China Digital Capitalism Geopolitics United States

Digital Capitalism in the 2020s: Dividing the World

By Dan Schiller

Presentation For Delivery to Digital Capitalism Communication Symposium

Üsküdar University

16 May 2023

Dan Schiller

Warm thanks to Rector Nazife Güngör for this invitation, and to Dean Süleyman İrvan for hosting us.[1]

1. Origins and Structure of Digital Capitalism

With the erection of a permanent war economy to support US global power during and after World War II,[2] new digital technologies were innovated and enlisted.

A digitally anchored political-economy gradually emerged.  It strengthened during the 1970s and 1980s, as computer networking expanded and the state authorized major privatization projects.  A massive phase-change was underway.[3] The form and location of production processes, the composition of capital investment, the commodities that generate high profits, the valued categories of labor, the profile of consumption: all were altering. At the same time, long-engraved imperatives of profit-maximization, cost efficiency, and labor control still carried forward. It was, and is, still capitalism – but with a digital character.[4]

New frontiers of commodification based on digital technologies continue to be explored.[5] The transnational companies that control 30% of global production and 80% of world trade are repeatedly rebuilding themselves around digital structures and dynamics; worldwide IT spending was forecast to increase to $4.6 trillion in 2023.[6]  In short, digital capitalism still has plenty of room in which to expand.   

The digital growth pole has been activated generally across every economic sector, not just the familiar consumer marketers – Google, Meta, Amazon, and Apple. Farm machinery manufacturer John Deere outfits tractors with software to collect soil data – in order to sell both tractors and these productivity-enhancing data to agribusiness.[7] The biggest US bank, JP Morgan Chase, boasts an IT staff of 57,000[8] and a tech budget of $14 billion; it also hosts roughly 6,000 apps.[9] Tesla is estimated to have gathered eight times more profit on each of its high-priced, software-saturated vehicles in late 2022 than Toyota.[10]    

Capitalism’s multifaceted crisis tendencies also persist; indeed, fifteen years after the crash of 2007-2008, it is arguable that this rolling catastrophe continues.[11]  In March 2023[12] a new bank panic began.[13] Gigantic black holes of unregulated activity constitute sources of unaddressed financial peril. More than fifty poor countries are facing severe debt crises[14]; and inflation has reached calamitous levels in a number of nations.  Local governments in China suffer from extreme indebtedness, and insolvent property developers there have fallen into managed bankruptcy,[15] while China’s party-state has recently reworked regulations to try to steady things.[16]  So the financial side of today’s digital capitalism is far from secure. 

2. Geo-Political Economy

This unstable political economy is also marked by an increasingly grave structural cleavage.  This split had not yet occurred in 1999, when I first framed an account of digital capitalism.[17]

During the 1990s, the US enjoyed unchallenged primacy.  Indeed, with the collapse of the Soviet Union; the decision by China’s party-state to reinsert China into global capitalism; and the immobilization of the Non-Aligned Movement – the anti-imperialist bloc formed decades before by nations of the Global South – the United States seized the opportunity to reorder the world.

A 1992 Pentagon document declared the strategy of US primacy, asserting that the US’s overarching mission must be “to insure that no rival superpower is allowed to emerge.”[18] Meanwhile, as transnational investment flows surged and pundits, politicians and executives trumpeted a US-centric “globalization,” the US also promoted a new mode of computer networking.  The internet functioned as a hegemonic popular force, a basis for additional cycles of commodification, and an infrastructure for coordinating the offshoring of manufacturing investment to low-wage regions – especially China.  US digital capitalism was riding high.

A quarter-century later, however, things look starkly different.  Free-market verities were mothballed during the crisis of 2008, when the US government stepped in to rescue the collapsing financial system.[19]  The unipolar epoch ended when, despite Washington’s desires, China grew into a first-rank power. Digital capitalism continues, but on altered terms.

Because its profit potential renders it a uniquely important growth-pole, US leaders are determined to maintain pre-eminence over digital technology.  Nevertheless, they face mounting difficulties.

The chief threat to US dominance stems neither from Europe nor Japan.  Despite rumblings of discontent and specialized competition, these potential rivals remain broadly in thralldom.[20]  The true challenge, again, comes from China. How do the US and China stand with respect to digital technology?

            China

Just a few decades ago, China remained an impoverished country.  Its fortunes changed only after its leaders embraced state-controlled inward foreign investment, export-led industrialization, and massive domestic infrastructure investment.  China then quickly became the center of world manufacturing; and, though US officialdom overlooked it at the time, China simultaneously developed a protected internet industry.[21] Chinese tech companies also plunged into international markets for PCs, telecommunications infrastructure, mobiles phones and, ultimately, games and internet apps.[22] 

After the financial crisis of 2008 Chinese leaders focused policy on high technology fields.[23] These efforts redoubled after Xi Jinping became President in 2012; Xi framed policy increasingly on autonomous development and self-reliance in technology.  Initiatives spanned the gamut of digital innovation, from electronic and autonomous vehicles[24] to supercomputers, satellites[25] and satellite navigation systems, quantum computing,[26] 5G and 6G wireless systems,[27] cloud computing services, and submarine cables.  Xi Jinping declared that China plans to dominate artificial intelligence by 2030.[28]  The party-state also prioritized advanced semiconductors,[29] though in this field – critical to virtually all the others – China has not yet shown outstanding success.[30] China is, however, the world’s second largest spender on research and development and it is closing the gap with the United States.[31] 

Between 2016 and 2021, the digital sector of China’s economy doubled, to $6.6 trillion.[32]  China was not only reorganizing its national political economy, but also bringing other countries into its digital orbit – in short, it was attempting to reconfigure the overall political economy of digital capitalism. 

Starting in 2013, its trillion-dollar Belt and Road initiative built infrastructure in countries throughout Eurasia, and then also in the Middle East, South America, and Africa.[33]  China has established multilateral organizations: the Global Security Initiative, the Global Development Initiative, the Global Civilization Initiative, and the Asian Infrastructure Development Bank. Alongside its efforts to internationalize its currency, the renmimbi, these “seek to position China as a country with which nations that are wary of U.S. hegemony can do business.”[34] Within this wider context, they create institutional bases for bringing countries into China’s burgeoning transborder digital infrastructure projects.  Scores of nations, especially in the Global South, have joined up. 

