Creative Destruction versus Restrictive Practices:

Deleuze, Schumpeter and Capitalism's uneasy relationship with technical innovation

That capitalist enterprises are driven to innovation is a concept firmly established in both political and economic common sense. It is this drive, perhaps more than anything else, that is supposed to be capitalism's great merit -- that unlike past social formations which remained hopelessly tied to tradition, capitalism encourages constant innovation and progress. It is a fact equally acknowledged by capitalism's detractors (Marx's "All that is solid melts into air...") as by its most fervent cheerleaders. Says Joseph Schumpeter,

As a matter of fact, capitalist economy is not and cannot be stationary. Nor is it merely expanding in a steady manner. It is incessantly being revolutionized from within by new enterprise, i.e., by the intrusion of new commodities or new methods of production or new commercial opportunities into the industrial structure as it exists at any moment. Any existing structure and all the conditions of doing business are always in a process of change. Every situation is being upset before it has had time to work itself out. Economic progress, in capitalist society, means turmoil... [1]

This innovative drive within capitalism is what leads Deleuze and Guattari to describe the capitalist axiomatic as a machine for the deterritorialization of flows, as capitalist enterprises constantly seek out new technical innovations as a means to free up flows of labour, knowledge, resources, energy and commodities.

This presumed relationship between capitalism and technological innovation cuts both ways. On the one hand, capitalism is innovative, driven by the profit principle to constantly seek out cheaper, quicker and more efficient methods of production. On the other hand, innovation is capitalist, as new innovations further cement and empower the real subsumption of productive practices under the capitalist axiomatic.

Understanding the relationship between capitalism and innovation in such a way creates a problem for those of us on the left who, on the one hand, wish to challenge the exploitation and violence of the capitalist axiomatic while, on the other, feel attracted to the power and promise that new technologies provide. We find ourselves wondering if capitalism is necessary to bring about this technological progress or, even worse, if the technological fruits of capitalism are fundamentally tainted by their lineage. By using the technology of advanced capitalism, are we necessarily forced to capitulate or deform ourselves to the requirements of the capitalist axiomatic?

This dilemma, however, changes radically if we challenge this essential, almost ontological, connection between capitalism and innovation -- not by arguing that capitalism doesn't possess an innovative drive, but by arguing that this drive is paralleled by an equally strong conservative drive. As much as capitalist enterprises are driven by market forces to introduce technological innovations, they are equally driven to limit, and frequently inhibit, technological innovation in ways which are necessary for them to maintain their control over the various processes of production, delivery, and consumption. This is why Deleuze and Guattari argue that, at the same time as the capitalist axiomatic is a deterritorializing machine, it is also an apparatus of capture which, though it deterritorializes various flows, always then "maintains the energy of the flows in a bound state on the body of capital." [2]

This essay will attempt to complicate the seemingly essential relationship between capitalism and innovation. In doing so it will be fighting a war on two fronts. Against those boosters of capitalism who see in it only innovation and progress, I will argue that because of the potential danger that innovation can pose to capitalism's coherence and control, it is frequently pressed to inhibit that innovation -- to channel, decelerate and in some cases reverse it. Conversely, to those critics who see in technological innovation only the further perfection of capitalist exploitation, [3] I argue that, because of this uneasy tension, new technologies (specifically new digital technologies) present potential sites of resistance and possibility which can be deployed against key capitalist axioms.

I will begin by investigating the question of technological innovation through the work of Joseph Schumpeter. Here I will note how we see, even in Schumpeter, that prophet of innovation and entrepreneurship, the outline of capitalism's conservative tendencies. I will then model this opposition through Deleuze and Guattari's conceptions of the capitalist axiomatic as both a machine for the deterritorialization of flows and an apparatus of capture. Finally, I will investigate this model through the specific case-study of advanced digital information technologies.

Capitalism and Innovation

Innovation and Entrepreneurship

We start with Joseph Schumpeter as the theorist of capitalist dynamism par excellence. He is the great thinker of technical innovation in capitalism, through the figure of "creative destruction." However, for our purposes, what is most useful about Schumpeter is that he also theorizes what he terms "restrictive practices," which function within capitalist production to constrain, channel and decelerate innovation. However, before we get to these restrictive practices, an analysis of Schumpeter's account of innovation is necessary.

Technical innovation, for Schumpeter, takes place against the backdrop of the day-to-day capitalist production that occurs in a relatively stable, static and circular fashion. [4] In day-to-day production, the processes of production and exchange maintain a relatively steady equilibrium that is produced through market pressures according to basic laws of supply and demand. [5] This is not to say that change doesn't take place. But change is either steady and incremental or a result of exogenous upheavals (such as wars or natural disasters) which will eventually be adapted to. Within this "accustomed circular flow,"

every individual can act promptly and rationally because he is sure of his ground and is supported by the conduct, as adjusted to this circular flow, of all other individuals, who in turn expect the accustomed activity from him... While in the accustomed channels his own ability and experience suffice for the normal individual... [6]

As a result, rational prediction and planning can take place, and the future can (barring exogenous change) be projected from the present.

However, opposed to this process of circular flows, Schumpeter then directs our attention to a collection of processes which produce "a change in the channels of economic routine or a spontaneous change in the economic data arising from within the system." [7] That is to say, Schumpeter identifies moments of innovation [8] which produce spontaneous, yet endogenous, [9] change in the production process and create upheavals in the established equilibrium.

