Exploring the Virtualization Characteristics of Economic Relations Under Digital Technology

2022, Issue 3

Exploring the Virtualization Characteristics of Economic Relations Under Digital Technology

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Author Introduction

Wang Lin

Lecturer, School of Economics, Shanghai University of Finance and Economics

Abstract

The innovation and application of digital technologies such as the Internet, artificial intelligence, and big data have profoundly changed the forms of economic relations, presenting increasingly distinct virtualization characteristics. These include the subordination of human-machine relationships in production relations, the concealment of labor-capital opposition, and the decentralization of labor relations; the dematerialization of digital codes in exchange relations and the overflow of exchange value; the socialization of distribution contradictions and the reconstruction of distribution patterns; and the bubble-like nature of consumption demand and the production-like nature of consumption processes. The virtualization characteristics depict and characterize the special connotations of economic relations under digital technology compared to previous forms. According to the basic theories of Marxist economics, the virtualization of economic relations does not change the theoretical essence of the interest relationships between people; rather, it is an inevitable result of the interests of capital owners pursuing excess surplus value, promoting the realization of commodity value, and redistributing surplus value. Based on this, the evolution laws and development trends of the virtualization of economic relations still follow the general laws of economic relations, namely, the level of development of digital productive forces determines the degree and form of economic relations’ virtualization, while the nature of basic social ownership determines the attributes and changing trends of virtual economic relations.

1. Introduction

Digital technology acts as a filter, mapping all real economic elements into virtual network space in the form of data codes. This leads to an increasing representation of economic relations between people, either directly or indirectly, as relationships between humans and intelligent machines or even between intelligent machines themselves, resulting in new issues such as platform monopolies, depersonalization of labor relations, and new types of labor-capital conflicts. Therefore, there is an urgent need to focus on the theoretical exploration of economic relations under digital technology.

To systematically analyze the logical changes and theoretical essence of economic relations under digital technology, it is necessary to organically unify their individuality, particularity, and generality, and comprehensively examine historical, realistic, and future clues to overcome the limitations and incompleteness of a single perspective. To achieve this, the analysis of “particularity” is crucial, as it involves abstraction and refinement based on a thorough understanding of “individuality” while clarifying the foundation of “generality,” jointly outlining the complete theoretical connotation of the matter.

In this regard, this article aims to refine the particularity of economic relations under digital technology as “virtualization” based on existing research and realistic characteristics. What is virtual? Based on the basic logic of Marxist political economy, it at least includes the following two basic connotations: (1) the formal virtualization that is dissimilar to the actual state of things. As Marx pointed out when analyzing commodity fetishism, the form of commodities represents “certain social relations among people,” but takes on the illusory form of “relations between things”; (2) the substantial virtualization that deviates from labor value. When analyzing non-labor products such as uncultivated land, conscience, and reputation, Marx emphasized that their “price expressions are illusory, just like certain quantities in mathematics,” and this “illusory price form” can “conceal the real value relations or the relationships derived from them”; in the analysis of differential rent, he also stated that differential rent is “determined by the market value achieved through competition on the basis of the capitalist mode of production; this determination produces a false social value.” Accordingly, the virtualization of economic relations under digital technology can be summarized in at least two dimensions: one is the formal virtualization, which arises from the illusion of economic relations under digital technology being dissimilar to previous forms, leading to a deviation between form and reality; the other is the substantial virtualization, which stems from the value movements and relationships that deviate from labor value under digital technology conditions.

Based on this basic connotation of “virtual,” this article aims to explore the virtualization characteristics of economic relations under digital technology from four dimensions: production relations, exchange relations, distribution relations, and consumption relations, completing the logical deduction from “individuality” to “particularity”; then, following the basic theories of Marxist economics, further elaborating on the theoretical essence, evolution laws, and development trends of the virtualization of economic relations, completing the abstract analysis from “particularity” to “generality”; subsequently, organically combining the three dimensions of individuality, particularity, and generality to systematically elaborate on the theoretical connotation of economic relations under digital technology.

