There is no such thing as a good and emancipatory technology that cannot be co-opted and perverted into a power of capital. – David Harvey

Working for a technology organisation, Libre Digital, which SilenceBreaker Media is part of, you might think that it’s strange I have included the quote above, especially given the important work The FreeTech Project has done in reducing social isolation and loneliness via technology – with technology a means to an end, rather than the end itself. However, importantly, what David Harvey is referring to is the power of capital, as a process, to adapt and co-opt, with this process central to our current political economy. We can only realise the true emancipatory power of technology once we overcome the contradictions of capitalism and the power of capital. Importantly, by capital, we are referring to the following David Harvey Marxist definition:

For Harvey capital is a process in which money is employed to make more money usually through the exploitation of labor power. Harvey claims that money, land, real estate, or plant and equipment that are not being used productively are not capital.

It was recently announced that Amazon, one of the wealthiest technology companies in the world, with their CEO and founder the richest man in the world, pulled out of their second headquarters deal in New York City. I discussed this proposed deal in a previous SilenceBreaker Media article:

You only have to look at how much state money has been thrown at Amazon in the US as they searched for their second headquarters to see how important the state has been for supporting capital, financial interests and the market. Richard Wolff discusses this in detail, referring to how Amazon invited all US States to bid and ‘compete’ to be the location. Key to Amazon splitting its second headquarters was the overwhelming response and attractive bids from the States, with Amazon deciding to have their headquarters in New York City, New York and Crystal City, Virginia with the total estimated cost for the headquarters standing at $10.5 billion and crucially subsidies given by the two states and cities amounting to an estimated $5.5 billion.

Alexandria Ocasio-Cortez (or ‘AOC’), a Democratic (Socialist) U.S Representative for the 14th Congressional District of New York, inspiring people across the World with her dynamic and principled approach to politics, was central to leading the revolt against Amazon coming to Long Island City, with her tweeting for instance:

Concerns regarding gentrification and people being unable to afford housing were key to people’s worries about the move. This is based on what has happened in Seattle, the main headquarters of Amazon:

In Seattle, rents have risen 39.8 percent in the past five years (in New York, rents had started to level off in many areas, and even decrease in some last year). In Seattle, as in New York, people of color have been threatened: the black population in Seattle’s historically black neighborhood Central District has shrunk, and some highly-skilled workers from countries like India who were once courted by tech companies were stuck in a visa backlog…Long Island City in particular was already undergoing rapid development and gentrification—it was dubbed the fastest-growing neighborhood in the country—and the Amazon deal immediately had an impact: Interest in local real estate spiked in the first couple of weeks in November, and, according to the Wall Street Journal, Amazon employees were laying claim to condos prior to the official announcement. Some reports suggested housing prices jumped before the move was public, too.

Land, wealth, power and property rights are all important when considering technology and its co-option by capital. Laurie Macfarlane wrote a great article looking at the “discrepancy between high levels of wealth and low levels of productivity” with this discussion relating to the importance of property rights:

The measure of wealth used by the OECD is ‘mean net wealth per household’. This is the value of all of the assets in a country, minus all debts. Assets can be physical, such as buildings and machinery, financial, such as shares and bonds, or intangible, such as intellectual property rights. But something can only become an asset once it has become property – something that can be alienated, priced, bought and sold. What is considered as property has varied across different jurisdictions and time periods, and is intimately bound up with the evolution of power and class relations…The lesson here is that aggregate wealth is not simply a reflection of the process of accumulation, as theory tends to imply. It is also a reflection of the boundaries of what can and cannot be alienated, priced, bought and sold, and the power dynamics that underpin them.

Importantly, Macfarlane, citing healthcare and pensions as examples, shows that a country that removes the profit motive and commodification of key services – which access to technology (especially the internet) should be considered as being – and therefore socialises these services, such as health care, education and energy, would look less wealthy according to this definition:

Because these benefits are non-monetary and accrue to everyone, they are not reflected in any asset prices and are not recorded as “wealth” in the national accounts… The way that we measure national wealth is therefore skewed towards commodification and privatisation, and against socialisation and universal provision.