When these innovations end up working, economic life is thrown out of equilibrium: new rules have to be invented, and economic laws have to reassert themselves. Old practices, processes and technologies which are less efficient or profitable than those which innovation brings, as well as those firms which are unable to adapt, are replaced. [10] It is this process which produces that "perennial gale of creative destruction" [11] that is at the heart of Schumpeter's analysis of capitalism. Capitalism's unique qualities as an economic formation are expressed through creative destruction. It encourages innovation and ensures that old ways of doing things, however comfortable and traditional, are discarded when they are shown to be inefficient. In so doing, the human potential for production and achievement expands and accelerates, seemingly without limit.

Restrictive Practices

Many accounts of Schumpeter (and of capitalism in general) end here -- with a description of the steady and circular flow of economic life, slowly expanding due to demographic shifts, occasionally radically accelerating due to technical innovations. This gives the impression of a healthy equilibrium alternating between times of static/circular flow and times of rapid, discontinuous change. However, this is to miss the way in which these two moments are in tension. Indeed, the only equilibrium is to be found within the circular flow of economic life, which innovation, in the Schumpeterian sense, shatters, destroying old certainties and forcing a new equilibrium to be painfully and erratically (re)composed. Schumpeter is well aware of how upsetting the upheavals of innovation can be within economic life. Indeed, just the possibility of such innovations diminishes the ability to act rationally and plan effectively in economic life:

[T]he impact of new things -- new technologies for instance -- on the existing structure of an industry considerably reduces the long-run scope and importance of practices that aim, through restricting output, at conserving established positions and at maximizing the profits accruing from them. [12]

Schumpeter goes on to draw out how the "perennial gale of creative destruction" can affect the day-to-day functioning and decision making processes of economic production:

Practically any investment entails, as a necessary complement of entrepreneurial action, certain safeguarding activites such as insuring or hedging. Long-range investing under rapidly changing conditions, especially under conditions that change or may change at any moment under the impact of new commodities and technologies, is like shooting at a target that is not only indistinct but moving -- and moving jerkily at that. [13]

The "destruction" of creative destruction is not just leveled against older forms of economic activity. It is the destruction of all the certainties of the economic system, which actors use to make decisions, plan, and organize production. Actors within the capitalist system thus have a vested interest in the maintenance of the system as it is and "will cling as tightly as possible to habitual economic methods and only submit to the pressure of circumstances as it becomes necessary." [14]

This conservative element within capitalism is, however, not just expressed through a baseline intransigence to novelty. In addition to this passive resistance, capitalist production is marked by a collection of what Schumpeter terms "restrictive practices," practices that exist for the purpose, express or not, of decreasing the rate and velocity of technological innovation, as well as for channeling it in systemically acceptable ways. These restrictive practices include, first, "patents or temporary secrecy of processes or, in some cases, long-period contracts secured in advance" [15] and, second, what Schumpeter calls "monopolistic practices", [16] whereby a firm, corporation or industry uses economic power to control or ward off technical innovation, despite it being useful/profitable, as a way of decreasing the shocks and destabilizations that innovation can bring to the economy. We will discuss each of these sets of practices in more detail shortly. For now it is useful for us to realize that

restrictive practices of this kind, as far as they are effective, acquire a new significance in the perennial gale of creative destruction, a significance which they would not have in a stationary state or in a state of slow and balanced growth. In either of these cases restrictive strategy would produce no result other than an increase in profits at the expense of buyers... But in the process of creative destruction, restrictive practices may do much to steady the ship and to alleviate temporal difficulties. [17]

This is to say, these restrictive practices are not temporary failures or distortions of the market. Rather they serve a necessary and central function in the reproduction of the capitalist system. We will now look at these arrangements in detail.


It is somewhat odd at first that Schumpeter identifies patents as one of his restrictive practices that inhibits technical innovation since, in principle, the purpose of patents it to encourage the development of new technologies. [18] Of course, in a very narrow sense, patents are essentially restrictive since they serve to put legal limits on the use of a practice or technology. As Christopher May and Susan Sell describe,

Intellectual property [of which patents are one form] constructs a scarce resource from knowledge or information that is not formally scarce. Unlike material things, knowledge and information are not necessarily rivalrous, and therefore coincident usage seldom detracts from social utility. Whereas two prospective users must compete to use a material resource (And this competition may be mediated through markets and the setting of a price), two or more users of any particular item of knowledge or information can use it simultaneously without competing. [19]

The logic of this restriction is that, by creating an artificial monopoly around a form of knowledge, the law ensures that the creator will be able to make money selling it (or at least more money than they would if they had competition). By doing this, the law provides an increased incentive to create and innovate. Alternately, if "information is not property, the incentives to create it will be lacking. Patents and copyrights are social innovations designed to create artificial scarcities where none exist naturally... These scarcities are intended to create the needed incentives for acquiring knowledge." [20]

Why then identify patents as a restrictive practice if, in theory, they serve instead to encourage innovation and change? At the very least, for Schumpeter, patents serve as a restrictive practice since they give the company introducing the innovation a level of certainty and stability through their property in the innovation in question, allowing them to determine how and to what extent the innovation will be introduced, rather than having to react to the competitive pressures of the market as a whole. This can frequently mean that the innovation will be introduced and utilized in a suboptimal manner. May and Sell describe James Watt's refusal to license his steam engine patent, requiring that all engine construction and sales go through him: "By doing so he may have 'held back the development of the metalworking industry for over a generation'. Had his monopoly expired in 1783, England might have had an extensive railway system much sooner." [21] If a single patent can have this kind of effect on the progress of technical innovation, it is not surprising that businesses frequently look at the acquisition of patents as a way of controlling the market. [22] More than this, the legal structure of patents creates a potential barrier to entry as the cost of defending them tends to discriminates against smaller and weaker entrepreneurs, in favour of stronger interests.

