Cognitive Capitalism as a Financial Economy of Production

The structural changes that occurred in the last 30 years have substantially modified the capitalistic organization of society, both at national and international level. A new regime of accumulation devoid of a stable mode of regulation and centred on financial valorisation of new socio-economic growth perspectives has been consolidating. Conditions imposed by financial markets in order to create the shareholder's value consisted of promoting downsizing, reengineering, outsourcing and M&A processes. The flexibilization of labour force and precarization of existence has thus been the result of the established valorization norm. But why should the corporate restructuring sustain the enterprise value by creating income stock ? The definition of a new regime of accumulation involves a research on the criteria of valorisation and the prevailing technological paradigm. The main changes of new capitalism concern mainly two spheres: the role played by knowledge in the new technological paradigm and valorisation process and the importance of finance. The dominant technological paradigm and the role played by knowledge within it are not enough to explain the evolution of the accumulation regime. It is needed to introduce further elements necessary to explain the expectations that sustain the investment choices made by capitalists; these are the conventions or collective beliefs. Then, after describing the main features of the accumulation paradigm that many scholars have not hesitated to name as Cognitive Capitalism , we shall attempt to provide a theoretical framework of it intended as a financial economy of production. We shall therefore proceed to the reformulation of the schemes of monetary circuit (Graziani 2003).

Cognitive Capitalism as a Financial Economy of Production

The structural changes that occurred in the last 30 years have substantially modified the capitalistic organization of society, both at national and international level. In order to understand the evolution of social and economic systems it is necessary to focus on the relations of production, that is on those social relationships that explain the valorisation process. Since the economic crisis of the 1970's until the late 1990's the structure of production in the developed countries has been characterised by the development of highly flexible forms of production. The organizational revolution that occurred within production activity has been achieved through introducing new information technologies and restructuring of production within increasingly wider territories. A new regime of accumulation devoid of a stable mode of regulation and centred on financial valorisation of new socio-economic growth perspectives has been consolidating. Conditions imposed by financial markets in order to create the shareholder's value consisted of promoting downsizing, reengineering, outsourcing and Merger & Acquisitions processes. The flexibilization of labour force and precarization of existence has thus been the result of the established valorization norm. But why should the corporate restructuring sustain the enterprise value by creating income stock ? In order to answer this question it is necessary to analyse the importance of knowledge in the production process. For this purpose, we shall use some categories of the so called French Regulation School. The definition of a new regime of accumulation involves a research on the criteria of valorisation and the prevailing technological paradigm. The main changes of new capitalism concern mainly two spheres: the role played by knowledge in the new technological paradigm and valorisation process and the importance of finance. The dominant technological paradigm and the role played by knowledge within it are not enough to explain the evolution of the accumulation regime. It is needed to introduce further elements necessary to explain the expectations that sustain the investment choices made by capitalists; these are the conventions or collective beliefs. Then, after describing the main features of the accumulation paradigm that many scholars have named as Cognitive Capitalism , we shall attempt to provide a theoretical framework of it intended as a financial economy of production. We shall therefore proceed to the reformulation of the schemes of monetary circuit.Cognitive Capitalism; French Regulation School; Monetary Circuit; Knowledge; Crisis; Financial Convention.

A model of Cognitive Capitalism: a preliminary analysis

The aim of this paper is to present a first theoretical macro-modelling of cognitive capitalism, by utilizing the French regulation theory approach. With regard to the supply side analysis, we shall emphasize the role played by productivity dynamics: it is mainly affected by two types of dynamics: scale economics, based on learning processes and network activity. Turning to demand-side aspects, aggregate demand takes in account also the role played by distribution effects of financial markets, which operates as a distorsive income multiplier. As, on the one side, it depends upon the trade-off between learning processes diffusion and intellectual property rights and, on the other, upon income polarization (due to precariousness and limited access to capital gains) and demand growth stability. The stability of the system cannot be guaranteed. The need for new rules concerning income distribution process (i.e. basic income policy) will be taken in consideration.Cognitive Capitalism, Knowledge, Learning Processes, Network Economies, General Intellect, Capital Gains, Basic Income

Basic income sustainability and productivity growth in cognitive capitalism: a first theoretical framework

This paper aims at proposing a first theoretical framework for studying the basic income sustainability. We consider the basic income not only as a tool of a policy to improve living standards and social well-being but, mostly, as the essential requisite to introduce a new stable compromise between capital and labour. Following the French Regulation School approach, we assert that the social compromise between capital and labour is founded on the redistribution of the productivity gains. Therefore we try to trace living standards and social well being problems back to their origins, i.e. the productivity growth. We think that describing the dynamics of productivity means understanding the main features of the contemporary capitalistic production. We first present a survey about BI in economic literature. We then focus on the socio-economic transformation of western countries and propose the term cognitive capitalism (CC) to describe the economic system after the Fordism paradigm crisis, highlighting the strong links between the exploitation of knowledge and the accumulation of surplus. Therefore we investigate the presence of a new type of Kaldor-Verdoorn law in cognitive capitalism (a virtuous circle among BI, increasing productivity - via knowledge and network externalities - output and employment). As a result, we first point out the ambiguous growth circle of the contemporary capitalism. Secondly we highlight that BI is compatible with the new way of accumulation, based on the exploitation of dynamic scale economies. BI increases productivity, through network (externalities) and learning processes and, at the same time, demand, via consumption level. This double result is not always guaranteed. It depends, on one side, on how much BI positively affects productivity, and the greater this probability, the lower the role played by intellectual property rights and the higher the diffusion of network economies (general intellect and social cooperation); on the other side, it depends on the way BI is financed. These results also depend on the assumption of closed economy, in which financial markets play no role at all.basic income, productivity, cognitive capitalism, crisis, Regulation School; Fordism; Post-fordism; knowledge; learning; externalities;, Kaldor-Verdoorn law; general intellect

From material rent to immaterial rent: continuity or theoretical rupture?