Value is central to the concept of wealth:

The amount of wealth does not just depend on the number of assets that are accumulated – it also depends on the value of these assets. The value of assets can go up and down over time, otherwise known as capital gains and losses.

It is important to consider the structural and ideological power central to value and wealth, with ownership central to this and productive capacity not having any central influence:

For example, rules that favour capitalists and landlords over workers and tenants, such as repressive trade union legislation and weak tenants’ rights, increase returns on capital and land. All else being equal, this will translate into higher stock and property prices, which will increase measured wealth. In contrast, rules that favour workers and tenants, such as minimum wage laws and rent controls, reduce returns on capital and land. This in turn will translate into lower stock and property prices, and lower paper wealth. Importantly, in both scenarios the productive capacity of the economy is unchanged…..While future returns to capital and land get capitalised into stock and property prices, future returns to labour – wages – do not get capitalised into asset prices. This is because unlike physical and financial assets, people do not have an “asset price”. They cannot become property.

Intellectual property rights have been central to the success of ‘Silicon Valley’, a technology hub in the southern San Francisco Bay Area of California, as technology has “facilitated the further concentration of wealth and power.” As brilliantly explained by Wendy Liu, Silicon Valley needs to be replaced, not reformed, with democratic ownership and the role of capital central to this:

The Silicon Valley model of technological development is structurally flawed. It can’t simply be tweaked in a more socially beneficial direction, because it was never intended to be useful for all of society in the first place. At its core, it was always a class project, meant to advance the interests of capital. The founders and investors and engineers who dutifully keep the engines running may not deliberately be reinforcing class divides, but functionally, they are carrying out technological development in a way that enables capitalism’s desire for endless accumulation. Consequently, fixing the problems with the tech industry requires revisiting the economic assumptions that underpin it.

Despite laissez-faire liberal state theory, David Harvey argues that the state has a central role in neoliberal systems:

In neo-liberalism it is accepted that the state play an active role in promoting technological changes and endless capital accumulation through the promotion of commodification and monetisation of everything along with the formation of powerful institutions (such as Central Banks and the International Monetary Fund) and the rebuilding of mental conceptions of the world in favor of neoliberal freedoms.

This is clear to see with the Amazon deal, where states were keen to throw money at one of the richest companies in the world to attract jobs without any clear conditions and through a lack of accountability, with this reflecting a general pattern of state aid for corporations:

According to The New York Times, American cities and states spend roughly $90 billion a year in cash and tax incentives to attract companies like Amazon. Because Amazon required each city to sign a nondisclosure agreement, citizens may never know what their elected officials offered the company.

Furthermore, AOC’s and others’ concerns related to Amazon as an organisation, given that it isn’t exactly a company with a very good track record when it comes to respecting rights of people that structurally have less power:

The company itself is rife with dubious practices. Its structure is set up such that other businesses are made to become dependent on its operations, feeding a litany of antitrust concerns and erecting a quiet monopoly. And it has been accused many times of bad labor practices, undermining unionizing efforts, and even participating with ICE to deport undocumented workers.

This obviously helps when it comes to increasing the value of assets, as discussed above, linking in with the concept of structural and ideological power. No wonder rich people are chucking money towards billboards attacking AOC for the collapse of the Amazon deal.

Technology was championed as having the potential to create a decentralised, bottom up, empowered, community driven society, but we have instead seen the concentration of wealth and power in the hands of a few very rich people. That isn’t to say technology itself is a bad thing. Technology has the power to be revolutionary. But we have to challenge the social, political, economic and ideological power structures that make this difficult to break through, where a very few rich people control some of the most powerful communication mediums in the world: Twitter and Facebook are prime examples. That involves challenging the power and role of capital as a process, it means re-examining the concept of value, wealth, and also challenging the concept of private property that is so key to such inequality and power divides. Democratic ownership of technology is key for this, and needs to be part of our counter-power structures.

Jane Watkinson (she/her) is an anti-capitalist, intersectional feminist and vegan interested in Marxism, social ecology, sociology, revolutionary humanism, and studying radical social, economic, and political theory and how this can be applied in practice. She is a freelance researcher working in the community sector. Her LinkTree is here.

