Beyond “Taming” the Tech Giants
by Wendy Liu (@dellsystem) on December 1, 2018



This talk was originally delivered at the DECODE Symposium in Barcelona on October 16, 2018, as part of a session called “Taming the Tech Giants: Responses to Digital Trade Wars and Monopoly Power”. This transcript has been lightly edited for clarity.


My contribution to this panel will be less about the details [of how to tame the tech giants] and more about the bigger picture of what’s wrong with the way things are. I don’t know a lot about trade policy or international regulation. Instead, I’d like to take a step back to analyse the [broader] problems with the increasingly dystopian world we live in today. And in this analysis, I see the problems with the tech giants as requiring larger structural transformations [than merely “taming” the tech giants]. Transformations that require changing the way this discussion is framed altogether.

There’s a tendency, in the discourse around technology regulation, to implicitly accept the terms that these corporations set. We buy into the narrative that they want us to believe1: that these corporations are the only possible stewards of innovation, and so deserve to profit handsomely as a result. This creates a situation where even if we try to rein in their worst excesses, rarely do we doubt their right to exist in the first place.

And I think this constrains our imagination. It limits possible solutions to things like codes of ethics2, more taxation, more consumer rights. But rarely do these solutions go beyond cosmetic tweaks. The underlying causes of the problem - their accumulated power and their role in propping up an increasingly lopsided economy - remain untouched.3

So what’s actually happening, behind the scenes? These companies have made use of technological advances - often funded ultimately by the state4 - and capitalised on them, quite literally. Through a combination of early mover advantage, network effects, and zero marginal costs of production, they’ve established themselves as middlemen to the digital realm. They dictate our terms of access in a way that has proven extremely lucrative, accumulating not just wealth but also power. Over users, over competitors, over whole industries. And they’re pouring their massive resources into developing technology not according to social need, but according to what they think will eventually make them money.

What makes the situation even more complicated is the transnational dimension, making it hard for any one nation state to tackle it effectively. The problems with taxation are already well-established, resulting from these companies being able to shift their immaterial assets according to wherever they get the lowest tax rate. But that’s just a symptom of a larger phenomenon of globalised capital. The wealth that fuels Silicon Valley, through venture capital and subsequent stock market holdings, isn’t bounded by national borders. Though a lot of this money was originally American, mostly due to the United States’ outsized role in the global economy post-WWII5, increasingly it’s been coming from everywhere else (e.g., sovereign wealth funds from Norway to Saudi Arabia - often the result of oil money6).

Now, if we consider why this global capital is flowing into Silicon Valley - why so many investors think that investing in technology will bring returns - then Silicon Valley’s role in the contemporary economy becomes quite clear. It is a way to make returns to capital on a macro scale at a time when the rest of the economy appears increasingly lethargic. Even if that’s not what the founders or employees of these companies want or even realise, that is the role that Silicon Valley has taken on: that of advancing the interests of capital. If, as David Harvey says, we can think of neoliberalism as a class project7, then Silicon Valley is, in a way, the industrial manifestation of neoliberalism applied to technology. It’s the digital embodiment of neoliberal governance and ideology8. Which means that Silicon Valley, too, is fundamentally a class project. Its goal is to increase returns to capital while simultaneously disempowering labour.

And so if we use the term “Silicon Valley” as a shorthand for this class of corporations - who hide behind the mask of technological innovation as a cover for exploitation - then we can’t just stop at trying to reform Silicon Valley, by breaking up a few companies and implementing some new regulations. Tackling the problem at the root requires that we abolish Silicon Valley9.

Now, I know that’s a provocative statement. And it’s admittedly not a small project. It requires a fundamental transformation of the way technology is developed so that it’s done for the public good, not in a geographically-concentrated way for the purpose of generating shareholder value. Any sort of technology that has the ability to mint a trillion company10 is too powerful to be left to corporate control. We know the dark costs of that - we know that the profits accrued through deploying this technology don’t just materialise out of thin air. As much as Silicon Valley likes to market itself as digital and virtual and immaterial, it’s ultimately still rooted in material conditions - that is, global value chains of commodity production.

