Presentation For Delivery to Digital Capitalism Communication Symposium
16 May 2023
Warm thanks to Rector Nazife Güngör for this invitation, and to Dean Süleyman İrvan for hosting us.
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, 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. 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.
New frontiers of commodification based on digital technologies continue to be explored. 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. 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. The biggest US bank, JP Morgan Chase, boasts an IT staff of 57,000 and a tech budget of $14 billion; it also hosts roughly 6,000 apps. Tesla is estimated to have gathered eight times more profit on each of its high-priced, software-saturated vehicles in late 2022 than Toyota.
Capitalism’s multifaceted crisis tendencies also persist; indeed, fifteen years after the crash of 2007-2008, it is arguable that this rolling catastrophe continues. In March 2023 a new bank panic began. Gigantic black holes of unregulated activity constitute sources of unaddressed financial peril. More than fifty poor countries are facing severe debt crises; 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, while China’s party-state has recently reworked regulations to try to steady things. So the financial side of today’s digital capitalism is far from secure.