The wealth of more than 2,200 billionaires across the globe had increased by $900bn in 2018 – or $2.5bn a day. The 12% increase in the wealth of the very richest contrasted with a fall of 11% in the wealth of the poorest half of the world’s population… The World Inequality Report 2018 – co-authored by Piketty – showed that between 1980 and 2016 the poorest 50% of humanity only captured 12 cents in every dollar of global income growth. By contrast, the top 1% captured 27 cents of every dollar.

These obscene levels of inequality link clearly with the growing problem and crisis of legitimacy of neoliberalism, as I discussed in my article here.

But, aren’t we told there is no money left? That the free market and capitalism is the best way? That we can’t curtail the freedom of the market as otherwise we risk a brain drain, a race to the bottom, or a lack of entrepreneurial spirit?

Fredrick Hayek – a significant influence upon the rise of neoliberalism in the 1980s – was very critical of government interference in the market, arguing it was the manipulation of money by the government that created problems regarding malinvestment and savings linking to the Austrian theory of the business cycle. Criticised economically, it was politically that Hayek had his most significant impact, including influencing Margaret Thatcher, who as UK’s Prime Minister was central to the rise of the neoliberal project.

The other political economist that is often cited as having a central influence on Thatcher and neoliberalism is Milton Friedman. Friedman has talked about the influence Hayek had on him:

Milton Friedman emphasizes that he is “an enormous admirer of Hayek, but not for his economics. I think Prices and Production is a very flawed book. I think his capital theory book [The Pure Theory] is unreadable. On the other hand, The Road to Serfdom is one of the great books of our time.”

The Road to Serfdom was the first interaction Thatcher had with Hayek’s views, with the Margaret Thatcher Foundation arguing “in fact one can argue that few books influenced her more deeply at any point in her life”. The Foundation goes further when discussing the book’s influence on Thatcher:

She absorbed deeply Hayek’s idea that you cannot compromise with socialism, even in mild social democratic forms, because by degrees socialism tends always to totalitarian outcomes, regardless of the intentions, professed or real, of its proponents. And she saw that her own party had done just that, putting her deeply at odds with its collective leadership.

After the post-war consensus was smashed, the return of Hayek – marked by his Nobel Prize for economics in 1974 – was instrumental to Thatcher, with the Foundation stressing this was a political, not economic, influence:

While there is no reason to doubt Hayek’s emblematic significance to the Thatcherites in their search for new roots, it was as a political and economic philosopher that he mattered, not as an economist. And The Road to Serfdom counted for more than The Constitution of Liberty, the critique of socialism more than the vision of a pared-down liberal state.”

There has been an increasing interest in Hayek’s economic writings given the 2007-8 crisis, with people looking for alternative explanations to why the sub-prime mortgage crisis happened. Hayek historically is mostly forgotten in mainstream economic debates, with it often being summarised as ‘John Maynard Keynes vs. Milton Freidman’. Comparing and contrasting these three thinkers, Hayek and Friedman advocated for free markets with limited, to no (in the case of Hayek), government intervention whilst Keynes encouraged government intervention, yet Hayek and Friedman disagreed on monetary policy with the former believing it created boom and bust cycles (as discussed above) whereas the latter believing it helped navigate economic crises. Keynes’ focus on fiscal policy was something both Hayek and Friedman were against. Therefore, concluding:

If we look at interventions government has taken to help “stimulate” the economy, the actions are more akin to the economics of Keynes and Friedman, where Congress passes stimulus packages, and the Central Bank inflates the money supply. Mainstream economics is a hybrid of the Keynes and Friedman approach. However, from Hayek’s view, the actions of a “stimulus” and inflation sow the seeds to next bust. In one respect, Friedman is a “Keynesian”, but in another he is not. The free market usually gets associated with Friedman, but not all free market folks follow Friedman’s economics. Many free market economists follow Hayek’s vision of economics, Austrian Economics. Austrian Economics rarely uses any mathematics, but seeks to understand human action. It takes into account the human element of economics.