A few quick indicators of China’s newfound prominence in global digital capitalism.  TikTok, the social media app owned by the Chinese company ByteDance is available in 155 countries and 75 languages, and claims over a billion monthly active users.  The US is presently considering a ban on TikTok and, perhaps, other Chinese apps.[35]

Huawei,[36] a transnational leader in telecommunications equipment, cloud computing, and cybersecurity, had completed or initiated 104 cable-laying contracts nearly everywhere apart from North America – about one-quarter of the global total as of 2019.[37] To the chagrin of US officials, in December 2022 Huawei signed agreements to provide cloud computing and high-tech infrastructure to Saudi Arabia.[38]  The US reacted by threatening a total ban on exports to Huawei.[39]

China’s Beidou satellite navigation system, finally, exceeds in capability the US Global Positioning System. The largest network of global positioning satellites ever built, Beidou’s 35 satellites observe capital cities in 165 countries more frequently than the 31 satellites used by the US’s GPS.[40] The Beidou system is integrated into China’s Belt and Road initiative, and provides navigational services to BRI countries.[41]

Noam Chomsky sums up the general ramifications of all this: “China refuses to surrender its technological development. It cannot be intimidated, and it does not follow orders…That’s the real problem for the United States.”[42] 

The specific problem is that China is asserting a leadership role in the global political economy of digital capitalism.  How has the United States responded to China’s sudden ascendancy?

            United States

Only after the worst of the financial crisis of 2008 had passed did President Obama initiate a foreign policy “pivot to Asia.”  Forceful and wide-ranging tariffs were thereafter imposed by the Trump administration; and both Obama and Trump applied US market restrictions to Huawei and ZTE, another leading Chinese tech company. Only after Joe Biden was elected in 2020, however, did US policy for digital capitalism begin to be systematically recast. With bipartisan support, Biden explicitly specified that the US objective was to hinder and slow China’s forward motion in high technology.

Evident were several interlocking initiatives. 

The US has been committed to a policy of global free flow of information for a century.[43]  This policy formed the basis of US global expansion in communications after the Second World War, and it underwrote the worldwide growth of the US-centric internet during the 1990s and 2000s. As recently as 2013, the Council on Foreign Relations – the country’s leading foreign policy thinktank – trumpeted a need to defend “an open, global internet.”[44]  However, in 2022 the same CFR conceded that this cornerstone of US policy had crumbled; and its 2022 Report signaled an extraordinary strategic retreat. 

“The era of the global internet is over,” the Report began. The US “has been unable to counter the persistent advance of the concept of cyber-sovereignty,” embraced especially by China and Russia, but also by other countries.  In the face of spiraling fragmentation, the Report recommended that the US construct a “digital trade bloc” with like-minded countries, including the EU, Japan, and others.[45]  The “strongest possible alliance” – really a protectionist wall – should be created first and foremost among the US’s chief military allies.  The US has been attempting to actualize this policy, with mixed results.

The Report also embraced increased investment in digital infrastructure and in strategic fields including AI and quantum computing, to preserve technological superiority; and it recommended export controls.  Export controls were indeed imposed on advanced semiconductors in October, 2022[46]; pressure was directed at high-tech suppliers of microelectronics manufacturing technology in Japan and the Netherlands to bring them into line with US directives.[47]  Passage of the CHIPS and Science Act in August 2022 provided multibillion dollar incentives for bringing back some semiconductor manufacturing to the United States.[48] 6G wireless technology was yet another site of coordinated effort.

In addition, the Committee on Foreign Investment in the United States (CFIUS)[49] now routinely interposes executive power into ostensibly independent Federal Communications Commission authorizations for submarine cables that may connect to China (and elsewhere).[50] A US Naval analyst asserts that such actions may presage “a decoupling of the internet’s infrastructure, with US companies increasingly building the pipes connecting allied nations, while China invests in those connecting much of Asia and Africa.”[51] 

The CFR Report also endorsed a mobilization of US state power, encompassing “diplomatic and economic pressure on adversaries, as well as more disruptive cyber operations.”[52] And it bears emphasis that hard-power often does overtly predominate in US policy calculations.[53] The 2023 US military budget officially totals about $843 billion; of the US’s 750 overseas military bases, spread out across eighty countries, 313 are located in East Asia.[54] 

Protectionism backed by military power is supplanting open borders for the US side of digital capitalism.

            An Unresolved Paradox

Yet a paradox underlies the US-China fight for supremacy over digital technology.  Since Deng Xiaoping’s reform and opening-up policy decisions, the US and China have bound themselves together through innumerable business and financial linkages: US foreign direct investment, intra-corporate trade, and heavy financial flows.  Symptomatic is that the largest and most valuable company in the world – Apple – is essentially dependent on its China-based manufacturing, where 95% of its iPhones, iPads, Macs and AirPods are made.[55]  China is the US’s third-largest trading partner; and the second-largest holder of US Treasury bonds.[56] 

Can these gigantic, intricate, and profitable ties be unwound?  Can China and the United States actually “decouple”? 

Certainly, efforts to do so are strengthening.  However, decoupling is not a mechanical process – and the policy itself is not uniformly agreed on either side.  US Treasury Secretary Janet Yellen warned in April that US decoupling from China would be “disastrous.”[57] Li Qiang, China’s new premier, asserted in his first press conference in 2023 that China and the US are economically intertwined – to the benefit of both countries.[58]

There is, in any case, no guarantee that US measures to inhibit and retard China’s innovation of digital technologies will succeed.[59]  China has set a goal of becoming self-reliant in high-technology industries, and it continues to pour investment into them.[60]  Its track record in moving toward technological independence is impressive.[61]

3. Conclusion

What began as an expression of US supremacy has transformed, throughout the past two decades, into a conflict over nothing less than the shape of the global order.  Amid innumerable pressures and uncertainties, the US-China rivalry over technology has become a more general geopolitical-economic contest.[62] 

To this struggle, the US brings diminished ideological and political resources.  The US has disengaged from international institutions such as the World Trade Organization, and participates only selectively in the United Nations.  Its much-vaunted “rules-based order” thus may look like nothing more than an arrangement in which the US makes the rules. Much of the world views the US-led West with open skepticism: as 21 African countries and other nations throughout Asia and Latin America refused to back the Euro-American war effort in Ukraine, French President Macron stated in February that “we have lost the trust of the global south.”[63]  Nor, in any case, is current US foreign policy itself stable – it may not carry over through next year’s US election. 