This function of patents as a way of inhibiting, rather than encouraging, technical innovation becomes even more acute as contemporary post-industrial economies become more dependent on intellectual property as a source of value. With the rising value of intellectual properties, we increasingly see what Arti Rai and Rebecca Eisenberg term "upstream patenting," which is to say patenting not just "end products" but also "fundamental discoveries that provide the knowledge base for future product development." [23] Scientific and technological progress has always depended on a certain amount of openness and free exchange of ideas, especially in the realm of pure research. New patenting strategies, however, seek to close off this openness, because of the developer's fear of losing control of the potential value of a discovery. This is dangerous because "[u]pstream patents may also hinder subsequent research if they give a single entity monopoly control of basic research discoveries that enable subsequent investigation across a broad scientific territory." [24] The open space of scientific discussion and debate has been replaced by a "patent thicket" in which researchers are frequently incapable of affording access to necessary forms of knowledge, and are afraid to act because of the threat of legal ramifications. This leads some writers to speak of the creation of an "anti-commons" [25] in which the collective knowledge of human effort is increasingly parceled off to individual ownership.

Software development constitutes another area (and a particularly crucial one in the context of the contemporary information economy) in which patents can serve to inhibit innovation. Patent laws in the US allow developers to patent not just entire applications, but any component part of the program, including tools, algorithms, or even a particular combination of existing technologies or ideas. As all the individual building blocks of computer code begin to be patented, it becomes almost impossible to write a computer program that doesn't infringe on one patent or another. [26] For the large corporations this isn't a problem, as they each tend to possess large patent portfolios, which they can then cross-license against one another, ensuring that they are able to make software unobstructed. For smaller developers, however, the choice is to either pay the license, which can frequently make the software unprofitable, or work around the patent, which is time-consuming and might not even be possible. The effect of patents on software development is therefore much the same as the effect of "upstream patenting" on scientific research: the existence of a monopoly over the tools for the production of new knowledge.

In patents we thus see an instrument which fits nicely with capitalism's ambiguous relationship with technological innovation. Patent law provides a legal structure for the ownership of knowledge, a way of encouraging innovation, while in turn that same structure provides a measure of control over that knowledge. Patent law turns what is potentially a public good into private property, making scarce what is not by nature. It turns the unruly progression of human knowledge into another commodity to be privately held, controlled and deployed for profit.

Monopolistic Practices

In addition to patents, Schumpeter identifies another mechanism of control, what he terms monopolistic practices, which refers to the economic powers that a large-scale concern is able to wield over the market. In Schumpeterian language, a firm need not be a full monopoly, which is to say in complete control of a particular commodity or market, to employ monopolistic practices. It must simply be able to exert a certain amount of autonomous control over the market, either alone or in concert with a few other concerns (it might be more accurate to call these practices oligopolistic but for the time being we will stick with Schumpeter's terms). Patents and monopolistic practices are not entirely unrelated, as patents confer a sort of monopoly and large corporations are able to more effectively acquire, enforce and contest patents. Large-scale concerns are able to use their power to inhibit technological innovation where it might threaten the existing forms of production. Thus, says Schumpeter,

Progress entails, as we have seen, destruction of capital values in the strata with which the new commodity or method of production competes. In perfect competition the old investments must be adapted at a sacrifice or abandoned; but when there is no perfect competition and when each industrial field is controlled by a few big concerns, these can in various ways fight the threatening attack on their capital structure and try to avoid losses on their capital accounts; that is to say, they can and will fight progress itself. [27]

Where the innovation is the result of the firm's own research, it can be introduced slowly, after current fixed capital investments have already been written off. [28] If the innovation comes from a smaller competitor, the concern can use patents and legal challenges to delay the introduction, or simply buy out the competitor and shelve the innovation.

Though large corporations are capable of delaying technical innovation in the short term, Schumpeter is not concerned about their ability to substantially diminish or block progress: "The power to exploit at pleasure a given pattern of demand -- or one that changes independently of the monopolist's action and of the reactions it provokes -- can under the conditions of intact capitalism hardly persist for periods long enough to matter for the analysis of total output." [29] Monopolistic practices thus serve as a way of slowing down or smoothing out the abrupt and destructive consequences that technical innovation can have. This is useful not just for the individual concerns, says Schumpeter, but for the market in general, which can potentially be thrown out of equilibrium, or drop into a depression, through the destruction of capital attendant to technical innovation:

'Restraint of trade' of the cartel type as well as those which merely consist in tacit understandings about price competition may be effective remedies under conditions of depression. As far as they are, they may in the end produce not only steadier but also greater expansion of total output than could be secured by an entirely uncontrolled onward rush that cannot fail to be studded with catastrophes. [30]

Though Schumpeter may be relatively unconcerned with the effect of monopolistic practices, later theorists argue that this is because he was writing before the true ascendancy of the large scale concern or corporation and had yet to see what real monopolistic practices could be deployed in the market. [31]