2. Virtualization Characteristics of Economic Relations Under Digital Technology

(1) Virtualization Characteristics of Production Relations Under Digital Technology

With the process of digital industrialization and industrial digitization, digital technology continuously acts on the production field, pushing specific production methods to present various new changes: first, during the digital industrialization process, specific production methods increasingly exhibit the characteristic of cross-temporal and cross-spatial human-machine interaction; second, during the industrial digitization process, specific production methods gradually manifest as intelligent systems dominating intelligent machines and the weakening of human labor.

The penetration and application of digital technology in the production field, along with the changes in specific production methods it brings, further promote changes in production relations, leading to various virtualization characteristics: first, the subordination of human-machine relationships, which differs from the past where “workers were treated as living appendages integrated into dead machinery,” but further manifests as workers being integrated into the “living” intelligent machine system as subordinates dominated by intelligent systems; second, the concealment of labor-capital opposition, where the opposing relationship between capital owners and workers presents an illusory form of fairness and reasonableness due to the “intelligent” facade of the production process; third, the decentralization of labor relations, where the cooperative relationships among workers are disrupted by intelligent systems and intelligent machines into scattered nodes, isolating the “illusory” shell of digital codes.

(2) Virtualization Characteristics of Exchange Relations Under Digital Technology

The “medium” characteristic of digital technology determines its widespread application in the circulation field, with the rapid development and popularization of e-commerce being a realistic manifestation. With the continuous penetration of digital technology in the circulation process, exchange methods also exhibit new characteristics such as cross-temporality and non-contact.

The changes in digital production relations and the specific changes in exchange methods brought about by digital technology further promote changes in exchange relations, increasingly presenting dual virtualization characteristics in both form and substance. On one hand, there is the dematerialization of digital codes, where under digital exchange conditions, digital goods often present opposition and divergence from real goods, and coded subjects from real subjects, leading to formal virtualization. On the other hand, there is the overflow of exchange value, where some digital exchanges give rise to “false social values” and non-equivalent exchange relationships, leading to substantial virtualization. For instance, digital products such as information and online services, once produced for the first time, require minimal labor for reproduction, yet can exchange at values exceeding their own in the market due to their monopolistic nature, thereby forming “false social values.”

(3) Virtualization Characteristics of Distribution Relations Under Digital Technology

With the penetration and application of digital technology in production and circulation processes, specific methods of distribution are also undergoing new changes: first, intelligent algorithms have become a new distribution mechanism, shifting the distribution mechanism from institutions to technology; second, data has become a new distribution principle, shifting the distribution principle from tangible to intangible.

The changes in specific distribution methods under the influence of digital technology also promote changes in distribution relations, resulting in both formal and substantial virtualization characteristics. On one hand, there is the socialization of distribution contradictions, where the distribution results based on intelligent algorithms present an “objective” appearance, and the distribution results are bound to consumption evaluations, externalizing the contradictions originally generated within enterprises into social contradictions, leading to formal virtualization. On the other hand, there is the reconstruction of distribution patterns, where the distribution methods based on data principles create conditions for obtaining “false social values,” leading to the digital reconstruction of distribution patterns between labor and capital, resulting in substantial virtualization. This is most evident in the platform economy, where digital platforms act like virtual land, and the “rental” income obtained through monopolizing platform data far exceeds the labor value created by itself, more so representing what Marx termed “false social value.”

(4) Virtualization Characteristics of Consumption Relations Under Digital Technology

With the widespread application of digital technology in economic processes, consumption methods are also undergoing new changes: first, consumption methods increasingly depend on digital platforms and are dominated by them; second, new consumption methods that focus on data and information are rapidly developing.

Corresponding to the new changes in consumption methods, the consumption relations under digital technology increasingly display formal and substantial virtualization characteristics. On one hand, there is the bubble-like nature of consumption demand, where the continued dependence of consumption methods on digital platforms gradually gives rise to an illusory appearance of irrational consumption demand and competitive consumption relationships, leading to formal virtualization; on the other hand, there is the production-like nature of the consumption process, where some consumption processes and relationships not only possess the nature of human production but also, in a certain sense, have genuine production characteristics—data production, the data produced can be possessed by digital platforms to obtain “false social value,” leading to substantial virtualization.

