Category: Commodification

Geopolitics and Economic Power in Today’s Digital Capitalism

Presentation to the Hans Crescent Seminar, London[i]
13 December 2015
Dan Schiller

During the second half of the 20th century, U.S. power was notably deployed in order to generalize capitalist imperatives in and around world communications. The technological revolution that was underway – the digitization of information processing – thus developed within a sharply altering political economy. Its very triumph, however, opened digital capitalism[1] to new geopolitical conflicts.

Digital Capitalism

Aggregate U.S. corporate investment in “Information Processing Equipment and Software” began to accelerate after the recession of the early 1970s.  It is the largest category of capital equipment spending overall and, amounting to $331 billion in 2013, it totals more than the GDPs of all but around 35 countries.[2] Collectively, the largest sectoral investor in information processing equipment and software is the information industry itself – a point I’ll come back to.[3] Network systems and services, however, lace through all sectors of the capitalist political economy: they are the predicate of big capital’s operations and profit projects across the world.  To comprehend this development it must be situated theoretically and historically.

If, as Ellen Wood has explained, the capitalist mode of production is distinctive for separating economic and political power then, paradoxically, this selfsame separation means that capital must depend fundamentally on the state – both to guarantee existing commodity relations, and to impose these relations in new fields to enable capital’s further expansion. [4]  Sweeping political intervention by the U.S. state was the demonstrable prerequisite of escalating corporate investments in information processing and software.

Corporate demands to liberalize and modernize proprietary networks developed domestically during the 1950s and 1960s, and the U.S. Government repeatedly acceded to these demands.[5]  A U.S. push to liberalize and upgrade networks soon also radiated outward. First of all, the U.S. intervened to preempt or to deflect political counter-movements.  U.S. state-directed attacks were waged against import-substitution policies for computerization [“informatics”], notably in Brazil; against European initiatives to restrict corporate trans-border data flows; against what were deemed lax intellectual property laws worldwide; and against the Non-Aligned Movement’s drive for a New International Information Order, which expressly prioritized economic redistribution rather than profit maximization in international communications.[6]

A fundamental feature of this U.S. state offensive – this new imperialism – was to plant capitalist imperatives and -property relations throughout global communications[7] even as it forcefully generalized a U.S.-centric data communications system, the Internet.[8] These, not coincidentally, were the years of the “hyper-power” that saw the collapse of the Soviet Union and the restoration of capitalism in China. Some nations opposed (Brazil) or tried to sidestep (France) the Internet’s U.S.-centric control structure; however, they gave way as the U.S. successfully established a worldwide data infrastructure for capital.

The Internet is often heralded as a democratizing force, however, its overriding function has been to deepen and renovate capitalism.  The Internet provides an unprecedentedly wide platform for driving capitalist imperatives into new industries, and restructuring existing industries.  This process is, however, neither democratic nor contradiction-free.

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