Features » April 3, 2013
How Capitalism Conquered the Internet
And how we can take it back.
Information on the Internet is virtually free, but commercial interests are working to make it scarce. To the extent they succeed, the GDP may grow, but society will be poorer.
In 1787, as the Constitution was being drafted in Philadelphia, Thomas Jefferson was ensconced in Paris as this young, undefined nation’s minister to France. From afar he corresponded on the matter of what was required for successful democratic governance. The formation of a free press was a central concern. Jefferson wrote:
The way to prevent these irregular interpositions of the people is to give them full information of their affairs thro’ the channel of the public papers, and to contrive that those papers should penetrate the whole mass of the people. The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them.
For Jefferson, having the right to speak without government censorship is a necessary but insufficient condition for a free press and therefore democracy, which also demands that there be a literate public, a viable press system and easy access to this press by the people.
But why, exactly, was this such an obsession to Jefferson? In the same letter, he praised Native American societies for being largely classless and happy, and he criticizes European societies—like the France he was witnessing firsthand on the eve of its revolution—in no uncertain terms for being their opposite. Jefferson described the central role of the press in stark class terms when he described its role in preventing exploitation and domination of the poor by the rich:
Among [European societies], under pretence of governing they have divided their nations into two classes, wolves and sheep. I do not exaggerate. This is a true picture of Europe. Cherish therefore the spirit of our people, and keep alive their attention. Do not be too severe upon their errors, but reclaim them by enlightening them. If once they become inattentive to the public affairs, you and I, and Congress, and Assemblies, judges and governors shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions; and experience declares that man is the only animal which devours his own kind, for I can apply no milder term to the governments of Europe, and to the general prey of the rich on the poor.
In short, the press has the obligation to undermine the natural tendency of propertied classes to dominate politics, open the doors to corruption, reduce the masses to powerlessness and eventually terminate self-government.
Jefferson was not alone. In the early republic, with no controversy, the government instituted massive postal and printing subsidies to found a viable press system. There was no illusion that the private sector was up to the task without these investments. For the first century of American history, most newspapers were distributed by mail, and the Post Office’s delivery charge for newspapers was very small. Newspapers constituted 90 to 95 percent of its weighted traffic, yet provided only 10 to 12 percent of its revenues.
As Jefferson noted in his assessment of the situation in 1787, one group definitely benefits from a lack of journalism and from information inequality: those who dominate society. The Wall Street banks, energy corporations, health insurance firms, defense contractors and agribusinesses are Jefferson’s wolves. None of them desires a journalism that will engage the electorate and draw the poor and working class into the political system. They might not say so in public, but their actions speak louder than words. Journalism? No, thank you.
The extent of the crisis in journalism is underappreciated by most Americans, including many serious news and political junkies. The primary reason may well be the Internet itself. Because many people envelop themselves in their favored news sites and access so much material online, even surfing out onto the “long tail,” the extent to which we are living in what veteran editor Tom Stites terms a “news desert” has been obscured. Moreover, using dissident websites, social media and smartphones, activists have sometimes “bypassed the gatekeepers” in what The Nation’s John Nichols calls the “next media system.” Its value is striking during periods of public protest and upheaval, but the illusion that this constitutes satisfactory journalism is growing thinner. Nothing demonstrates the situation better than the release by WikiLeaks of an immense number of secret U.S. government documents between 2009 and 2011. To some this was investigative journalism at its best, and WikiLeaks had established how superior the Internet was as an information source. It clearly threatened those in power, so this was exactly the sort of Fourth Estate a free people needed. Thanks to the Internet, some claimed, we were now truly free and had the power to hold leaders accountable.
In fact, the WikiLeaks episode demonstrates precisely the opposite. WikiLeaks was not a journalistic organization. It released secret documents to the public, but the “documents languished online and only came to the public’s attention when they were written up by professional journalists,” as journalist Heather Brooke put it. “Raw material alone wasn’t enough.” Journalism had to give the material credibility, and journalists had to do the hard work of vetting the material and analyzing it to find out what it meant. That required paid, full-time journalists with institutional support. The United States has too few of these, and those it has are too closely attached to the power structure, so most of the material still has not been studied and summarized for a popular audience—and it may never be in our lifetimes.
Moreover, there was no independent journalism to respond when the U.S. government launched a successful PR and media blitz to discredit WikiLeaks. Attention largely shifted from the content of these documents to overblown and unsubstantiated claims that WikiLeaks was costing innocent lives, and to a personal focus on WikiLeaks leader Julian Assange. Columnist Glenn Greenwald was only slightly exaggerating when he stated, “There was almost a full and complete consensus that WikiLeaks was satanic.” The onslaught discredited and isolated WikiLeaks, despite the dramatic content that could be found in the documents WikiLeaks had published. The point was to get U.S. editors and reporters to think twice before opening the WikiLeaks door. It worked.
