Monetizability is an ugly word, but you cannot understand many features of the economy without it.
It is, quite simply, the ability to turn a good or service into cash flow. And this, in turn depends upon the power to exclude - the power to deny customers a valuable product if they don’t pay, or the power to exclude potential rivals from one’s market.
Take, for example, the question of whether the Guardian should have a paywall, whether it can monetize its online content. This depends upon its power to exclude. If it has a sufficient monopoly over the supply of upper-class sanctimoniousness, then a paywall makes sense, as it can force people to pay for this sanctimoniousness. But if there’s an alternative, free, supply of it - say, from blogs such as this - then a paywall won’t bring in much revenue as people will merely substitute towards that free supply.
Or take the question of whether ITV can monetize its ITV player. This too depends upon its power to exclude. If we can only see special webisodes of Corrie by paying, then the strategy might work. But if ITV tries to make us pay to see programmes it has already broadcast, it won’t; we’ll simply remember to use Sky+, or ITV2 or ITV+1 instead. ITV’s power to exclude is then weak, and so is its monetizability.
Shell, Centrica and Apple might not seem to have much in common. But they do. All have announced high profits recently. And the common factor is that their profitability is founded upon a power to exclude rivals - by high capital costs in the case of Shell and Centrica, and by a powerful brand in Apple’s case. The crisis of newspapers and the music industry, by contrast, originates from the fact that technical change has reduced their power to exclude and hence their monetizability.
And I suspect that a big factor behind the investment dearth is that firms appreciate that innovation is not monetizable. This might be because they’ve wised up to an old fact. Or it might be that changes in capital requirements, technology, globalization or social norms (“what, you expect me to, like, pay for stuff, dude?“) have reduced monetizability.
So far, so conventional.
But there’s more. Monetizability applies also to workers.
Put it this way. Imagine you could get 600 people to pay you just 20p per day - less than 3p per hour. Doesn’t seem a big ask, does it? But if you could do this, you’d earn more than the median wage.
So why do most people earn less? It could be that their marginal product is very low. But it could also be that they lack the power to monetize their services - that, as Marx said, workers bring nothing to the market but their own hide and expect nothing but a hiding. As Stephen Margin famously pointed out, the origin of the factory system lay not so much in its technical superiority, but in the fact that it transferred power from workers to capitalists.
And this inequality of power, of monetizability, has increased in recent years, through (at least) three forces:
1. Globalization means capitalists are more able to exclude workers from a share of revenues: they have used competition from cheap Asian labour to drive wages down.
2. Technical change has reduced workers’ power to either withhold their services by shirking or to monetize them by little fiddles.
3. Bosses have increased their monetizability by an ideological con-trick. They’ve managed to persuade us that management is a rare and indispensable talent that can only be motivated by massive salaries.
4. Some strategically powerful people - traders at banks or bosses in ordinary firms - have the power to ruin a firm, for example by selling off assets cheaply or by undertaking destructive ventures. This power to destroy a firm confers upon them the power to, in effect, demand huge salaries. It’s a form of protection racket.
My point here is simple. Crises in particular industries, the lack of investment and the growing power of capitalists over workers have a common origin - in changes in monetizability.