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Catalyst
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The great Internet monopolies of Amazon, Apple, Facebook, Google (Alphabet), and Microsoft are different. They are global firms and do not depend upon government licenses for the market power. At the same time, they have extremely close relations with the US government and much of their work relies upon research and innovations first developed under military auspices. In just two decades, these five firms have conquered capitalism in an unprecedented manner. If you look at the largest companies in America today in terms of market value, the top five companies in the United States and the world in terms of market value are, in no particular order, Microsoft, Apple, Amazon, Google, and Facebook. They’re the top five companies in the world in terms of market value. It’s astonishing what a dominant role they play. They blow everyone out of the water and they are growing at breakneck speed.
I think that ten of the top twenty-four corporations in the US are internet companies, and fifteen of the top forty. The number of internet firms drops off sharply once you get past the top forty. There is not much of a middle class or even upper middle class in digital capitalism.
nothing new, but maybe worth citing
[...] these companies then undertake this very close surveillance, which then becomes available to the highest bidder for commercial purposes.
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[...] alongside this centralization of control there is also the fact that journalism itself is dying. The internet hasn’t caused its death, but it has accelerated it, and eliminated any hope for a successful commercial news media system that can serve the information needs of the entire population.
The roots of its decline stretch back decades. For the first hundred or so years in American history, newspapers were heavily subsidized by the federal government, in order to encourage a rich array of news media. No one at that time thought the profit motive operating in the “free” market alone would be sufficient to provide the caliber of news media the constitution required. This was done primarily through free or nominal distribution of newspapers by the post office — almost all newspapers were distributed by post in the early republic — and also by printing contracts handed out with the explicit intent to help support different newspapers, by branches of government. In combination, the annual government subsidy of journalism as a percentage of GDP in the 1840s would be worth around $35 billion in today’s economy.
By the late nineteenth century, the commercial system consolidated whereby advertising provided the lion’s share of the revenues, and the state subsidies declined in importance and, in many cases, disappeared. Publishing newspapers, building journalism empires, began to generate massive fortunes while continuing to provide owners with immense political power. This is the context in which professional journalism — purportedly nonpartisan, opinion-free, politically neutral and fact-obsessed — was spawned in the first few decades of the twentieth century.
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The basic problem is that the giant internet companies — especially Facebook and Google — are taking away the advertising money that would’ve traditionally gone to some newspaper or journalism-producing entity. But Facebook and Google aren’t using this money to invest in more journalists or news reporting.
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This looked like the transition, say, in the year 2000, that we would slowly be seeing. It wasn’t clear we would lose commercial journalism. But what happened with the surveillance model is that no one buys ads on a website. You don’t go to the New York Times and say, “Hey, I want to buy an ad,” and hope and pray my target audience comes and looks at your website and sees my ad. Instead, you go to Google or Facebook or aol , and you say, “Hey, I want to reach every American male in this income group between the age of 30 and 34 who might be interested in buying a new car in the next three months,” and aol will locate every one of those men, wherever they are online, and your ad will appear on whatever website they go to, usually straight away. They will find them.
That means the content producers, in this case the news media, don’t get a cut anymore. Those advertising dollars used to subsidize most of their work. Now, if they do get an ad on your site, they get much less for it, and they only get it for those users who are in the target audience of the person placing the ad, not everyone who goes to their site. If you and I were to go to the same site, we’d get different ads, probably, working for different products. The amount of money that the actual website gets is infinitesimal compared to what it would be if they got the whole amount, like in the good old days.
The commercial model’s gone, which is why journalism’s dying, why there are very few working journalists left. No rational capitalist is investing in journalism because of its profit potential. To the extent they invest, it tends usually be some hedge-fund douchebags buying dying media and stripping them for parts, or some billionaire like Jeff Bezos buying the Washington Post or Sheldon Adelson buying the Las Vegas Review-Journal, always at fire-sale prices. The point of the exercise in these instances is to use the newspaper to shape the broader political narrative to the owner’s liking, with very few other voices in opposition. That is hardly a promising development for an open society.
in response to
What that means is that what started out as a radically decentralized
and almost impossible to monitor form of communication, within a few
short years, became incredibly centralized, where all the information
was passing through just a very small number of hands.
and
What does this do to the original two ambitions of the scientific community behind the internet, anonymity and better dissemination of information?
Exactly. It is a long-term phenomenon but surveillance digital technologies have enhanced its power by orders of magnitude. So in 2012, Obama did wonders with this approach in galvanizing his supporters and shaking them down for contributions. It only took another election cycle for these technologies to turn to the dark side: instead of trying to locate and cultivate potential supporters, use the power of this technology to demonize your opponent and undermine support for your opponent. This has proven to be the most frightening development by far.