It seems obvious that if the Internet is really reviving American democracy, as its celebrants claim, it’s taking a roundabout route. The hand of capital seems heavier and heavier on the steering wheel, taking us to places way off the democratic grid, and nowhere is the Internet’s failure clearer or the stakes higher than in journalism.
The Internet and the broader digital revolution are not inexorably determined by technology; they are shaped by how society elects to develop them. Reciprocally, our chosen way of development will shape us and our society, probably dramatically. We ought to be debating a number of policy issues and suggesting the type of reforms that could put the Internet and our society on a very different trajectory, changing America for the better and making it a much more democratic society. Yet none of these policy reforms has a chance because of the corruption of the policy-making process.
This situation results not necessarily from a conspiracy, but from the quite visible, unabashed logic of capitalism itself. Capitalism is a system based on people trying to make endless profits by any means necessary. You can never have too much. Endless greed—behavior that is derided as insanity in all noncapitalist societies—is the value system of those atop the economy. The ethos explicitly rejects any worries about social complications, or “externalities.”
Capitalists are constantly locating new places to generate profits, and sometimes that entails taking what had been plentiful and making it scarce. So it is for the Internet. Information on it is virtually free, but commercial interests are working to make it scarce. To the extent they succeed, the GDP may grow, but society will be poorer.
Pause to consider how far the digital revolution has traveled from the halcyon days of the 1980s and early 1990s to where it is today. People thought that the Internet would provide instant free global access to all human knowledge. It would be a noncommercial zone, a genuine public sphere, leading to far greater public awareness, stronger communities and greater political participation. It would sound the death knell for widespread inequality and political tyranny, as well as corporate monopolies. Work would become more efficient, engaging, cooperative and humane. To the contrary, at what seems like every possible turn, the Internet has been commercialized, copyrighted, patented, privatized, data-inspected and monopolized; scarcity has been created. One 2012 survey concludes that digital technologies, far from relieving workloads, have made it possible for the typical American worker to provide as much as a month and a half of unpaid overtime annually, just by using their smartphones and computers for work at all hours while outside the workplace: “Almost half feel they have no choice.” The economy is topped by gazillionaires who have succeeded in creating digital fiefdoms and adding to the GDP, but the public wealth is much less. Our wealth of information is increasingly accessible only by entering walled gardens of proprietary control feeding into monopolistic pricing systems. To make the Internet a capitalist gold mine, people have sacrificed not just their privacy—and to skeptics, their humanity—but much of the great promise that once seemed possible.
To win any of the Internet policy fights will require a broader political movement motivated by a general progressive agenda, not one specifically focused on the Internet or media. Only then will there be the enormous numbers possible to defeat the power of big money. As the legendary community organizer Saul Alinsky put it, the only thing that can beat organized money is organized people, lots of them.
In “normal” times, such movements are mostly hypothetical in the United States. The political economy has been successful enough to prevent a groundswell of grassroots popular opposition. But these are not normal times, and we are getting further away from normal with every passing day. One need only look at the great protests of 2011—the likes of which we have not seen for decades—against rampant inequality, corporate domination of the economy and politics, a deathlike embrace of austerity, endless war making, and a stagnant political economy that has no apparent use for young people, workers or nature.
Nobel laureate economist Joseph Stiglitz captured the spirit of the protest movements in the United States and worldwide in 2012:
Underlying most of the protests were old grievances that took on new forms and a new urgency. There was a widespread feeling that something is wrong with our economic system, and the political system as well, because rather than correcting our economic system, it reinforced the failures. The gap between what our economic and political system is supposed to do—what we were told that it did do—and what it actually does became too large to be ignored. … universal values of freedom and fairness had been sacrificed to the greed of the few.
Those primarily concerned with Internet policies and hesitant to stick their toes into deeper political waters need to grasp the nature of our times. This isn’t a business as-usual period, when the system is ensconced and reformers need the benediction of those in power to win marginal reforms. The system is failing, conventional policies and institutions are increasingly discredited and fundamental changes of one form or another are likely to come, for better or worse.
Can one reform the Internet and make it a public good with capitalism still intact? Information technology accounts for some 40 percent of all nonresidential private investment in the U.S., quadrupling the figure from 50 years ago. Internet-related corporations now comprise nearly one half of the 30 largest firms in the U.S. in terms of market value. If one challenges the prerogatives of the Internet giants, odes to the catechism notwithstanding, one is challenging the dominant component of really existing capitalism.
