By Hugh Charles Smith
All those who believe the 'privatized totalitarianism' of Big Tech 'platform plantations' are 'capitalism' have been brainwashed into servitude by Big Tech's pretense of capitalism.
| Though a small point, it is important to note that the author of this generally sound critique of America's present day economic organization misapplies the term capitalism. Capitalism is: an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.From the definition one sees that, contrary to the author's claim, capitalism is what America has got, there being no inherent inconsistency between capitalism and monopolism, the latter being the target of the author's criticism. What America has in large part lost, is competitive free market capitalism, and I say lost, not abandoned because America never had any serious commitment to restricting monopolism. Thus, America has capitalism, but in large part it is a viciously exploitive form of capitalism. Moreover it is something totally opposed to the competitive market capitalism to which Adam Smith attributed an invisible hand that led the capitalist to act in such a way as to promote the public good: As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value, every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.Today American capitalism works unimpeded by the invisible hand and thus serves, not the interests of the American people, but only to maximize the accumulation of wealth by a tiny minority at the expense of the rest of society. |
What do you call an economy of monopolies without competition or any regulatory restraints? An economy of monopolies that control both the buying and selling in the markets they control? Monopolies with the power to commit legalized fraud and the profits to buy political influence? Monopolies whose black box algorithms are all-powerful but completely opaque to public scrutiny?
Call it whatever you want, but it certainly isn't Capitalism, which requires competition and market transparency to price capital, labor, risk, credit, goods, services, etc.
Black Box Monopoly is the death of Capitalism as it eliminates competition and market transparency.
The American economy is now dominated by Big Tech Black Box Monopolies, and thus what we have isn't a "free market" system (a.k.a. capitalism), it's the pretense of capitalism, a slick PR cover for the most rapacious form of exploitation.
The SillyCon Valley model is simple: achieve monopoly power by scaling the network effect and buying up hundreds of potential competitors with stock "printed" out of thin air. Once monopoly is achieved, buyers and sellers are both captive to the Big Tech monopoly: both buyers and sellers of apps, for example, must submit to the profiteering and control of the Big Tech monopoly.
Once the profits flowing from monopoly pile up, buy back the shares you "printed" to eliminate competition, boosting the wealth of insiders to the moon. Since share buybacks were once illegal, this is nothing but legalized fraud.
Despite the immense destruction these Big Tech monopolies wreak on society, the political power they purchase protects them from any limits. That their platforms now control the flow of data, including political content and adverts, is brushed aside with the usual paradoxical claims of "free markets."
Ironic, isn't it? Big Tech Black Box Monopolies claim they shouldn't be exposed to any regulation because they've destroyed competition and transparency within the letter of the law. Monopoly platforms that control the flow of data, news and narratives are privatized totalitarianism, cloaked by the pretense of capitalism.
Like all totalitarian monopolies, Big Tech now claims "you can't limit us because now you depend on us." In other words, Big Tech is now too centralized and powerful to submit to any socio-political controls.
It's a neat trick, isn't it? Enrich the super-wealthy "investor class" with your buyback-juiced stock valuations, "buying" their loyalty and political pull with these outsized gains to keep your monopoly out of reach of any public scrutiny or limits on your profiteering and privatized totalitarianism.
That our society and economy are now in thrall to privatized totalitarian Big Tech monopolies is straight out of a Philip K. Dick story in which what's perceived as real has been manipulated by those who own the means of manipulation.
We're not just debt-serfs in central-bank feudalism, we're all serfs on Big Tech's platform plantations. If you don't love your servitude with sufficient enthusiasm, Big Tech has a special place for you: the Village of the Deplatformed, a village of ghosts who have disappeared from the platform plantations and who no longer show up in search, social media, app stores, etc.
Just as the Soviets snipped those sent to the gulag out of photos, the privatized totalitarian Big Tech monopolies cut out your selfhood and your income: Deplatformed doesn't just mean you disappear from view, it also means you've been demonetized-- your ability to earn money from your own content has been eliminated.
In effect, your labor, content and selfhood have been expropriated by Big Tech's totalitarian platforms. Big Tech monopolies don't just "own" the plantation of the mind, they own the platform plantations that control what we see, buy and sell, and what the algorithms collect and sell to everyone who wants to influence what we see, buy and sell.