So you are describing a deeper phenomenon that’s now taking root,
which is that political parties see their voters as a demographic which
they try to manage, just the same way that corporations try to manage
market perceptions. Voters are part of a marketing ploy, rather than a
component of a democratic culture.
No, I don’t think that can work. These markets tend toward monopoly. They’re easy to capture because you get tremendous network effects, which basically means that whoever is bigger gets the whole game, because all the users have tremendous incentives to go to the largest network. All the smaller networks disappear. When social media was starting up, there was initially great competition between Facebook and Myspace and one or two others. But pretty soon, once everyone starts going to Facebook, no one’s going to Myspace, because Facebook has so many more people on it. When you’re on social media, you go where everyone is. So all the other ones disappear and Facebook is all alone, and they’re left with a monopoly. That’s a network effect. McDonald’s hamburgers never got that. You didn’t have to go to McDonald’s to get a hamburger. You could go to other places still, so Burger King and Wendy’s can compete with them.
When you combine that, then, with traditional concentration techniques in capitalism, the massive barriers to entry — Amazon, Google, Microsoft, all five of these companies have to spend billions and billions of dollars annually on these enormous server farms and computer farms and their cloud, and in the case of Amazon, they have huge warehouses — that, along with network effects, pretty much precludes any lasting competition. So the idea that you can break up companies like that into thirty or forty smaller parts and have competitive markets doesn’t make any sense. These are natural monopolies, so to speak.
So that leaves two reforms. One is, you let them remain private, but you regulate them like the phone company was in America for a long time, AT&T. You let them make profits but hold them to public regulations, in exchange for letting them have a natural monopoly. To me, it doesn’t take much study to see that this is not realistic. These are huge, extremely powerful entities. The idea that you’re going to regulate them and get them to do stuff that’s not profitable to them — it’s ridiculous. Do you think you’re going to take on the five largest companies in the world and have that be successful? There’s no evidence to suggest that.
The other option is to nationalize them or municipalize them. You take them out of the capital-accumulation process, you set them up as independent, nonprofit, noncommercial concerns.
That’s probably the case. But, ironically, what I’m proposing hasn’t always been associated with the anticapitalist left. One person who wrote on this exact subject was Henry Calvert Simons, a laissez-faire economist from the University of Chicago, who was Milton Friedman’s mentor. He opposed the New Deal. He lived in the mid-twentieth century. Not a fan of labor unions or social security — a pure, free-market capitalist. But he wrote widely that if you have a monopoly that can’t be broken into small bits, the idea that you can regulate it is nonsense. This monopoly is not only going to screw over consumers, it’s going to screw over legitimate firms, legitimate capitalist enterprises, because it’s going to charge them higher prices. He said, the only thing you can do if you believe in capitalism is nationalize them. Take them out of the profit system. Otherwise, they’ll completely distort the marketplace and corrupt the system into crony capitalism. I think that’s true, whether you believe in capitalism or, like me, you are a socialist.
But as difficult as it may seem today, this is going to be an unavoidable fight. Cracks in the façade like the Edward Snowden revelations and the Cambridge Analytic scandal are chipping away at the legitimacy and popular acceptance of these monopolies, but we have a long way to go. The place to begin is to identify the problem and talk about it and get it on the table. Don’t assume the issue cannot be raised because there is no ready-made functional alternative in hand. In unpredictable and turbulent times like these, issues can explode before our eyes, but it helps if we lay the groundwork in advance.
Once you start talking about taking the center of the capitalist economy and taking it out of capitalism, well, then I think you’re getting, like you said, you’re getting to very radical turf, and that’s exactly where we’re pointed — where we have to be pointed.
But even if we organize around journalism and eliminating the isp
cartel, what do we do about those five monopolies that now are the
US Steel and the Standard Oil of the information age? What do we do
about Apple, Amazon, Facebook, Google, and Microsoft? It is hard
to see how we can have a progressive and democratic society with
these behemoths dominating the economy, the culture, and the polity.
and
Are you talking about breaking them up into smaller companies, like
the telephone companies in the 1980s?
and
But you’re talking about nationalizing five of the biggest corporations
in the United States. That would require a massive social movement, even an anticapitalist one.
Antonio Gramsci in his prison notebooks has a theory of elaboration, which I think is very important. Gramsci argued that people in a capitalist system absorb ideas from a variety of sources — family, education, media, workplaces — and that the totality of these notions forms what he calls “common sense.” Now this common sense is useful because it explains a great deal about the world as it is — and how it appears. But there are fundamental elements of the world that remain difficult to fully understand. There are contradictions that make no sense.
Gramsci says that the mass of the people experience reality through a contradictory consciousness. Gramsci argues that the communist or the socialist goes among the people, interacts with them, and listens intently to their common sense. Then the communist activist or journalist critically elaborates upon their common sense, takes this contradictory common sense and elaborates it into “good sense” or philosophy. Good socialist nonfiction writing does not assume that it emerges from the genius of the writer or an inspiration — but it comes from being absorbed by the common sense around us, and by being honest about elaborating it into philosophy of good sense.
