It was capitalism all along!

In this last semester at Harvard, I’ve been following a class at Harvard, on Cyberpolitics, offered by Ruxandra Paul. For the final paper, the students were quite free to pick a topic of their choosing.
The scope of the course is quite broad, which meant the range of possible subjects was significant. So, I did what I figured was the only sensible option, which of course is to try and make clear that all problems on the cusp of ‘cyber’ and ‘politics’ are caused by capitalism.

Abstract

In recent years, a growing number of analysts and academics have exposed endemic problems in how online and mobile technologies are deployed, ostensibly with the objective of creating value for the end-user, but at obfuscated and not always fully understood costs. The critique which has garnered the most public attention has perhaps been Shoshana Zuboff’s The Age of Surveillance Capitalism. However, though she and others bring up the context of ‘capitalism’ as a driver for the problems they identify, none directly point a finger at capitalism as the actual source of the problem.

Here, I show that capitalism is at the root of tech’s evils.

I will argue that the challenges society experiences in relation to where ‘cyber’ and ‘politics’ meet, are driven by features inherent to capitalism, particularly unrestrained capitalism. I first identify a number of problems residing on the cusp of technology, and politics. I will then look at the features of capitalism, and how they are responsible for these problems.
Finally, I briefly discuss alternative sociocultural systems to replace capitalism.

What is the problem?

There is no shortage of societal problems on the cusp of technology and politics. An abridged list:

  • The extensive, unjustified, and illegal, pervasive surveillance evidenced by the Snowden Leaks, amongst others documented by Glenn Greenwald.
  • Maximisation of the ‘data exhaust’, and the consequential manipulation, if not abuse, of individuals, as described by Shoshana Zuboff. This includes the curation, automated or not, of social media feeds in order to maximise engagement.
  • Soft censorship, as described by Margaret Roberts. Her focus is on China, but the forms of censorship she describes, of ‘friction’ and ‘flooding’, have examples in shadow banning and overloading of hashtags. Shadow banning is actively used by most, if not all, major platforms (Reddit, TikTok, Instagram, etc.). Flooding is practiced by content farms and trolls, often hired to manipulate discourse. 
  • The implicit and difficult to objectively identify bias, and racism, in algorithms and AI, as documented by Sofiya Noble and Cathy O’Neill.
  • ‘Truth decay’, as defined by Mazarr et al, as the combination of increased disagreements on facts, a blurring of the line between opinion and fact, the increasing relative volume, and influence, of opinion, followed by a declining trust in formerly respected sources of factual information.
  • Exploitation in the gig economy.

I will consider it beyond the scope of this paper to also show that ‘crypto’ and ‘web3’ is, by design, detrimental in every way, while deeply connected to core features of capitalism. This is extensively argued elsewhere, for example by Ledesma et al, Diehl, and O’Reilly.

What capitalism?

Many varieties of capitalism exist. I will use the description below.

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price systems, private property, property rights recognition, voluntary exchange, and wage labor.

In a capitalist market economy, decision-making and investments are determined by the owners of wealth, that is, property, through the ability to manoeuvre capital or production ability in capital and financial markets, while prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

Due to the rapid historical emergence of the internet, and related technologies, and due to lack of regulation, the manifestation of capitalism through technology has typically operated under forms of ‘free-market capitalism’, in which prices for goods and services are set by the forces of supply and demand. Or by those able to manipulate the market with the objective of maximising profit. But, importantly, with little intervention by government policy. This is evidenced by the historical strong pushback against attempts at government regulations by major (western) internet companies such as Google, Facebook (Meta), Twitter, and others.

Meanwhile, particularly since the end of the Cold War, society at large has come to function, at best, under a form of ‘advanced capitalism’, characterised by Habermas through the following:

  • Concentration of industrial activity in a few large firms.
  • Constant reliance on the state to stabilise the economic system.
  • A formally democratic government that legitimises the activities of the state and dissipates opposition to the system.
  • The use of nominal wage increases to pacify the most restless segments of the work force.

