Marx,subsumption and the critique of innovation

Abstract

This paper advances a Marxist approach to the critical study of innovation. Such an approach offers alternative analytical tools for understanding the social and political aspects of innovation that are increasingly coming into focus within academic and practitioner fields. After outlining the emerging field of critical innovation studies and its key concerns, I turn to the question of how a Marxist critique differs from other forms of critical scholarship. I then introduce Marx’s application of the concept of subsumption to account for the relation between innovation and capital and to demonstrate the strength of a Marxist approach to the critical study of innovation.

As a distinct form of inquiry, the academic study of innovation developed from around the mid twentieth century (Godin, 2015). By 2009 this had reached a level of activity such that Fagerberg and Verspagen (2009) were able to verify its character as an ‘emerging scientific field’ (p. 218). For their study, Fagerberg and Verspagen conducted a survey of almost 900 scholars who self-identified as belonging to the area of ‘innovation studies’. In addition, they identified institutional resources, such as research units and conferences, in order to determine the general ‘structure’ of this emerging scientific field. At the time they offered a conservative estimate of around 4,000 scholars worldwide whose work they considered to fit within innovation studies. In the decade since the article was published, the field of innovation studies seems only to have grown. Today, as Godin and Vinck (2017) reflect, ‘the study of innovation has become an industry’ (p. 1).

Fagerberg and Verspagen’s (2009) study asked survey respondents to list their main ‘sources of scholarly inspiration’ for the study of innovation (p. 224). They include a list of the most statistically significant names offered by the survey respondents (those that were named by above 5% of respondents). In this a person appears that, they admit, ‘may perhaps come as a surprise to some’: the figure of Marx (2009: 224). They do not offer much by way of an explanation beyond mentioning Marx’s influence on Joseph Schumpeter, who holds the top position as a source of scholarly inspiration for innovation studies. This appearance of Marx is likely to remain surprising to those whose work falls within the broad remit of innovation studies because of the continued paucity of published works within the field that cite, let alone seriously engage, the work of Marx or the Marxist canon. Indeed, aside from Schumpeter’s contributions, the author of Capital seems to be almost entirely excluded from not only the mainstream of innovation studies but, as we shall see, from its emerging ‘critical’ strand as well. ¹

Some studies trace themes in innovation back to historical figures such as Xenophon (Blok, 2019; Godin, 2008, 2015) or Machiavelli (Bontems, 2014; Godin, 2008, 2015; Pocock, 1972). Yet despite being an intellectual source with far more historical relevance, Marx and Marxism have not received the same treatment. This is even more surprising given the influence of Marx on Schumpeter (1939, 1943), who remains the main scholarly influence for mainstream innovation studies after giving the question of innovation one of its first systematic theoretical developments in the early twentieth century. Schumpeter himself expressed surprise at the failure of his contemporaries to recognise the destructive side of innovation, an idea captured in his much extolled concept of ‘creative destruction’, writing that, ‘it may seem strange that anyone can fail to see so obvious a fact which moreover was long ago emphasized by Karl Marx’ (Schumpeter, 1943: 82).

This being said, a small but growing number of studies are beginning to shed critical light on the innovation process, its contradictions, and the often spurious assumptions that accompany mainstream innovation scholarship. There is also a growing recognition of the disconnect between ambitions for innovative change stated by businesses and governments and the possibilities afforded by the organisational and conceptual frameworks that presently structure innovative activities. Over the past 20 years innovation has captured the policy space. The European Union, for example, has been criticised for placing an ‘increasingly singular emphasis on “innovation” as the solution to Europe’s economic and social problems’ (de Saille, 2015: 155). Penetrating critical accounts of innovation are therefore needed to balance the influence of an uncritical and academically dubious pro-innovation lobby.

What is lacking from the growing body of work of critical innovation studies, and what I hope to add with this paper, is an explicit discussion of the relation between capital and innovation, and an explicitly Marxist approach to key concerns within the discourse of innovation studies. More generally, I offer the fairly simple suggestion that innovation today is best understood as innovation under capital. Taking this as a starting point opens the rich resources of the Marxist critique of political economy to the study of innovation. Many of the paradoxes of innovation are perfectly comprehensible and indeed predicted by a Marxist analysis. Moreover, a Marxist analysis offers an account of innovation that situates technological and economic development within a broader account of economy and society. In particular, Marx’s work on the formal and real subsumption of labour under capital offers novel ways to understand the key political imperatives that drive much economic and technological development.

This paper offers an initial attempt at recovering the work of Marx and the Marxist tradition for the study of innovation. I use the word ‘recover’ here, rather than ‘introduce’, because of the recognised influence of Marxism on the foundational ideas of innovation studies. Although this influence has primarily been transmitted via Schumpeter, Marxism has always existed and developed in relation to mainstream, or ‘bourgeois’, accounts of the economy. This lies at the core of what Marx meant when he gave the subtitle ‘a critique of political economy’ to Capital. I return to the question of what a Marxist ‘critique’ means below. Innovation studies often take capitalism for granted and the word itself is one of capital’s contemporary slogans. If such studies now represent something of a field, then a Marxist response is appropriate, and brings with it theoretical resources for understanding the significance of innovation under capital.