In summary, the innovation and application of new digital technologies such as the Internet, artificial intelligence, and big data have profoundly changed the forms of economic relations, making production relations, exchange relations, distribution relations, and consumption relations increasingly exhibit distinct forms or substantial virtualization characteristics, constituting the special connotation of economic relations under digital technology.

3. Theoretical Logic of Economic Relations Virtualization Under Digital Technology

(1) Theoretical Essence: The Interest Relationship Between People

The virtualization characteristics respond to and portray the particularity of economic relations under digital technology compared to previous forms, but does this mean that it has changed the essence of economic relations? According to the basic theories of Marxist economics, the virtualization of economic relations does not change the theoretical essence of the interest relationships between people.

First, the virtualization of production relations is an inevitable result of capital pursuing excess surplus value through the replacement of humans by machines, and its essence remains the interest relationship between capital owners and workers. The human-machine and machine-machine relationships in the production process under digital technology still reflect relationships among people. That is, for capital to obtain excess surplus value or to ensure the realization of its surplus value in the wave of industrial digitization, it must replace workers with intelligent machines and continuously strengthen its dominance over workers, which is the essential reason for the virtualization of production relations and also the essence of the labor-capital interest relationship it conceals.

Second, the virtualization of exchange relations is an inevitable requirement and important means for commodity owners to pursue value realization under digital technology, and its essence remains the social and interest relationships among people. When digital technology penetrates a sufficiently large range, if digital exchange methods are not utilized, the social basis for realizing commodity value will be lost; moreover, compared to traditional exchange methods, digital exchange methods with cross-temporal characteristics have greater “social power” and can better promote the realization of commodity value. Therefore, the formation of virtual exchange relations still originates from the pursuit of material interests by people, reflecting their interest relationships.

Third, the virtualization of distribution relations is a result of the general law of capital accumulation under digital technology, and its essence remains the redistribution of surplus value within society. In the digital economy era, the monopoly and accumulation of data have become an important form of capital accumulation. In this process, one extreme is the wealth accumulation of platform capital owners, while the other extreme is the relatively impoverished accumulation of classes that produce data as capital, leading to a digital reconstruction of distribution patterns. That is, behind the virtualization of distribution relations remains the interest relationships of capital dividing surplus value and the polarization between labor and capital.

Fourth, the virtualization of consumption relations is significantly driven by the capital accumulation and surplus value pursuit of digital platforms, and its essence still reflects the interest relationship between capital owners and workers. The formal virtualization of consumption relations is the illusory appearance of competitive consumption created by capital, which is an important means for capital owners to accumulate capital and ensure the realization of surplus value, possessing a certain inevitability; the substantial virtualization of some consumption relations, characterized by their data production nature, reflects a new form of exploitation of workers by platform capital under digital technology, where the interest opposition between labor and capital still exists.

(2) Evolution Laws: Following the Interaction Between Digital Productive Forces and Digital Production Relations

As the new logic of economic relations in the digital economy era—virtualization, its development and evolution also follow general laws, which are decisively influenced by digital productive forces. Specifically, the reason why digital productive forces can play a decisive role in the virtualization of economic relations lies in the fact that only when digital productive forces develop to a certain extent can they provide sufficient interest support for the formation of corresponding degrees of virtual economic relations. It is this interest link between virtual economic relations and digital productive forces that causes the degree and form of virtual economic relations to vary at different times and levels of digital productive forces, and with the enhancement of digital productive forces, a continuously expanding and extending development path and trend emerges.

At the same time, the development and evolution of economic relations virtualization will also positively react on digital productive forces, which can also be specifically examined from the perspective of interest-driven factors. The degree and form of virtual economic relations at a given time will change the interest-driven motivations of economic entities in the research and application of digital technology, thereby promoting or inhibiting further development of digital productive forces. From a practical standpoint, with the development and evolution of virtual economic relations, indeed, more market demand and entrepreneurial space have emerged, and these interests have promoted the research and application of relevant digital technologies; however, it cannot be ignored that the byproducts of virtual economic relations, such as platform monopolies and digital speculation, have also, to some extent, restricted and constrained this technological innovation drive, necessitating appropriate government guidance and regulation.

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