Chapter I. An Asset You Can't Understand… The Business Theory of Social Production. It is becoming ever more obvious that the information economy is split in two; we have two economies rather than one (or three, if we include the growing criminal or informal economy which we will not treat in this paper). On the one hand, there is the traditional capitalist economy that works with monetary incentives. This economy still handles the main part of material production: the production of cars, shoes, computer chips, and the transportation and maintenance of these goods. But immaterial production- the production of the ideas, innovations, experiences and other intangibles that virtually everybody agrees to be the most important source of value and development- is increasingly performed by another economy that does not primarily move according to monetary incentives. Most people who participate in creating the enormous wealth of content that give MySpace or YouTube their market values are not in it for the money. Instead they want to build networks, make friends, show off, be cool or what have you. The same thing goes for the users who participate in the multitude of smaller, less famous sites that make up the new productive developments known as Web 2.0. Neither are the people who participate in the many business initiated user-led innovation initiatives that now proliferate primarily there for the money. Indeed the very business sense behind such initiatives is that they give access to an enormous reservoir of free creativity that needs not be paid for (to be deployed either in the actual design of products or advertisements, or, more importantly perhaps, in brand building).[i] The importance of such non-monetary production is however not limited to the world of on-line initiatives or web 2.0. Within companies it has long been recognized that the prime source of productivity is not what people get paid for, but what is more difficult to include in a job description: their ability to network, share knowledge and support each other, to co-create a good working environment, a marketable service or a flexible organization. Managers recognize that the best way to foster such forms of cooperation is not through monetary incentives, but rather by fostering a solid corporate culture with strong values, a strong sense of solidarity or commitment, a particular ‘mood’ or ‘vibe’. Similarly marketers have discovered that the autonomous cooperation among consumers is an important source of brand value.[ii] Big Business increasingly consider NGOs as partners in supply chain management, insuring coherence with overall value standards and best practices. Finally, the ‘creative economy’ of the urban music, arts and fashion scenes, which is growing in importance as a productive externality for the creative industries proper, is not primarily motivated by monetary incentives. Most members of the ‘creative class’ do not live off their creative labour, but rather accept poor or precarious economic conditions as a (temporary, they hope) trade off for the ability to realize themselves or pursue their dreams. There is, in other words, an emerging archipelago of social production, ranging from the mundane to the sophisticated (OpenScience), from the small to the large scale. This new productive force is affirming itself as an important social, political and economic reality, with profound implication for the kinds of social scenarios that we can imagine for the 21st century. The emergence of social production has of course not passed unnoticed. On the contrary, recent years have seen a steady flow of books on the subject that analyse and draw out its social, economic, managerial or even spiritual implications.[iii] The most prevalent perspective however has been that of business. This is not strange since the growing prominence of management consultants and business writers as public intellectuals (and the concomitant growth in the number and status of business schools) have, since the 1980s, established the point of view and the preoccupations of the business community on the common agenda. Hence is not uncommon to see guides to he management of creativity, or analyses of the economic potential of web 2.0 next to Anne Rice and Michael Crichton in the airport bookstore. Consequently the last decade has experiences cascade of best-sellers like The Wisdom of Crowds, Funky Business, Wikinomics, The Rise of the Creative Class, Revolutionary Wealth and so on, by means of which we have been given a fairly elaborate and coherent understanding of these phenomena- a business theory of social production. [iv] However these explanations necessarily remain partial. They tend to depart from the business point of view, where the phenomena of self-organized social production present themselves as opportunities to exploit (and sometime as challenges to be overcome), but at any rate as something that needs to be subsumed under and incorporated within the established logic of affairs. These analyses generally do not depart from a detailed analysis of the phenomena of social production, rather they depart from what is usually a managerial or accounting problem- how to account for the value of intangibles, for example- and then only push their analysis as far as is necessary for them to deal with the challenge that social production poses for their particular problem. (By arguing, for example that the value of a brand builds on the psychological attitudes of individual consumers, it becomes possible to estimate the value of a brand by determining the psychological attitudes of different categories of