All those who believe the privatized totalitarianism of Big Tech platform plantations are "capitalism" have been brainwashed into servitude by Big Tech's pretense of capitalism. Just because totalitarianism and fraud are now "legal" doesn't mean they're not evil.
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Good article, CS. Thank you for linking this.
ReplyDeleteIt's totalitarianism, but it can't be "Big Tech" totalitarianism. The politics behind the politics doesn't add up. Mark Zuckerberg, Bill Gates, Steve Jobs, and Jeff Bezos almighty dictators? No way. They only succeed in establishing their monopolies because someone or some thing is behind them, above them.
The internet is a product of DARPA. The basic technology was originally intended to allow the military operations of command and control. Literally!
Once the Internet was made available to anyone, anyone with something to sell had access to national or international markets for the cost of a virtual Web server. That meant the possibility of building sales extremely fast at virtually zero cost. Profits could then be poured into developing the product and the product delivery system to create a position of market dominance: hence Google, Amazon and FaceBook -- Tesla also, the latter having used the Internet to achieve global sales without the expense of a global dealership network.
DeleteThus, the popular idea that the people behind these Tech giants are self-made men, holds water: they were at the right place, with the right skills, at the right time.
But, the businesses they run have implications for national security, hence their path to wealth and public prominence will have been facilitated by the state in return for collaboration with the state in its surveillance of the population, its management of public opinion, and its maintenance of national security.
As the primary function of the state is the protection of property, such collaboration between the tech billionaires and the state is naturally cooperative and highly beneficial to both parties: hence effective anti-monopoly legislation in America will never happen.
"Thus, the popular idea that the people behind these Tech giants are self-made men, holds water: they were at the right place, with the right skills, at the right time."
ReplyDeleteAs far as I can tell, this is most true for Jeff Bezos. However, the mega-success of both Google and Facebook has, since the beginning, seemed suspicious to me.
I had watched with a great deal of interest the rise of the search engine and believed as early as 1997 search engine companies probably were good investments. I wasn't so much interested in Yahoo!, as in some of the others, such as AltaVista. (I believe Yahoo eventually acquired what was left of AltaVista.) Over time, though, none of these other companies lived up to the promise I thought I saw.
Then in 2004,long after the tech crash, came the buzz and excitement over Google. Though I may not have been diligent enough, I failed to see why Google would succeed where these others failed. (Clearly, though, the others did make strategic errors which could have been avoided and a smart competitor later into the game would learn from them.)
I also found it extraordinary people would line up for another tech IPO. Had they learned nothing? IPO's have a history of being risky investments, losers, and to me it seemed if nothing else the tech crash and events leading into it would have reinforced this view.
Google had a PE ratio of over 100, and while it had a strong record of revenue and profit growth, there was no reason at that time to believe it wouldn't in the near future face stiff competitive pressure. In other words, coming out of the gate there was no reason to believe Google could become a monopoly.
There were other oddities, but one I remember best is the extremely shallow and unsophisticated "Founders' Letter" which in my opinion only served to advertise the eccentric quirkiness of the "Founders." By 2004, I also thought the public would have had enough of that.
Yet there was instant success. Right out of the block and never looking back, Google took over. It dominates.
Something similar has happened with Facebook. There were other popular social media outlets available when Facebook arrived on the scene, and in my way of thinking, Facebook was just another "face". I don't even know what happened to the other social media companies. They faded.
Both Google and Facebook are advertising giants. They get revenue from advertising, not making products.
Amazon probably survived the big tech crash by drastically rearranging its business plan. In the beginning Amazon subcontracted much of the work (the non-tech work) involved in the book business. This ended because it made Amazon too vulnerable to poor quality work done in its name. It ceased to be a "tech" company when it ended this subcontracting.
ReplyDeleteFacebook was in hot water for a brief time due to privacy violations. These were dealt with, not by ceasing privacy violations, but by including such privacy violations in Facebook's terms of use. It gets away with this as if no one notices a privacy violation is still a privacy violation. I thought the whole affair was a way of reminding Matt Zuckerberg who is boss and who can break him down and pack him away at any moment.