On the other hand, for many states China’s commitment to the UN system, its rhetoric of multilateralism, and its proclaimed policy of non-interference in the sovereign affairs of other countries[64] may offer an appealing alternative. China’s brokering of a renewal of diplomatic relations between Iran and Saudi Arabia boxed the United States out of a region it has long considered its own backyard.  China’s assertive strategy is to champion reform of today’s deeply unbalanced international order – to push for adequate representation for the Global South.[65]  Backed by its strengthening digital capitalism, this strategy will probably fortify China’s geopolitical standing.

*

We are living through an epochal and unresolved historical transition.  Akin to past transitions of this kind, digital capitalism in the 2020s is likely to be marked by violent contingency, perilous confrontation, and continued geopolitical reconfiguration.     

[1] Thanks to Susan Davis, Danny Nasset, Min Tang, Mandy Troeger and ShinJoung Yeo for comments and criticism.

[2] Melvyn P. Leffler, A Preponderance of Power: National Security, The Truman Administration, and the Cold War.  Stanford: Stanford University Press, 1993.

[3] Herbert I. Schiller, Information and the Crisis Economy.  Norwood: Ablex, 1984; Dan Schiller, Digital Capitalism: Networking the Global Market System.  Cambridge: MIT Press, 1999. 

[4] There is debate about the extent to which digital capitalism rests upon capitalism’s traditional basis – accumulation via productive investment – or, in addition or instead, intellectual monopoly rents and other forms of surplus appropriation and re-appropriation.

[5] Including around AI and intermediate commercial services. Martin Wolf, “Globalisation is not dying, it’s changing,” FT September 13, 2022; Dan Schiller, Digital Depression: Information Technology and Economic Crisis.  Urbana: University of Illinois Press, 2014: 240-45; Dan Schiller and Shinjoung Yeo, “Powered By Google: Widening Access and Tightening Corporate Control,” Leonardo Electronic Almanac 20 (1), 2014: 44-57.

[6]  “Gartner forecasts worldwide IT spending to grow 5.1% in 2023,” Press Release October 19, 2022.

[7] Jacob Bunge and Bob Tita, “Monsanto, Deere Join Forces Over Data Services,” WSJ November 5, 2015 ; Scott Carpenter, “Access To Big Data Turns Farm Machine Makers Into Tech Firms,” Forbes, December 31, 2020 ; Dan Schiller and ShinJoung Yeo, “Betting the Farm,” Information Observatory, May 11, 2016.

[8] Steve Lohr, “Beyond Silicon Valley, Spending on Technology Is Resilient,” NYT February 13, 2023 

[9] “J.P. Morgan Lays out Its Technology Plans,” WSJ February 22, 2016; Matt Ashare, “How JP Morgan Chase Allots Its 14B IT Budget,” BankingDive October 3, 2022.

[10] Kazuhiro Noguchi “Tesla earns 8 times more profit than Toyota per car,” Nikkei Asia November 8, 2022

[11] Yanis Varoufakis, “This Is Not a Repeat of the 2008 Financial Crisis, But It Is the Same Capitalist Rot,” Common Dreams, March 17, 2023

[12] Editorial Board, “Silicon Valley Bank’s Collapse Reveals Regulatory Flaws,” FT March 13, 2023

[13] Joe Leahy, “IMF’s Georgieva warns of increased risks to financial stability,” FT March 26, 2023

[14] Martha Muir, “Quarter of emerging countries lose effective access to debt markets,” FT March 30, 2023

[15] Ho-Fung Hung, “Mussolini In Beijing,” Jacobin No. 48, Winter 2023: 113-117; Chan Ho-him and Thomas Hale, “Evergrande releases restructuring timeline,” FT March 20, 2023; Li Yuan, “China’s Cities Are Buried in Debt, but They Keep Shoveling It On,” NYT March 28, 2023

[16] Meijun Qian, “China’s regulatory restructuring targets conflicting roles,” Nikkei Asia March 17, 2023; Zhiwu Chen, “How China Keeps Putting Off Its ‘Lehman Moment,’” NYT March 26, 2023

[17] It became significant during the 2000s and early 2010s, as I have argued earlier. Dan Schiller, Digital Depression: Information Technology and Economic Crisis.  Urbana: University of Illinois Press, 2014.

[18] Patrick E. Tyler, “U.S. Strategy Plan Calls For Insuring No Rivals Develop,” NYT March 8, 1992; also M. E. Sarotte, Not One Inch: America, Russia, And the Making of Post-Cold War Stalemate.  New Haven: Yale University Press, 2021: 142.

[19] Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World.  New York: Viking, 2018: 143-201.

[20] For an unusually strong recent expression of discontent over US hegemony by a European leader, see Jamil Anderlini and Clea Caulcutt, “Europe must resist pressure to become ‘America’s followers,’ says Macron,” Politico April 9, 2023.

[21] Yu Hong, Labor, Class Formation, and China’s Informationized Policy of Economic Development. Lanham: Lexington Books, 2011; Yu Hong, Networking China: The Digital Transformation of the Chinese Economy.  Urbana: University of Illinois Press, 2017; Min Tang, Tencent: The Political Economy of China’s Surging Internet Giant. New York: Routledge: 2020.

[22] Hong Shen, Alibaba: Infrastructuring Global China.  New York: Routledge, 2022.

[23] Yu Hong, Networking China; Yu Hong, “Reading the Twelfth Five-Year Plan: China’s Communication-Driven Mode of Economic Restructuring,” International Journal of Communication 5 (2011): 1045-57; Yu Hong, “Reading the Thirteenth Five-Year Plan: Reflections on China’s ICT Policy,” International Journal of Communication 11 (2017): 1755-74; Tooze, Crashed: 242-253.

[24] Harry Dempsey and Gloria Li, “Chinese battery makers strengthen grip on global supply,” FT January 4, 2023 

[25] Cate Cadell, “China’s military aims to launch 13,000 satellites to rival Elon Musk’s Starlink,” Washington Post, April 6, 2023.

[26] Rob Jesudason, “China will win quantum computing race unless West ups its game,” Nikkei Asia, January 12, 2023.