consumers in a small sample, and then multiplying this with the total number of consumers in such categories. As a ‘measurement’ of an external reality this is of course entirely non-sense, but it works in that it allows managers to talk about the problem in some way and take some form of action.) ‘Business theories’ might supply functional abstractions, abstractions that work within the everyday practice of management. But these abstractions are seldom adequate as descriptions of what they depict. Such partial and ‘interested’ explanations are not without value, they allow the discourse and practice of management (and related disciplines) to go on, and they enable management gurus to make a living. The contemporary success of managerial discourse is premised precisely on the (perhaps healthy) desire not to reach too deep an understanding of current affairs, and not to ask too many questions. But there is (of course) a significant down-side to such reluctance to understand and analyse. While a consciously superficial approach might very well work in the short run, it builds on the implicit preposition that status quo will endure, and that if the growing galaxy of social production poses any serious challenges, then these can just be wished away. People who believe that this is not the case need a more far reaching analysis of what is going on, one which departs form the phenomena themselves, and not from the challenges they pose to established managerial practices. Such an analysis is crucial not only in order to undertake the systemic change that we, and a growing number of other people, think is necessary, as well as potentially profitable even in the short run, but also to actually accomplish what contemporary managerial theory sets out to accomplish, arriving at a rational evaluation of intangibles, or developing sustainable policies for creative development, for example. This entails going beyond the way in which these phenomena present themselves to business interests, and to descend into the depths of production, as Marx put is some 150 years ago. To propose such an understanding will be the task of the following three chapters. In this chapter we would like to outline the most common positions of contemporary 'business theory' in order to show both what they have understood, and what lacks in their understanding. We will argue that what these established positions lack the most is an understanding of the value logic that governs social production. Most of business theory sees social production as something close to a natural resource to be freely appropriated by business, a 'free lunch for business' to use Alvin Toffler's term. Since these practices do not move according to a monetary logic of value, they appear to have no value. However this is a misunderstanding (as the following chapters will show in more detail) and a potentially costly one too. Not to understand the particular logic of value that governs social production make for poor business judgements and tactical blunders in trying to exploit this resource. More seriously perhaps it creates a strategic blindness as to what are the larger social and economic implications of this new phenomenon. The outline that follows might seem a bit of a caricature, reality is more complex, most individual business book expose some genuine insights that are, generally, not shared by others. But more or less, they share the following four cardinal mistakes. First Mistake: Individualism The back cover of an enormously popular management book sums it up well: ‘Karl Marx was right. The workers do control the most critical means of production. 1.3 kilograms of brain holds the key to all our futures’. It expresses a very common view within contemporary business theory: that strategically important resources like intellectual capital, innovation, social capital, agility and what have you are the outcome of the properties of individuals, and that consequently these valuable individual properties can be owned, as a form of human capital. The notion of human capital, that workers have individually acquired and propertied skills which differentiate their market value goes back to Adam Smith, who listed this as a fourth form of capital: along with machines, buildings and land. He defined it as qualities embodied in the human psyche, acquired through real expense and effort and thus, (according the humeian conception of property that he worked with) the legitimate property of individuals. [ q Smith: the acquired and useful abilities of all the inhabitants or members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person. p…] Since then it has been a core assumption of the human capital literature, including Peter Drucker's path-breaking notions of a new class of knowledge workers that he argued were defined by skills acquired in formal education. [v] However, this testifies to a profound misunderstanding of how social production works. Such a theory of human capital might very well have been true in Smith’s own time. The new industrial production that he described still relied on the specialized skills of individual craftsmen who preoccupied themselves with specific aspects of the production process, as he observed of the pin-factory: one man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds. [q] This was before modern industrial organization however, the explicit purpose of which was to make workers replaceable and to radically decrease the value of specialized individual skills. (To a great extent the success of Fredrick W. Taylor’s scientific management depended on its political efficacy. It served to weaken the power of heavily unionized craft-workers, by enabling employers to replace them with recently arrived immigrants with little in terms of industry specific skills and political consciousness.