The market and capital interests have not been left to be ‘free’ and fail. If we are to follow a Hayek approach to the markets, the banks and financial actors central to creating the sub-prime mortgage crisis, they should have been left to fail. However, Cédric Durand in his book, Fictitious Capital: How Finance is Appropriating Our Future (2017), shows that:

Between autumn 2008 and the beginning of 2009, the total amount that states and central banks in the advanced countries committed to supporting the financial sector (through recapitalisation, nationalisation, repurchasing assets, loans, guarantees, injections of liquidity) has been evaluated at some 50.4 per cent of world GDP! (page 39)

You only have to look at how much state money has been thrown at Amazon in the US as they searched for their second headquarters to see how important the state has been for supporting capital, financial interests and the market. Richard Wolff discusses this in detail, referring to how Amazon invited all US States to bid and ‘compete’ to be the location. Key to Amazon splitting its second headquarters was the overwhelming response and attractive bids from the States, with Amazon deciding to have their headquarters in New York City, New York and Crystal City, Virginia with the total estimated cost for the headquarters standing at $10.5 billion and crucially subsidies given by the two states and cities amounting to an estimated $5.5 billion.

Let’s remember, the owner of Amazon, Jeff Bezos, is the richest man in the world, and the Oxfam report shows how he “saw his fortune increase to $112bn. Just 1% of his fortune is equivalent to the whole health budget for Ethiopia, a country of 105 million people.”

The state supports the corporate and capital interests whilst politically we argue about the virtue of the free market. This goes alongside the Oxfam report criticising governments around the world for not investing in public services, meaning inequality is getting worse.

The concept of the individual over the collective, the critique of socialism and the advocacy for the free market are all related to support for the capitalist system. Whilst Hayek’s economic opinions might be becoming more popular for some, it must be remembered that this is a political decision. In search for creating an alternative argument – one that takes attention from the inherent contradictions and flaws of the capitalist neoliberal system – Hayek’s theory can quite easily be utilised to take attention away from the financial actors that have constructed financial instruments such as collateralized debt obligation with limited regulation, think tanks (such as the Mont Pelerin Society, which Hayek and Friedman, amongst others, founded) and spent lots of money to ‘buy’ politicians and political parties to create a political class project where a very few people own the majority of the world’s wealth.

For instance, Oxfam’s report found since the financial crisis, “the number of billionaires has nearly doubled…between 2017 and 2018 a new billionaire was created every two days” and to top this off, “the poorest 10% of Britons are paying a higher effective tax rate than the richest 10% (49% compared with 34%) once taxes on consumption such as VAT are taken into account.” This links into the problem regarding the concept of value, price and the market, something I discussed with Jay Baker in a recent vlog of ours as part of Jay & Jane.

The Oxfam report calls for a wealth tax to address the global wealth inequalities:

It said the widening gap was hindering the fight against poverty, adding that a wealth tax on the 1% would raise an estimated $418bn (£325bn) a year – enough to educate every child not in school and provide healthcare that would prevent 3 million deaths.

This relates to the problems of an unspoken acceptance of the ‘right’ of capital mobility, and how important capital controls are to bring in – alongside taxes such as a wealth tax – to address the global economic imbalances. This is something Grace Blakeley discussed in great detail when referring to the 70% marginal tax rate that Alexandria Ocasio-Cortez has proposed:

The golden age of capitalism took place under the Bretton Woods system of exchange rate pegging, which permitted the use of capital controls (limits on the amount of money that can be brought into or out of a country). These controls were anathema to the global elite, which sought the right to move their money to wherever the most profitable investment opportunities – and lowest tax rates – could be found. Friedrich Hayek – the intellectual godfather of neoliberalism – called capital controls “the decisive advance on the path to totalitarianism and the suppression of individual liberty…Raising top marginal tax rates is the best moral and economic course of action for the UK, but any socialist government that attempted to do so would be punished severely by “the markets”. Without constraints on capital mobility, investors will continue to exercise a veto power over domestic states’ fiscal policy, and tax competition will only get worse.

We therefore need to be aware of the ideological and political theories and arguments that have underpinned the dominant economic arguments tied with Western governments and global institutions such as the International Monetary Fund, and crucially central to the neoliberal project, if we are to tackle these global wealth inequalities. The market has been supported for years by the state, with governments only willing to bail out corporate and capital interests and then politically blame everyone else in the hopes of divide and rule. This has worked. But it is also facing a huge legitimacy crisis after the 2007 crash. It is about seizing control of this narrative, as key political actors across the world are, and arguing that democracy needs to be at the heart of the economy as well as in our political system and that capitalism is antithetical to this.