Besides that many have argued that this system is at breaking point, evidenced by shifts in political polarisation, stagnated wages, and rising, in some cases exploding, inflation, what needs to be observed is that even ‘advanced capitalism’ is a tempered form of pure capitalism. In essence, ‘advanced’ refers to ‘capitalism’ being adjusted for its excesses, the state regulating those aspects that are the unsustainable features of the capitalist model.

It has been argued, recently by Varoufakis, that the West’s shift towards social democracy, mitigating the worst of capitalist systems, was fuelled by the mere existence of the Soviet Union. The continuous shift away from this model, since the fall of the Soviet Union, supports this.
This could make one wonder whether rise of social democracies in Western Europe were primarily an accident of history.

Though it might be possible to limit the excesses of capitalism through regulation, capitalist society, by design, shifts towards its own extreme, implying that no form of capitalism can counter the excesses we encounter. To meaningfully survive, can we only replace capitalism with a more equitable economic system?

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The problem is capitalism

Bhasin, channelling Marx, states that “capitalism encourages monopolies”, and “companies which have monopoly exploit consumers”. Marx, and Lenin, warned against the problems of state-sanctioned capitalist models, through the concept of State Monopoly Capitalism, as a consequence of laissez-faire capitalism, dovetailing with the definition of State Capitalism of more anarchistic provenance.

Noble’s “we are the product that Google sells to advertisers” makes the citizenry the raw material from which a product is crafted which is being sold to advertisers. This is explicitly exploitation of the consumer, the citizen. Zuboff’s “Google, Facebook and Amazon have become modern-day robber barons, bending laws to themselves and their own” invokes the image of 19th century American industrialists who used exploitative practices to amass their wealth.

This positioning of the citizen as raw material in order to abstract profit is at the root of all capitalist abuse of the citizenry. Surveillance and exploitation of the ‘data exhaust’ are abuse of what we as consumers produce. And, as a business has no latent morals preventing them from being exploitative, the sole reason to refrain from exploitation is when meaningful, enforceable, and enforced laws prevent exploitation from happening.

As per Haque, capitalism has taught (Americans) that exploitation is good for them, also showing how productivity and worker compensation became disconnected in their growth trajectories in the 1970s, diverging ever since.
Aggarwal et al sum up the ethical problems, with a particular focus on the gig economy: They are mechanisms of algorithmic control and managerial oversight, through the use of algorithmic reputation and rating systems. These systems permit invasive and unaccountable control of the work force, giving platform administrators unregulated power to manipulate the scoring and matching algorithms that govern the platform and influence job allocation decisions. 

Job insecurity, as per Bhasin, is a feature of capitalist economies, as they see high unemployment as well as underemployment, because rapidly changing requirements of the market make it difficult to match skills with jobs.

As per O’Neill, the use of opaque algorithms can, and do, produce unfair outcomes, with the “best” (highest rated) workers receiving a greater and growing share of available work, while certain groups of workers, particularly women and ethnic minorities, are discriminated against. In addition, gig work is often unsavoury in nature, producing heightened emotional stress, with particularly content moderation, at scale, being known to cause PTSD in workers. The unsavoury nature of the work, and the need for a race to the bottom in terms of compensation, means that, whenever possible, gig work, whenever possible, is outsourced to the least regulated, cheapest jurisdiction.
Because capitalists avoid providing social and legal protection, including the right to a minimum wage, health, and insurance benefits, casting these as external costs, the gig economy explicitly exploits gig workers due to their misclassification as independent contractors, rather than employees or workers, for whom some protection exists under many jurisdictions.
Bhasin underscores this by pointing out that gig workers are paid less (than employees) and that government regulations, if existing and designed to protect employees, do not apply to gig workers, as independent contractors.

Agarwal et al point out that, as per Bill Gates in The Road Ahead, we have moved into a more and more friction-free economy, easily allowing capitalists, as I mention above, to outsource gig work to low-rights jurisdictions, that is, other countries, often in the Global South, in, what Aggarwal calls, ‘ethics dumping’, and, as per Spacey, results in the commoditisation of labour.