This is an important question, too, for those who have paid little attention to Internet policies but are deeply concerned about injustice, poverty, inequality and corruption. At times, one senses among such activists the celebrants’ notion that digital technologies can create a new capitalist economy that is dramatically superior and that the existing Internet giants are allies, not adversaries, in creating a new friendly capitalism that will deliver the goods. The logic is sound: In the past, massive investments in railroads and automobiles (and related spin-off industries) propelled entire eras of capitalism to much higher growth rates and standards of living. When seeing the enormous investments in information technology, one wonders why it can’t be that way again, and this time without all the environmental damage? The problem is simple: Despite endless claims about the great new capitalism just around the bend thanks to digital technologies, there is little evidence to back them up. In particular, the Internet giants comprise 13 of the 30 most valuable U.S. firms, but only make up four of the 30 largest private employers. There is clearly a lot of money for those at the top—who want to keep it that way—but little evidence that it is passing benefits down the food chain. Quite the contrary.
Efforts to reform or replace capitalism but leave the Internet giants riding high will not reform or replace really existing capitalism. The Internet giants are not a progressive force. Their massive profits are the result of monopoly privileges, network effects, commercialism, exploited labor, and a number of government policies and subsidies. The growth model for the Internet giants, as one leading business analyst put it, is “harvesting intellectual property,” i.e., making scarce what should be abundant.
Internet and media issues must be in the center of any credible popular democratic uprising. Given the extent to which the digital revolution permeates and defines nearly every aspect of our social lives, any other course would be absurd.
For an increasing number of people, the logic suggests one thing: It is time to give serious consideration to the establishment of a new economy. “The capitalist system was able to thrive, on and off, during the 18th, 19th, and 20th centuries,” Jerry Mander wrote in 2012. “But it’s now obsolete, nonmalleable, and increasingly destructive.” Capitalism “had its day. If we care about the future well-being of humans and nature, it’s time to move on.”
Mander’s conclusions elicit incredible fury in the contemporary United States. Capitalism has become what Mander terms “a kind of ‘third rail’ of politics—forbidden to touch.” He acknowledges, “It remains okay to critique certain aspects of the system,” but the capitalist system itself “occupies a virtually permanent existence, like a religion, a gift of God, infallible.” The reason is obvious: Those in power do not wish the system that makes them powerful to be questioned. Keeping capitalism off-limits to critical review is essential for that system, because it generates demoralization, disengagement and apathy. This is not a political economy that can withstand much engaged political participation.
During the depths of the Great Depression, Keynes wrote an extraordinary essay acknowledging that economists, as well as business and political leaders, had been woefully wrong about the economy and how to make it work for the bulk of the population. “The decadent international but individualistic capitalism, in the hands of which we found ourselves after the war,” Keynes wrote in 1933, “is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods.” He argued that what was necessary was a wide-open period of debate and experimentation because the existing theories and policies had proven so disastrous and bankrupt.
What Keynes proposed in the early 1930s is precisely the approach we need today. We need to be open-minded and to experiment. We have to escape the shackles of the current system and see what can work. We “need to imagine a different social order,” Chris Hayes writes, “to conceive of what more egalitarian institutions would look like.” Certain values appear in most writing on the subject, especially from economists like Richard Wolff, Juliet Schor and Gar Alperovitz:
- The wealth of a community has to be controlled by the people of that community.
- Decentralized and local community control should be emphasized, with the state reinforcing local planning.
- There must be a strong commitment to a variety of cooperatives and nonprofit organizations.
- Democratic control of enterprises by their workers is imperative.
- Environmentally sound production and distribution must be emphasized.
In the American context, such words can make someone question an author’s sanity; they seem so far removed from existing reality and conventional wisdom. But beneath the surface, there has been a rise in new kinds of economic ventures. In distressed communities like Cleveland, they are a source of promise for the future. We are beginning to develop some experience about what a democratic, post-capitalist economy might look like and how it could function. There will be markets, there will be for-profit enterprises, but under the overarching logic of the system, the surplus will be mostly under nonprofit community control.
Absolutely central to building this new political economy will be constructing nonprofit and noncommercial operations to do journalism, produce culture, provide Internet access and serve as bedrock local institutions. These can range from community radio and television stations and Internet media centers to cultural centers, sports leagues and community ISPs.
Left on their current course and driven by the needs of capital, digital technologies can be deployed in ways that are extraordinarily inimical to freedom, democracy and anything remotely connected to the good life. Therefore, battles over the Internet are of central importance for all those seeking to build a better society. When the dust clears on this critical juncture, if our societies have not been fundamentally transformed for the better, if democracy has not triumphed over capital, the digital revolution may prove to have been a revolution in name only, an ironic, tragic reminder of the growing gap between the potential and the reality of human society.
Excerpted and adapted with permission from Digital Disconnect: How Capitalism is Turning the Internet Against Democracy (New Press) by Robert McChesney.
Robert W. McChesney is a professor of communication at the University of Illinois at Urbana-Champaign and co-editor of Monthly Review. He is the author, most recently, of Rich Media, Poor Democracy: Communication Politics in Dubious Times.