According to Baran and Sweezy, in Schumpeter's time there were still enough small scale economic firms to ensure that new technical innovations would eventually, if slowly, work their way into the market. However, with the rise of what they term "monopoly capitalism," which is to say the rise of the market being primarily dominated by large corporations which are able to express monopoly-like control (and which relate to one another according to principles of "corespectivity," rather than traditional economic competition), there is no longer the same competitive pressure to innovate, or to take account of innovations produced by others. Once the "largest-scale unit of control" has taken over, "the new commodity, the new technology, the new source of supply, the new type of organization" all tend to be monopolized by a handful of giant corporations. [32]

As a result of this, innovations are typically introduced (or soon taken over) by giant corporations which act not under the compulsion of competitive pressures but in accordance with careful calculations of the profit-maximizing course. Whereas in the competitive case no one, not even the innovating firms themselves, can control the rate at which new technologies are generally adopted, this ceases to be true in the monopolistic case. It is clear that the giant corporation will be guided not by the profitability of the new method considered in isolation, but by the net effect of the new method on the overall profitability of the firm. And this means that in general there will be a slower rate of introduction of innovations than under competitive criteria. [33]

Baran and Sweezy argue that "this means that Schumpeter's perennial gale of creative destruction has subsided into an occasional mild breeze." [33]

The ability of large corporations to exert monopoly-like economic power in the market affects both the pace and direction of technical change. In the most basic sense, this can mean the general production of sub-optimal technology (sub-optimal both in terms of what is available according to existing technologies and in terms of inadequate research and development). One example of this is what's commonly known as planned obsolescence. [34]

However, this capitalist reticence towards technical innovations need not be based solely on fear of competition or being supplanted in the market. New technical innovation, even when not in conflict with existing productive processes, and when developed by one of the large concerns, might still be deemed undesirable due to the way that they subvert the existing principles of capitalist organization and private property regimes.

Take, for example the development of certain information and communication technologies. New communication technologies allow for a more fluid and decentralized distribution of information and decision making, thus making numerous processes within production and exchange potentially more efficient. As Peter Meiksins describes,

One of the potential consequences of the new technologies is to create a technological basis for alternative ways of organizing economic activity, for pushing further some of the embryonic efforts to decentralize economic activity.... Since these technologies facilitate rapid communication over long distances, it now is possible for widely separated enterprises to coordinate their activities. Moreover, since they are also able to provide individuals and/or enterprises with sophisticated, up-to-date information about markets, the behavior of other actors within the technological network and other relevant matter, those individuals and/or enterprises no longer need to be confined within rigid, prescriptive plans and procedures set well in advance. Instead, with an understanding of what is expected of them, they can react autonomously and creatively to the information provided through the technological link. [35]

The trouble is, however, that decentralizing information and allowing for autonomous and creative decision making accelerates and exacerbates elements of uncertainty and unpredictability that we have described as being uncomfortable for capitalist enterprises, as well as subverting hierarchies of control present in most corporations. As such, moments of autonomy and creativity are to be kept to a minimum. Frequently, rather than taking advantage of these opportunities, capitalist enterprises will instead use these new information technologies as a way of surveilling and controlling more completely the actions of workers and consumers -- even when this is less efficient, and less desirable to the consuming public.

The individual capitalist is thus torn between two separate drives: the first the drive to innovate, to make things more flexible and efficient, the second the drive to conserve, to maintain stability, control and capture. Meiksins shows how the banking sector provides a key example of this tension:

In the case of banking, the contradictions are... obvious. Systems are installed with the explicit purpose of reducing teller discretion, replacing middle level management, and increasing centralized control over information flow and the behaviour of employees. Yet, at the same time, under pressure from external markets to extend the range of banking services available to customers, banks are forced to "upgrade" tellers; the new technology is used to provide tellers with information and abilities that they can use to sell a wider variety of banking services and products to customers. Banks are clearly uncomfortable with this contradiction, and do whatever they can to limit and "program" away teller discretion. Nevertheless, the underlying contradiction does not disappear and the possibilities of the new technology cannot be entirely suppressed. [36]


This tension between technical innovation and established interests, between creative destruction and restrictive practices, between progress and control, lies at the heart of the capitalist assemblage. Deleuze and Guattari map this tension theoretically in the image of capitalism as both a machine for the decoding and deterritorialization of flows and as an apparatus of capture. By pursuing this tension through Deleuze and Guattari's analysis, however, we can go beyond the duality of Schumpeter's account, uncovering a more volatile and multifarious capitalism than even the prophet of creative destruction imagined.

The capitalist axiomatic is marked by two drives: the accelerative and the conservative. On the one hand, it decodes and deterritorializes flows, freeing up stocks of goods, people, knowledge, money, etc. that might be immobilized by tradition or insufficient technological advances. The capitalist axiomatic, as Marx tells us, drives to break every barrier and loose every fetter. In this regard, it must reject the sovereign overcodings which necessarily territorialize and block these flows.

And yet, just as this deterritorializing movement pushes towards the "infinite," [37] towards an absolute deterritorialization, the capitalist axiomatic must function as an apparatus of capture and reterritorialize these flows back "on the full body of capital," [38] which is to say immanently reintegrate them into the orderly process of capitalist production (which, as we saw above, is willing to tolerate surprisingly little in the way of novelty, disorder and dynamism).