In this paper we will try to represent in mathematical form some of the characteristics of a Post-Fordist economic system. In particular, we will focus on the theory of distribution, and on the role of income. We will try to identify the process that led to the crisis of Fordism by modifiyng the Ricardian framework presented in Pasinetti 1966. Rent in Fordist system of production is linked to the diminishing returns. In Post-Fordist production process we will assume a law of formation of (immaterial) rent related to increasing returns .Capitalismo Cognitivo; Fordismo; Pasinetti; Ricardo; rendita; Postfordismo

Labour Market, Bioeconomy and Basic Income

By treating labor like any other tradable good, orthodox economic models ignore various features that define the specificity of the labor market (disponibility, solvability, alienation). Taking into account such features, as the new situation generated by the emergence of cognitive capitalism forces us to do, requires a major change in paradigm. In the new “bio-economic” paradigm, classical distinctions between production and reproduction, consumption and production, leisure and work tend to vanish, while labor increasingly appears as a common good. The most important input being life itself, a just retribution of productive forces must now include a retribution for living, i.e., a universal, unconditional and guaranteed basic income.Bioeconomy, Production, Basic Income, Cognitive Capitalism

A Financialized Monetary Economy of Production

The monetary theory of production offers a systemic approach to describe systemic crises, but, faced with contemporary capitalism, it needs to be modified. In accordance with the Schumpeterian perspective, we adopt a framework that points to both the monetary nature of and qualitative changes in the capitalist system. The low level of wages, and the consequent underconsumption, is not the unique cause of the 2007–9 crisis. Not only has financialization changed the behavior of consumer-savers, but investment has also changed. The overfinanced leverage that was an important characteristic of the crisis may be better understood historically with the emergence of the 1990s’ technological paradigm. The crisis stems mainly from overinvestment in new technologies. Particularly during the 1990s, the emerging industrial technology favored its own sort of financing. The financialization of the monetary economy of production can be better explained if we understand the shift to a new technological paradigm as a general outlook on the productive problems faced by firms, whereby the relevance of the so-called immaterial production takes on greater importance. To describe this dynamic, we present two different analytical forms of the monetary economy of production: the first one represents the new economy scenario, and the second one represents the financialized monetary circuit during the real estate bubble

Rethinking Money, Rebuilding Communities: A Multidimensional Analysis of Crypto and Complementary Currencies

In the current scenario of global crisis, our official monetary system's inadequacy to provide solutions to the numerous serious problems affecting our society has become increasingly evident. This has led to the emergence of an astonishing number of projects that aim to rethink money. In order to make sense of these projects, it is necessary to explore the deepest meanings of money, as a multidimensional institution whose concrete nature and functioning are still object of a whole set of unsolved disputes. Under these premises, this article proposes an interdisciplinary reading of crypto and complementary currencies. The goal is twofold: on the one hand, the authors aim to shed light on the conditions which have to be met for the establishment of a sustainable monetary innovation; on the other hand, the article constitutes an attempt to use ongoing experiences as a lens through which to gain new insights into the general phenomenon of money and as a laboratory for exploring the possibility to move towards new socio-economic paradigms

Cicli politici elettorali ed evoluzione del finanziamento della sanità italiana: uno studio di lungo periodo

The aim of the paper is the explanation of the instability of the financing rules embracing the political-electoral cycles approach. A demonstration of the two following assertions is presented: - when Local Governments (Regions) are the sole manager of the HCS' expenditure, the increase of HCS' expenditure represents a political tool for the incumbent (a signaling towards the voters in the electoral period); - given the signaling strategy of Regions during the electoral period , Central Government is induced to decrease the ordinary financing from one hand, and to bail out (ex post financing) from the other hand. An empirical analysis of the two theoretical results is presented, concluding that the expectations on the regional elections can explain the HCS' bailing out (Italy 1981-2005). Only a better division of the responsibilities about the HCS' financing between Central Government and Regions can reduce the instability that political-electoral cycles introduce in the NHCS' financing

Between Money and Sovereignty: Is a New Monetary Thinking Needed to Institute the Common?

The diffusion of alternative financial and credit circuits, in which the money favours the self-management of social wealth, may curb the expropriation caused by processes of abnormal indebtedness that increasingly characterise economic systems. The article proposes an examination of four experiences with complementary currencies that have sprung up in Europe after the recent crisis, distinguishing between local currencies (Sardex, SoNantes and Sol Violette) and crypto coins (Bitcoin). The possibility of taking advantage of the monetary know-how that animates various experiences (like crypto coins and local clearing houses) would contribute to the re-thinking money as a social institution. Three main topics are discussed: 1. the “political technologies” in which the alternative monetary circuits consist; 2. democratic participation in the decision-making processes that characterise them; and 3. the meaning of the sovereignties that they potentially defin