[vi]) Along the assembly line any man (or woman) could take any position. The reason for this is that in industrial capitalism productivity no longer depends primarily on individual skills, but on the social organization of production. (Or rather, the kinds of technical skills needed: the ability to operate a machine and to function in a factory environment, are abundant.) And since this tendency towards more generic technical skills increases with automation, it is true for the contemporary information economy as well. It is true that knowledge work does require some formal skills, and that the diffusion of such skills by means of secondary education has increased, as Peter Drucker predicted it would. But in most cases these skills boil down to the ability to use a computer and a certain familiarity with the language and practice of management. Such skills are hardly scarce: the very boom in secondary and in particular business education has made them abundant. (In the US the number of college BA degrees conferred annually has almost doubled, from 840.000 in 1970 to 1.450.000 in 2005.At the same time the number of business MAs has increased more than sixfold, form 26.000 in 1970 to 143.000 in 2005.[vii]) An MBA is a condition of entry into the profession, but not, in themselves what determine the market value of a knowledge worker. The skills that distinguish valuable or 'talented' knowledge workers are different. They are generally skills that one can apprehend from other knowledge workers. Most successful entrepreneurs in the high-tech sector have been able to capitalize on insights that they have developed by participating in networks of knowledge sharing or 'collective intelligence' like OpenSource or other peer networks, or by otherwise taking part in milieus that cultivate particular specialized forms of knowledge (Los Angeles for film, New York for Advertising, Silicon Valley for software etc.) Indeed, the prime minds of the 'web generation' that have been driving the 'New Economy' since the dotcom boom of the 1990s, people like Bill Gates or Steve Jobs, acquired their extraordinary skills, not in universities or other systems of formal education, but by participating in informal knowledge milieus, like the hacker or computer amateur movements. The same thing goes for today's Web 2.0 entrepreneurs who learn their ropes in Barcamps and similar informal environments. Indeed a surprising number of them are college dropouts. For ordinary knowledge workers a similar mechanism is at work. Even though they might posses a formal education, their market value is increases greatly with their experience. It is difficult to get a job when you're fresh out of university, but generally after three to four years in a first job you begin to get a lot of offers. What is it that these knowledge workers pickup in their first few years of professional existence and that makes them so valuable? It is generally social skills. The present ‘war on talent’ is on for people who are able to motivate others and have proven their worth in acquiring and nurturing networks or otherwise organizing social processes, or in creating 'a climate conducive to innovation' or to use the definition of McKinsey’s recent research report on the ‘war of talent’ smart, sophisticated businesspeople who are technologically literate, globally astute, and operationally agile [and that], in the right kind of culture, have better ideas, execute those ideas better - and even develop other people better.[viii] In other words, talent is primarily about being able to s exploit the capacity of social production. Such talent is to some extent a matter of personal qualities. However the personal qualities required are mostly affective qualities: the ability to feel with, motivate (or manipulate) others. William Halal calls this ‘inner leadership’: it builds on the capacity to ‘really listen’ and being able to articulate the common vision and wisdom of a productive network. And these are skills that come with networks. That is, it is often the case that people who are talented in this way owe their ‘talents’ to the networks that they can command. So the most valuable skills in today's workplace are generally not, codified skills obtained by investments of time and money in formal education; the skills that reside in your head, that you own. Rather they are non-codified, or tacit skills obtained by participation in productive networks; the skills that reside in the common social environment in which you move, and that you share with others. They are skills that emerge from and develop and grow in large-scale non-institutionalized social processes. Richard Florida get this right when he points at the city rather than the firm or the university as the main catalyst of knowledge and talent, and underlines the fundamental role that openness, talent and 'free' forms of social interaction play in this process. (And before him there was a long, although more technical and less popular literature on learning regions or districts.) Indeed, recent empirical studies of 'creative cities' show that what distinguishes successful members of the ‘creative class’ is that they have networks that extend into the ‘dark matter’ of (mostly unpaid) self organized creative production that marks the metropolis, and are thus able to mobilize and translate such resources into commercially viable products. [ix] The 'knowledge