[27] Elisabeth Braw, “The 6G showdown with China is coming,” FT November 30, 2022

[28] Kotaro Fukuoka, Shunsuke Tabeta and Akira Oikawa, China trounces U.S. in AI research output and quality,” Nikkei Asia January 16, 2023; Edward Luce, “China is right about US containment,” FT March 8, 2023.

[29] Yuki Okoshi, “China tops U.S. to take research crown at global chip conference,” Nikkei Asia November 18, 2022 

[30] Chris Miller, Chip War: The Fight for the World’s Most Critical Technology.  New York: Scribner, 2022.

[31] U.S. National Science Board, “Research and Development: U.S. Trends and International Comparisons 2022 Executive Summary,” at https://ncses.nsf.gov/pubs/nsb20225

[32] Cissy Zhou and Pak Yiu, “China’s new power structure tightens grip on data, tech, finance,” Nikkei Asia March 21, 2023.

[33] China’s overall investment just in sub-Saharan infrastructure projects over the past two decades has been $155 billion – including but not limited to BRI.  Robert Bociaga, “China’s Africa Belt and Road investment drops as West spends more,” Nikkei Asia March 25, 2023; James Kynge, “China grants billions in bailouts as Belt and Road Initiative falters,” FT March 28, 2023.

[34] Jonathan Cheng, “China Is Starting to Act Like a Global Power,” WSJ March 22, 2023.

[35] Christopher Mims, “A TikTok Ban May Be Just the Beginning,” WSJ March 25, 2023.

[36] Yun Wen, The Huawei Model: The Rise of China’s Technology Giant. Urbana: University of Illinois Press, 2020.

[37] “Huawei Marine Achieves over 100 Contracts,” News Release, February 2020.

[38] Reuters, “Saudi Araba signs MoU with China’s Huawei -statement,” December 8, 2022

[39] Takashi Kawakami, Risa Kawaba, and Rintaro Tobita, “Huawei’s rebirth as cloud provider faces total U.S. export ban threat,” Nikkei Asia, March 3, 2023.

[40] Toru Tsunashima, “In 165 countries, China’s Beidou eclipses American GPS,” Nikkei Asia November 25, 2020,”

[41] ChinaPower, “How is China Advancing its Space Launch Capabilities?” CSIS ; Mitsuro Obe, ”Japan’s war on space junk,” Nikkei Asia, February 8, 2023 

[42] Vijay Prashad and Noam Chomsky, The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of U.S. Power. New York: The New Press, 2022: 184-5.

[43] Herbert I. Schiller, Communication and Cultural Domination.  White Plains: International Arts & Sciences Press, 1976: 24-45; Dan Schiller, Digital Depression: 162-69.

[44] Council on Foreign Relations, Defending an Open, Global, Secure, and Resilent Internet.  Independent Task Force Report No. 70.  John D. Negroponte and Samuel J. Palmisano, Chairs, and Adam Segal, Project Director.  New York: 2013.  Discussed in Schiller, Digital Depression:

[45] Council on Foreign Relations, Confronting Reality in Cyberspace: Foreign Policy for a Fragmented Internet. Independent Task Force Report No. 80.  Nathaniel Fick and Jami Miscik, Chairs; Adam Segal, Project Director. New York: 2022: 7, 15, 19, 43.

[46] Bureau of Industry and Security, US Department of Commerce, “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification,” Federal Register, October 13, 2022. 

[47] Masaya Kato, “Japan weighs China chip export curbs at U.S. request,” Nikkei Asia January 29, 2023

[48] The White House, “Fact Sheet: CHIPS and Science Act Will Lower Costs, Create Jobs, Strengthen Supply Chains, and Counter China,” August 9, 2022.

[49] Congressional Research Service, “The Committee on Foreign Investment in the United States (CFIUS)” Updated July 3, 2018, CRS Report RL 33388; “What Is CFIUS?” Information Observatory, February 26, 2016.

[50] For example, a Google-backed private cable called Firmina, linking the US with Brazil, Uruguay and Argentina.  “Cable Compendium” CommsUpdate 6 January 2023.

[51] Gross and Heal, “China Pulls Back”; also, Anna Gross, Alexandra Heal, Demetri Sevastopulu, Kathrin Hille and Mercedes Ruehl, “China exerts control over internet cable projects in South China Sea,” FT March 13, 2023.

[52] Council on Foreign Relations, Confronting Reality in Cyberspace: 13-14.  The report specified that “the United States should develop a broad effort to erode adversarial capabilities, making them less effective by taking out infrastructure; exposing tools; and creating political, diplomatic, and economic pressure on finances, authorities, and leadership.” Ibid: 58.

[53] “Notes from the Editors,” Monthly Review Volume 74 No. 7 December 2022: 64; The White House, National Security Strategy, October 12, 2022.

[54] David Vine in “The U.S. Has 750 Overseas Military Bases, and Continues to Build More to Encircle China,” Democracy Now! February 14, 2023.

[55] Patrick McGee, “What it would take for Apple to disentangle  itself from China,” FT January 17, 2023.  Apple now hopes to shift up to one-quarter of its supply chain to India.  Patrick McGee, “How Apple Tied Its Fortunes To China,” FT January 16, 2023.

[56] Henry M. Paulson, Jr. “America’s China Policy Is Not Working: The Dangers of a Broad Decoupling,” Foreign Policy January 26, 202; Yuta Saito and Iori Kawate, “China’s U.S. Treasury Holdings Hit 12-Year Low on Rate Hikes, Tensions,” Nikkei Asia February 17, 2023

[57] Demetri Sevastopulo, “Janet Yellen warns US decoupling from China would be ‘disastrous,’” FT April 20, 2023

[58] Ryan McMorrow, Joe Leahy and Cheng Leng, “Xi Jinping vows to make Chinese military ‘great wall of steel’ as tensions rise with west,” FT March 12, 2023

[59] For a different view see Veneziale, “Who Is Leading The United States To War?”: 34-62.

[60] “China Overhauls Ministries to Take on the West in Tech,” FT 7 March 2023 at

[61] Dan Wang, “China’s Hidden Tech Revolution,” Foreign Affairs, March/April 2023: 65-77.

