Introduction: Assetization and Technoscientific Capitalism

Abstract

Kean Birch and Fabian Muniesa capital investment. Those are very different things, and the aim of contributors to this book is to flesh out this central point. Our perspective, then, is that we cannot characterize and analyze technoscientific capitalism solely in commodity terms anymore, not in the era of Uber and Airbnb, Google and Amgen. Can we understand the "unicorns" stalking Silicon Valley (i.e., firms whose notional valuations top $1 billion, promising huge returns to shrewd investors), the biopharmaceutical firms ramping up drug prices (while buying back their shares to shore up their share value), and governments turning the atmosphere into financial assets (and giving them away to polluters) without struggling within prevailing conceptions of the commercialization, marketization, and commodification of technoscientific research and innovation? As the latest stage of capitalism entrenches, it becomes even more difficult to see what is driving the accumulation of capital. As the marginal cost of production approaches zero, it is increasingly evident that productivity increases will not lead to sustainable profits. What will? Business model sorcery perhaps? Intriguing things are going on indeed, we contend, as a consequence of an emerging "asset form" that has come to replace the commodity as the primary basis of contemporary capitalism. By asset, we mean something that can be owned or controlled, traded, and capitalized as a revenue stream, often involving the valuation of discounted future earnings in the present-it could be a piece of land, a skill or experience, a sum of money, a bodily function or affective personality, a life-form, a patent or copyright, and so on. Discounting reflects an assumption about the future value of money, which is framed by expectations about future inflation, risks, and uncertainties (Muniesa et al. 2017). Assets can be bought and sold, yes. But the point is to get a durable economic rent from them, not to sell them in the market today; here we use the term rent to mean the extraction of value through the ownership and control of an asset, which usually entails limiting access to it (Birch 2020). How do things become assets, then? They are made so: the asset form is not, it is important to stress, the consequence of some inherent or embodied quality. One intention with this book is to show how assets are constructed, how a variety of things are and can be turned into assets, examining the interests, activities, skills, organizations, and relations entangled in this process. Another is to stress that technoscientific capitalism entails specific practices that make the uncertainty inherent in innovation understandable

Imprinting the economy: The structural power of venture capital

“…VCs delineate the legal terms of investment in the term sheet (TS) and investment agreement (IA) (Alemany and Andreoli, 2018: 258 f.). This way, venture capitalists construe the shape of the asset (Birch and Muniesa, 2020: 6). In these documents, VCs and startups agree on the investment amount, payout conditions, board seats, and shareholder rights (Alemany and Andreoli, 2018: 258 f.).…”

“…To build momentum, investors may start a round with a low valuation, which is increased by the high demand and inspires fear of missing out (FOMO). The frequent mentioning of FOMO, a phenomenon that surfaced in the context of millennial social media consumption, speaks to the dynamic nature of the valuation process (see also Birch and Muniesa, 2020: 6).Um, another thing is don’t start too high in negotiations. […] it's much better to start relatively low, and then the market presses you up, and you go back saying, hey, thanks for the offer, but I have a better one than you get a positive dynamic going.…”

“…Consequently, the asset form VCs impose on startups implies an effective decoupling of financial value and long-term economic performance. Instead of reflecting an inherent quality, startups-as-assets’ value is dynamic and temporal, construed by social actors (Birch and Muniesa, 2020: 6). The two patterns analyzed above are not the sole drivers of VC valuations, neither can the above section discuss VC valuation practices in all its complexities (for a detailed discussion of VC valuation, see Feld and Mendelson, 2017: 43 f.).…”

“…Within the social studies of finance, VC is tied to the asset form to explain platform companies’ tendency toward monopolistic business models (Balzam and Yuran, 2022) and exit-oriented innovation landscapes (Birch, 2017). Generally, the asset form is understood as a legal construct, which comes with “distinct modes of ownership and control” and involves rentiership (Birch, 2017: 469 f.; Birch and Muniesa, 2020: 5 f.). Asset values are shaped by future expectations, in other words, adhere to a speculative logic and are subject to the actions of the owners and other social actors, making value temporal and dynamic (Birch, 2017: 469 f.; Birch and Muniesa, 2020: 5 f.).…”

“…Generally, the asset form is understood as a legal construct, which comes with “distinct modes of ownership and control” and involves rentiership (Birch, 2017: 469 f.; Birch and Muniesa, 2020: 5 f.). Asset values are shaped by future expectations, in other words, adhere to a speculative logic and are subject to the actions of the owners and other social actors, making value temporal and dynamic (Birch, 2017: 469 f.; Birch and Muniesa, 2020: 5 f.). Rent, which is crucial in understanding the logic of VC, is a “payment to an economic actor (the rentier) who receives that rent—and this is the key factor—purely by virtue of controlling something valuable” (Christophers, 2020: xvi).…”