In Platform Capitalism, Nick Srnicek examines the rise of platform-based businesses from the 1970s to the present and how these are transforming the workings of contemporary capitalism. While more discussion of potential sites of future contestation would have been welcome, Sin Yee Koh applauds this book for its rational and accessible portrayal of the evolution of platform capitalism. If you are interested in this book, you may also like to read Nick Srnicek’s short essay on Platform Capitalism, published on LSE RB on 24 February 2017, or listen to a recording of his LSE Lit Fest panel discussion with Luke Dormehl and Laurie Penny on ‘The Future of Humanity’ 

Koh, Sin Yee

LSE Research Online

2017-6-5Book Review: Platform Capitalism by Nick Srnicekblogs.lse.ac.uk /lsereviewofbooks/2017/06/05/book-review-platform-capitalism-by-nick-srnicek/In Platform Capitalism, Nick Srnicek examines the rise of platform-based businesses from the 1970s to thepresent and how these are transforming the workings of contemporary capitalism. While more discussion of potentialsites of future contestation would have been welcome, Sin Yee Koh applauds this book for its rational andaccessible portrayal of the evolution of platform capitalism. If you are interested in this book, you may also like to read Nick Srnicek’s short essay on Platform Capitalism,published on LSE RB on 24 February 2017, or listen to a recording of his LSE Lit Fest panel discussion with LukeDormehl and Laurie Penny on ‘The Future of Humanity’ .Platform Capitalism. Nick Srnicek. Polity Press. 2017.Find this book: How do we make sense of the rise of platform-based businesses that areincreasingly monopolising the global economy? How did they grow and morph sorapidly? What are the consequences of this business trend? And are there anyalternative possibilities as we contemplate a post-capitalist future?Platform Capitalism addresses these questions through a matter-of-fact narration ofthe growth of platform-based businesses in the broader history of capitalistdevelopment – or what Mark Carrigan calls ‘the historicisation of the platform’ in hisreview of the book. As Nick Srnicek argues: ‘phenomena that appear to be radicalnovelties may, in historical light, reveal themselves to be simple continuities’ (9).Through this broadened historical perspective, the book takes readers through anenlightening journey that seeks to understanding the past, present and futuretrajectories of capitalism and digital technology.As a reader who is generally interested in financialisation and big data, I found thebook’s matter-of-fact narrative useful in two ways. First, it connects the dotsbetween events that may initially appear to be disparate. This helps readers tounderstand that the current state of the global economy is an inevitable part ofcapitalist processes. Specifically, by positioning major tech companies as ‘economic actors within a capitalist modeof production’ (3) – instead of cultural or political actors who are informed by cultural values or motivated by thepursuit of power – readers come to understand, with economic clarity, that these companies’ actions are merelyreactions to business needs. Secondly, by removing emotions from the narrative style, it allows readers to thinklogically (and therefore less subjectively) about possible solutions for the future.In terms of organisation, this short and concise book consists of an introduction and three chapters. The first chapterpresents an economic history of the global economy. It focuses specifically on three milestones in the twentieth andtwenty-first centuries: ‘the response to the 1970s downturn; the boom and bust of the 1990s; and the response to the2008 crisis’ (9). The second chapter explains the rise of business models capitalising on big data and thedevelopment of their monopolising platforms. In this characterisation, data is synonymous with oil, i.e. a resource ‘tobe extracted, refined, and used in a variety of ways’ (40). The third chapter analyses the present state of theplatforms – specifically their tendencies as they contend with intracapitalist competition and the challenges they facein the current global economy milieu characterised by stagnant wages, declining productivity and rising inequality –before ending with some concluding thoughts about the future.1/3Image Credit: (Esther Vargas CC by SA 2.0)According to Srnicek, platforms embody four characteristics. Firstly, they are intermediary digital infrastructures  thatenable different user groups – ‘customers, advertisers, service providers, producers, suppliers, and even physicalobjects’ – to interact (43). Some platforms further empower users ‘with a series of tools that enable [them] to buildtheir own products, services, and