The paper is organised into three main sections. First, I introduce the emerging field of critical innovation studies in order to situate its key areas of focus and insights about the limits and presuppositions of mainstream innovation studies. Second, I turn to the question of what makes a form of scholarship ‘critical’ in order to lay the groundwork for a Marxist approach. Following this, I introduce Marx’s concepts of the formal and real subsumption of labour under capital in order to demonstrate the relevance these concepts have for critical studies of innovation. While this is only the beginning of a conversation, with this paper I hope to open the field of critical innovation studies to the analytic resources of Marxism.

The emerging field of critical innovation studies

If the study of innovation has become a recognisable and institutionally established field, critical studies of innovation are extremely marginal by comparison. At the time of writing, only one edited collection, Critical Studies of Innovation, explicitly considers itself to offer a ‘critical’ study of innovation (Godin and Vinck, 2017). An earlier collection, Challenging the Innovation Paradigm (Sveiby et al., 2012a), as well as a handful of journal articles, some of which are considered below, can also be considered to take a critical stance and, taken together, constitute what might be called the ‘emerging field’ of critical innovation studies.

Both Critical Studies of Innovation and Challenging the Innovation Paradigm begin from a recognition of the continued dominance of a ‘pro-innovation bias’ that has characterised the field since its beginnings (See Rogers, 1962). ‘Innovation research’, argue Gripenberg et al. (2012) ‘seems to be built on a dominant assumption that “innovation is good” regardless of the consequences’ (p. 1). Godin and Vinck (2017) note that this pro-innovation bias contributes to a situation where innovation has become ‘a panacea for every socioeconomic problem’ despite a marked lack of attention to ‘what these problems are, and what the collateral impacts of the innovation would be’ (p. 2).

Mainstream innovation studies hardly ever pause to consider the negative consequences of innovation. The first task critical studies of innovation are faced with is simply establishing that innovation does not offer a magic solution to problems of economy and society and establishing the necessity of challenging such assumptions. Challenging the Innovation Paradigm and Critical Studies of Innovation are certainly successful in this task and offer valuable reflections on the history, politics, economics and culture of innovation that dissent from and challenge the taken for granted assumptions of mainstream innovation studies.

The pro-innovation bias has had a material impact on the field. Sveiby et al. (2012b) undertook two systematic literature searches and a reading of the six most influential handbooks in the field of innovation studies in order to account for studies addressing the negative consequences of innovation. They found that only 0.1%–0.4% of the articles their search yielded contained discussions of the unintended or undesirable consequences of innovation. Moreover, they found that most of these treated innovation as the dependent variable, meaning that ‘they study effects that have a negative impact on innovation, rather than the negative effects that follow innovation’ (Sveiby et al., 2012b: 76). As their analysis makes clear, it becomes very difficult to imagine how innovation could ever be a panacea to social problems when, ‘Environmental issues, harmful products or issues for society outside the industry, or firm contexts are rarely raised as topics, and when they are, innovation is the dependent variable’ (Sveiby et al., 2012b: 78). The marginalisation of such ‘externalities’ in mainstream innovation studies means that the ‘fact that the issues and concerns may be caused by innovation in the first place is not a topic’ (Sveiby et al., 2012b: 78). As we will see below, this externalising gesture is key to Marx’s concept of formal subsumption.

In addition to combatting the pro-innovation bias, the need for a critical approach to innovation is evidenced by the ambiguous position politics holds within the innovation literature. A central theme of existing critical approaches to innovation is found in their affirmation that innovation is an object for political contestation. As Godin’s (2008, 2015, 2016, 2017) historical work tracing the origins and development of the concept from antiquity shows, the widely celebrated position innovation enjoys today sits in contrast to what was once a widely contested and, importantly, political concept. His comprehensive bibliometric study of the development of the concept shows that its present configuration as a concept devoid of politics is a relatively recent phenomenon. This shift in the position of politics with regard to innovation is significant. The ancient understanding of innovation as something that threatened ‘the established order’ (Godin, 2015: 5) is fundamentally different to the role innovation plays within contemporary capitalism, where it functions to defend and expand the command of capital.

The academic depoliticisation of innovation is contemporaneous with innovation playing a central role in state policy and economic planning. Pfotenhauer and Juhl (2017) challenge the ‘consistently narrow framing of the relationship between innovation and the state as a normative and deeply problematic construct’ (p. 70). Their critical summary of Mazzucato’s (2015) The Entrepreneurial State describes a situation where innovation ‘plays out in a seemingly apolitical and conflict-free space between objective science and technology, on the one hand, and efficient rational markets, on the other’ (Pfotenhauer and Juhl, 2017: 69). As such, the role of the state, they argue, is routinely limited to the ‘mere facilitation of a naturalized dynamic’ (p. 81). This apolitical framing of innovation is insincere; by their own reckoning, innovation is a means for governing society. The constant framing of innovation as apolitical turns out to be a crucial part of innovation’s political agenda. The routine presentation of innovation as ‘a naturalized dynamic’ means its specific ‘political aspects’ (Courvisanos, 2009) as part of the governance of modern capitalist economies are obscured or put off the table.

