Political economy—an understanding of capitalism and its relationship to democracy—can provide a rudder as we make sense of the Internet. [...]

There are numerous other important direct and indirect subsidies that the government provides commercial media [...] First, advertising is condoned and encouraged by government policies and regulations. Allowing businesses to write off their advertising expenditures as a business expense on their tax returns not only costs the government tens of billions annually in revenues, but also encourages ever greater commercialism in our culture. by performing only lax regulation of advertising content, even as permitted by the law, the floodgates to commercialism are kept wide open. [...]

Second, and by far the most important for entertainment media, is copyright. Media products have always been a fundamental problem for capitalist economics, going back to the advent of the book. Without direct government intervention, the marketplace would barely exist as we have come to know it. The problem is that a person’s use of information, unlike tangible goods and services, does not prohibit others from using it. (In economic terms, it is nonrivalrous and nonexclusionary.) [...]

The tremendous promise of the digital revolution has been compromised by capitalist appropriation and development of the Internet. In the great conflict between openness and a closed system of corporate profitability, the forces of capital have triumphed whenever an issue mattered to them. The Internet has been subjected to the capital-accumulation process, which has a clear logic of its own, inimical to much of the democratic potential of digital communication. What seemed to be an increasingly open public sphere, removed from the world of commodity exchange, seems to be morphing into a private sphere of increasingly closed, proprietary, even monopolistic markets. The extent of this capitalist colonization of the Internet has not been as obtrusive as it might have been, because the vast reaches of cyberspace have continued to permit noncommercial utilization, although increasingly on the margins.

In this chapter I assess how capitalism conquered the Internet—an institution that was singularly noncommercial, even anticommercial, for its first two decades—in the 1990s and what the consequences have been subsequently. by capitalism I mean the really existing capitalism of large corporations, monopolistic markets, advertising, public relations, and close, collegial, important, necessary, and often corrupt relationships with the government and the military [...]

[...] the profitability of the digital giants is centered on establishing proprietary systems for which they control access and the terms of the relationship [...]

A key development that accompanies and enables proprietary systems is cloud computing, wherein each of the giants stores vast amounts of material on their battalions of servers. users do not need to have massive computer memories to store their own material; they can—indeed, must—access everything they have from a small device just by gaining access to the cloud. There are still “little guys” who offer hosting services, and that is a constructive activity. At the other end of the spectrum, though, the digital monopolists, including Google, Facebook, Amazon, Apple, and Microsoft, have all invested to build enormous private clouds. Cloud computing is a brilliant way to make the Internet more efficient and less expensive to users and society, but whether having the preponderance of cloud capacity in the hands of a few giant firms is a wise policy is another matter altogether. The clouds can be a treasure chest full of valuable data for the giants to exploit.

In combination, these factors demonstrate how absurd are the claims by
giants like Microsoft and Google that “competition is a click away” and that
they are in mortal fear for their very survival if someone were to develop a
better algorithm in her garage. Amazon, too, is more than an algorithm
and a stack of patents. It has sixty-nine data and fulfillment centers in the
united States, seventeen of which were built since 2011, with plans for more
to come. It has a nonunion workforce [...]