When Big Tech Becomes the Guardian of Capitalism, Say Good-bye to the Competitive Free Market and the Hidden Hand

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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Trump's Tariffs: Why Such a Half-Baked Policy?

The problem with Trump is an incapacity to act to any effect. He hasn't even built the goddam wall, or stopped the flood of illegal immigrants by other means.

Now Trump is imposing tariffs on China to punish China for stealing American industrial and military secrets, which obviously, won't stop China stealing American industrial and military secrets.

Why not?

Because the US is in an informational, technological and economic war with China for global supremacy. China ain't gonna give up just because Trump bans Huiwei phone gear, or sticks a tariff on imports of Chinese-made Christmas tree lights.

The only consequence of Trump's anti-China tariffs, if they stay, is to force global corporations in search of cheap labor, to move off-shore production from China to Bangladesh, Vietnam or a dozen other places. Meantime, the Chinese will have more Christmas tree lights for their own consumption. So who cares? What difference does it make?

If Trump actually wanted to rebuild America's industrial base, he should impose a tariff wall against every one, with the exception of Canada, Mexico, and the rest of Latin America: the condition being, of course, that those countries free to export to America tariff-free enter the same tariff ring-fence as America.

That way, US labor would be competing not with billions of low wage workers, but a manageable 400 million Latin Americans. Moreover, those Latin American competitors would have an incentive to purchase high-tech gear tariff-free from the US, rather than China or elsewhere beyond the tariff ring fence. A further benefit would be to raise the prosperity of Latin America, thereby reducing the inclination of millions of Latin Americans to migrate to North America.

Two other requirements for a sound US industrial policy are:

1. Anti-monopoly legislation that creates fierce competition within the protected Western Hemisphere market;

2. Negotiation with other high wage countries, including Japan, S. Korea, Australia, and the European nations, to bring them within the tariff protected trade zone.

None of this will get done, obviously. Instead, it looks as though we may be about to see the Mother-of-all wars for global hegemony against Iran.