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No question, digital technology has created tremendous new avenues for growth. Apple, Google, Facebook, Amazon, Microsoft, and many other corporations have created new opportunities and new millionaires. But as a result of their extractive, monopolistic practices, the landscape is left with less total activity and potential for growth. The pie is smaller, or at best staying the same, but these digital businesses have managed to get bigger pieces of it—making it harder for every other corporation around, including themselves in the long term.
In large part, this is because they’re still operating as if they were twentieth-century industrial corporations—only the original corporate code is now being executed by entirely more powerful and rapidly acting digital business plans. What algorithms do to the trading floor, digital business does to the economy. In the purely rational light of the computer program, a digital corporation is optimized to convert cash into share price—money and value into pure capital. Most of the people enabling this have no reason to believe it is harmful to the business landscape, much less to human beings
something to cite I guess
This rationale has been enough to keep most thoughtful Silicon Valley entrepreneurs from worrying too hard about the repercussions of their actions. After all, digital corporations will necessarily carry out corporate code better than their predecessors. They apply the engineer’s logic to every situation or choice and always optimize for the best and most defensible outcomes. For example, last century’s retailers mailed out catalogues and then used sales feedback to adjust the offerings for the next quarter. A digital company will A/B test its Web page, display ad, or online catalogue in real time. Every interaction is a test of a bigger/smaller font, a higher/lower price, friendly/formal language, and so on. The thousandth time a page is rendered, it has evolved into a much better selling mechanism. Digital is better.
Amazon retrieves the spirit of empire by colonizing not just verticals within its own category but horizontals in everyone else’s. It first established a platform monopoly in books by selling books at a loss, in the manner of Walmart using its ample war chest of capital to undercut local stores. A simple loyalty perk like free shipping was eventually revealed to be the ever-expanding, increasingly sticky Amazon Prime. Amazon then leveraged its monopoly in books and free shipping to develop monopolies in other verticals, beginning with home electronics (bankrupting Circuit City and Best Buy), and then every other link in the physical and virtual fulfillment chain, from shoes and food to music and videos.
[...]
Amazon isn’t really a new sort of company so much as a very old sort of company. It is leveraging digital platforms the way colonial powers once leveraged their exclusive shipping routes to the New World. (Both even have pirates to watch out for!) That’s why none of this is ever about bringing more value to people or—heaven forbid—helping people create and exchange value on their own. Digitizing the corporation simply affords it ever more efficient and compelling ways to extract what remaining value people and places have to offer.
I really like the title
Amazon amplifies the power of central authorities. It first appeared that it would empower the independent publisher by giving everyone a place on its infinite shelf space. But it eventually grew into the center of the publishing universe. Everyone is the same size—tiny—compared to the platform on which they sell and interact. Amazon sets the prices, the terms, the technologies, the copy protection, the privacy of readers . . . everything.
As corporate law is currently structured, CEOs and their boards of directors can be held liable if they fail to do everything in their power to maximize quarterly returns for public shareholders. CEOs are not merely incentivized to pursue the short-term bottom line; they are legally obligated. Rather than liberating the corporation from such ultimately counterproductive rules, the digital age has put them on automatic, exacerbating their impact and making them appear more permanently embedded than ever. The more promising potential of the digital environment would be to revise the corporation itself to our liking. That’s the invitation here—not to digitize the corporation with technology but to approach the corporation itself from a digital perspective of redesign. The corporation’s charter can be recoded.
a little too corporation-centred for my liking but this is a good view to mention in my diss (in terms of existing proposals)
[...] Mozilla is actually made up of two different entities: the Mozilla Foundation, a nonprofit, and the Mozilla Corporation, which the foundation oversees. The subsidiary corporation is responsible for much of Mozilla software’s development, marketing, and distribution. It collects the massive revenue generated by Firefox, but it has no publicly traded stock, no dividends, and no shareholders [...]
ehh.. this isnt a good thing. where do Firefox's revenues come from??? partnering with Google. ie advertising. think about that pls
Currencies, tokens, and precious metals have indeed been used as means of exchange for thousands of years; but debt-based, interest-bearing, bank-issued central currency is a very particular tool with very particular biases—most significantly, a bias for growth. Capitalism itself is less the driver of this currency than it is the result. Capital is not an ideology so much as an artifact of a kind of money—a way of exploiting a particular operating system that runs on growth.
should think about this more to see how it connects (or otherwise) with more critical perspectives on capitalism
[...] Money makes money faster than people or companies can create value. The richest people and companies should, therefore, position themselves as far away from working or creating things, and as close to the money spigot, as possible.
good metaphor. on financial services dominating the economy
(a few pages later, he talks about Jack Welch instructing biz school students to "see productive industries as mere stepping-stones to becoming holding companies. The further up the money chain you can get—the more like a bank issuing money—the better")
This is the real cause of the severity and longevity of the 2007 crash. Rather than figuring out how to compensate for central currency’s extractive bias, a highly digital finance industry chose to exploit it. The digital perspective that allows us to see money as an operating system doesn’t necessarily motivate people to revise the core code so that it serves people better. That would be a pretty heavy lift, even for the most idealistic among us. So instead, bankers and financiers sought to leverage the structural flaws of the money system for their own gain.
this metaphor is getting a little old by this point, but still worth remembering
instead of refactoring codebase ... think about who the players are in this analogy. in a communal software system, who has the ability to refactor? who has the ability (and incentive) to exploit flaws? it's almost a tragedy of the commons-type scenario
[...] speculators saw in digital technology a gateway to a new, virtual form of colonialism: a new place to lend and deploy capital, new territory for growth.
Alas, the big data profiles of teenagers can’t support the same robustness of growth as entire continents of slaves and spices. Besides, consumer research is all about winning some portion of a fixed number of purchases. It doesn’t create more consumption. If anything, technological solutions tend to make markets smaller and less likely to spawn associated industries in shipping, resource management, and labor services. They make the differential between real growth and return on capital worse, not better. This means they push the banks and investors even further away from anything like real earnings until eventually there’s a complete disconnect between capital and value.
big fan of the colonialism metaphor tbh. shoot that shit straight into my veins
I don't agree that it doesn't create more consumption though. Maybe not more overall (perhaps??) but definitely more in certain sectors (useless commodities, experiences, etc)