[62] Edward Wong, “China Increasingly Seen as Antagonist in Diplomatic Talks Around the World,” NYT March 3, 2023

[63] Guy Chazan and John Paul Rathbone, “Germany’s Olaf Schulz airs frustration over allies’ stance on tanks for Ukraine,” FT February 17, 2023; Sylvie Kauffmann, “Emmanuel Macron must reset France’s Africa policy,” FT February 27, 2023

[64] Relatedly, China has also stepped up its public diplomacy and greatly expanded its foreign service.  “China Leads World in Number of Diplomatic Posts, Leaving US in its Wake,” The Guardian, November 27, 2019

[65] Masahiro Okoshi, “China eyes Global South, not West, to expand influence: expert,” Nikkei Asia, March 20, 2023

Abraham Lincoln Brigade Archive Spanish War

Anti-Fascists and Archives: An Antidote to Amnesia

By Dan Schiller

It is ever-important to excavate and preserve the history of struggles for justice – not to be nostalgic, but to find sources of inspiration and tactical knowledge to fuel positive social change. This post is about that.

The Spanish Civil War was the immediate forerunner of World War Two, and the front line of the popular struggle against global fascism. A 1936 coup against the Spanish Republic was led by right-wing generals, with support from an outsized officer corps, a domestic fascist party – the Falange – and much of the Catholic church. Faced by fierce resistance from Spain’s politicized working class, the coup faltered.  Within weeks, however, Spain’s Army of Africa was airlifted by German planes from Spanish Morocco to Seville; and its generals gained financing from some of Spain’s wealthiest capitalists, as well as aircraft, armaments and soldiers from Nazi Germany and Fascist Italy. A failing military coup then transformed into a protracted civil war.

England, France, and the United States stood by, in the face of the Spanish Republic’s repeated pleas for support.  Indeed, the Ford Motor Company supplied a fleet of trucks to the rebels while Texaco sent them fuel, both on credit.[1] Appeasement – the official name for this policy was “nonintervention” – persisted until the Nazi invasion of Poland in September 1939.  By then, five months after the fall of Madrid, it was too late. 

Immediately as it got underway, however, the Spanish Civil War gripped the political consciousness of a generation.  Nearly 40,000 volunteers from sixty-one countries came to defend Spanish democracy against the troops of Spain’s General Francisco Franco, Hitler and Mussolini.[2] Many were Communists, but the volunteers constituted a broad Popular Front force; indeed, a recent historian asserts, “only one political and moral category fits almost all the Brigaders.  They were anti-fascists.”[3]  The Soviet Union both helped organize the International Brigades and supplied military aid to the Spanish Republic, though on a much smaller scale than Germany and Italy.

Nearly 3000 of the volunteers hailed from the United States. Attached to different units of the loyalist (Republican) forces, collectively they became known as the Abraham Lincoln Brigade.[4]  Among other noteworthy attainments, the Lincolns boasted the first African American to command white troops in US military history.

The war was relentlessly brutal, and the Lincolns suffered severe casualties.  With Franco’s victory, Spain was ruled for the next 35 years by an authoritarian dictatorship which routinely practiced torture and disappearance against those it regarded as enemies. Nearly half a million loyalists fled to France at war’s end.  Some Brigaders went on to join Resistance forces, in France, Italy, and the then Yugoslavia. Many ultimately emigrated to Mexico and other countries.

Meanwhile, many of the surviving Lincolns stepped forward to serve, or try to, in World War II, where they helped put an end to German, Italian and Japanese fascism.[5]  And many continued to affirm their identity as “fighting anti-fascists.” As the US Cold War got going after World War II, the Lincolns worked successfully with other groups to prevent the seating of a Franco delegation at the founding conference of the United Nations. While they focused their efforts, especially on Spain and the plight of the Spanish refugees, they also threw themselves into struggles against US racism; US military support for Chiang Kai-shek in China; the application of the Truman Doctrine against communism in Greece and Turkey; and the US’s Taft-Hartley ‘slave labor law.’[6] One of the leaders of the Lincolns recalled, “Anything that was anti-fascist we were into.”[7]

However, their activism prompted harsh reprisals. Virtually from the moment they returned to the United States in 1938, the volunteers were singled out for having been “premature anti-fascists” – supposed enemies of the US state.[8] They often suffered harassment, official and unofficial, disparagement, and blacklisting. During the 1950s, some went to prison for what were deemed violations of anti-subversion laws. It became an uphill climb to keep alive a public memory of their brave civic commitment to anti-fascism, and its historic importance.  In 1985, then President Ronald Reagan even declared that the Lincolns had fought “on the wrong side.”[9]

This history was both vilified and erased; but a nation’s archives not only preserve the history of people’s struggles for democracy and humanity but also allow such struggles to be reclaimed.  As a society’s changing present alters the needs it makes of its past, archives may offer pathways toward redressive social action. 

Thankfully, this is true for the volunteers who went to Spain.  Established in 1978, the Abraham Lincoln Brigade Archive (ALBA) is devoted not only to conserving the Lincolns’ history, but to relating the memory of the great 1930s fight against Spanish fascism to contemporary struggles for social justice.  This is vital today, when fascism’s threat is once again rising. 

ALBA, states the organization, “is an educational non-profit dedicated to promoting social activism and the defense of human rights. ALBA works to preserve the legacy of the Abraham Lincoln Brigade as an inspiration for present and future generations.”

ALBA digitized its historically important collections including the James Lardner Papers, the Herman Greenfield Papers, the Miriam Sigel Papers, and the Marjorie Polon Papers.  They contain journalistic accounts of the war and letters from ALB volunteers who died in the war. The physical collections are housed in NYU’s Tamiment library; however, everyone can access digital collections through the Digital Culture of Metropolitan New York.

ALBA’s journal, The Volunteer, recovers and publishes experiences of the Lincolns’. A comprehensive Brigade Biographical Database Directory has been compiled; it permits users to learn about individual volunteers.  ALBA works with high school and college students to explain the importance of the Lincolns for US and international history.  It also hosts lectures, workshops, interviews, films and teaching institutes. You will find more about their endeavors to keep this important history alive on the ALBA’s website.

In 2008, an outdoor monument to the veterans of the Abraham Lincoln Brigade – the sole such  commemoration to their bravery in the United States – was erected in San Francisco.  Like the ALBA itself, it creates what historian Peter N. Carroll calls an “antidote to amnesia.”[10]

[1] Paul Preston, A People Betrayed: A History of Corruption, Political Incompetence and Social Division in Modern Spain (New York: Liveright Publishing, 2020), 325.