Working within what most would recognise as a neo-Keynesian framework, Courvisanos (2009) develops an important critical account of ‘the political aspects of innovation’, analysing the strategies capitalist organisations use to protect their interests by influencing innovation policy, and demonstrating how these strategies coincide with the movement of mid to long-term business cycles. Although the main motivation for this work is the development an analytical policy tool, Courvisanos’ contribution offers an important counterpoint to the otherwise broad depoliticisation of innovation. Innovation might indeed be presented as a naturalised dynamic in much of the literature, yet as Courvisanos makes clear, capitalist firms and their lobbyists are perfectly aware of the ‘political aspects’ of innovation and incorporate these within their strategies. Courvisanos therefore reveals the implicit political aspects of the otherwise ‘depoliticised’ sphere of innovation.

Godin’s (2006a, 2006b) efforts to account for the origins of the technological and economic framing of innovation that predominates today are similarly attentive to the political aspects of innovation. This is shown in his concern for the homogenisation of innovation policy. Godin (2003, 2006a, 2006b) shows in detail how the relatively independent investigations into innovation by three separate communities – scientists (including social scientists), management theorists and economists – coalesced, with the help of OECD statistics, into the homogenous concept that now informs government science policies worldwide. Despite Schumpeter’s (1939) distinction between invention and innovation, which bracketed scientific invention as being ‘without importance to economic analysis’ (p. 85), the idea that innovation primarily concerns the commercialisation of scientific invention has become standard in the literature. This path from scientific invention to its commercialisation is what came to be known as the linear model of innovation. This is now fully standardised within the statistical approaches to the measurement of innovative activities that inform government science policies worldwide. As Godin (2006b) demonstrates, the development of statistical modelling was crucial in reinforcing this particular understanding of the innovation process: ‘Having become entrenched – with the help of statistical categories for counting resources and allocating money to science and technology – and standardized under the auspices of the Organization for Economic Cooperation and Development (OECD) and its methodological manuals the linear model functioned as a social fact’ (p. 641).

In both the economics and policy fields, those analysing innovation often build their models around the most economically significant aspects of the process, describing the path from ‘basic’ or ‘pure’ scientific work through to its application, development, commercialisation and diffusion, including marketing. This places particular emphasis on the processes by which firms or organisations can capture value generated by workers and turn this into profit. Not only is this the main conceptual framework within which innovation is considered, it also operates as the main accountant of innovative activity, as measures such as Gross Domestic Expenditure on Research and Development (GERD) become key indicators determining how ‘innovative’ a particular country or region is. This focus on measurability obscures much scientific work by relegating it to the indeterminate category of ‘basic research’. I return to this question of measurement below where I show how the ‘demand pull’ model of innovation demonstrates the importance of Marx’s concept of formal subsumption to understanding innovation under capital.

Within the context of a widespread pro-innovation bias, innovation appears as a form of ‘hyper-confident social engineering’ (Bauer, 2017: 162) that is ignorant to other ways of understanding the world and other ways of enacting social change. As such, organised resistance to innovation reveals the ‘other side’ of the increased homogenisation of innovation policy (Bauer, 2017; Brandao and Bagattolli, 2017; Fougère and Harding, 2012; Thomas et al., 2017). While the dominant understanding of innovation is depoliticised, focused on its technological and commercial aspects, and tending toward homogenisation, a few studies have evidenced what might be called the ‘imperialistic’ nature of this and have attempted to understand innovation ‘from below’ (Fougère and Harding, 2012; Thomas et al., 2017). Thomas et al. (2017) argue against ‘reductionist perspectives’ of the resistance to innovations, such as those represented by the derogatory use of the term ‘Luddite’. Rather than reducing the rejection or destruction of artefacts or technological systems ‘to a simple irrational act of rejection of the new’ (Thomas et al., 2017: 184), or ‘neophobia’ (Bauer, 2017: 163), forms of resistance to innovation have their own logics and purposes. Fougère and Harding (2012) are attentive to the imperialistic nature of the homogenisation of innovation policy. Arguing that ‘successful innovations are part of the constructions through which the West knows itself as ‘modern’ or ‘advanced’ (p. 22), their analysis offers an important political explanation for the ongoing pro-innovation bias. Innovations cannot fail, ‘because failed innovations would have devastating ontological consequences – we would no longer be “advanced”’ (p. 22). I return to the resistance of innovation when I consider Marx’s concept of the real subsumption of labour below.