To come at this from another level: socialist writing is about democracy, about seeing readers as part of our process and not as consumers who must buy the commodities we produce. Socialist writing should be a conversation.
Art cannot by itself change the world. It can provide insight and perhaps an epiphany — but it does not change the relations of power in the world. For that, one needs organizational power and struggle.
But art at the same time must be free to engage with contradictory consciousness without a predetermined end — the ends of politics, for instance. If a political line drives the process of elaboration, then we would know the answer to our question before we began our studies among the people. In order to best understand social relations, socialist writing and art must have freedom to come as close as possible to the contradictory common sense and produce — again in conversation with the people, with one’s comrades — the good sense of our times.
W. E. B Du Bois in Souls of Black Folk asked a question, “How does it feel to be a problem?” This was his detonator sentence. It carried the entire book with it. People of African descent in the United States had been made — through slavery and Jim Crow codes — to experience a subdued dignity. That was Du Bois’s point.
I came at it from a different place. In my second book, Karma of Brown Folk, I developed an argument about race in the United States, and why certain races stood for success while others stood for failure. This hierarchy of races allows white supremacy to make the claim that it is not after all racist.
South Asians in particular, but other Asian Americans as well, entered the United States after 1965 with advanced degrees. Their success story was written by immigration law, so that their “genius” was not through natural selection but by state selection. Nonetheless, South Asians were being positioned, against African Americans, as a success story. Drawing from Du Bois’s detonator sentence, I asked, “How does it feel to be a solution?” That question grounded the book.
One of my other books — The Darker Nations — is about the Third World Project, the political movement of the formerly colonized states on the world stage. The term “Third World” had become resonant with disparagement — state failure, corruption, violence. But this was a phenomenon of the 1980s, when the Third World Project had been, as I wrote, assassinated. From the 1920s to the 1980s, the term referred to that immense struggle to produce an alternative inter-state system. So the detonator sentence for that book — in fact the first sentence — ran, “The Third World is not a place, but a project.” In other words, the disparagement — which is about places in the world that had been reduced to penury and hopelessness — could not account for the political struggle — the project.
Writing should be crisp, not for itself — because there is a new aestheticization of writing, a kind of writing for its own sake. I have many friends who say that V. S. Naipaul — forget his politics — is a great writer. I’m not keen on this kind of attitude.
Writing is a form of communication. The point of writing is to reach someone, to say something. What you say is relevant, of course. But I don’t want to get dogmatic. I like to read people I might not agree with, certainly, and I can judge them by the basis of their ability to tell me what they think. This is not clarity, but precision. Is the writing precise? Why should writing be spare or precise? Because it must be able to evoke something in a reader. The reader should not have to run for cover because the author has fired off clichés — a fusillade of dead words. Writers must pay special attention to evoking something in the reader. Even texts on development should attempt to reach the heart of the readers — not to manipulate them, but to interest them.
I think socialist writing has an important and very difficult challenge. One of the things that has become clear to me is that once human beings surrender to the present, the idea of the future wears thin. There is only a present. The present stretches on into infinity. When we say tomorrow, we mean only tomorrow in time, but not in epochal terms. Tomorrow will look like today. The sensation of an endless present greets us each day. Change is never going to come.
That feeling — of futility — is the greatest detriment to the socialist imagination. Socialist writing, to my mind, has to help break that fatalism and create what Arundhati Roy calls “a new imagination” — an imagination of a different kind of world, with different priorities and different sensibilities.
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But more than anything else, the socialist should not write in a register of anguish or even merely anger. For gloom and doom does not help clarify the future, the possibility of the future.
I’ve been saying that the time of the present is over, and that the time of the future is at hand. What this means is not that we are on the threshold of a breakthrough, but that the managers of our world order are not capable of solving our problems. That means that the present has no solutions for us. We need to seek our solutions from the future, from a different way of ordering our needs and our luxuries, our excesses and our scarcities.
We don’t need texts of frustration and rage, but texts that suggest inevitability, the idea that we have in our marrow that this present of ours is simply not able to deal with our problems of inequality, climate catastrophes, war and so on, and that we not only need an alternative but that in our struggles an alternative is at hand. In other words, the time of the future exists in our struggles. Our writing has to capture that sensation.
The simplest way, as I pointed out in response to Weisenthal’s query, would be for cities to adopt regulatory codes that only permit ride-sharing by worker-owned firms. Uber would then seamlessly become a software provider.
This sort of restriction isn’t unprecedented. Many states forbid corporations from engaging in certain kinds of farming; many exclude for-profit companies from certain kinds of gambling and credit counseling businesses; and federal restrictions on foreign ownership exist in a wide range of industries.