economy' is more than anything else a 'communication economy'. It does not primarily thrive on particularly talented individuals, but on social formations where knowledge circulates rapidly and effortlessly, and where collective intelligence thrives. [x] So the popular standpoint that attributes qualities like agility, flexibility or innovation to individual talent is right in the sense that it recognizes the growing importance of such ‘soft factors’ vis-a-vis material production. It is wrong however in treating what is an emergent property of networks as if it was an individual skill. Or rather it is not so much a matter of being wrong as it is a matter of being ideological, i.e. of being wrong in an interested and strategic way. Management itself recognizes the fundamentally social nature of these phenomena, as the salience of concepts like social capital or collective intelligence testify to. Indeed, the recommendations for new ‘talent management’ that came out of McKinsey’s survey on the ‘war on talent’ was that managers should invest more in shaping the company to appeal to and nurture ‘talent’ through, among other things coaching and mentoring programs. So nurturing talent comes to be primarily about creating a social environment that promotes these kinds of attributes among successful individuals. [xi] At the same time, the authors recommend that companies differentiate among A, B and C performers and reward people accordingly. What this amounts to is essentially making people responsible for and rewarding them for the performance of the social networks of which they are part. This might provides a viable point of control or governance- the individuals that can be rewarded or punished for the outcome of more large scale social processes and that thus have an incentive to try to steer or manipulate these- but it does not further any real comprehension of the nature of these social processes. The outcome is rather to foster a cynical and manipulative attitude, as well as a generalized experience of insecurity. Second Cardinal Mistake: Cynicism Such a cynical and manipulative attitude is evident in the self-branding literature, of which Tom Peters’ The Brand Called You is the perhaps most abhorrent example. This has become a very influential force in fostering a managerial state of mind to fit the realities of contemporary social production: much like Benjamin Franklin-inspired self-help books helped foster 19th century industrial entrepreneurs. The argument goes a bit like this: In an earlier epoch, personal identity was largely given by factors beyond the control of the individual- class, religion, inherited profession- and did in any way not matter much for his or her personal success. Today, however, personal self-presentation and social networks are directly productive elements and need to be rationally cultivated in order to maximize the individual’s chances for success. To become a ‘personal brand’ thus means to rationalize one’s self-presentation in order to maximize one’s social efficiency as a ‘networker’, but to do this for ultimately purely strategic purposes: to further one’s personal success. Apart from the outright cynicism that marks this approach, the personal branding literature is marked by two fundamental misconceptions (which it shares with much of the branding literature tout court): that ‘networks’ are morally neutral and that strategies of symbolic manipulation, to pretend or appear to be something, are sufficient to obtain real results. The presupposition that networks are morally neutral is common to most contemporary social science approaches: from the now long-standing discussion of social capital, trough the booming field of mathematical network theory to contemporary theories of the ‘attention economy’. In the latter approach it is assumed that the value of a brand or a website is directly related to the quantity of attention or ‘hits’ that it can accumulate. It is not that theories of an attention economy discard the affective qualities of relations as unimportant. But they argue, along with influential notions of an ‘experience economy’ that such affective qualities are mainly realized in personal experiences that arise from the individual encounter between a consumer and a product, brand or service. In other words qualitative experiences are individual psychological phenomena, and not socially shared. This approach might have worked reasonably well in an earlier online economy (Web 1.0), but contemporary successes like Twitter or MySpace depend not only on the number but also on the affective qualities that they can generate: they are successful because they are experienced as communities. Similarly, most empirical research on ‘experiential consumption’ stresses the social production and consumption of such valuable experiences: that is, for most experiential consumer goods, the value of the experience consists in its ability to provide and experience of social relations and community. In social science, social capital or ‘networks’ are similarly measured according to the quantity of social connections that they enable; essentially a person has a high degree of social capital or is a powerful node in a network if he or she knows many people and can activate these connections, while the affective qualities of these connections are often ignored. While such an approach might carry a lot of explanatory weight in analyzing the diffusion of viruses or the political potential of a social movement, it does not offer a good understanding of how networks function as a productive force. As Chapter X will show in more detail, the