[2] Giles Tremlett, The International Brigades: Fascism, Freedom and The Spanish Civil War (London: Bloomsbury: 2020).

[3] Tremlett, International Brigades, 7.

[4] An excellent history is Peter N. Carroll, The Odyssey of the Abraham Lincoln Brigade: Americans in the Spanish Civil War (Stanford: Stanford University Press, 1994).

[5] Tremlett, International Brigades, 9-10.

[6] Carroll, Odyssey, 276, 284.  Also, Nelson Lichtenstein, “Taft-Hartley: A Slave-Labor Law?” Catholic University Law Review, 47( 3), 1998.

[7] Carroll, Odyssey, 300.

[8] Carroll, Odyssey, 209-94, especially 250-64.  More generally, Ellen Schrecker, Many Are The Crimes: McCarthyism in America (Boston: Little, Brown: 1998), 105.

[9] Quote in Tremlett, International Brigades, 534.

[10] Marina Garde, “The Abraham Lincoln Brigade Monument in San Francisco,” October 18, 2017.

Broadband Fiber-optic cables Utility Poles

Greed, Fear, and Public Need in Today’s Telecommunications

By Schiller and Yeo

How are telecommunications network development priorities shaped? Recent news stories shed some light. A profit motive is overwhelming other social objectives in network infrastructure projects, from utility poles throughout rural areas to Arctic Ocean fiber-optic cables.

Utility Poles

In the US, it is a given that broadband infrastructure will not be built out unless there is money to be made – because business interests have been permitted to provide internet access across the country. The COVID pandemic made the results clear, as people in poor and rural areas struggled to access the internet – which is no longer a luxury but a necessity for work, school, and life in general.

The pandemic that claimed over one million lives in the US propelled federal intervention to expand broadband infrastructure, by allocating $65 billion as part of the Infrastructure Investment Bill and American Jobs Act (IIJA) in 2021.[1] In 2022, the Federal Communications Commission (FCC) announced that it would fund over $1.2 billion to expand broadband services in rural areas as part of its Rural Digital Opportunity Fund involving 23 broadband providers.[2]

This is good news to be sure; however, a contest between opposed corporate interests erupted around a 19th-century invention that is still crucial to today’s broadband infrastructure – utility poles – stymieing the FCC’s plan.[3]

Utility poles are so ubiquitous as to be nearly unseen in our built environment. However, in order to build broadband infrastructure, internet providers must either lease access to existing networks of poles, or install their own new poles to attach their cables and hardware. Both of these are expensive and politically-charged options.

Most utility poles are owned by electricity- and telecom companies. These owners can leverage political-economic power to slow down or block the construction of new broadband networks by their competitors. In the past, ATT, which owns many of the approximately 160 million poles around the US,[4] was able to drag out the internet fiber buildout of Google, its competitor. Eventually, the FCC stepped into the fray and approved its One Touch Make Ready (OTMR) rule. The rule favored Google. Under OTMR, companies who need to attach cables to existing utility poles can mount their hardware without waiting for the pole owners to prepare for the new attachments. On the surface, the rule could speed up the broadband rollout and appeared to serve the public interest; however, OTMR also included a fatal anti-labor provision. The Communication Workers of America (CWA), which represents telecommunication workers, was vehemently opposed to OTMR because the new rule allowed internet companies to hire third-party contract workers, thereby bypassing union labor.[5]

With the recent windfall of federal broadband money fueling additional construction of broadband network infrastructure, a new feud over utility poles has erupted.  This time, pole owners including ATT and Verizon, alongside electricity companies, are pitted against internet service providers (ISPs) like Comcast and Charter Communications – who don’t own poles and who wish to attach their equipment and cables. The crux of the fight is who is going to cough up the money to put new equipment on existing poles or replace old poles to attach new cables. ATT and Verizon want to preserve the existing rules, under which the financial burden is squarely on the attachers. Charter, representing fiber builders, is lobbying the FCC to shift the costs of new utility poles to the pole owners.  Both are competing for billions of dollars in public funds.

The FCC is currently soliciting public comments on the rules in order to negotiate the current dispute[6] – “to strike a balance between the local authority of pole owners and internet service providers,” as the Wall Street Journal puts it.[7]  While the FCC referees between the two sets of entrenched corporate powers, however, the public interest twists in the wind.  Both poll owners and attachers have already enriched themselves for decades through price-gouging, government subsidies, tax breaks, rule-bending, and labor repression.

The debacle over utility poles is evidence of how corporate greed continues to overshadow social need. A similar tendency is also imprinted on subsea fiber-optic cables that could benefit remote communities in Alaska and Canada.

Arctic subsea fiber-optic cables

Throughout US history, financial traders have repeatedly sought to carve private informational advantages into networks. A Northern merchant’s reliance on privately-run express mail services in the 1830s conferred advanced knowledge of the condition of the Southern cotton harvest – enabling them to make a speculative killing.[8] Today’s network counterparts are more complex, but comparable. This is illustrated by the ongoing arms race conducted by giant financial firms to exploit subsea fiber-optic cable networks.

High-frequency trading of equities, relying on proprietary algorithms and computer networks, accounts for about half of total US equity trading and 35% of the EU’s.[9] For the hedge funds, megabanks, and other such participants – which are able to make the continuing investments in digital technology that are needed to exploit high-frequency trading – it can be highly lucrative.  Playing the market for them is less about making shrewd estimates of specific companies’ earning potential, than about pursuing ceaseless innovation in digital technology and network infrastructure. For many years, high-frequency traders (HFT) like Goldman Sachs, Morgan Stanley, JP Morgan and the like have invested hundreds of millions of dollars in technology and deployed trading systems that trace microsecond stock price movements. They are competing for speed and superior information processing power as their HFT platforms analyze multiple exchanges simultaneously and buy and sell orders in fractions of a second.[10] 

The servers used by these trading networks need to be located as close as possible to those operated by each stock exchange in order to cut latency. And, for big financial institutions, ultra-fast links built along the shortest routes between exchanges are key. These networks are not, however, stationary outcomes but moving targets, akin to Olympic speed records. Technology and geography continue to permit more rapid transmission and, sometimes, shorter routes. For large financial intermediaries, “shaving off just a few milliseconds of connectivity between two trading locations can earn them tens of millions of dollars a year – so they’re willing to pay extra for the fastest path.”[11] Which brings us to a projected Arctic subsea fiber-optic cable. 

