In a tentative mode, I would like to suggest that the term or notion of the algorithm should also be considered when attempting to understand the social power of algorithms. In some ways this power can potentially be detached from its technical and material form whilst still capturing something of the exteriority. As such, we would need to understand algorithms within their discursive practices and framings. The notion of the algorithm is evoked to influence and convince, to suggest things and to envision a certain approach, governmentality and way of ordering. Plus, the term is also part of wider rationalities and ways of thinking. Together then, this requires us to explore and illustrate the power of this term whilst also potentially using it as a focal point for opening up or revealing these wider rationalities. The notion of the algorithm is part of a wider vocabulary, a vocabulary that we might see deployed to promote a certain rationality, a rationality based upon the virtues of calculation, competition, efficiency, objectivity and the need to be strategic. As such, the notion of the algorithm can be powerful in shaping decisions, influencing behaviour and ushering in certain approaches and ideals. The algorithm’s power may then not just be in the code, but in that way that it becomes part of a discursive understanding of desirability and efficiency in which the mention of algorithms is part of ‘a code of normalization’ [Foucault, M. (2004). Society must be defended: Lectures at the collège de France, 1975–76. London: Penguin., p. 38]. The notion of the algorithm is part of the social power we should be exploring. The term algorithm carries something of this authority. Algorithms are, largely, trusted for their precision and objectivity. A certain rationality may well then be built into this perception of the algorithm. The discourse surrounding the algorithm might well reveal something of the wider political dynamics of which they are a part.
A form of accounting, in which the sums were not expressible in common units, would of course not yield anything rationally intelligible. Now, a socialist economy, as we have defined it earlier in terms of its goals, in no way presumes a purely administrative economy, which unilaterally sets the prices for all goods (fixed prices), yielding figures that can be readily added. Instead, such a socialist economy also allows for these prices to arise through agreement (negotiated prices). Since we thus do not want to make any presuppositions about price formation, we must consider the theoretically most general––and, from the viewpoint of accounting, practically most unfavorable—case. We therefore assume that the economy for which we seek a quantitative overview has all types of price formation, from price formation in a market through the free play of supply and demand to administratively set prices. Whether such an assumption is theoretically valid, or even practically conceivable, remains to be seen. […]
But here begins the actual difficulty, which we wish to designate the quantitative difficulty. Fixed prices can affect negotiated prices at a minimum in two fundamentally different ways, according to whether their effect propagates “downstream,” […] meaning the same direction that the production process runs (towards the final product)—or in the opposite direction (towards the raw materials). The cost principle in accounting implies, however, that only those cost figures arising from the “downstream” effect of a fixed price may be added to one another. […] A fixed price and all the negotiated prices that arise from its “upstream” effect may be added neither to that fixed price itself nor to the negotiated prices arising from its “downstream” effect […]
Natural costs express the sacrifices that the natural process of material production requires, according to the character of the production task involved. Social costs, on the other hand, are that extra sacrifice that society’s will imposes on us via the effort both to ensure just distribution in every instance and to secure production with higher social utility. It is evident that separate quantitative recording of these cost groups (natural and social costs) is the main, practical task of socialist accounting. Without the recording of natural costs, production would have no reliable, infinitesimally precise guidelines, operating instead on intuition and approximation. We wish to point out here with particular emphasis that without the recording of social costs, the political-moral side of socialism would be no more realizable than the technical side would be without the recording of natural costs. Humanity will only be free when it understands what it must pay for its ideals. Only then will humanity come to recognize that the realization of these ideals depends exclusively on humanity itself. Then too, however, humanity will find the strength to realize its ideals.
“Sozialistische Rechnungslegung” [“Socialist Accounting”], 1922; trans. Johanna Bockman, Ariane Fischer, & David Woodruff 2016.
Money has provided us with the sole possibility for uniting people while excluding everything personal and specific.
The disintegrating and isolating effect of money is not only the general precondition and corollary of this conciliatory and unifying quality; under specific historical conditions, money simultaneously exerts both a disintegrating and a unifying effect. For instance, the organic unity and narrowness of family life has on the one hand been destroyed as a consequence of the money economy, while, acknowledging this as a fact, it has been emphasized that the family has become almost nothing more than an organization  for inheritance. If, among several interests that determine the cohesion of the group, one of them has a destructive effect upon all the others, then this interest will survive the others and become the only bond between the different elements whose other relationships it has destroyed. It is not only because of its immanent character, but precisely because it destroys so many other kinds of relationships between people, that money establishes relationships between elements that otherwise would have no connection whatsoever. Today there probably exists no association between people that does not include some monetary interest, even if it is only the rent for a hall for a religious association.
The more the unifying bond of social life takes on the character of an association for specific purposes, the more soulless it becomes. The complete heartlessness of money is reflected in our social culture, which is itself determined by money. Perhaps the power of the socialist ideal is partly a reaction to this. For by declaring war upon this monetary system, socialism seeks to abolish the individual’s isolation in relation to the group as embodied in the form of the purposive association, and at the same time it appeals to all the most innermost and enthusiastic sympathies for the group that may lie dormant in the individual. Undoubtedly, socialism is directed towards a rationalization of life, towards control of life’s chance and unique elements by the law-like regularities and calculations of reason. At the same time, socialism has affinities with the hollow communistic instincts that, as the residue of times long since past, still lie in the remote corners of the soul. Socialism’s dual motivations have diametrically opposed psychic roots […]
Georg Simmel, The Philosophy of Money (Routledge, 2011), pp.374-275. Translated by Tom Bottomore, David Frisby and Kaethe Mengelberg.