affective qualities of network relations matter a lot in the networks of social production: that's why we call them an 'ethical economy'! Indeed this economy is ‘ethical’ precisely because what gives these networks productive power is that its members experience them as communities. Consequently actors are generally conscious of the importance of the affective qualities of relations that underpin such experiences of community and put a lot of effort not only in expanding the size of their networks but also in cultivating their community status. This is generally done by ensuring that ones actions not only further ones own goals, but that such actions also promote ones standing within the community. In short to be a productive member of a community (networked or not) one must matter to that community. And to matter one must actually do things for that community. Simply to appear to matter or to brand oneself as ‘someone who cares’ is not enough. The presumption of moral neutrality is related to the idea that symbolic intervention is sufficient to manipulate such networks. It is telling that the most important theory of causation underlying such approaches is magic. As suggested by The Secret and other similar successful self-help books, reflexive manipulation of what one can control- one’s self or ones thoughts- will somehow magically affect what one cannot control, the realties of social relations.[xii] To quote one self-branding article, this time (quite paradoxically) praising the virtues of appearing authentic: If you are branded in this organic, authentic and holistic way your Personal Brand will be strong, clear, complete, and valuable to others. You will also create a life that is fulfilling and you will automatically attract the people and opportunities that are perfect for you. [xiii] The recourse to magic is the result of the lack of an underlying theory of the productive dynamics of such networks. Magic, like cynicism results from believing that self-organized forms of social production lack a logic of value: that there is no systematic way of evaluating the quality of relations or the contribution of participants, and that questions of value can thus be bracketed with relative ease, to concentrate on the mere size of what one is able to appropriate, the number of clicks or connections. Alternatively this is understood as a magical source of wealth that somehow (in ways reminiscent of protestant theories of predetermination) just flows to the worthy. Not surprisingly such a worldview, marked by either cynicism or magic is similar to that which characterized the medieval European feudal lords who, lacking a theory of agricultural production, had no way of understanding the true nature of their riches, attributing them instead to the wheels of Fortuna. This might not have been an inaccurate description form their point of view, but it made them utterly unable to rationalize and improve the source of such riches. Similarly, contemporary theories of self-branding and the attention economy might offer ways to manipulate and even estimate one’s share of social production, but they offer little guidance in nurturing and rationalizing this productive force. So, to summarize, theories of self-branding and networks are right in that they appreciate the social nature of valuable skills. They do not understand, however, that these social forms, networks, are not just morally neutral agglomerations of 'connections', 'links' or 'nodes', but, in so far as they really are productive, they are ethically significant communities. Third Cardinal Mistake: Gratuity This lack of a theory of value is particularly evident from the business theory of social production, wikinomics, user-led innovation and so forth, and a lot of the critical academic attempts to come to terms with this phenomenon that have emerged in recent years. Neither of these two streams of thought engage with their object on its own terms. The analyses put forth by business theory, exemplified by successful books like Wikinomics, or Revolutionary Wealth generally consist in a list of examples and illustrations of the fact that a lot of (primarily) immaterial wealth is now produced outside of the direct control of capital, informing managers and other potential readers of this new opportunity and suggesting how to best appropriate and monetize it. It generally lacks any in-depth analysis of these phenomena. This is evident not only from the fact that a range of widely diverse practice - form using an ATM to producing OpenSource software- are lumped together under the same heading, 'prosumerism' or something similar, but also from its general blindness to any potential contradiction or even conflict between these socialized productive practices and the value logic of capitalism.[xiv] Instead the 'prosumers' are simply seen as a natural resource to tap into, as an immense free lunch for business. The chief problem is understood to be to bring such 'non monetary phenomena' into the monetary economy again, to enclose and commodify them.