After all, iPhones don’t make themselves; they require coltan miners in the Congo and factory workers in China.11 And when it comes to advertising-based companies like Google and Facebook - who love to act as if their profits come from thin air, through their sheer innovative brilliance - well, their profits come from getting a cut of the costs of commodities that are actually being sold. Which means they are as complicit in these global neo-imperialist chains of commodity production as companies they like to think of themselves as morally superior to. They may not have been originally responsible for creating these global value chains, but by virtue of their position at the top of these chains as gateways to digital advertising, they have become embedded in them, and are profiteering from them in a way that entrenches them.12

What this should remind us is that when we talk about taxing these companies fairly or regulating them better, we shouldn’t limit ourselves to just thinking about consumers.13 We also have to think about workers14, including those who are employed in nonstandard relationships15 or who are only indirectly employed through these global value chains. Often we’re used to a very narrow conception of “tech worker” as the software developers or managers involved directly in the production of technology at these companies, but such a view is reductive and ultimately misguided.16 Anyone who works in the industry - from highly-paid software developers, to bus drivers and security guards, to Amazon warehouse workers, to Facebook’s content moderators in the Philippines - is involved in the creation of value, and so their labour is being exploited by these tech companies, directly or not. As a result, they deserve decent working conditions, collective representation, and a say in how their labour is used.

This is a crucial point that I find is often neglected in the discourse. If Silicon Valley is a class project, then tackling it - abolishing it - means changing the balance of class forces, tipping it away from capital and in favour of labour. That’ll require an ecosystem of different tactics and approaches: we’ll need worldwide labour movements to build worker power from below, pushing for democratisation of the industry from the perspective of workers in order to challenge the current system where an executive in California makes product decisions to maximise shareholder value and not social value. At the same time, we’ll also need policy responses to slowly start taking lucrative technologies out of the capital-accumulation process,17 through whatever means and locality necessary, and building public, democratically-controlled alternatives on a municipal, national, and international level.

Overall, I think the only way to understand Silicon Valley is through a structural analysis. The problems we’ve seen in Silicon Valley are not necessarily unique to Silicon Valley. Silicon Valley may have its own peculiarities stemming from its ideological and geopolitical underpinnings, but ultimately, it’s exposing problems with the corporate form itself, as the virtual structure of capital. Capital’s destructive tendencies are simply magnified and accelerated by these technologies now available. The people who manage to make money in this field aren’t uniquely evil - in fact, you could say that many of them are more idealistic than people who work in finance or similarly high-paying industries. The point is that the sector is, as of now, structurally set up to quash any idealistic notions.

Part of this has to do with the way Silicon Valley is entwined with the financial industry. More generally, it’s about serving capital through the shell form of a corporation. Technology that could potentially have had emancipatory potential is instead being made the servant of the corporation, enabling capital’s need to monopolise and commodify everything it touches.

Consequently, challenging this state of affairs requires more than replacing some CEOs or adding some more regulations - which, after all, these companies are structurally incentivised to get around18. Tougher regulation without a change in the balance of class forces - and an alternative economic and social landscape - isn’t enough. Any movement to hold these companies to account, to really tackle the problems at the root by diminishing their power, needs to be about class struggle.

It’s becoming increasingly clear that the current system, which benefits the owners of the platforms a lot more than it benefits everyone else, is sub-optimal. And just as in any hierarchical and unfair system, those on top need to make us believe that they are needed. Unfortunately, in our current ideological landscape - where private enterprise is glorified and public services are constantly being attacked - it’s an easy argument to make. Capitalist realism19 tells us that there is no alternative to exposing every aspect of our lives to the vicissitudes of the market, to tolerating the growth of a few mega corporations over whom we have no democratic control. We start to believe its central premise: that agency is only possible on the level of the consumer and not as a collective.

There are times when it’s hard to imagine an alternative, because our present socioeconomic landscape feels eternal and unchangeable. But, to paraphrase a quote from the late science fiction writer Ursula K. Le Guin, so, too, did the divine right of kings. Feudalism had similar patterns of wealth distribution, if slightly less social mobility than the state we’re in now. Today’s economy - call it surveillance capitalism20, or platform capitalism, or just plain old capitalism - is governed by different principles, of meritocracy and myths of wealth creation rather some divine birthright. But ultimately it’s just as suspect, and its moral justifications are starting to come apart.