Thus, in contrast to the image we saw in the introduction, capitalism is not synonymous with innovation and progress, is not defined purely by an inherent dynamism, because it only ever effects "relative breaks, because it ... maintains the energy of the flows in a bound state on the body of capital as a socius that is deterritorialized, but also a socius that is even more pitiless than any other." [39] At the same time as it has a tendency to overcome limits, "capitalism only functions on condition that it inhibit this tendency, or that it push back or displace this limit, by substituting for it its own immanent relative limits, which it continually reproduces on a widened scale. It axiomatizes with one hand what it decodes with the other." [40] Even as capitalism is driven to innovate for the purposes of efficiency, it needs to ensure that this innovation does not require the supplanting of core capitalist axioms of control and coherence over the productive processes (the case of the banking industry's struggle with the trade off between flexibility and control is instructive here).

Deleuze describes this conservative drive in terms of the creation of blocks of antiproduction which stop production and innovation from "getting away from" the capitalist axiomatic and running roughshod over the calm and orderly process of production. Thus, the axiomatics of antiproduction "double the capital and the flow of knowledge with a capital and an equivalent flow of stupidity that also effects an absorption and a realization that ensures the integration of groups and individuals into the system. Not only lack amid overabundance, but stupidity in the midst of knowledge and science." [41]

What we have then is a tension between two opposing forces, one innovative and deterritorializing and the other conservative and reterritorializing. However, let us not make the mistake of conceiving of this duality of forces as some manner of dialectical contradiction which will be resolved in a future synthesis. This duality of forces is constitutive of capitalism, and therefore cannot be resolved. The best that can be hoped for is the contingent and aleatory stabilization of the conflict somewhere between the two ideal poles of creativity and control. This is one of the roots of the sheer multiplicity of forms of capitalism we see in the world. Different capitalisms -- and different sectors within different capitalisms -- produce and are produced by different negotiations between these warring forces. Where the balance between these opposing forces will be established is the result of multiple factors within the capitalist assemblage in which they take place, including cultural practices, legal structures, political formations, business and management cultures, material conditions, etc., all of which are themselves the aggregate results of countless micro-level decisions. [42] Thus on the one hand we might see a manufacturing sector which inclines towards conservatism, even in the face of a declining rate of profit, [43] while on the other hand we might see a financial sector which inclines towards greater risk and innovation in pursuit of new investment opportunities (for example, the development of increasingly esoteric credit instruments which lie at the heart of the current economic crisis).

The stabilizations achieved between these various conflicting forces are always contingent, contingent both because they are the result of complex and innumerable decisions made at a variety of levels (and hence not the result of an immutable economic or technological logic unfolding in teleological time), but also contingent since they do not fundamentally resolve the contradiction between these opposing forces; they merely negotiate between them and produce a temporary equilibrium. As time progresses, these opposing forces will require new negotiations in response to new dangers. If a particular market cleaves too closely to the conservative pole, we will potentially see its collapse (the failure of the "big three" automakers in America, for example). Conversely, we are currently seeing what happens when the creative impulse in capital markets is pushed beyond the capitalist axiomatic's limit of coherence and control. In this regard we see how deterritorialized flows which escape reterritorialization can potentially become unreterritorializable "lines of death." [44]

Deleuze and Gauttari remind us, however, that there is another possibility for the deterritorialized flows that capitalism is so driven to produce. In addition to spiraling off into nothingness, or being relatively reterritorialized onto the body of capital, there is also the possibility that they might be absolutely reterritorialized onto another plane of immanence. Deterritorialized flows might become lines of flight, leading to potentially non-capitalist spaces. This is of interest to those of us who see in technological innovation at least the potential of a challenge to capitalism. We might look to the possibility of taking advantage of those deterritorialized flows which capitalism produces and turning them against it, exacerbating them, using them as lines of flight and escape that might lead us to new and different worlds.

As an example of how technological innovations can turn against the capitalist axiomatic, in the next section we will turn to the specific case-study of the development of new information technologies. Here we will see a line of deterritorialization that the capitalist axiomatic is unable to comfortably reterritorialize relatively, and which has the potential to turn into a line of flight that might be absolutely reterritorialized on a whole different plane of immanence. This is to say that we see how a deterritorialized flow might, if pushed beyond the comfort level of the capitalist axiomatic, produce a non-capitalist regime or practice.

Information Technology and Intellectual Property Rights

We can start by looking at one particular aspect of information technology, the drive for the increased digitalization of information: "Digitalization has removed the quality/copy trade-off, by allowing generational copies to be, for all intents and purposes, exact copies of the original digital artifact... a 'frictionless environment' for content, where successive copies do not degrade..." [45] There are countless ways in which this digitalization has been useful to business, both in terms of production and day-to-day operations. From the ability to speed up internal communication, to making production and delivery of music, books and film cheaper and more efficient, digitalization perfectly serves capitalism's internal drive to decrease production and circulation time and accelerate capital as value-in-motion.

