Pathfinders: Subscription-based Capitalism
Everyone knows that cutting costs means boosting or at least safeguarding profits, and some elements in the capitalist class are now figuring out that they can cut their administration costs by doing away with individual purchase transactions and moving towards a subscription-based business model.
We’re familiar with subscriptions with things like unions, clubs, political parties, rail travel, telephone lines and mobiles and newspapers. You could add the BBC TV licence fee, the NHS and any kind of insurance policy too. One can think of a subscription as another form of rent for something you use but don’t own. The advantage to you is simplicity. The advantage to the provider is low admin costs, locked-in customers or ‘members’, and reliable, predictable income, an especially bankable asset for any business.
So now we have Netflix subscriptions, and Spotify and iTunes. Software houses like Microsoft and Adobe, tired of having to market every update and sell it all over again to customers who don’t need it, have moved over to subscription-based models. You can’t buy the software, you can only rent it, but the updates are all free.
Perhaps no surprise that the founder of Netflix now wants to do the same thing with cinemas (BBC Online, 8 September, http://tinyurl.com/yabwqfd4).
The subscription model was always practical for retail areas that were steady and largely unchanging. What’s new is that the model can now be applied to areas of fluctuating demand and usage, thanks to sophisticated real-time transaction monitoring within a fully-connected and automated banking system. Just how far can this model go? What if it goes all the way?
Recently technology has facilitated the rise of the so-called Platform service, an aggregation of small or sole traders onto one centralised commercial hub which gives them access for a fee to a level of marketing, market reach and financial administration that would be beyond them as individuals. Think Uber, and the ubiquitous Just Eat, now appearing on every high street. Think eBay, and Airbnb, and Facebook and Google, all matchmaking buyer to seller and streamlining the transactional process.
People who have multiple debts and at least some hope of being able to pay them already know that they can consolidate these disparate debts, with their varying rates and payment terms, into one central pot. This makes it simpler for them, and works for the debtors too.
Suppose, on the same principle, a new cloud-based super-Platform service arises which offers to consolidate ALL your living expenses including rent, food budget, fuel, education, entertainment, holidays, even savings, into one monthly sub, which amounts to most or perhaps even the total of your wage. So your wage doesn’t go to you, it goes to the Hub, and you don’t need to think about money at all unless you want to buy something that’s not in the budget. This might then be automatically negotiated as an overall rearrangement in your Hub payment, with less going to savings, holidays etc. You wouldn’t have to worry about whether you could pay back a debt because you wouldn’t be allowed to accrue any debts. The only thing you’d need to worry about is not losing your job and being unable to pay your monthly life subscription. If you underspend carefully, you’ll be in credit and more goes into your savings. If you overspend, then once your savings and holiday funds are gone you will not be able to buy anything as the Hub will not allow it, but will instead place you ‘in administration’. What this might involve is anybody’s guess. The experience could be like being strangled by your own dog lead.
Well, so what, you might ask. Maybe capitalism will go down this road, maybe it won’t. How does this change anything?
Well that’s the interesting question, from a socialist point of view. What a subscription does is decouple the act of consumption from the act of transaction. To an outsider who does not see the monthly, digital payment that takes place behind the scenes, normal everyday consumption would look as if it was free. You get a train ticket: no charge. You get breakfast on the train: no charge. You go to the movies, buy a dress, have a couple of G&Ts in a wine-bar, take a taxi home, order a takeout: no charge.
In other words, it would look like a society of free access, and subscribers would grow accustomed to a culture and an expectation of free access. Even though it isn’t free, it would look and feel that way. Paying real cash would come to be seen as weird and unnatural. And perhaps in order to cut admin costs ever further, the Hub would start to make some cheap things actually free, the way supermarkets offer free taxi phones and trains offer free newspapers. Over time, the expectation may be one of increasing levels of service and free elements, versus stable or lowering subscription rates.
The subjective experience of such a subscription-based world would be a life without paying for things, without cash or card transactions, where money becomes invisible and, in practice, non-existent. All that would remain is the single subscription, the Life Bond.
Could all this help socialist ideas to prosper, if we don’t get a revolution in the meantime through other means? What it could do is reduce the conceptual gap. Life as it is presently experienced in capitalism is a matter of being caught fast in a giant web of debts and financial obligations. It’s hard to see how you can sever all the bonds that hold you to capitalism, in fact it seems impossible. But one single connection is a different matter. Then the task becomes conceptually easier. Instead of hacking your way out of a limitless financial mesh, you are invited to cut just one cord, the golden leash that binds you. For the rest, you are already accustomed to free access, so instead of being some frightening leap in the dark, socialism represents a world of familiarity and continuity, something you almost had anyway but not quite, and not for real. Thus, Day One of socialism could mean, for many people, continuing largely as they did before, the only material difference being that they would not be required to worry about subscriptions, or the means to service them, ever again.