What can Marx contribute?

What a Marxist approach will add to this emerging discourse hinges on what is meant by the term ‘critical’. So far, critical studies of innovation have tended to be ‘critical’ in the conventional sense of the term by focusing on the negative or ‘bad’ aspects of innovation. In their willingness to challenge an innovation status quo marked by naive celebration and rhetoric, these studies are ‘critical’ in the sense that they bring the harmful aspects of innovation to light. As demonstrated above, critical studies of innovation have usefully drawn out the negative and undesirable aspects of innovation that some researchers have sought to obscure over the past few decades. These negative aspects of innovation were a concern from the very beginnings of what we now call innovation studies, especially in the case of Schumpeter, and it is only more recently that they have become obscured. These studies are an important voice dissenting against the noise of the pro-innovation lobby.

A second sense of critique is evident in the existing literature; what we might call an ‘Enlightenment’ or ‘Kantian’ sense of critique (Kant, 1996). When put to innovation, these works test the concept and its uses and see how it stands up to rational scrutiny. They do not take innovation for granted as an established category and rather conduct independent investigations that challenge the core assumptions of mainstream innovation studies. Godin’s work is exemplary here, as well as many of the contributions to Critical Studies of Innovation (Godin and Vinck, 2017) and Challenging the Innovation Paradigm (Sveiby et al., 2012). The specifically Marxist form of critique that I suggest here is one that certainly shares the Enlightenment spirit of careful scientific analysis and open criticism. It is, however, more specific in the way it situates itself in relation to mainstream discourse. Enlightenment critique sets itself against dogma. It offers an abstract negation of dogma, in the sense that it rejects received knowledge in favour of independent investigation and verification (Kant, 1996). This form of criticism is abstract in the sense that it applies to all dogma, rather than to specific doctrines. A truly scientific spirit perpetually applies this principle to itself and its own productions, and ‘critique’ means the ongoing cycles of hypothesis testing, conjecture and refutation (Popper, 2002).

Rather than an abstract negation of dogma, Backhaus (2005: 17) offers that Marx’s concept of critique represents a determinate negation of economics. This form of critique takes the categories and arguments of mainstream, or bourgeois economics, and sees them as the manifestation of a particular form of knowledge. This knowledge is not merely ideological but contains a kernel of truth, albeit a one-sided truth, that cannot be abstractly done away with. The strength of this form of critique is found in its reckoning with the details. Backhaus (2005) offers a clear formulation: ‘The project of a critique of “the” economy, as it was, is and will be, can be conceived and developed only on the condition that “the” economist or “the” economy can become object of a critical ideological investigation’ (p. 23).

To better understand this, it is useful to think about what the autonomous discipline of economics represents. Wood (1981) argues that perhaps ‘the most effective defense mechanism available to capital’ is found in the separation of the economic and the political in bourgeois economics and political economy (p. 67). By abstracting from the social and positing the economy as an autonomous sphere, these disciplines can largely ignore political questions, relegating them a secondary status to properly ‘economic’ analysis. We have already seen that this is largely the case with innovation today. Externalising political concerns has the effect of naturalising the capitalist mode of production, abstracting from and obscuring its history. ² Despite this, the categories of economics, ‘do reflect – albeit in a distorting mirror – an historical reality specific to capitalism’ (Wood, 1981: 67). Rather than rejecting the ideological construction of the categories of bourgeois economics and political economy, Marx adopted them ‘as his point of departure precisely because they expressed, not a universal truth, but a historical reality in capitalist society’ (Wood, 1981: 69). Marx was able to ‘decipher the real meaning of the “appearance”’ through ‘the critical elaboration of bourgeois categories’ and to return to these categories their properly political status (Wood, 1981: 69). The critique of political economy, then, involves an immanent engagement with the material in question. In Marx’s own words, this form of critique does not merely ‘show up contradictions as existing; it explains them, it comprehends their genesis, their necessity. It considers them in their specific significance’ (Marx, 1979: 91).

When discussing innovation, mainstream economics have been less celebratory than the policy crowd and if they have exhibited a ‘pro-innovation bias’ it is only because this is caught up in a broader ‘pro-growth’, ‘pro-profit’ or indeed, ‘pro-capital’ bias. Whether this is at the micro or macro level, economists have generally opted for a more ‘realist’ view of innovation than many writing in the policy or management realm. Indeed, for economists, being ‘pro’ or ‘anti’ innovation seems a little beside the point. Rather, innovation is a strategy available to firms seeking to maintain or capture market share, for those seeking to increase revenue, or indeed, for those seeking to subvert worker resistance. In other words, innovation is one strategy capitalists employ in their efforts to make profits, whatever specificities these efforts entail. General economic trends and business cycles will influence what strategies are most promising. In turn, investment in innovation has long been recognised as an important driver of these cycles (Courvisanos, 2012; Mandel, 1998). This recognition was perhaps Schumpeter’s (1939) most important contribution.

