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Wall Street tech companies
AP Photo/Mark Lennihan
Capitalism is the operating system for technology, and companies are the software.
SYSTEM MALFUNCTION

We shouldn’t blame Silicon Valley for technology’s problems—we should blame capitalism

Douglas Rushkoff
By Douglas Rushkoff

Author of "Team Human"

Technology is not driving itself. It doesn’t want anything. Rather, there is a market expressing itself through technology—an operating system beneath our various computer interfaces and platforms that is often unrecognized by the developers themselves.

This operating system is called capitalism, and it drives the antihuman agenda in our society at least as much as any technology.

Commerce is not the problem. People and businesses can transact in ways that make everyone more prosperous. If anything, capitalism as it’s currently being executed is the enemy of commerce, extracting value from marketplaces and delivering it to remote shareholders.

If central currency can be thought of as the operating system of our economy, corporations are the software that runs on top of it. They are the true natives of capitalism, which is why they are so much more at home in this environment than we humans.

In perhaps the most spectacular reversal of figure and ground we’ve yet witnessed, corporations have been winning court cases that give them the rights of human beings—from personhood and property to free speech and religious convictions—while human beings now strive to brand themselves in the style of corporations.

But corporations are not people. They are abstract, and can scale up infinitely to meet the demands of the debt-based economy. People can only work so hard or consume so much before we reach our limits. We are still part of the organic world, and subject to the laws of nature. Corporations know no such bounds, making them an awful lot like the digital technologies they are developing and inhabiting.

The pioneering philosopher of the political economy, Adam Smith, was well aware of the abstract nature of corporations—particularly large ones—and stressed that regulations would be necessary to keep them from destroying the marketplace. He argued that there are three factors of production, which must all be recognized as equally important:

  • the land, on which we grow the crops or extract the resources;
  • the labor, who till the soil or manufacture the goods;
  • and, finally, the capital—either the money invested or the tools and machines purchased.

But unlike land and humans, which are fixed, capital can keep growing. It has to, because a growth-based economy always requires more money.

Growth was easy when there were new territories to conquer, resources to take, and people to exploit. Once those people and places started to push back, digital technology came to the rescue, providing virtual territory for capital’s expansion. Unfortunately, while the internet can scale almost infinitely, the human time and attention that create the real value are limited.

Digital companies work the same way as their extractive forebears. When a big box store moves to a new neighborhood, it undercuts local businesses and eventually becomes the sole retailer and employer in the region. With its local monopoly, it can then raise prices while lowering wages, reduce labor to part-time status, and externalize the costs of healthcare and food stamps to the government.

The net effect of the business on the community is extractive. The town becomes poorer, not richer. The corporation takes money out of the economy—out of the land and labor—and delivers it to its shareholders.

New, paradigm-busting inventions must not only keep coming, but keep coming faster and faster.

A digital business does the same thing, only faster. It picks an inefficiently run industry, like taxis or book publishing, and optimizes the system by cutting out most of the people who used to participate. So a taxi service platform charges drivers and passengers for a ride while externalizing the cost of the car, the roads, and the traffic to others. The bookselling website doesn’t care if authors or publishers make a sustainable income; it uses its sole buyer or “monopsony” power to force both sides to accept less money for their labor. The initial monopoly can then expand to other industries, like retail, movies, or cloud services.

Such businesses end up destroying the marketplaces on which they initially depend. When the big box store does this, it simply closes one location and starts the process again in another. When a digital business does this, it pivots or expands from its original market to the next—say, from books to toys to all of retail, or from ride-sharing to restaurant delivery to autonomous vehicles—increasing the value of its real product, the stock shares, along the way.

While digital business plans destroy a human-scaled economy, the digital businesses themselves compromise the human sensibilities required to dig ourselves out of this mess. The human beings running those enterprises are no less the psychic victims of their companies’ practices than the rest of us, which is why it’s so hard for them to envision a way out.

The myth on which the techno-enthusiasts hang their hopes is that new innovations will continue to create new markets and more growth. For most of history, this has been true—sort of.

Just when agriculture reached a plateau, we got the steam engine. When consumerism stalled, television emerged to create new demand. When web retail slowed its growth, we got data mining. When data as a commodity seemed to plateau, we got artificial intelligence, which needs massive supplies of data in order to learn.

Except in order to stoke and accelerate growth, new, paradigm-busting inventions like smartphones, robots, and drones must not only keep coming, but keep coming faster and faster. The math doesn’t work: we are quickly approaching the moment when we will need a major, civilization-changing innovation to occur on a monthly or even weekly basis in order to support the rate of growth demanded by the underlying operating system.

Such sustained exponential growth does not occur in the natural world, except maybe for cancer—and that growth ceases once the host has been consumed.

Growth was easy when there were new territories to conquer, resources to take, and people to exploit.

Well-meaning developers, who have come to recognize the disastrous impacts of their companies, seek to solve technology’s problems with technological solutions. They see that social media algorithms are exacerbating wealth division and mental confusion, and resolve to tweak them not to do that—at least not so badly. The technosolutionists never consider the possibility that some technologies themselves have intrinsic antihuman affordances. (Guns may not kill people, but they are more biased toward killing than, say, pillows, even though both can be used for that purpose.)

Even promising wealth redistribution ideas, such as universal basic income, are recontextualized by the technosolutionists as a way of keeping their companies going. In principle, the idea of a negative income tax for the poor, or a guaranteed minimum income for everyone, makes economic sense. But when we hear these ideas espoused by Silicon Valley’s CEOs, it’s usually in the context of keeping the extraction going. People have been sucked dry, so now the government should just print more money for them to spend. The argument merely reinforces the human obligation to keep consuming, or to keep working for an unlivable wage.

More countercultural solutions, such as bitcoin and the blockchain, are no less technosolutionist in spirit. The blockchain replaces the need for central authorities such as banks by letting everyone on a network authenticate their transactions with computer encryption. It may disintermediate exploitative financial institutions but it doesn’t help rehumanize the economy, or reestablish the trust, cohesion, and ethos of mutual aid that was undermined by digital capitalism. It simply substitutes for trust in a different way: using the energy costs of blockchain mining as a security measure against counterfeiting or other false claims. (The computer power needed to create one bitcoin consumes at least as much electricity as the average American household burns through in two years.)

Is this the fundamental fix we really need? A better ledger?

The problem the blockchain solves is the utilitarian one of better, faster accounting, and maybe an easier way to verify someone’s identity online. That’s why the banking industry has ultimately embraced it: the quicker to find us and drain our assets. Progressives, meanwhile, hope that the blockchain will be able to record and reward the unseen value people are creating as they go about their lives—as if all human activity were transactional and capable of being calculated by computer.

So with the blessings of much of the science industry and its collaborating futurists, corporations press on, accelerating civilization under the false premise that because things are looking better for the wealthiest beneficiaries, they must be better for everyone. Progress is good, they say. Any potential impediment to the frictionless ascent of technological and economic scale—such as the cost of labor, the limits of a particular market, the constraints of the planet, ethical misgivings, or human frailty—must be eliminated.

The models would all work if only there weren’t people in the way. That’s why capitalism’s true believers are seeking someone or, better, something to do their bidding with greater intelligence and less empathy than humans.

Adapted from Team Human by Douglas Rushkoff. Copyright ©2019 by Douglas Rushkoff.  Used with permission of the publisher, W. W. Norton & Company, Inc. All rights reserved.