The problem however is that, as digitalization produces a "frictionless environment," producers are increasingly incapable of maintaining control over content. Digitalization "immediately raises the potential threat that once a digital good is distributed, unauthorized copies can compete throughout its market for consumer use." [46]

Once the digitalization of content combined with widespread access to high-bandwidth networks (as well as increasingly cheap memory) it became feasible to share digital content with people anywhere in the world. This ability lead to the rise of Peer-to-Peer software (P2P) such as Soulseek or BitTorrent, which allowed individuals to search the collections of all other users on the network and download from them. The potential to freely distribute information was seen as a deep threat to the ability of corporations to control their products. According to the Recording Industry Association of American [RIAA], "estimate[s] for worldwide losses in 1994 was $2.245 Billion," [47] and the Business Software Alliance claims that "losses to the worldwide software industry caused by the use of unlicensed software were said to amount to US$10.97 billion in 2001." [48]

In response to the loss of control over content brought about by these new technologies, the content owners have sought to employ the restrictive practices with which we are now familiar. In the first instance, the media concerns sought to use legal power against illegal copying. The RIAA, for example, in 2003 began a campaign of tracking down and suing music downloaders for copyright violations. [49] In concert with this increased enforcement has been a push for an increased scope and power of copyright laws. For example, "[o]ne of the more notorious measures is the Digital Millenium Copyright Act (DMCA), an act of US congress...whose purpose is to update US copyright laws for the digital age." [50] The DMCA allows for quicker enforcement of copyright law through the use of "take-down notices" which need not go through the courts.

This deployment of legal power was then backed-up by a deployment of economic power to decrease the speed and flexibility of information technology. One way this was done was through the introduction of what are termed Digital Rights Management (DRM) technologies, the introduction of code into digital content and players that limits their ability to be used for piracy purposes. What is important to understand is that the use of DRM technology exists solely for the purpose of increasing the ability of copyright holders to control their content and necessarily results in the production of sub-optimal technology. DRM decreases the speed, ease and flexibility of information technology, making interoperability more difficult, and even disabling the ability to use it in non-infringing, but also non-authorized ways (such as Fair Use, or using digital technology to produce and play independent media created and distributed for free). Indeed, DRM technology frequently makes digital technology less functional than the non-electronic equivalent, inhibiting the ability to do such things as make back-up copies, use small portions for personal use, or even lend it to a friend. DRM necessarily makes information technology worse. It attempts to reverse the effects of the "frictionless environment" that digitalization introduced. Here, we can think back to Deleuze and Guattari's reference to doubling the flow of information with a flow stupidity.

This is particularly important in the context of a culture in which media consumers are frequently also becoming media producers. Remixing, mash-ups, self-publishing, micro-low-budget filmmaking: all of these new forms of independent media production are aided by the increasing fluidity of digital media. Technologies such as DRM make it more difficult for independent producers to use new media technologies, and hence potentially ensure the monopoly of large media concerns over content production.

In response to this purposeful sub-optimalization of digital technology, individual users all over the world have taken to trying to overturn DRM technology. Hackers figure out how to break encryption technology on DVD's, strip DRM out of music files, crack software and open up music and video players for unrestricted use. In response to this, media conglomerates have returned to legal powers as way of protecting their sub-optimal technology. Another, and perhaps more disturbing, aspect of the DMCA is that it "prohibits circumvention of any technological protection against copying and prevents the production of any device or provision of any service designed to defeat protection mechanisms." [51]

This tension between the potential of information technologies and the attempts to control them, both through legal and economic means, has lead to a struggle between producers and users. As media corporations try to close Pandora's box and reacquire the control over information that they lost with the development of digital technology, users have become increasingly enchanted with the possibilities that these technologies provide, and frustrated with attempts to block their use and development. The work hackers have done is just one element of a more generalized push to take advantage of the speed and flexibility of digital technologies, and take control of the possibilities that they offer. Indeed, these individual acts of technological subversion, frequently undertaken for self-interested reasons (not that that makes them illegitimate), have begun to percolate into broader social and political positions. As people see how digital technologies allow for information to be easily shared and re-mixed, used and combined, they begin to question the current structure of intellectual property and the types of control it seeks to exercise. As a result certain groups have begun to develop new ways to think about intellectual property.

One example of the attempt to develop a new intellectual property regime is seen in the "Creative Commons" license:

The Creative Commons is a non-profit corporation established in Massachusetts, but with its home at Stanford University. Its aim is to build a layer of reasonable copyright on top of the extremes that now reign. It does this by making it easy for people to build upon other people's work, by making it simple for creators to express the freedom for others to take and build upon their work. Simple tags, tied to human-readable descriptions, tied to bulletproof licenses, make this possible. [52]

Creative commons licensing allows creators to give away, up front, the right to use their work in specific ways.

The most interesting thing about the use of Creative Commons licensing for our purposes is the way in which it begins not from the primacy of the singular author as the agent of creativity but instead from the commons. As knowledge producers (whether in the arts or sciences) become aware of the ease with which communications technologies can facilitate collaboration, and as users become increasingly used to forms of knowledge production based on the explicit use and repurposing of old knowledge objects (everything from software development to music remixing), the idea of creativity as the gift of a sole agent begins to wane in favour of an image of a vibrant commons of intellectual labour. [53] The creative commons license is not "anti-capitalist" per se. What it does do is re-introduce the notion of the commons as a central figure in the innovation of human knowledge.

