💾 Archived View for library.inu.red › file › eric-fleischmann-nfts-suck-for-labor.gmi captured on 2023-01-29 at 09:31:21. Gemini links have been rewritten to link to archived content

-=-=-=-=-=-=-

Title: NFTs Suck for Labor
Author: Eric Fleischmann
Date: November 16th, 2021
Language: en
Topics: crypto, labor theory of value, Laurance Labadie, commodity
Source: Retrieved on 1/1/22 from https://c4ss.org/content/55526
Notes: Post-publication edits noted in original

Eric Fleischmann

NFTs Suck for Labor

It’s best to start this piece off by admitting that I am not

particularly tech-savvy. I am a cheerleader for open-source,

peer-to-peer, decentralized, appropriate, etc. technology, but,

otherwise, I am only about as knowledgeable about this stuff as your

average zoomer.[1] However, some things in the technological and digital

world appear quite obvious to me. For example, the latest cancerous

offshoot of the private property regime has arrived: the NFT (a term you

may have recently come across on the Internet). An abbreviation for

‘non-fungible token,’ these tokens, as Robyn Conti and John Schmidt

describe for Forbes, are…

a digital asset that represents real-world objects like art, music,

in-game items and videos. They are bought and sold online, frequently

with cryptocurrency, and they are generally encoded with the same

underlying software as many cryptos.

Although they’ve been around since 2014, NFTs are gaining notoriety now

because they are becoming an increasingly popular way to buy and sell

digital artwork. A staggering $174 million has been spent on NFTs since

November 2017.

They are called ‘non-fungible’ because, unlike conventional

cryptocurrencies, they cannot be traded/exchanged for one another. In

its basic function, NFTs allow someone to purchase the rights to the

original version of a piece of media and then, by means of blockchain

(decentralized lists of records maintained through networked

cryptography), they can be authenticated as the actual owner regardless

of how many times and in what ways it has been shared.

The conventional left-labor critique of this phenomenon is obvious:

private property is fundamentally anti-social and so any expansion of

private property into the digital realm will produce primarily negative

ends. However, the broader critique of intellectual property pre-dates

the Internet by decades and has primarily been the domain of the

individualist anarchists and mutualists. The great individualist

Benjamin Tucker writes:

[T]he patent monopoly, which consists in protecting inventors and

authors against competition for a period long enough to enable them to

extort from the people a reward enormously in excess of the labor

measure of their services, – in other words, in giving certain people a

right of property for a term of years in laws and facts of Nature, and

the power to exact tribute from others for the use of this natural

wealth, which should be open to all. The abolition of this monopoly

would fill its beneficiaries with a wholesome fear of competition which

would cause them to be satisfied with pay for their services equal to

that which other laborers get for theirs, and to secure it by placing

their products and works on the market at the outset at prices so low

that their lines of business would be no more tempting to competitors

than any other lines.

And this line of thinking is continued into the 20th Century by Laurance

Labadie, who writesthat some of the main “restrictions to free

production and distribution are patents, copyrights, and tariffs” and

into the 21st Century by Carson, who writes that “enclosure, via

‘intellectual property,’ is why Nike can pay a sweatshop owner a few

bucks for a pair of sneakers and then mark them up to $200. Most of what

you pay for isn’t the actual cost of labor and materials, but the

trademark."[2] And as such, IP works, as all monopolies do, to restrict

free production and voluntary exchange and thus artificially shift the

price of goods above the cost of production; the market equilibrium of

the labor theory of value as it is presented in modern interpretations

by Laurance Labadie and Carson.[3] These two thinkers write,

respectively, that “it may be said that, granting free competition, that

is, free and equal access to the means of production, to the raw

materials, and to an unrestricted market, the price of all articles will

always tend to be measured by the effort necessary for their production.

In other words, labor as a factor in measuring value will become

predominant” and that “[i]n an economy of distributive property

ownership . . . time-preference would affect only laborers’ calculations

of their own present consumption versus their own future consumption.

All consumption, present or future, would be beyond question the result

of labor.”

But why is intellectual property and its effect on pricing being

discussed here? NFT ownership is ‘enforced’ through blockchain, not by

the government, right? It’s not actually copyright or anything? Correct,

NFTs are not the same as copyright or any other kind of IP. David

Lizerbram & Associates write that NFT owners…

have the right to own, sell, lend, or otherwise transfer the NFT itself.

They don’t (unless they own the copyright) have the right to make or

sell copies of the digital art, to transfer the copyright in the work,

or to create derivative works based on the original.

