruding into the most inner aspects of a person’s identity. [...] This is why I see the two parts of Profit and Gift as not fitting well together. The empirical parts do not confirm the normative demands the book rightfully makes. [...] As a last point, I turn to the role of the state in Profit and Gift. Elder-Vass does repeatedly refer to the state as a crucial provisioning system of contemporary societies [e.g. 230]. However, the state does not play any significant role in the examples of firms of the digital economy that were chosen. [...] I do share many of the normative and theoretical concerns of Dave Elder-Vass, but I am afraid I do not share the 'careful optimism' of the book––at least not with regard to the digital economy."

Relevant Links

Table of Contents of Profit and Gift in the Digital Economy

Part I. Diverse Economies:

  1. Introduction [download full chapter]
  2. Diverse economies [excerpt chapter start]

Part II. Political Economies:

  1. Beyond Marxist political economy [excerpt chapter start]
  2. Mainstream economics and its rivals [excerpt chapter start]
  3. Complexes of appropriative practices [excerpt chapter start / excerpt additional pages]

Part III. Digital Economies:

  1. Digital monopoly capitalism: Apple [excerpt chapter start]
  2. Co-operative peer production: Wikipedia [excerpt chapter start]
  3. Does Google give gifts? [excerpt chapter start]
  4. User content capitalism [excerpt chapter start]
  5. Conclusion [excerpt chapter start / excerpt closing pages ]