How capitalism is changing ownership

“The first person who, having enclosed a plot of land, took it into his head to say, ‘This is mine,’ and found people simple enough to believe him, was the true founder of civil society.’

J. J. Rousseau (1754)  

Private ownership is at the core of social inequality, but it represents also a protection for the consumer. The seller transfers his property to the buyer who has full right to use it as he wishes and after all, it seems to follow the way of nature. The endowment effect proves that ownership is something that humans have inside.

The purchase of a book still belongs to this model of ownership and the buyer of the book has the right and the faculty to use it as he wishes. In the case of an ebook, it is different. Do you actually own your ebooks? It is becoming a question with no answer.

Capitalism is determined to leave the consumer without houses, cars, phones, and everything he is accustomed to considering his properties.

Pushed by the saturation to which it is forced by its own nature, capitalism is changing the way a commodity switches from the seller to the buyer. This happens through a change articulated into three processes:

  • Dematerialization of the product

Capitalism, by its nature, devours space and time and for this reason, it has been forced to expand in space through globalization and in time by increasing the speed of the turnover of the cycle of accumulation, production, and consumption. The extension in space and the acceleration in time should not be understood as the effects of the development of technology but rather as the cause. These two processes are accompanied by a third, consequence of the resistance that space and time oppose to capital: the dematerialization of the product.

The dematerialized product has important consequences on production, consumption, and social relations, in fact, it can be moved more easily in space and can be accelerated indefinitely in time and it changes the nature of ownership.

In The fourth industrial revolution (p.26), Schwab tells us that the sharing economy and its platforms lower barriers for businesses and individuals to create wealth. He mentions Uber as a model of ‘rapidly multiplying new services ranging from laundry to shopping, from chores to parking, from home-stays to sharing long-distance rides. They have one thing in common: by matching supply and demand in a very accessible (low cost) way, by providing consumers with diverse goods, and by allowing both parties to interact and give feedback, these platforms, therefore, seed trust.’

Shwab says also that ‘Digital platforms have dramatically reduced the transaction and friction costs incurred when individuals or organizations share the use of an asset or provide a service. Each transaction can now be divided into very fine increments, with economic gains for all parties involved.’ (p.27)

I would like to be so optimistic.

  • Fragmentation of the product

in terms of production, the product is fragmented into many components, some of which are protected by copyright, that allows the owners to hold many rights in their hands. The buyer purchases a product that he should theoretically own, but he ends up having on it just the control he has over the component with the more limited rights.

From ownership to subscription economy
  • The shift from sale to subscription

To answer our original question: ‘Do we really own the ebook we buy?’ In The End of Ownership, Perzanowski says that ‘despite the common sense that would make us say yes, digital retailers insist that ownership depends on the terms of an end user license agreement (“EULA”)—that incomprehensible slew of legalese you reflexively click “I agree”’  and according to them ‘you don’t own the ebooks you bought; you merely license them. That is to say, you have permission to read them. Until one day, you don’t.’ ( p.2)

What is being affirmed is the shift from sale to subscription.

The effects of deownerization

Deownerization has many effects on the relationship between seller and buyer, elite and common citizen, law and common practice, namely the loss of control of the product, its reliability, and its price.

  • The loss of control

At the end of the deownerization prrocess, the control of the use is completely absorbed by the platform and subtracted from the buyer. The property is no longer transferred with all its rights as it happened with a book, but especially for intangible products such as ebooks, online music, or online movies, the use is granted for the time indicated by the contact. Usually, this contract has limited rights and is unilaterally designed by the platform.

  • Reliability

The transition from ownership to subscription leads to lower reliability. if the property is in the hands of the platform, its availability is not guaranteed. The chances that you can watch a movie on Netflix after twenty years of your subscription are not the same provided by an old movie you have on videotape.

The last representatives of the traditional ownership
  • Control of prizes

The platforms have a structure inherently oriented to monopoly and economy of scale and once the monopoly position has been reached, and the traditional products based on ownership are cut out from the market, the control of the prices is almost entirely in the hands of the owners of the platform. Once the record stores are closed, the competitive checks on the price of services like Spotify are weakened.

In the beginning, the consumer defends himself by having access to services such as newspapers, music, and films without subscribing, which means illegally,  but over time the platforms are able to apply much more precise and severe controls and the consumer ends to be at the mercy of higher prices.

Furthermore, in the long run, platforms will be able to make use of algorithms capable of providing information about property values ​​in the neighborhood, checking driving patterns, and car search history that will make it able to predict exactly how much any user is willing to pay for the service.

From consumer to user

In a deownerized economy, the consumer is transformed into a user, and property is transformed into use, subscription, and shared consumption. Both the traditional buyer and seller lose power in favor of the owners of the platforms and the resistance that the buyer could oppose to planned obsolescence and the artificial creation of needs has definitively vanished.

The system moved fast from the client is always right to the client has no rights.

Will it really be, as some supporters of the great reset say, that You’ll own nothing and be happy or will it rather happen that no one will have anything because few, very few, will have everything?

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