The “right to make copies” bit is messy in the digital world. For

example, if I buy an NFT, and then I post it to Instagram with the

message “Check out this cool NFT that I just bought!”, that’s creating

many more digital copies. But this is true for all kinds of visual art

these days, and the artist is free to go to Instagram and file a

ownership of the NFT wouldn’t make that request invalid unless I also

owned the copyright.

Therefore, NFTs do not directly—at least to a very significant

degree—alter the price of the goods themselves away from the cost of

production, but they do something similar to the ownership of goods,

artificially creating a market in the production of ownership of things

instead of things themselves. This inflates the value of the certificate

from almost zero—the cost of the ‘production’ of the ownership (though

the ‘per-token’ cost of maintaining the blockchain needs systemic

consideration particularly in respect to the environmental externalities

of its overall energy use and carbon emissions and the overall labor, as

will be gestured toward later on, to perpetuate the Internet through

information and technology production)—to the ridiculous price of the

token’s speculative resale value as the ‘original’ version or as part of

an NFT ‘brand,’ thus creating a sense of value totally detached from the

actual labor required for production. Amanda Yeo explains this

proliferation of ‘false’ value in a hypothetical scenario:

I imagine you stumbling through a post-COVID, post-apocalyptic party,

gripping a half-empty beer and shouting in strangers’ ears over pounding

EDM.

“I own @dril’s pinned tweet,” you declare, pronouncing the @ because

that’s the person you’ve become. “Like, the original. I own it.”

“You can’t own someone else’s tweet,” replies your unimpressed victim as

they subtly scan the room for friends. “It’s text on the internet.”

You falter. “No you don’t get it — I tokenised it. I got the original.

All… Everything else, the retweets, they’re all just copies. They don’t…

Mine has value.”

You can’t explain what this value is, but you paid $2.5 million so there

must be value. The thudding song blasting over the speakers drops its

beat. The beat is always dropping. The beat has never dropped. The beat

dropped 13 years ago.

This is basically like if you actually believed buying an ‘acre of the

moon’ or a star granted the same value as an actual acre of the moon or

an actual star and you sold it within a community that somehow agreed

with you.

And this rather gross dystopian vision should distinctly worry advocates

of labor. Firstly—as demonstrated above—it adds to a culture,

particularly on the Internet, that does not understand or accept labor

as being a main definer of value; a culture, it should be noted, that is

only disrupted by the direct action of the working class and through

efforts to widen the distribution of the means of production and

investable wealth. [4] This has been an enormous problem since the

advent of the Internet. As the Wu Ming Foundation writes…

Behind the phantasmagory of the Internet lies a set of definite social

relations, and Marx means production relations, exploitation relations.

The net rhetoric hides these relations. It is indeed possible to talk

about the Internet for hours, days, months, touching only marginally the

issue of who owns it, who is really in control of the nodes, the

infrastructure, the hardware. The pyramid of labour — including

slave-like labour — incorporated into the devices we use (computers,

smartphones, ereaders etc.) and as a consequence into the Internet

itself, is even less discussed. Everyday, corporations expropriate

social wealth on the net, and oppress the working class at each corner

of the Earth behind the scenes.

The Foundation goes further to point out that Facebook and other social

media sites—the platforms which have been and will continue to be

integral to the proliferation of NFTs (Facebook and Twitter are both

looking to integrate them even further)—are largely the product of its

users’ surplus labor. In fact…

“[y]our whole work is surplus work on Facebook, because you are not

paid. Everyday Zuckerberg sells your surplus work—-that is to say, he

sells your life (your sensitive data, your navigation patterns, etc.)

and your relations. He makes several million dollars each day, because

he is the owner of the [means] of production, and you are not.

Information is a commodity. Knowledge is a commodity. In fact, it is the

quintessential commodity in Post-Fordism (or whatever you want to call

it).”

But returning to the matter of anti-labor valuation more generally, this

issue appears, from a Marxist perspective, in all market exchanges—such

as, obviously, NFT transactions—in the form of commodity fetishization,

the false belief that the value of a commodity is somehow intrinsic and

the failure to realize its value as an investment of labor—the

disappearing of social relationships above being the “net” version of

this phenomena. But, for individualist anarchists and mutualists, as is

discussed above, this is not, at least to the degree marxists posit, a

condition of market exchange universally, but rather one enabled by an

economic system—like capitalism—that restricts free competition in

production and exchange, and therefore shifts primarily to defining

value through marginal utility. Both groups would, however, likely agree

that NFTs further integrate this problem into blockchain technology.