So what’s the alternative to this current system of corporate monoliths who use technology that should belong to us in common for their own profit? What should we be aiming for instead? For me, the answer has to involve democracy. We need democratic control over this technology in a way that cannot be done in the current conception of these corporation - in a way that is deliberately not permissible within these corporate structures. This means freeing the means of development of technology from corporate fetters and returning it back to the public realm where it belongs - where it can be democratically governed and used for social good.

We can’t let these companies commodify more and more of our lives in exchange for creating some mostly subpar jobs and boosting GDP. We need to fight our way to a world without them.


  1. In May, I delivered a talk at John McDonnell’s State of the Economy conference that illuminates the gap between the mainstream discourse around technology and what’s actually happening. A transcript of that talk, titled Technological Development For The Many, was later published by New Socialist. 

  2. Some of the arguments in this talk build on my piece for the first issue of Tribune Magazine, titled “Abolish Silicon Valley”. Sadly, the article is not yet publicly accessible online, so you’ll have to subscribe (print or digital) get access to it for the time being. I am not happy about this state of affairs, as I very much believe that information should be free, but I also recognise that existing (as a socialist publication) in a capitalist world requires some compromises, so please do subscribe if you can. 

  3. When I say “codes of ethics”, I’m really talking about any solution that expects executives to make “ethical” decisions out of the goodness of their hearts without considering structural incentives. One prominent recent example: soon after I gave this talk, the New York Times published an op-ed by veteran technology journalist titled Who Will Teach Silicon Valley to Be Ethical?, in which Swisher advocates the appointment of “chief ethics officers” at tech companies (which would probably be taken about as seriously as “chief diversity officers” - that is to say, not very). I apologise if this is self-aggrandising, but I’d like to quote some prescient bits from my Abolish Silicon Valley article: “In the coming years, you’ll read a lot of columns agonising over how to ‘fix’ Silicon Valley. Most will be technocratic, evacuating politics from the discussion. […] But structural problems require structural solutions. Rather than relying on ‘ethical’ founders or investors to change the system, we need collective action to challenge it.” 

  4. If you want to read more on this, Mariana Mazzucato’s 2013 book The Entrepreneurial State is probably the seminal work in this field. If you just want a short summary, this Jacobin article by Tony Smith is an excellent place to start. 

  5. Nick Srnicek’s 2016 book Platform Capitalism is a great short read on the political economy of investment in technology platforms. 

  6. For more details on the relationship between Saudi Arabian money and Silicon Valley, see this article: “The biggest deals [made by Saudi Arabia’s sovereign wealth fund] of the last two years have been investment rounds backing Silicon Valley startups.” 

  7. This video featuring David Harvey at The World Transformed in September 2018 has a lovely 2-minute explanation of what that means. See also the transcript of a much longer interview for Jacobin, titled “Neoliberalism Is a Political Project”. 

  8. The language here is a little clunky, for which I apologise. I still haven’t worked out a nice and succinct way of putting this. If you’ve come across good takes on the relationship between Silicon Valley and neoliberalism, please send them my way. 

  9. A brief genealogy of this abolition-based framing (meant initially as a joke): I first tweeted it out in June, around the time when calls to abolish ICE were at a peak. Soon after, I appeared on two different podcasts which both decided to use “Abolish Silicon Valley” in their episode title, and in August, I wrote an article for the first issue of Tribune titled “Abolish Silicon Valley”. And now, I’m working on a book for Repeater that is tentatively titled - you guessed it - “Abolish Silicon Valley”. 

  10. In August, Apple became the first public company to be valued at $1 trillion USD. A few weeks after that, Amazon briefly joined the ranks of the trillion-dollar club before settling back down to just below the threshold. More generally, it’s a bit of a truism in the tech world that deploying technology intelligently can result in massive amounts of wealth, and that this outcome is inevitable (and even good, to some degree). Sam Altman, president of startup accelerator Y Combinator (and, sadly, one of the more progressive figures in the field), has said: “We need to be ready for a world with trillionaires in it […] It feels unfair to me. But to drive society forward, you’ve got to let that happen.” 