The ice that has long covered the Arctic is melting quickly because of climate change. A Finnish-Japanese-Alaskan joint venture hopes to take advantage of this warming to lay a 10,500 mile cable, to permit data to transit between Asia, Europe, and North America.[12] This Arctic route would grant broadband service to remote communities in northern Alaska and Canada.  It also would offer the shortest – thus the fastest – connection between London and Tokyo and, explains, Isabelle Bousquette, could benefit banks and other financial traders, which gain extra profit if they are able to send and receive information ahead of rivals.[13] Customer greed is a propulsive motivator.

However, it is not the only factor.  Arctic cables have tempted projectors for over twenty years, but the challenges remain daunting. Construction, maintenance, and repairs can only be performed during the summer months.  If the cable is damaged or broken during the winter, fixing it will have to wait – perhaps for months – until the ice sheet has melted sufficiently. Meanwhile, service is unavailable.

In these circumstances, fear offsets greed: big corporate customers have been loath to commit their money in advance. The venture has only signed up one client, a Nordic nonprofit which will buy a mere 6-8 percent of the cable system’s projected capacity (The venture needs to sell at least half before it can initiate work on the system). All, however, may not be lost. The projectors have been stressing the importance of a “secure, resilient data infrastructure” linking the US, Canada, Europe, and Japan before the European Commission, in light of inflamed tensions between Russia, China, and the West.[14] Perhaps, as so often, so-called military preparedness will prime the pump?

Whether corporate interests clash over utility poles or Artic cables, what is most striking is the invisibility of social need in policymaking discourse. Network development is implanted deeply within the existing political-economic system. To reverse currently distorted priorities and construct a viable network infrastructure, we will need to dismantle this dominative order.

[1] “NTIA’s Role in Implementing the Broadband Provisions of the 2021 Infrastructure Investment and Jobs Act,” Broadband USA.

[2] “FCC Announces Over $1.2B for Rural Broadband in 32 States,” FCC, January 228, 2022.

[3] Ryan Tracy, Fights Over Rural America’s Phone Poles Slow Internet Rollout, Wall Street Journal, March 12, 2023.

[4] Robert A. Zabel, Jeffrey J. Morrell, “Decay problems associated with some major uses of wood products,” Wood Microbiology, 2000.

[5] “FCC Adopts Dangerous, Anti-Worker “One Touch, Make Ready” Policy,” Communications Workers of America, August 9, 2018,

https://cwa-union.org/news/fcc-adopts-dangerous-anti-worker-one-touch-make-ready-policy-0

[6] “FCC Seeks Comment on Resolving Disputes Over Pole Replacement Costs,” FCC,  March 18, 2022, https://www.fcc.gov/document/fcc-seeks-comment-resolving-disputes-over-pole-replacement-costs.

[7] Ryan Tracy, Fights Over Rural America’s Phone Poles Slow Internet Rollout, Wall Street Journal, March 12, 2023.

[8] Dan Schiller, Crossed Wires: The Conflicted History of US Telecommunications, From the Post Office to the Internet (New York: Oxford University Press 2023), 24-33.

[9] Benjamin Clapham, Martin Haferkorn, and Kai Zimmermann, “The Impact of High-Frequency Trading on Modern Securities Markets,” Business and Information Systems Engineering 65 (1), 2023: 7-24.

[10] Steve Kroft, “How Speed Traders Are Changing Wall Street,” Sixty Minutes, CBS, October 10, 2010.

[11] “Hibernia Pulls Ahead in Trans-Atlantic Speed Race,” TeleGeography’s CommsUpdate, September 30, 2010, quoting TeleGeography Vice President of Research Tim Stronge.

[12] Isabelle Bousquette, “What Will It Take to Connect the Artic? $1.2 Billion, 10,000 Miles of Fiber-Optic Cable and Patience,” Wall Street Journal, March 10, 2023.

[13] Ibid.

[14] Ibid.

Internet Industry Russia Ukraine War

Declaration of Withdrawal

By ShinJoung Yeo

For the past few weeks, the mainstream media have been plastered with news about ChatGPT – a chatbot developed by the Silicon Valley company OpenAI which recently received a $10 billion investment from Microsoft. Will Microsoft revolutionize its Bing search with ChatGPT? How did Google lose $100 million with its mishap on its new AI chatbot? Will ChatGPT change education? Will ChatGPT affect the future of work? We’re sure that an AI chatbot is worthy of the corporate media’s close probing, but amidst plenty of media coverage on technology, there is a deprivation of critical analysis on the tech industry’s involvement in the current war between Ukraine and Russia resulting in the killing of thousands of people on both sides NOW – not in some version of the future. We insist this requires a series of probing questions and elaboration.

A few months after the war broke out, the US and its allies imposed economic sanctions against Russia.[1] Company after company loudly publicized that they were withdrawing their businesses from Russia; though after a year of the war, hundreds of the US and European companies, including Pfizer, BP, and Renault, are still doing business in Russia according to a recent NY Times report.[2]

By March 2022, the major tech companies were also joining this drive. Apple stopped selling new products and paused its Apple payment services; Amazon suspended shipments of its retail products and new clients for its cloud services in Russia and Belarus. Google’s Russian subsidiary filed for bankruptcy in Russia and suspended ads in Russia on Google’s internet properties including YouTube. Microsoft announced that the company was also suspending new sales in Russia.

Despite their public declarations, it is not clear to what extent the US tech industry has actually pulled their businesses from Russia; however, one still wonders what has driven this unusually prompt rhetoric of withdrawal? According to the tech companies, they were responding to an unlawful invasion and a humanitarian disaster. This line of reasoning is inconsistent with the tech companies’ previous behavior, as they are doing or have done plenty of business in countries with repressive regimes around the globe and have ignored other humanitarian disasters.[3]

The tech companies’ exit from Russia came as a result of governmental edicts. The question then is, what has moved these companies to comply with the US state’s current geopolitical ambitions? What is the basis of the interlock? The complete answers to these questions are multi-faceted because we need to consider the tech giants’ long relationship with the Democratic party; their interests in domestic and governmental markets; their involvements in US foreign policy; and their leaders’ class interests – all of which are intricately intertwined.  Further explication of these questions will occupy multiple posts. However, for this piece, we’re calling attention to one of the apparent reasons for the tech companies’ swift withdrawal announcements from Russia.