[xv] This notion of social production as a 'free lunch' departs from the misconception that since these practices do not follow the monetary logic of value of capitalism, they cannot follow any logic of value. And since they do not follow any logic of value of their own they can be tapped into and subsumed under a capitalist logic of value without this creating much friction. Like the networks through which they are organized these productive practices are perceived to be value-neutral. This inability to imagine that social production can have a value logic of its own leads to a least two strategic shortcomings that could easily have been avoided. It also risks provoking a growing legitimacy crisis for capitalism as a system. This is visible at the minute everyday level where savvy consumers recognize their productive role in producing brand value and resent the brand owners whom they feel are exploiting them[xvi]. It is beginning to be visible on a larger scale, as social movements are forming around the issue of guaranteed income, which is perceived as just payment for the unpaid productivity that most people qua 'prosumers' engage in. In failing to recognize and understand the logic of value that underlies self-organized practices of social production, business risks further alienating or even antagonizing the people involved in these practices on which business itself tends to be ever more dependent. A similar refusal to recognize that these phenomena might have a logic of value of their own, is also common among academics and intellectuals. While liberal academics like Yochlai Benkler, simply leave the question open, arguing that new practices of social production are driven by a diversity of individual motivations and that their particular political and institutional consequences are yet to be seen, most academic or critical analyses come from an anarchist or a Marxist perspective. To the anarchists it is politically useful to argue that new practices of social production have no unified logic of value. This allows them to argue that a social formation without any central order is in fact emerging. (And it does not hurt that such perspectives agree well with the established cannon of postmodernist, or post-structuralist 'Theory'.) Web 2.0, peer production and related practices thus become an incarnation of 'actually existing anarchy', much like the Soviet Union incarnated 'actually existing socialism' to European communist parties up until the mid 1970s. The Marxists, on the other hand, are generally too fixated on the labor theory of value to even conceive of possibility that other forms of value might exist. This gives them two, equally misleading options. One, they can argue that practices of social production are 'beyond value' and hence effectively proclaim the imminent (or virtual) arrival of communism as Marx intended it. Alternatively, they can try to reduce these practices to the established logic of the labor theory of value, by arguing for example that the 'value' of free software is set by the alternative cost of employing programmers.[xvii] Both these prepositions miss the point (as Chapter IV will show) and they lead to inefficient political suggestions: utopianism in the first case, an inability to conceive of the radical potential of present developments on the other. An adequate comprehension of the emerging value-logic that actually guides these practices is even more crucial to progressive thinkers who whish to extract, not monetary exchange value, but new political and ethical values- ideologies and form of life- from these practices. In order to do so with any hope of success, they must leave the schemas and models of the nineteenth century behind. Fouth Cardinal Mistake: Imesurability The area where the absence of a theory of value is most strongly felt is that of intangibles. Since the 1950s there has been a steadily growing significance of this strange asset in financial calculations.[xviii] Today, some, like the World Bank, estimate intangibles to make up a whopping 70 per cent of the world’s wealth.[xix] In a recent article Business Week estimates that investments in intangibles (which are not counted as investments in traditional national accounting systems) could amount to 6.8 per cent of national expenditure in the US, or about $ 1 trillion. There are also clear indications that the relative value of intangibles has increased in recent decades. Leonard Nakamura of the research department of the US Federal Bank argues that factoring in intangibles would result in 0.3 per cent higher growth figures for the US economy in the 1970s and 1.2 per cent in the 1980s. Similarly, data on the one hundred most traded companies on the London Stock Exchange estimate the share of market price attributable to intangibles to have increased from about 20 per cent in 1950 to about 70 per cent in 2000. [xx] In his study Baruch Lev concludes that overall, current levels of intangibles relative to book value are unprecedented, having risen from little over one per cent in the late 1970s to more than six per cent in the 1990s.[xxi] What then is an ‘intangible’? There are many candidates, brand value, reputation, goodwill, stakeholder relations, human capital are most common. But essentially ‘intangibles’ are defined as things that account for the growing discrepancy between the market values of companies and their book values. This way an intangible is something that one knows (or at least suspects) creates value, but that one cannot measure. Intangibles are those assets that an old accounting system, developed in order to measure the productivity of the ‘tangible’ assets: those involved in materially oriented industrial production, cannot measure. While most intangibles are also immaterial assets, this is not the crucial point. (A work of art, for example, or a new storefront, are highly material things, but the benefits they might confer to a company, the increased goodwill or brand equity, are counted as intangibles.) ‘Intangible’ first of all signifies ‘immeasurable’ (within the present accounting system). Indeed there is an emerging consensus in the accounting community that the growing importance