  11. Lots has been written on this topic in the media & communications studies field in particular. Christian Fuchs has a number of books and edited collections touching on this area, including Marx in the Age of Digital Capitalism (Haymarket, 2017; co-edited with Vincent Mosco) and Digital Labour and Karl Marx (Routledge, 2013). For a short introduction to Fuchs’ work, check out Digital Labor and Imperialism, a Monthly Review article from 2016. 

  12. David Quentin wrote an article touching on this for New Socialist last year, through the lens of tax avoidance by multinationals and where value is actually created along these global supply chains. I also really like Dmytri Kleiner’s writing on this topic: “the paying customers are the advertisers, and what is being sold are the users themselves, not their content. This means that the source of value that becomes Facebook’s profits is the work done by the workers in the global fields and factories, who are producing the commodities being advertised to Facebook’s audience.” For a more visual depiction of this process, see this tweet

  13. Most existing and proposed regulation that I’ve seen is consumer-centric, partly because mechanisms for enforcing consumer protection law are stronger than equivalent mechanisms for enforcing labour standards. GDPR is a great example of this - an attempt to engineer a (slightly) better experience for consumers without tackling the structural dominance of the tech giants. That’s not to say that consumer-focused regulation is bad, per se; the point is that it’s not enough, especially if it isn’t deliberately designed to chip away at the power of tech monopolies. 

  14. Another way of putting this that we have to look beyond the surface-level view, characterised by our relationship to commodities as consumers, and descend into what Marx called the “hidden abode of production”. 

  15. By this, I mean those whose work is mediated by gig economy platforms like Uber and Deliveroo, as well as those who are employed as contractors for other tech companies in all sorts of roles. For more on the gig economy aspect, see my piece on it for New Socialist last year; for more on contractors employed by other tech companies - especially those working on tech company campuses - see my recent piece on Silicon Valley’s shadow workforce for Notes From Below

  16. This piece for Notes From Below (by Jason Prado of the Tech Workers Coalition) does a great job breaking down the various types of workers in the tech industry and outlines a useful strategy for how it can be organised. 

  17. I came across this framing in an interview with Robert McChesney for the previous issue of Catalyst, which I found to be a helpful way to conceptualise the options. For McChesney, given the monopolistic tendencies of these companies, there are really only two options. One is to let them remain private, but impose heavy regulation to limit their profits (in short, treating them as utilities), which McChesney doesn’t see as particularly achievable. The alternative, according to McChesney, “is to nationalize them or municipalize them. You take them out of the capital-accumulation process, you set them up as independent, nonprofit, noncommercial concerns.” 

  18. Evgeny Morozov has an excellent article in the Guardian on this exact point: “The problem with regulating technology companies is that, faced with tough new rules, they can eventually innovate their way out, often by switching to newer, unregulated technologies. The risk of targeted regulation informed by little other than economic doctrines might even be fuelling a corporate quest for eternal disruption: instead of surrendering to the regulators, technology firms prefer to abandon their old business model.” Compounding the problem are the suspect financial motives of the “experts” who are called to testify during hearings. This FastCompany article, titled Should we break up the tech giants? Not if you ask the economists who take money from them, explains: “This week’s FTC hearings on the growing power of companies like Amazon, Facebook, and Google only included economists who have taken money, directly and indirectly, from giant corporations that have a stake in the debate.” 

  19. The title of an incredibly illuminating book by Mark Fisher, who wrote a lovely piece explaining the concept for STRIKE! Magazine. Highly recommended. 

  20. A term popularised by Shoshana Zuboff in her 2015 paper “Big other: surveillance capitalism and the prospects of an information civilization”, and which will be developed further in her upcoming book, The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power


author

Wendy Liu (@dellsystem)

Wendy is an editor for the economics section. She is a former startup founder who now writes about the political economy of the tech industry and why tech workers need to unionise. She goes by @dellsystem for fairly prosaic reasons.

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Tackling the platforms: on IPPR's Digital Commonwealth report

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