But furthermore, it is sometimes argued by those in the neoliberal

center and center-right that IP is essential to protecting ownership of

the products of artistic producers’ labor. The same holds true of

arguments in favor of NFTs, and this is how it has often been presented

to me in my ‘part-time work’ as a punk musician. And for leftists and

pro-labor folks, this may appear to be enacting the slogan “labor is

entitled to all it creates.” Or at the very least it might appear to be

a trick that visual artists, musicians, and writers can take advantage

of to increase their personal profit. Conti and Schmidt argue that…

[b]lockchain technology and NFTs afford artists and content creators a

unique opportunity to monetize their wares. For example, artists no

longer have to rely on galleries or auction houses to sell their art.

Instead, the artist can sell it directly to the consumer as an NFT,

which also lets them keep more of the profits. In addition, artists can

program in royalties so they’ll receive a percentage of sales whenever

their art is sold to a new owner. This is an attractive feature as

artists generally do not receive future proceeds after their art is

first sold.

The picture is far less rosy than they make it out to be though, and Yeo

outlines very clearly why:

There is the argument that NFTs are good for digital artists, as they

enable them to be paid for their work. Currently, images are easily

taken, duplicated, and spread online, often with no credit given to

their original creator. NFTs enable us to hold one up as the one true

original, giving it value and stimulating the arts industry by enabling

collectors to collect. Surely this is a good use of cryptocurrency?

To that I say: If you want a unique artwork, then commission an artist.

If you want to ensure creators are properly compensated for their

labour, then commission an artist. If you’re concerned about the

viability of the arts industry, then commission an artist.

More than this, NFTs don’t even guarantee any money goes to the person

who created the work. As it currently stands, there is nothing stopping

people from simply tokenising other people’s work, claiming it and

profiting off it. In fact it’s already happening. There is even a

Twitter account that will tokenise any tweet for you regardless of

whether or not you yourself wrote it — all you have to do is tag it.

Blockchain technology, particularly cryptocurrencies, are becoming more

and more accessible—and therefore more commonplace—for the average lay

person,* with crypto ATMs popping up all over the place and more and

more countries approving the official usage of cryptocurrencies. Jim

Barth explains that, “[i]nitially a fringe movement supported by a small

fraction of early adopters, the use of cryptocurrencies is following the

trajectory of cell phone adoption, online shopping, touchless payment

systems, and other technological and behavioral evolutions. These

innovations started slowly as well before reaching an inflection point

followed by explosive expansion.” He points out further that “mainstream

payments firms, including PayPal, now offer customers the ability to buy

and sell Bitcoins – or fractions of Bitcoins – from their accounts. And

an increasing number of tech companies, including Square Inc., accept

payments in Bitcoins and hold portions of their cash reserves in the

digital currency. Even VISA has jumped into the fray. Coinbase, the

largest U.S. cryptocurrency exchange, will soon offer a VISA debit card

that lets customers spend Bitcoins from their Coinbase VISA accounts.”

So as this popularity grows, the awful and, honestly, stupid reality of

NFTs for visual artists, musicians, writers, and other artistic

producers must be made clear. [5] NFTs suck for labor.

[1] See Kevin Carson’s The Homebrew Industrial Revolution: A

Low-Overhead Manifesto, Karl Hess’s Community Technology, and E.F.

Schumacher’s Small Is Beautiful: Economics as if People Mattered.

[2] Here, the forms of IP—patent, copyright, trademark—are treated as

amalgamous in their behavior as mechanisms of monopoly.

[3] Economists hate them! Learn this one weird trick!

[4] In the context of the Internet and its technologies, the Wu Ming

Foundation invisions this as a “worldwide alliance between “digital

activists”, cognitive workers, and electronic-industry workers.”

However, “[t]he forms of this alliance, of course, are all to be

discovered.”

[5] The answer for artistic producers is and will always be copyleft and

other strategies of the intellectual and digital commons. Carson

explains, for example, that “file-sharing has destroyed an enormous

amount of total music industry revenue. But the revenue losses have come

entirely at the expense of the record companies and their profits. The

artists themselves have suffered no significant loss, and in fact have

probably increased sales because of file-sharing.” In my experience as a

punk musician (check out my current projects Consumerist, Manbitesdog,

and Soy.), making my music widely and readily available has only

increased my listening base and encouraged people to buy cassettes,

t-shirts, etc. This is a fairly consistent phenomenon across creative

industries, and I firmly agree with Carson that “[f]ree culture benefits

consumers, it benefits artists, and it benefits the general culture. The

only people who don’t benefit are the [parasitic] corporations of Big

Content. Good riddance.”