Leitner’s (2017) discussion of ‘no’ and ‘slow’ innovation strategies offers an instructive example. Recognising that ‘the call for innovation has become a mantra in the modern economy’ (p. 201), Leitner seeks to account for the reasons why some firms are choosing ‘non-innovation’ and ‘slow innovation’ strategies. Indeed, Leitner cites numerous studies that find that there has been a slowdown in innovation activity among European companies. While some of this can be explained by broader economic pressures such at the 2008 Global Financial Crisis, it remains puzzling that this decline is concurrent with the rise of innovation as a central pillar of regional economic strategy. Leitner makes it clear that for capitalist firms, innovation is rarely seen as a good in itself. Whether technological innovation is good or bad for a firm depends largely on the firm’s structure and the ‘business environment’ in which it operates. Innovation policy, riding on the pro-innovation bias, can then be seen as an attempt to govern this environment and construct the best possible conditions for firm driven innovation.

For capital, the question is never: innovation, yes or no? It is always: when to innovate, how to innovate and what kind of innovation is best. It is about recognising innovation as a key strategy for capitalist accumulation and recognising that policy settings can, in turn, encourage or discourage capitalist innovation. This latter point is vital. Technical developments in production are largely determined by the ‘business environment’ that a firm operates within, as these are the basis from which innovation strategies are enacted. This explains the rise of innovation as a key factor of economic policy over the past 30 years (Bontems, 2014; de Saille, 2015). Policy recommendations that seek to promote innovation or ‘technology adoption’ are, for example, often made against policies designed to protect workers (Walsh, 2020).

It is a disarmingly simple point. In a capitalist economy, innovation is firstly a vehicle for the accumulation of capital; any other concerns come second. As Courvisanos (2009) makes clear, understanding the specific innovation strategies employed by firms is crucial in understanding the significance of innovation as an economic and political fact. What a Marxist approach offers is a way to make sense of these diverse aspects and to situate capitalist innovation within a broader historical account of economy and society. This is what I propose to do in this paper by introducing Marx’s concepts of formal and real subsumption.

Subsumption

A key aspect of Marx’s critique of political economy is found in his demonstration of how capital takes over existing production processes and social arrangements and intervenes in both for its own purposes. Innovation is not only a name given to technological development spurred by capitalist competition but refers more broadly to a spectrum of strategic options available to capitalist firms. As we have seen, these can be, and often are – somewhat paradoxically – non-innovative strategies. Innovation is therefore not only about progress in science and technology or the adoption and ‘diffusion’ of new technologies, but about the creation, maintenance and development of a particular form of production and a particular way of organising society and economy. In this third section I introduce the concept of subsumption as it is used by Marx. This is a focus of Marx’s work, and of Marxism more broadly, that has much relevance to the critical study of innovation, as I hope to make clear in what follows. There are of course other possible applications of Marx and Marxism to the study of innovation and these will look very different to what I present here. In this paper I have attempted to identify openings where critical innovation studies might engage with Marxist theory. For the task of recovering Marxism for innovation studies, subsumption is a useful place to start because it cuts to the core of Marx’s own methodology and establishes the grounds of his analysis.

Subsumption is a relational concept that refers to the process by which something particular is gathered within, or placed under, a general category. In short, to subsume something means to subordinate it to something else. Marx was familiar with the concept from his deep reading of 18th and 19th century German philosophy, notably the works of Kant, Schelling and G.W.F Hegel (Murray, 1988). The concept is an important feature of Kant’s ‘transcendental deduction’ in the Critique of Pure Reason, where he argues that the manifold of intuitions are subsumed by the categories of understanding (Kant, 2007). Against Kant, Hegel (2015) saw subsumption as a limited activity of understanding itself; as an intellectual process of abstracting from the particular and leaving its specificity behind as it becomes incorporated within a higher category. Following Hegel’s use of the concept, Marx recognised that subsumption was not always a neutral process, as it might be with purely philosophical speculation, but rather something that affected, sometimes violently, the particulars in question. Marx drew out the concrete aspects of subsumption, showing them to have a thoroughly social as well as intellectual reality.

With the subsumption of labour under capital, capital presents itself as the truth of the production process while labour is taken to be nothing but wages to be paid or an industrial obstacle to be overcome. This has concrete manifestations in both the intellectual realm (economics) and the social (relations of production). Marx (1990) divides the subsumption of labour into two main types, formal and real, and two minor variations, hybrid and ideal (pp. 645; 1019–1038). Although some important contributions have emerged on the questions of ideal and hybrid subsumption (Murray, 2016; Tomba, 2013), here I deal only with the main categories: formal and real.