of intangible assets have produced a situation where financial reporting no longer represents actual value creation. [xxii] As Chapter III will explain in more detail, this rising discrepancy between market value and book value, and the concomitant rise in the importance of intangibles is the consequence of a real structural transformation in post-war capitalism: the growing socialization of production and its allocation to productive practices that cannot easily be subsumed under established practices for representing assets as (valuable) capital. These practices include the self-organization of knowledge work (represented as 'social capital' or 'knowledge capital', consumer co-production of brands and experiences ('brand equity), Intellectual property that originates from socialized processes of knowledge creation and most of the practices that this book treats as the productive substratum of an emerging ethical economy. In a way informational capitalism here faces a problem similar to that which Herman de Soto has famously described in the case of poor, underdeveloped countries. These countries are poor, not because they do not have any assets (the poor save a lot), but because these assets cannot be represented as valuable, as capital that can function as collateral for credit for example, in any reliable or systematic way. Similarly a contemporary brand-centric company knows that it has a lot of assets in the form of consumer trust and sympathy, but it has no way of representing these assets as value in any rational or coherent way. That there is no coherent, established method for valuing social production (and this is the crux of the matter) does not mean that there are no attempts in that direction. On the contrary there is a booming market for more or less fantastic solutions for valuing intangibles. These instruments are however generally not interested in measuring the value of practices of social production. Instead, and like the business approach to social production in general, they depart from an established problem- the discrepancy between market and book values- and try to invent credible fictions that can account for and legitimize these discrepancies. The mere diversity of approaches and methods that they exhibit in itself testifies to the absence of an established standard measure. The absence of a rational measure of intangibles has problematic consequences for the systemic rationality of informational capitalism. First, the absence of such a measure inhibits the rational allocation of resources. This tends to increase the irrationality and volatility of financial markets and produce recurring speculative bubbles: dotcom, housing market, and what next. It also makes it difficult for agents who do want to have a social impact to decide where to put their resources. Today it is very difficult to know which NGO has a real impact, or which 'ethical' brand actually behaves in a desirable way. Finally, the absence of an established measure means that the non-monetary values that all admit have a growing subjective relevance to a wide range, or even a majority of actors- sustainability, fair trade, global solidarity- lack an adequate impact on business decisions. (Rather engaging with these 'values' becomes a matter of philanthropy, of 'doing good'.) Even if a majority of managers do feel that these things are worth something, there is no way to include their worth into the calculations of objective costs and benefits that drive managerial decisions. Since these values have no objective emboiment, they cannot become a parameter in business decisions. This is tragic, not only from the point of view of a necessary transformation of global capitalism, but also from the point of view of the single company. If it is not able to take these values into account in a systemic way, it is not able to act rationally from a long term, strategic point of view. Conclusion. The split in the information economy means that business increasingly rely on an asset- social production- that it does not fully understand. From the established and growing corpus of business theory we can extract a partial understanding. First, that is by now common knowledge that immaterial or intangible resources are a crucial asset to business. This can be a matter of codified knowledge. But often this asset is composed of things that are more difficult to pin down: tacit knowledge, flexibility, creativity, reputation, brand equity and so on. Second, there is an emerging consensus that these assets, or at least a growing share of them, are produced in processes that unfold beyond managerial control. Consumers interact around a brand, knowledge workers organize their own work-process, bloggers generate reputation that spreads 'virally' and so on. What is missing is an understanding of the value logic behind such processes. This lack implies two important things. First, although there is consensus as to the fact that these intangible assets are worth quite a lot, nobody is able to say with any precision how much they are worth. We lack a rational measure. Second there is an emerging consensus as to the importance of working with, nurturing and supporting processes of social production, of taking them seriously as an asset. However nobody seems to have considered that such a serious consideration of social production might have important implications for the ways in which established business work and think. In order to begin to fill this lack, we need an understanding of the value logic that governs social production. And where better to start than with its historical emergence.