marketplaces’ (43). Secondly, platforms rely and thrive on network effects. Themore users a platform accumulates, the more potential it has to milk and generate value from its users and theiractivities on the platform. This explains why platform businesses enjoy rapid, exponential growth and unprecedentedcapital accumulation over a relatively short period of time.Thirdly, platforms use cross-subsidisation. By offering free products and services, a particular platform couldaccumulate more users and, therefore, more activities on its network. Economic gains and losses are balanced outas the platform corporation taps on its multiple arms of business. Finally, platforms deploy the strategy of constantuser engagement through attractive presentations of themselves and their offerings. This is done with the endpurpose of extracting (more) data from its users.Through the interplay of these four characteristics, platform businesses can thus enjoy massive and almostperpetual returns on their initial infrastructural investments. This is because once the platforms are built andestablished, these businesses can enjoy the monopolistic ability to continually exploit and benefit from their usersand their activities, with relatively little productive input on their part. Put differently, in John Hermann’s words: ‘ifsuccessful, a platform creates its own marketplace; if extremely successful, it ends up controlling something closerto an entire economy.’Srnicek goes on to identify five types of platforms, which may exist in various combinations (or in full) within aparticular platform corporation. These are advertising platforms (e.g. Google, Facebook), which extract user dataand capitalise on ad space; cloud platforms (e.g. Salesforce), which own and rent out hardware and software;industrial platforms (e.g. GE, Siemens), which build the necessary infrastructures ‘to transform traditionalmanufacturing into internet-connected processes’ (49); product platforms (e.g. Rolls Royce, Spotify), which makeuse of other platforms ‘to transform a traditional good into service’ (49); and lean platforms (e.g. Uber, Airbnb), whichoperate on a business model of minimal asset ownership.Although some large platform businesses have enjoyed economic success, the sector as a whole is facing fourinterrelated tendencies. These are the ‘expansion of extraction, position as a gatekeeper, convergence of markets,and the enclosure of ecosystems’ (98). On the one hand, the inherent push towards expanding the reach andtechnologies of data extraction is counterintuitive to the business logic of keeping platform businesses lean. On the2/3other hand, the competitive need to dominate a certain niche becomes increasingly difficult as markets and usergroups converge, therefore presenting pressures for common or shared interfaces. One reaction to this is forplatform businesses to enclose their proprietary ecosystems (e.g. developing closed apps and privatised internetinfrastructure) in order to maintain competitive advantage over their rivals. This, however, will lead to thefragmentation of the internet, which stands counter to the digital economy.Looking at the current and near-future state of platform capitalism, Srnicek predicts that platform businesses ‘will beforced either to develop novel means of extracting a surplus from the general economic pie or to fold their expansivecross-subsidising monopolies into much more traditional business forms’ (125). In other words, platform businesseswill have to conjure up complete reinventions of their business model to ensure sustainability or face an eventualapocalypse.Although I applaud this book for its rational and easy-to-understand portrayal of the evolution of platform capitalism,I am somewhat disappointed by the concluding section on ‘futures’ (126-29). While Srnicek does offer a possiblesolution to counter the expansion of platform businesses, which is to create public platforms ‘owned and controlledby the people’ (128), this section pales in comparison to the rest of the book in terms of its depth of analysis andextent of elaboration. Perhaps only time will tell if, and how, the story of platform capitalism and our collectivecontestations against it will unfold in the economic history of capitalism.Sin Yee Koh is Assistant Professor of Geography in the Institute of Asian Studies at Universiti Brunei Darussalam.She is author of Race, Education, and Citizenship (Palgrave, 2017) and co-editor of Cities and the Super-Rich(Palgrave, 2017). Read more reviews by Sin Yee.Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of theLondon School of Economics. Copyright 2013 LSE Review of Books3/3

Book review: platform capitalism by Nick Srnicek

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