On 16 September 2022, Eric Schmidt, former Google CEO and current Chair of the US National Security Commission on Artificial Intelligence – who has also been newly appointed to serve on the National Security Commission on Emerging Biotechnology – visited Ukraine and met with Ukrainian government officials. Soon after his trip, Schmidt gave a talk at the Cyber Media Forum at Georgetown University.[4]  He remarked that he was interested in knowing what the tech industry did to help the war (not peace!).

Sharing his observations from the trip, Schmidt said that the Ukraine government changed a law that had prevented government data from being stored in the cloud – so they could move all their government data to cloud services. Though he didn’t reveal which cloud services the Ukraine government would be relying on, one would not have to work hard to guess. He continued:

Elon Musk is genuinely a hero here, Elon based on just a verbal statement, was willing to authorize a large number of Starlinks[5] into the country. I won’t say their names, but other entrepreneurs, other donors, gave Ukraine a great deal of money that ultimately resulted in what I was told was about 20,000 Starlinks in Ukraine itself. This allowed the strategy of shutting down the internet by the opposition to fail.[6]

One of Schmidt’s unidentified donors was the United States Agency for International Development (USAID). Elon Musk’s initial zeal to supply SpaceX’s Starlink internet routers fizzled; he asserted that it was too costly for the company and asked for Pentagon funding.[7] According to a Washington Post article, Space X donated 3,670 terminals and USAID ponied up part of the bill by purchasing  over 1,330 terminals from SpaceX and sending them to Ukraine.[8]  To be sure, this is only a fraction of the $113 billion in aid and military assistance to Ukraine[9] – or even of the $67 billion that was allocated for military aid.

Schmidt – who has been a staunch advocate of US digital war-making and of AI innovation to beat China, and who holds investments in AI start-ups for the defense industry[10] – stressed that Ukraine is a valuable case-study of the success of a networked war; indeed, he signaled investors and entrepreneurs to come to Ukraine and get on board with digital militarism.[11] If his signal was too subtle, Ukraine president Volodymyr Zelenskyy’s message was made loud and clear. On 23 January of this year, he made a speech to a US corporate lobby group, the National Association of State Chambers about rebuilding Ukraine after defeating Russia. Zelenskyy spoke about his plan and said,[12]

… when we’ll be able to end this war by throwing out the occupiers – in the same manner together we’ll be able to start the difficult work of rebuilding Ukraine – our cities, our economy, our infrastructure.

…It is already clear that this will be the largest economic project of our time in Europe. It is obvious that American business can become the locomotive that will once again push forward global economic growth.

President Zelenskyy proudly affirmed that global financial companies like Black Rock, J.P. Morgan, and Goldman Sachs, as well as defense contractors like Lockheed Martin, have already set up shop in Ukraine – and so have the tech giants. In fact, in May 2022, Google received the Ukrainian “Peace” Prize presented by Minister of Digital Transformation Mykhailo Fedorov in Davos, where the world’s billionaires meet to talk about the global economy.[13] Google was the first company to be awarded the prize, but not the last. Shortly thereafter, Microsoft and Amazon were also awarded the same prize.[14]

If peace means no war, a peace prize can’t be given to anyone that supports war. This prize was not for peace-making but was instead given for joining in war-profiteering. In turn, the tech companies’ declaration of their withdrawal from Russia did not involve striving for any lofty ideal; rather, it was a shallow, self-interested strategy to march headlong into the business of war.

[1] U.S. Department of The Treasury, “Ukraine-/Russia-related Sanctions,” https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information/ukraine-russia-related-sanctions.

[2] Liz Alderman, “Leave Russia? A Year Later Many Companies Can’t, or Won’t” New York Times, March 2, 2023,https://www.nytimes.com/2023/03/02/business/russia-companies-exit.html.

[3] See Who’s Behind ICE? https://mijente.net/wp-content/uploads/2018/10/WHO%E2%80%99S-BEHIND-ICE_-The-Tech-and-Data-Companies-Fueling-Deportations-_v1.pdf, and see Amazon Web Services and Google signed a $1.2 billion contract to provide cloud services to the Israeli government and its military. This technology is used to facilitate the expansion of illegal occupation of Palestine. See Ramzy Baroud, “Billion-dollar deal partners Google and Amazon in Israeli occupation of Palestine” People’s World, March 28, 2022, https://www.peoplesworld.org/article/billion-dollar-deal-partners-google-and-amazon-in-israeli-occupation-of-palestine/.

[4] The First Networked War: Eric Schmidt’s Ukraine Trip Report, Special Competitive Studies Project, September 13, 2022.

[5] StarLink is a satellite internet operated by Elon Musk’s SpaceX. Space X sent Starlink terminals to Ukraine to connect to the satellite internet.

[6] The First Networked War: Eric Schmidt’s Ukraine Trip Report, Special Competitive Studies Project, September 13, 2022.

[7] Richard Waters and Felicia Schwartz, “Pentagon in talks to fund Ukrainian troop access to Musk’s Starlink,” Financial Times, October 14, 2022.

[8] Cristiano Lima, “U.S. quietly paying millions to send Starlink terminals to Ukraine, contrary to SpaceX claims,” Washington Post, April 8, 2022.

[9] “Congress Approved $113 Billion of Aid to Ukraine in 2022,” Committee for Responsible Federal Budget, January 5, 2023.

[10] Kate Conger and Cade Metz, “‘I Could Solve Most of Your Problems’: Eric Schmidt’s Pentagon Offensive,” New York Times, May 2, 2021.

[11] “The First Networked War: Eric Schmidt’s Ukraine Trip Report,” 2-2-2 newsletter, September 13, 2022.

[12] President of Ukraine’s address to the participants of the meeting of the National Association of State Chambers, January 23, 2022.

[13] “Google Was the First to Receive “Peace Prize” From Ukraine,” Tech Ukraine, May 25, 2022.

[14] Simon Sharwood, “Microsoft, AWS awarded Ukraine peace prize for cloudy services,” Register, July 7, 2022.