Jane Watkinson (she/her) is an anti-capitalist, intersectional feminist and vegan interested in Marxism, social ecology, sociology, revolutionary humanism, and studying radical social, economic, and political theory and how this can be applied in practice. She is a freelance researcher working in the community sector. Her LinkTree is here.

There isn’t a better example of how our system, economy and culture relies upon debt than Christmas. Research shows that “the average person will spend £923 on food, drinks and presents” at Christmas. Additionally, “over half of Brits will spend more than they earn in December and that the average time to pay off Christmas debt is five months.” This links into the concept of a ‘Debt Hangover’ – another example of how capitalism normalises debt and excessive consumption alongside related instability and imbalances through language (also, remember the use of ‘Credit Crunch’ to describe the international financial meltdown of 2007/8).

UK debt – including household debt, student debt and consumer credit – is increasing. As you can see from the graph below we are the second most indebted country in the G8:

This links to small or non-existent wage increases when taking into account inflation, as people turn to credit to cope with the increasing cost of living with The Resolution Foundation finding the UK “on course for the longest fall in living standards since records began in the 1950s.”

Related to this is the concept of debt peonage that David Harvey has discussed:

I mean basically debt is a claim on future labor, and when people are indebted they have to labor to pay off their debts. And we see this with students, for example, right now. Many of them come out, they’ve got this huge debt, in a sense their future is foreclosed — they’ve got to pay off that debt before they can really have a life. And this is extremely, extremely difficult. That’s why I call it anti-value, because it’s not as if people have a right to the value they’re going to create. They have to actually create value in order to pay off the debt. So for them it’s a negative life that they’re living as opposed to a positive life…So this is the world we’re living in, we’re living in a world of debt peonage…their future is foreclosed by the way in which the capital is wrapped around them. This kind of thing about the good life is: borrow money and then everything will be OK.

This is an important concept to understand the reality of the system we find ourselves within. Debt constrains what we can do, it keeps us invested in a system we need to be able to pay for basic things but also to live up to cultural demands of consumption that things such as Christmas create. Described as a ‘golden quarter’, the Christmas period is considered a great time for business – with food shops and online shopping especially benefiting – and despite there being concerns about consumers tightening some of their spending, especially when it comes to the high street, there is still a big increase in consumption:

Total retail spending is expected to rise 4% in December, compared with the same month in 2017, to reach nearly £48bn excluding VAT, according to data from the market research firm Mintel.

The obsession with consumption also links into the biggest threat to our future: environmental crisis. Extinction Rebellion are an inspirational grassroots organisation raising awareness of this issue. The effect Christmas has on the environment was something Adbusters have highlighted in a recent email sent to subscribers:

Since manufacturing and consumption are responsible for more than half of the global carbon emissions, choosing to buy as little as possible this Xmas may give our Planet Earth some much needed relief. And if you still need to be convinced to consume less, consider that if we heat up just 4 degrees more, we will witness the total and irreversible collapse of human civilization as we know it.

The Washington Post also covered why such an increase poses a danger to the world as we know it in a recent article here.

Alongside being critical of what is happening we have to be positive and hopeful about what we are for. Whilst I am critical of the capitalist co-option of Christmas, there are lots of good things about this time of year including: a healthier work life balance; focus on the importance of seeing friends and family; compassion, togetherness and caring about people in positions and situations of disadvantage and hardship. However, rather than being reserved for this time of year, they are things we should be focussed on all year around. It shouldn’t be part of a token appeasement tied up with capitalist driven consumption. That fun, enjoyment and happiness and concern for others and having a more cohesive, fairer and inclusive society for all should be something we strive for no matter the time of year. Only through a radically new way of doing things via systemic change can this happen.

Jane Watkinson (she/her) is an anti-capitalist, intersectional feminist and vegan interested in Marxism, social ecology, sociology, revolutionary humanism, and studying radical social, economic, and political theory and how this can be applied in practice. She is a freelance researcher working in the community sector. Her LinkTree is here.