Formal subsumption

Formal subsumption is the precondition for real subsumption. Indeed, Marx (1990) refers to formal subsumption as ‘the general form of every capitalist process of production’ (p. 1019). Formal subsumption concerns the basic building blocks of capitalist society; the social-economic formations that put wage labour between workers and their access to the means of social reproduction. Although Marxist scholarship of recent decades has tended to focus on the question of real subsumption, which I return to below, a few important works have recently emphasised the fundamental importance of formal subsumption to Marx’s critique of political economy (Harootunian, 2015; Tomba, 2013, 2015). Formal subsumption accounts for the near complete capture of the discourse of innovation by the categories of the capitalist mode of production. As such, formal subsumption offers a theoretical explanation for the depoliticisation of innovation, as well as for its homogenisation into a predominantly economic and technological concept, both key foci in the emerging field of critical innovation studies.

Recalling that subsumption involves an erasure of particularity, the formal subsumption of labour marks the erasure of non-capitalist particulars, and their designation as ‘externalities’. This is an important point when we consider the depoliticisation of innovation. Abstracting from the social base of production and externalising non-capitalist particulars as secondary to immediate ‘economic’ concerns is the precise ‘defense mechanism’ Wood speaks of above. With the formal subsumption of labour under capital, particularities that may have been of central concern to the production process, such as the reproduction of the community from which workers come, are no longer of an immediate concern to the organisation of production when considered from the perspective of capital.

Formal subsumption is often used to refer to a process whereby previously independent crafts-people (or those engaged in simple co-operation) enter a wage relation with capital without the production process itself being altered. The technical aspects of the work remain the same, however a capitalist now owns of the means of production, pays wages to workers and takes responsibility for coordinating the production process. Formal subsumption refers to a formal change in the relations of production while the content, the technical process itself, remains the same. The subordination of the production process to the logic of capital is therefore key to formal subsumption. Before any technical interventions into production, formal subsumption marks the moment where the prerogatives of capital are cemented as that which commands production.

In order to demonstrate the importance of formal subsumption to critical studies of innovation we can look to the history of the ‘demand pull’ model of innovation. This alternative conception challenged the privileged place held by basic research in the linear, or ‘technology-push’ model (Godin and Lane, 2013; Kalcheva et al., 2018). Rather than seeing innovation as stemming from basic research begetting new technologies and these being rolled out onto the market (technology-push), the demand-pull model identifies ‘social need’, in some form, as the motivating force of the innovation process. In the 1970s ‘push’ and ‘pull’ conceptions were cast against one another with the ‘push’ side ultimately emerging victorious due to its compliance with established statistical methodologies for measuring scientific activity (Godin and Lane, 2013: 629–631). During this period, economists drew attention to methodological complexities associated with the measurement of human needs. Need, they argued, is a broad concept and difficult to measure. In a decisive 1979 paper, Mowery and Rosenberg (1979) argued that the failure of the demand-pull model was due to a failure to distinguish between (social) need and (market) demand. According to Mowery and Rosenberg, ‘need’ was a ‘shapeless and elusive notion’, whereas market demand was a ‘precise’ and measurable concept (p. 140). Following this intervention, considerations of social need has been uniformly reduced to market demand in the innovation literature.

While formal subsumption signals the capitalist takeover of existing production processes without substantially modifying the labour process, this radical inversion of the purpose of production denotes a profound social shift (Tomba, 2013: 83–89, 2015: 294). As Murray (2016) puts it: ‘The social transformations involved in formal subsumption are epochal, but the material transformations are slight’ (p. 304). Formal subsumption sets up the terrain of capitalist relations of production and is repeated everywhere that productive activities previously conducted outside the capital relation are brought into the fold. Formal subsumption lays this transformation bare because no meaningful technical change in production is involved. The production process is ostensibly the same, capital merely takes command. In a strictly technical sense, there is nothing innovative about this:

Money wealth never invented nor fabricated the spinning wheel and the loom. But, once unbound from their land and soil, spinner and weaver with their stools and wheels came under the command of money wealth. Capital proper does nothing but bring together the mass of hands and instruments which it finds at hand. It agglomerates them under its command (Marx, 1993: 507–508, emphasis in original).

Still, on the other hand, this can be considered the most far reaching organisational innovation of the modern era. The entire purpose of production moves from varied forms of social reproduction, to production for the sake of the reproduction of capital on an ever expanding scale, which is both historically and logically distinct (Marx, 1990: 711–724). Formal subsumption therefore denotes the formal specificity of the capitalist mode of production, it is ‘the form that enables us to determine the mode of production as a capitalist one’ (Tomba, 2015: 294).

Beyond the immediate implications this has for production, formal subsumption signals the beginning of a form of thought that subsumes production to the demands of capital and, with the normalisation of wage labour, externalises broader questions of the reproduction of the community or the welfare of the environment (James and Dalla Costa, 1972). Formal subsumption can be considered the historical and logical basis from which this reconfiguration of the social unfolds. This is an important point that is often missed in the Marxist literature. Although the capitalist subsumption of labour originates in distinct historical moments, it is not limited to this. Rather, formal subsumption names a major transformation in the logic of production that is repeated everywhere the mode of production is a capitalist one. For this reason, formal subsumption is something both ongoing, in the concrete sense that specific instances of it happen today, and universal to capitalism.

