The Internet's Unholy Marriage to Capitalism

tags

Software vs Capitalism

(Foster, J. B. & McChesney, R. W.: The Internet’s Unholy Marriage to Capitalism)

"Communication is more than an ordinary market. Indeed, it is properly not a market at all. It is more like air or water—a form of public wealth, a commons. When Aristotle said that human beings were “social animals,” he might just as well have said that we are communicative animals. We know that the human brain coevolved with language (a social characteristic).63 The development of social relations and democratic forms, as well as science, culture, etc., are all communicative. The rise of the Internet as a form of free communication, seemingly without limits, thus raises the prospect of vast new realms of human sociability and enhanced democratic possibilities. Yet, rather than a means of expanding human sociability, the Internet is being turned into the opposite: a new means of alienation. There is nothing natural in this process; at bottom it remains a social choice."

The failure of the Internet's potential

"What is striking, as one returns to the late 1980s and early 1990s and reads about the Internet and its future, is that these accounts were almost uniformly optimistic."

"The Internet, or more broadly, the digital revolution is truly changing the world at multiple levels. But it has also failed to deliver on much of the promise that was once seen as implicit"

"technologies do not ride roughshod over history"

"seems to be morphing into a private sphere of increasingly closed, proprietary, even monopolistic markets"

Public goods

Lauderdale Paradox: Should start from the assumption that the Internet should be fundamentally outside the domain of capital

"the system’s overriding logic—and the starting point for all policy discussions—must be as an institution operated on public interest values"

"large portions of capitalist societies have historically been and remain largely outside of the capital accumulation process. One could think of community, family, religion, education, romance, elections, research, and national defense"

"entire realm of digital communication was developed through government-subsidized-and-directed research"

"Meinrath’s estimate puts the federal investment in the Internet at least ten times greater than the cost of the Manhattan Project"

"digital revolution exploding at precisely the moment that neoliberalism was in ascendance"

"broadband access for Americans were and are controlled by the handful of firms that dominated telephone and cable television. These firms were all local monopolies that existed because of government monopoly license"

"They would not know a “free market” if it kicked them in the corporate butt."

"Deregulation has led to the worst of both worlds: fewer enormous firms with far less regulation."

"a digital underclass encourages people to pay what it takes to avoid being unconnected"

Monopolization

"capitalist development of Internet-related industries has quickly, inexorably, generated considerable market concentration at almost every level, often beyond that found in non-digital markets"

"In the old days, such “winner take all” markets were termed “natural monopolies.”"

"collaborative potential, arguably the democratic genius of the Internet, runs up against the pressure of capital to consolidate monopoly power, create artificial scarcity, and erect fences wherever possible."

"commercial interests have incentive to acquire proprietary rights to a technical standard that is highly desirable, or even necessary, for users"

"carry with them applications specific to a given device that are designed to lock customers in a whole commercial domain that mediates between them and the Internet"

"The exceptional case is not actual competition—that is not even in the range of outcomes—but, instead when a new application avoids being conquered by an existing giant and creates another new monopolistic powerhouse (a new Facebook, for example) because the upstart is able to escape the clutches or enticements of an existing giant laden with cash, and create its own “walled garden”"

"The usual assumption is that new technology will beat down the walls erected around any monopolistic market in a Schumpeterian wave of creative destruction. But there is little evidence to support this claim"

"In much economic theory, natural monopolies should either be publicly owned or, at the very least, heavily regulated"

"In the realm of the Internet, a state-corporate alliance has developed that is matched perhaps only in finance and militarism"

"what is emerging veers toward the classic definition of fascism as right-wing corporatism"

Economics and Information

Conflict between economic theory and the Internet around rivalrousness and excludability

"Copyright has long ago lost its loose connection to promoting the interests of the itinerant author, and has become a major policy to protect the wholesale privatization of our common culture."

"immediate response of the commercial media to their worst nightmare was to ratchet up copyright enforcement, and this has proven to be somewhat effective, though at a high cost for Internet users"

"(DRM) technologies that imposed artificial limitations on the functionalities of digital devices and software"

"Apple’s iTunes began to point the way: downplay the open Internet, the World Wide Web, and set up proprietary systems"

"we are entering a world of digital feudalism, where a handful of colossal corporate mega-giants rule private empires"

Journalism: "The Internet arguably came with greater promise for journalism, freedom of speech, and democratic renewal than for any other area. Here, therefore, the failure is most profound."

"Putting together an attractive Web site people would want to visit and support in large numbers requires resources."

"There is little evidence that final purchasers of news media throughout history ever comprised a large enough revenue base to support a satisfactory popular news media, something that democratic governance requires."

"Were the U.S. federal government to subsidize journalism in 2011 at the same percentage of GDP it did in the 1840s, it would spend in the $30-35 billion range."

"In 1960 the ratio of public relations people—attempting surreptitiously to doctor the news—to working journalists was around 1-to-1. In 2011 the ratio approaches 4-to-1"

"For the past decade, the great question has been: Will the Internet provide the market basis for resources sufficient to spawn a viable independent mass journalism? The answer is now in: It won’t. Not even close."

"we should not confuse the right to speak with the ability to be heard."

"Google search mechanism strongly encourages implicit censorship"

"no “middle class” of robust, moderately sized Web sites"

"online news media are more concentrated than the old media world"

The Lauderdale Paradox

Public wealth is inversely proportional to private riches

e.g. "if one could monopolize water that had previously been freely available by placing a fee on wells, the measured riches of the nation would be increased at the expense of the growing thirst of the population"

"“The common sense of mankind,” Lauderdale contended, “would revolt” […] Nevertheless, he was aware that the capitalist society in which he lived was already, in many ways, doing something of the very sort"

Lauderdale: "nothing but the impossibility of general combination protects the public wealth against the rapacity of private avarice"

"Marx built his entire critique of political economy in large part around the contradiction between use value and exchange value"

"An oil spill in the Gulf of Mexico increases GDP by promoting cleanup and litigation costs, while registering little in the way of economic losses."

The Paradox of the Internet

Corollary to the Lauderdale paradox: Massive public good of the Internet has been sublimated into private riches

"Competitive strategy in this sphere revolves around the concept of the lock-in of customers and the leveraging of demand-side economies of scale, which allow for the creation of massive concentrations of capital"

"disappearance of those use values associated with relatively free communication comes to be registered as a gain in wealth, since it produces massive private riches"

"From a capitalist standpoint, it is the very abundance represented by the Internet that has thwarted profit-making."

"An innovation is commercially developed, and a market created, only by finding a way to “wall” off a sector of public wealth and effectively privatize and monopolize it, leading to huge returns."

"The state, in effect, looks the other way when it sees new realms of economic wealth being made out of “nothing”"