Ritchie explains that “capitalism is fundamentally unethical”, and “commodity exchanges on the market cannot be understood without recognising their human consequences”. Hence Aggarwal’s description of this outsourcing of work as ‘ethics dumping’, underscoring the need of ethical decision making.

Varoufakis coined the concept of ‘techno-feudalism’, as the current, next, step in capitalism’s shape shifting history; First from its competitive guise to oligopoly, with the second industrial revolution. Then, when the end of Bretton Woods in 1971 unleashed capitalism’s second transformation, Wall Street functionaries demanded deregulation, and oligopolistic capitalism morphed into financialized capitalism.
After 2008, the G7’s central banks coalesced in April 2009 to use their money printing capacity to re-float global finance, and a deep discontinuity emerged: The global economy is now powered by the constant generation of central bank money, as opposed to private profit. Meanwhile, value extraction is shifting away from markets and onto digital platforms, like Facebook and Google, which no longer operate like oligopolistic firms, but rather like private fiefdoms. This, because digital platforms replace conventional markets as the locus of private wealth extraction: We all produce, for free, the capital stock of these large corporations.
Zuboff calls this Surveillance Capitalism, which Varoufakis explains as techno-feudalism, where the individual is beholden to the institutions for whom he produces. Indeed, under this form of late-stage capitalism, we truly have become the raw material generating profits for the capitalist upper class. This societal model, driven by big tech, explains how, through institutional curation, and censorship, of content, the outputs from these raw materials, our activity, can be optimised.

Similarly, because resource extraction is optimised, the veracity of the input, that is, information, becomes irrelevant. As a consequence of this, we no longer can expect a societal regression to a shared understanding of reality; cohorts are ‘fed’ whatever optimises their output, and, through big tech, we abstract different versions of reality, which brings us ‘truth decay’.

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Kwet broadens the exploitation of labour to a concept of digital colonialism, specifically when focusing on the role of big tech in the Global South. Kwet shows that (US) multinationals exercise imperial control at the architecture level of the digital ecosystem, giving rise to new forms of domination: 

  • The monopoly power of multinational corporations, used for resource extraction through rent and surveillance, constitutes a new form of economic domination. 
  • Controlling the digital ecosystem, big tech corporations control computer-mediated experiences, giving them direct power over political, economic, and cultural domains of life, creating a new form of imperial control. 
  • Big tech, through usage of ‘big data’, violates our privacy and concentrates economic power into the hands of large corporations, facilitating a system of global surveillance capitalism. And, with agencies from the Global North dominant in this exploitation, the Global South in particular suffers from imperial state surveillance.

Kwet’s digital colonialism is directed at big tech’s role in the global south, but equally applies to big tech’s role in exploitation of consumers and workers in the north.

So it becomes obvious how, and why, as per Noble, “Commercial control over the internet, the commons, has moved it further away from the public.” and how, for commercial enterprises like Google, “the discussions about [the meaning of words, classification, is] situated under [the rubric of] free speech and protected corporate speech” such that it becomes “impossible with the current commercial practices” to ensure that “underrepresented ideas are included [and] have [big tech’s products] serve as a democratisation tool”.
It’s not the citizenry who steer the discourse, it is the techno-feudalists.

Almost as an aside, Rushkoff, also deals with the perception that modern technology provides meaningful access to a much broader range of content. Originally focussing on the model of Spotify and similar platforms, Ruskhoff points out that “digital platforms amplify the power law dynamics that determine winners and losers. While [they] make space for many more [creators] to sell their [work], their architecture and recommendation engines end up promoting many fewer [creators] than a diverse ecosystem of [record stores] did [in the past]. One or two superstars get all the plays, and everyone else sells almost nothing.”