I've also felt the initial advantages of the internet for the little guy were nothing more than lead loss enticements to help people overcome their reluctance to go online. Many people didn't trust the internet...It wasn't an irrational fear. Whatever the case may be, these advantages, incentives, and enticements have slowly but surely eroded. People were enticed into a trap. I don't believe we've even begun to see the monopolistic potentials of the tech giants. Wasn't Jeff Bezos planning to start his own FedEx/UPS distribution system?
"FedEx said it would end domestic ground deliveries for Amazon packages when the contract between the companies expires at the end of August. ... “FedEx has made the decision that is no longer wants to sharpen its executioner's sword,” said Scott Galloway, a professor at New York University's Stern School of Business.Aug 7, 2019"
Amazon is the death of retail, including the little guy.
When Amazon wanted to relocate its headquarters, competing communities offered to cede governmental functions to it, willing, in some cases to give Amazon the power to set tax rates, and, IIRC, collect taxes.
Amazon rules. But I don't believe power works this way. It is all nothing if there isn't muscle behind it. How hard would it be to pressure Bill Gates or Matt Zuckerberg? How would they, or could they, fight back? If they had to rely on the U.S. military or law enforcement, surely this would be an entry for the government to begin running them, if it wasn't already.
I've always felt these kind of guys were easily manipulated. They think of themselves as the very smartest, and are blind to all the ways their intelligence is defective. Often enough, it is their self awareness which is defective. They themselves do not know what makes them tick-- but others see clearly enough.
We're right in the middle of one of the most decisive events in world history.
ReplyDeleteSomeone somewhere has given the order to lock down. We lock down. Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to practice social distancing. We practice social distancing. Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to wear masks. We wear masks. Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to become unemployed. We become unemployed.
Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to close our businesses. We close our businesses. Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to close the schools. We close the schools.
Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to close the public libraries. We close the public libraries. Nearly everyone IN THE ENTIRE WORLD does this!
Someone somewhere has given the order to close the churches. We close the churches. Nearly everyone IN THE ENTIRE WORLD does this!
It does not appear to us we are merely blindly obedient, why? It does not appear to us we are blindly obedient to a strangely anonymous master, why? And this is nearly all of us, nearly everyone IN THE ENTIRE WORLD!
I concede that those who dominate in the cybersphere likely had, or are known to have had, state backing, e.g., Google (CIA funding and weekly White House consultations for former CEO Eric Schmidt), these benefits being granted, presumably, in return for government access to data.
DeleteBut this is a new manifestation of an old relationship between big business and the state. Thus, for example, the Communications Assistance for Law Enforcement Act requires:
"that telecommunications carriers and manufacturers of telecommunications equipment modify and design their equipment, facilities, and services to ensure that they have built-in capabilities for targeted surveillance, allowing federal agencies to selectively wiretap any telephone traffic."
And Jeff Bezos, and Amazon, are big winners here. So is Google, especially as YouTube views go through the roof.
ReplyDeleteImagine the power if ALL retail is funneled through Google and to incredibly centralized and monitored internet-based businesses such as Amazon. Totalitarian is the only word for it. Hitler and Mussolini could only have dreamed of such command and control, though I think Mussolini was onto something when he defined fascism as corporatism-- that's descriptive of "When Big Tech Becomes the Guardian of Capitalism." It isn't capitalism and it isn't socialism, either. It is an unholy alliance of the two. "Say Good-bye to the Competitive Free Market"-- but the whole apparatus of capitalism was justified on the basis of the competitive free market.
Yes, since the broadening of the franchise from the property owning classes to the masses, a primary objective of government has been to achieve control over public perception. Thus political development throughout the West has followed a similar course, although tactics for gaining control of the public mind have varied. The Anglo-American approach has relied heavily on the media and the state-controlled educational system to achieve voluntary submission of the masses to the interests of property, as represented today chiefly by the great business corporations. This development was well underway prior to WW2 and was satirized by Sinclair Lewis in the novel "It Can't Happen Here" and, less directly, by Evelyn Waugh in Decline and Fall etc.
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