Real subsumption

If formal subsumption marks the establishment of the labour capital-relation and is ‘the general form of every capitalist process of production’ (Marx, 1990: 1019), then this almost immediately inaugurates what Marx calls ‘real subsumption’. Real subsumption involves the on-going transformation of labour processes in accordance with the dictates of capital. With formal subsumption, existing production processes came under the command of capital, with real subsumption, capital actively intervenes in these processes for its own purposes.

Real subsumption is driven by both competition among capitalists and the efforts of capitalists to gain advantage over workers. With formal subsumption, because capital merely integrates existing processes of production, the knowledge and skill of workers remains vital to the production process. Uniquely knowledgeable and skilful workers are not so easily replaced. Moreover, as easily as they can apply their knowledge to production, they can withhold it to leverage power. A large part of real subsumption is found in capital’s efforts to overcome this burden. Knowledge is therefore central. Real subsumption names the on-going ‘separation of the intellectual faculties of the production process from manual labour, and the transformation of those faculties into powers exercised by capital over labour’ (Marx, 1990: 548).

Importantly, and alongside extracting knowledge of the production process from the heads of workers, real subsumption involves the integration of scientific invention into the service of capital. Harry Braverman detailed this in his study of transformations to the labour process. The ‘key innovation’ of the 20th century, argued Braverman (1974), was not to be found in any specific technology, ‘but rather in the transformation of science itself into capital’ (pp. 114–115). In one of the most highly cited papers in the innovation literature, Teece (1986) outlines the importance of intellectual property in determining who seeks to profit from innovation. Managing ‘appropriability’, seen as a firm’s strategy for placing legal limits on the informational content of an innovation, proves to be an important mechanism through which firms are able to secure profits from their innovative activity, or prevent would-be entrants from competing with an improved technology (Teece, 1986). Put simply, a firm’s ability to appropriate and control access to knowledge is fundamental to profiting from the innovation process.

Real subsumption also accounts for the on-going development of management theory and scientific research and development applied to industry. Indeed, the development of innovation policy in the post-war 20th century was in large part an effort to better align scientific research and development with industry. The intimate connections forged between science and industry during the war were transformed into permanent weapons of class war in peace time. Policy debates over ‘basic’ versus ‘applied’ research were largely formed around the efforts of the scientific community to secure autonomy against industry seeking to capture a larger share of science funding (Pielke, 2012).

To understand the logical specificity of real subsumption it is necessary to understand the role ‘socially necessary labour-time’ plays in Marx’s overall conceptual apparatus. According to Marx (1990), ‘socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society’ (p. 129). The key here is that socially necessary labour-time is not a cumulative measure, but an abstraction denoting the average or general level of labour-time necessary for a particular form of production at a particular level of technological development. In other words, it is the level of productivity expected of a firm if they hope to be competitive in a given branch of industry and in a particular location. Within Marx’s theory of value, socially necessary labour-time is the measure against which the individual production of commodities is always set. The time it takes to produce an individual commodity is always relative to this average. It is always less or more.

This difference is crucial to capitalist competition. Because of the capitalist’s orientation toward the market as a means to realise profits, capital is necessarily cognisant of the level of productivity required to be competitive within a given branch of production. Technological innovation can allow a firm to temporarily produce at a rate faster than the social average. This allows firms to accrue ‘surplus-profits’; profits above the average rate of profit for that industry (Marx, 1991: 273–301, 1989: 470). They are, quite simply, able to produce more for less. This only lasts, however, as long as the social average remains lower than that of the innovating firm. It is the difference that is crucial. As soon as the difference is dissolved the firm’s advantage disappears. While this gives insight into capital’s appetite for technological innovation in the narrow sense, it also reveals something that is fundamental to capitalist innovation in a much broader sense. As a system, capitalism requires these differences in levels of productivity for its own dynamism. Tomba (2015) characterises these as ‘asynchronies’ within the capitalist mode of production, arguing that they are absolutely necessary for the ongoing survival of capitalism, ‘necessary in order to extract relative surplus value from the benefits of technological innovation’ (Tomba, 2015: 291).

Because real subsumption is such a large category – conceptually capturing everything that capital does and has done to transform the world, both materially and ideologically – most of what has been observed of the techno-economic paradigm of innovation falls within it. Yet capital is always situated and innovation, we are told, is only possible within economic conditions where such strategies are feasible. Capital always runs up against limits and innovation is one trajectory where this becomes legible. Deregulation is common strategy pursued by capitalist lobbyists because it creates a favourable environment for the expansion of capital and this is often pursued in the name of innovation. In some contexts this lobbying strategy will be more attractive to capital because of the high financial risks of genuinely transformative technological innovation.