Per Spacey, capitalism allows for no alternative models operating in the market; Successful businesses control markets such that competition ceases to exist, resulting in higher prices, decreased product quality and unfair terms for the end user. Even more so for friction-free, digital, business models, this results in monopolies, as well as monopsony, when one employer is the only company in a particular geographical area.
So, we see market control with uncompetitive practices as a consequence of market domination.

To the point of exploitation of consumers, Noble points out that “Google is prioritising predatory misrepresentations […] because it is profitable to do so.” As per Zuboff, and mentioned above, big tech does not care if news is fake, as long as it makes a profit. And, as neoliberal policies allow capitalists to disconnect their actions from their social context, they foster societal instability and social inequality.

Zuboff points out that the platforms which create value no longer have to own the means of production, as owning the means of behavioural modification, the algorithms influencing our behaviour, has eclipsed ownership of the means of production as the fountainhead of capitalist wealth and power. This, in accordance with Varoufakis’ points, above.
And though Zuboff’s focus is on the tech industry, the same framework increasingly is applicable in other sectors.

Operating outside of a framework of accountability, (surveillance) capitalism is anti-democratic. O’Neill agrees, in that “we cannot count on the free market itself to right these wrongs” and “the free market [can] not control the excesses [of algorithmic abuse]”.

The above dovetails with the capitalist need to externalise implicit costs; Nestle (the author, not the company) shows how food is ‘cheaper’ because costs are externalised. Oxley expands this to a crisis of capitalism, underscoring Bhasin, who establishes that capitalists adopt malpractices without considering their effects on people or the environment. Because they can.
Zuboff points out that the system we currently suffer under is “inherently” and “profoundly” undemocratic; A tyranny with the objective of dominating human nature.

Spacey agrees and explains how this leads to societal destruction through the gutting of the income of the state: It is common for wealth to use aggressive tax structures and strategies to avoid paying taxes, resulting in a high tax burden for the middle class and less resources for those in need, undermining democracy, and undermining the possibility of economic mobilities.

Per Bhasin, and many others, capitalism creates two classes in society; those with the means, and those without. This inequality, by design, helps those with the means to become wealthier, excluding, and pushing down, those who lack these means.
Now, per Zuboff, our current model of capitalism no longer requires political reciprocity between labor and capital for large capitalist entities to flourish; The shift to individualism in western society has combined with the neoliberal economic paradigm of destroying individual agency, and results in a complete disconnect between wealth creation, for the rich, and societal development, for the poor.

With capitalism’s ever-larger reach, national politics, already slow to respond, can not keep up with the quickly changing scope. Nor are there usable global frameworks, nor is there international consensus, on countering the globally destructive influence of capitalism.

Capitalism is the problem. State-lead societal control, under capitalism, is more and more difficult to maintain, while only addressing the symptoms, not the core problems.

Alternatives to capitalism?

Few widely recognised contemporary frameworks exist that are able to ‘take on’ capitalism as a societal model, let alone have been proven to be workable. In communism’s most rudimentary definition, where all property is publicly owned and each person works and is paid according to their abilities and needs, is perhaps the most ideal solution, in theory, but so abstract that, in practice, no viable path towards realisation, at scale, appears to exist.

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Political anarchists address this challenge of implementing a radically egalitarian society through the conceptualisation of non-bureaucratic systems in which decisions are made by the people. However, this, too, at scale, has not yet been shown to be viable.

A recently introduced post-capitalist model is detailed by Varoufakis in Another Now. With self-regulation, an abolished stock market, and company shares collectively owned by the workers, Varoufakis’ model is interesting, because it mixes elements of classic democracy, and communism, and uses technology to work towards a form of egalitarianism. But, Varoufakis’ model has also not been tested in practice.

What should be clear from my analysis above is that, even if alternative models might be elusive, capitalist society is so detrimental, requiring so much regulation to function, that capitalist society needs to cease to exist, if we want to put societal development, and most importantly people, front and center.

And, more and more clearly, we see that capitalism will not go down without a fight, willing to sacrifice the fuel of their economic engine. My hope is that we will find large enough numbers to fight that fight, and win.

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