A Story of Subversion
Soft-wars is an excellent review by Blair Fix of the recently released book of the same name1. The book is a case study of the behaviour of big tech2.
To quote Blair:
"Mouré’s analysis nicely illustrates a truism in economics: big corporations behave nothing like economics textbooks say they should. The textbooks say that profits should stem from productivity. But the reality is that what big companies care about most is restriction. The battle for profits is a battle over property rights — the legal right to restrict."
"We all know that big tech is engaged in nefarious activity. The point is that this is the norm, not the exception. Econ textbooks say that firms should play nice. In the real world, the big boys make their own rules."
Orthodox economics is built on a theory of pure or perfect competition, "a theoretical market structure in which the following criteria are met:
All firms sell an identical product (the product is a "commodity" or "homogeneous"). All firms are price takers (they cannot influence the market price of their product). Market share has no influence on prices. Buyers have complete or "perfect" information—in the past, present, and future—about the product being sold and the prices charged by each firm. Capital resources and labor are perfectly mobile. Firms can enter or exit the market without cost."
If such a market existed, intense competition would eliminate excessive profit taking, and put to the sword inefficient producers who failed to meet market demands.
Neoliberals champion free markets and small government. This is their mantra. This is the neoliberal implication that you've been voting for. The implication being that real markets are close to perfect markets, requiring little or no government intervention. That whatever you desire will be better delivered by so-called 'free' markets.
Neoliberals don't believe a word of it. It's for your benefit. For your votes.
Look at their actions. They speak much louder than their words. The reality is that neoliberals understand and respect the power of currency issuing government. Only government can deliver the grossly imperfect markets that increase their profits. It's therefore imperative for parasitic rentiers that they control government, democratic or otherwise.
Neoliberalism is "generally associated with policies of economic liberalization, including privatization, deregulation, globalization, free trade, austerity and reductions in government spending in order to increase the role of the private sector in the economy and society."3 The outcome is inequality, endemic racketeering, and environmental damage, to name just a few.
We, the voters, took little interest in our democracy, and this allowed neoliberals to subvert government. It no longer matters who you vote for.
Big tech knew that the route to maximum profits was to absorb companies important to their competitors and to them, and to have restrictive property rights enforced. Government allowed the creation of monopolies, the antithesis of perfect markets.
All these tech giants are beholding to government, not the other way round.
So what might government (or should I say its controllers) get out of aiding and abetting or looking the other way?
Many of them are beneficiaries of the monopoly profits, but that may not be the primary driver.
More than ever, governments feel the need to keep tabs on people and countries. And, we've obliged by signing up to everything, and spilling the beans.
If it costs you nothing, your data is the product for sale and or the price of the government licence to stay in business.
Governments have known for a very long time that the world is running out of affordable dense energy. Energy that feeds billions of people.
Any hiccup in energy prices precipitates economic collapse and starvation. Prices are increasing just as they did pre-GFC. Private debt has never been higher.
This is the quid pro quo. Government allows big tech to subvert markets in return for greater profits and, more importantly, data about everyone and everything. Given the high stakes, it's government that has a gun to their heads, notwithstanding that big tech may be members of the coterie running government.
Something like that.
Mouré, Chris. 2021. ‘Soft-wars: A Capital-as-Power Analysis of Google’s Differential Power Trajectory’. Review of Capital as Power, Vol. 2, No. 1, pp. 71–90.↩
Please support Blair on Patreon, and buy Chris's book.↩