A similar set of challenges to the maximalist form of intellectual property rights comes from the Free Software foundation and the idea of Free Software/Open-Source Software (FS/OSS): "FS/OSS is software whose source code is shared. Anyone can download the technology that makes a FS/OSS program run. And anyone eager to learn how a particular bit of FS/OSS technology works can tinker with the code." [54] To call it "free" software does not mean that it is given away for no charge. What it does mean is that the software is free of any copyright rules or restrictions which would inhibit your ability to use, change, or even share the program. Free Software is distributed on a special copyright license that producers call "copyleft::

Copyleft uses copyright law, but flips it over to serve the opposite of its usual purpose: instead of a means of privatizing software, it becomes a means of keeping software free. The central idea of copyleft is that we give everyone permission to run the program, copy the program, modify the program, and distribute modified versions -- but not permission to add restrictions of their own. Thus, the crucial freedoms that define "free software" are guaranteed to everyone who has a copy; they become inalienable rights. [55]

The use of copyleft turns copyright against itself. Copyleft not only releases information into the public domain, but ensures that anyone who wants to use that information will also have to contribute to the public domain. It is thus an engine for growing the intellectual commons.

The FS/OSS movement, though constrained to a narrow (though increasingly important) sector of production, challenges the current property regimes and seeks to encourage a mode of production based on ethical and intellectual beliefs in collaboration and community.

In addition to those actively trying to promote alternative intellectual property regimes, there are multiple groups trying to affect the functioning of the current regime, such as the Electronic Freedom Foundation and The Association for Progressive Communication, both of which "attempt to influence the global communications policy agenda from a civil society perspective." [56] In addition to these specific organization "[m]ajor Foundations, such as the Ford Foundation, Markle Foundation, and George Soros' Open Society Institute, have supplied critical funding and encouragement to bring civil society actors interested in information and communication technologies together." [57] Thus we see how the development of technological lines of deterritorialization can become lines of flight, leading from the capitalist axiomatic to new organizations of law, right, politics and economics (not to mention artistic and scientific innovation).

It's true that none of these organizations or movements are explicitly "anti-capitalist." However, all advance ideas which begin to challenge the current intellectual property regime, and also challenge central axioms of capitalist production, consumption, labour and organization. In the case of the alternate intellectual property regimes we discussed, though they do not separate themselves from the capitalist market (indeed, they build on the current existing intellectual property regime), they do challenge it by opening up new spaces, showing new possibilities for production (the essential nature of the Creative Commons is to give away your property rights, to allow others access to that which is supposedly yours). Indeed, we should not conceive of the idea of absolute reterritorialization as the complete rejection of all capitalist principles ( and even less as a revolutionary overthrowing of the capitalist regime), nor should we conceive of a non-capitalist plane of immanence as one that is completely separate from the capitalist axiomatic. Such binary duality between the capitalist and the non-captialist is unnecessary. For a line of flight to be absolutely reterritorialized on a new, non-capitalist plane of immanence, it need only function in such a way as to challenge one or more of capitalism's central axioms and open up a space for alternative production or consumption. It may continue to enter into assemblage with the capitalist axiomatic (indeed, given the capitalist axiomatic's scope and intensity in late modernity, it would be almost impossible for it not to). However, in doing so, it forces a change in the territory of the capitalist assemblage, expanding its borders and challenging its axioms.

In this case, we see a collection of actors and organizations that advance the idea that innovation and progress are better served and encouraged through some element of common ownership of human knowledge, rather than exclusive private property. Note that this is a fairly radical claim. It is one thing in this day and age to challenge the justice and equity of capitalism. But to charge it with inefficiency and conservatism is to strike where it is supposedly strongest. These organizations have seen the opportunities that new information and communications technologies provide, how much easier they make collaboration and cooperation, how they make possible the leveraging of mass collective action for problem solving and production.

The purpose of this account is not to suggest that digital technologies are the gateway to a glorious post-capitalist utopia. Nor is it to argue that if we manage to overcome DRM technology capitalism will have been defeated. [58] Rather, it is to point out that, in the face of all of the discussions about the wonders of post-industrial info-capitalism, capitalism and digital technologies do not fit together perfectly, but rather exist in an uneasy tension. By looking out for fault-lines between particular innovations and particular capitalist axioms we can see and develop potential sites of resistance. And by having an open and experimental attitude towards economic and technological practices, [59] we can potentially take advantage of new technologies and push them into new, unexplored spaces -- spaces of imagination, innovation, community and equality.


[1] Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York: Harper Perennial, 1950) 31-32.

[2] Gilles Deleuze and Felix Guattari, Anti-Oedipus Trans. Robert Hurley, Mark Seem and Helen R. Lane (Minneapolis: U of Minnesota P: 1983) 246.

[3] See, for example, the discussion of the Frankfurt school's account of technology in Moishe Postone's Time, Labor and Social Domination (Cambridge: Cambridge U P, 2003).

[4] Schumpeter, A Theory of Economic Development ch. 1.

[5] Ibid. 11.

[6] Ibid. 79.

[7] Ibid. 82-83.

[8] For Schumpeter, innovation can include a number of different phenomena, including 1) "the introduction of a new good...or a new quality of a good"; 2) "The introduction of a new method of production"; 3) "The opening of a new market, that is a market into which a the particular branch of a manufacture of the country in question has not previously entered"; 4)"The conquest of a new source of supply of raw materials or half-manufactures goods"; 5) "The carrying out of the new organization of any industry. " See Joseph A. Schumpeter The Theory of Economic Development Trans. John E. Elliot (New Brunswick: Transaction Publishers, 2002) 66.