Indeed, much of what is called innovation today falls within the category of real subsumption. What an understanding of formal subsumption reminds us, however, is that what is at stake is not the particular subsumption of one sphere of production or another (for example the subsumption of scientific labour in research and development), but the subsumption of labour as such as being a foundational aspect of the capitalist mode of production, and the presupposition from which it develops its understanding the world. A key question concerning real subsumption is how far capital’s interventions into this world can go. The question is this: if capital is indeed transforming the world then what are the limits of this intervention?

Critical innovation studies offer empirical and theoretical insight into this question. Marxist theorists trying to understand this important concept in Marx can also learn from an engagement with innovation studies. The homogenisation of innovation policy and the resistance to innovation offer examples of real subsumption. This is a key element of real subsumption because it concerns the integration of scientific research and development into an overarching logic that is not only geared toward accumulation, but presupposes its own structure as the basis from which it measures its object; innovation.

Conclusion

The analysis of innovation afforded by a Marxist approach has wide application. Take the OECD’s original Oslo Manual, which offers guidelines for the measurement of innovative activities. In this, innovation is only dealt with in terms of,

changes which take place at the level of the individual firm. It does not cover some other categories of innovation discussed for example by Schumpeter, such as the opening of a new market, the conquest of a new source of supply of raw materials or semi-manufactured goods, or the re-organisation of an industry (OECD, 1997: 8).

Fougère and Harding (2012) argue ‘the understanding of innovation articulated in the Oslo Manuals has become so dominant that it is close to such a hegemonic status’ (p. 17). The centrality of the firm to this, grounded on the formal subsumption of labour under capital, and the ‘real’ transformation of the world in capital’s own image and interests, is crucial to understanding the political aspects of innovation policy. As discussed above, Godin’s (2003, 2004, 2006a, 2006b) work demonstrates how statistics following OECD methodologies have contributed to the ossification of a homogenous and depoliticised ‘techno-economic’ paradigm of innovation.

The resistance to innovations likewise informs us of the limits of real subsumption and offers a rich resource for organising outside the limits of formal subsumption. Thomas et al. (2017: 193) discuss an example of Indigenous Mapuche people in the Bίo Bίo region of southern Chile who resist the advance of the ‘agro-business system’ through traditional seed sharing. These explicitly non-market practices of social reproduction form a barrier to the extension of market logics into these societies. Rather than being a last line of resistance against the global capitalist hegemon of agro-business, Thomas et al. (2017) show how this is part of a wider ‘socio-technical alliance’ between farmers and organisations participating a global agro-ecological movement against ‘hegemonic commercial-extensive agriculture, based on the use of technology packages’ (p. 192). In other words, a broad network of resistance to capitalist innovation. Such examples offer empirical cases that demonstrate the limits of real subsumption.

This paper has offered a Marxist approach to innovation that seeks to build on and advance existing critical work in the field of innovation studies. As I have demonstrated, a Marxist approach to innovation offers tools for a broad system-wide analysis, with particular strength in identifying how innovation plays a central role in the tensions, conflicts and contradictions of the capitalist mode of production. With the concept of subsumption above, I have shown that a Marxist approach offers a nuanced account of the innovation strategies of firms. The above discussion of formal subsumption exposes the way that capital, or more specifically individual capitals, have the same basic form in both highly advanced and comparatively less advanced economic environments. Such an analysis is able to account for the ‘uneven’ development of innovations globally, providing a framework for understanding the historical constitution of this difference (Tomba, 2015). In this sense, Marxist theory offers opportunities for connecting the general systemic features of contemporary capitalist innovation with unique local experiences such as those outlined by Thomas et al. (2017). The Marxist concepts of formal and real subsumption offer useful tools for critical studies of innovation concerned with the ‘top-down’, ‘imperialistic’ or indeed ‘neo-colonial’ nature of innovation models and innovation policy, and to those attentive to the ‘one-sided’ presentation of innovation within mainstream economic and policy approaches.

What I offer here is by no means the only way Marxist theory can be useful for innovation studies. As the above analysis has shown, a Marxist approach to innovation offers insight into many key areas of concern at the forefront of critical innovation studies. Where possible I have attempted to point to a few key places in Marx’s own writings that are relevant to the questions of innovation under consideration. I have also pointed to several key developments in contemporary Marxist thought that shed light on innovation. These references are no doubt incomplete, but they do offer a few starting points for innovation researchers unfamiliar with the Marxist canon to begin considering the significance of a Marxist approach for their own work.

While this is an invitation to innovation researchers to consider Marxism seriously as a valuable intellectual resource, it is equally an invitation to researchers already versed in Marxist thought to consider the importance of the category of innovation to understanding contemporary capitalism and its forms of organisation. A great deal of contemporary Marxist thought is preoccupied with theoretical minutia and somewhat esoteric debate. What I have attempted to do here is to demonstrate the strength of an applied Marxism that is engaged with developments in discourses outside the mainstream of Marxism itself. Beating global capital requires the critical elaboration and refutation of capital’s own categories, one of which is innovation.