[9] Please note that the invocation of "spontaneous" and "endogenous," is not meant to suggest either the primacy, or conceptual distinctness, of the economic sphere. It's merely meant to identify technical innovations as something which serves a purpose within economic production, and therefore something sought after by capitalist enterprises.

[10] Ibid. 66.

[11] Schumpeter, Capitalism, Socialism and Democracy 84.

[12] Ibid. 87.

[13] Ibid. 88.

[14] Schumpeter, A Theory of Economic Development 9.

[15] Schumpeter, Capitalism, Socialism and Democracy 88.

[16] Ibid. 102.

[17] Ibid. 87.

[18] James Boyle, Shamans, Software and Spleens: Law and the Construction of the Information Society (Cambridge: Harvard U P, 1996) 43.

[19] Christopher May and Susan K. Sell, Intellectual Property Rights: A Critical History (Colorado: Lynne Rienner Publishers, 2006) 5.

[20] Kenneth Arrow in Ibid. 22.

[21] May and Sell, Intellectual Property Rights 38.

[22] May and Sell make a convincing argument that the real genius of famed inventor Thomas Edison lay primarily in his ability to manipulate patents. Ibid. 122.

[23] Arti K. Rai, and Rebecca S. Eisenberg, "Bayh-Dole Reform and the Progress of Biomedicine" Law and Contemporary Problems 66, Nos. 1 and 2. 289.

[24] Ibid. 296.

[25] See Keith E. Maskus and Jerome H. Reichman, "The Globalisation of Private Knowledge Goods and the Privatisation of Global Public Goods" Journal of International Economic Law (June 2004) 3.

[26] "This is why software patents tend to obstruct the progress of software -- the work of software development. If it were 'one patent, one product,' then these patents wouldn't obstruct the development of products because if you develop a new product, it wouldn't be patented by somebody else already. But when one product corresponds to many different ideas combined, it gets very likely your new product (either part or all of your product) is going to be patented by somebody else already." Richard K. Stallman, Free Software, Free Society Ed. Joshua Gay (Boston: Free Software Foundation, 2002) 105-106 .

[27] Schumpeter, Capitalism, Socialism and Democracy 96.

[28] Ibid. 98.

[29] Ibid. 99.

[30] Ibid. 91.

[31] Paul A. Baran, and Paul M. Sweezy, Monopoly Capital: An essay on the American economic and social order (New York: Monthly Review P, 1966) 6.

[32] Ibid. 74.

[33] Ibid. 94-95.

[34] Ibid. 74.

[35] "Monopolists generally have an incentive to produce goods with inefficiently short useful lives." Jeremy Bulow, "An Economic Theory of Planned Obsolescence" The Quarterly Journal of Economics November 1986. 746.

Indeed, more than just this matter of the quality of goods, monopolistic actors can control the type of innovation, channeling research and development into sub-optimal directions. Thus "a monopolist might consciously forego development of a socially desirable technology in order to develop and utilize a socially undesirable alternative. In so doing, he effectively prevents development of the socially desirable technology."

William James Adams and David Encaoua, "Distorting the direction of technological change" European Economic Review 38 (1994) 664.

[36] Peter Meiksins, "Work, New Technology, And Capitalism" Monthly Review 48, no. 3 (July/Aug96) 99, 3.

[37] Ibid. 5.

[38] Karl Marx, Grundrisse Trans. Martin Nicolaus (London: Penguin Classics, 1973) 334.

[39] Deleuze, Anti-Oedipus 255.

[40] Ibid. 246.

[41] Ibid. 246.

[42] Ibid. 236.

[43] The implication of this form of analysis is a fundamental rejection of either economic or technological determinism, arguing that technological effects can only be understood in the context of a much broader social assemblage.

[44] Gilles Deleuze and Felix Guattari, A Thousand Plateaus (Minneapolis:U of Minnesota 1987) 229-231.

[45] May and Sell, Intellectual Property Rights 183.

[46] Ibid.

[47] Boyle, Shamans, Spleens and Software 121.

[48] Ronald J. Deibert, "Black Code: Censorship, Surveillance and the Militarisation of Cyberspace" Millennium: Journal of International Studies 32, no. 3 (2003) 506-507.

[49] Electronic Frontier Foundation RIAA v. The People: Four Years Later

[50] Deibert, "Dark Code" 507-508

[51] May and Sell, Intellectual Property Rights 181

[52] Lawrence Lessig, Free Culture: The Nature and Future of Creativity (New York: Penguin Books, 2004) 282

[53] Indeed, some authors go so far as to note that "an authored-centered regime can actually slow down scientific progress, diminish the opportunities for creativity, and curtail the availability of new products." Boyle, Shamans, Spleens and Software 119

[54] Lessig, Free Culture 46

[55] Stallman, Free Software, Free Society 20

[56] Deibert, "Black Code" 525

[57] Ibid.

[58] Indeed, we're increasingly seeing major media companies giving up on DRM based strategies and moving to other avenues for protecting content.

[59] For a discussion of the importance of experimentation in economic theory and practice see J.K Gibson-Graham, A Postcapitalist Politics (Minneapolis: U of Minnesota P, 2006).

Simon Glezos is is a postdoctoral research fellow at the Pacific Center for Technology and Culture at the University of Victoria, and also teaches in the department of Political Science. He has a Ph.D. in political theory and international relations from the Johns Hopkins University. He writes on issues of speed, technology, warfare, capitalism and globalization, and has articles forthcoming in CTheory and Contemporary Political Theory.