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The purpose of this writing is two-fold – to throw a bit of light onto the closely intermingled relationship between big tech, epitomized by Silicon Valley companies and global financial capitalism, and then to see what is our role, as users, service-consumers in this new digital paradigm.
FANG (acronym for Facebook, Amazon, Netflix, Google) are indeed since many years the most valuable S&P100 (largest 100 companies traded at NYSE and NASDAQ) companies. Their capitalized market share is close to 50% of S&P 500, meaning that the group of four, plus Microsoft, accounts for almost half of the market value of top 500 companies in USA. It is no exaggeration to say that most of US economic growth since the last financial crisis is owed to them.
The cherished companies, resident in Silicon Valley are not all of them the same. There are the elder ones, old-runners, like the mentioned FANG, already listed at the stock market before the 2007-2008 financial crisis, and the most valuable start-ups like Uber, AirBnB, WeWork, Pinterest or Snap.
Whereas the former ones are well-established technological oligopolies, given the number of users (or clients) they can reach, massive amounts of capital they reaped and assets they possess, the latter one succeeded via what is called uberisation. That means provision of highly efficient customer services by facilitating peer-to-peer transactions between users and the platform. This continuous optimization targets either the real-estate, be it our flats (AirBnB), or hotels (Oyo Rooms), our cars utilization (Uber), desk offices for small and medium enterprises(WeWork), food delivery services (Deliveroo or DoorDash), posh bourgeois customs, as dog walking (Wag), or, last but not least, our data (Palantir).
This new type of doing business gave birth to the myth of successful entrepreneur acting to the benefit of its society. He can succeed via leadership, innovation and efficient management qualities. His business model and vision is not based on ownership but rather on access economy (remember the viral epigram: “AirBnB owns no flats, Uber owns no cars, Apple is not a music producer”). Furthermore, Silicon Valley elite and entrepreneurs, tried to dissociate itself permanently, especially during the last US presidential elections in 2016, from the old, sluggish industrial capitalism. The new digital capitalism is supposedly not founded on extractivism (does not constantly exploit the nature and transform it in commodities), on the contrary, is environment-friendly, and is not so labour intensive, does not reap its profits directly from human labour exploitation.
Ok, so this is the fairy tale we may or may not buy into.
Personally, I like the way Evgeny Morozov critically considers this new business model and reveals the social conflicts it generates. In this speech and dialogue at Impakt Festival, end of last October, he nails down three issues which should be at the core of debate about “digital-ethics” and constitutional and human rights in the new context of digital economy:

  1. Financial and digital economy are closely intertwined and the highly cherished start-ups would have not succeeded if not steamed by cheap cash available from sovereign investment funds from oil Gulf monarchies or China
  2. More and more local economy is being increasingly displaced by the new integrated and globalized digital economy
  3. The new business model is not based anymore on directly selling digital services to consumers and taking profit out of that, but on collecting data from the users and selling it to big business or governments.

Let’s take them one by one. First, where is the money coming from? This article, by Anand Giridharadas, was seminal in revealing the obvious. During the last years it was increasingly a known fact that Gulf oil monarchies, with the Wahhabite Saudis at the forefront, were seeking influence in the West, especially in Silicon Valley’s tech companies. Lately, especially after prince Mohamed bin Salman came to power, it became an open fact that he sought economic alliances and investment opportunities in California, in order to prepare his country for the “post-hydrocarbure” age. Those approaches were either in the form of bringing some of its elite, like Marc Andreessen, the head of investment firm Andreessen Horowitz, the former Uber C.E.O. Travis Kalanick or the Boston Dynamics C.E.O Marc Raibert, in the advisory board of multi-billion mega-city project, Neom, either by organizing the “Davos in the desert”, the Future Investment Initiative annual forum, or by popping up in Menlo Park or Mountain View, dressed casual, without guthra and egal, and shaking hands with Sergey Brin, Mark Zuckerberg or Jeff Bezos.
How does the Saudi money get to Silicon Valley? Mainly via Softbank, a Japanese holding conglomerate, known as a world’s largest technology investor, owning Arm Holdings (the major chip designer for smartphones) and Boston Dynamics (probably you’ve seen the viral movie with the robot dogs opening doors) and having significant stakes in Alibaba, Yahoo Japan, Sprint (US 4th largest mobile operator) or Uber. Softbank announced, back in 2016, that will create Vision Investment fund, world’s largest technology fund, to invest 100 billion dollars in start-ups. 45 of those 100 billion will be provided by the Saudi Public Investment Fund. In a financial world where return of investment rates are trapped around 5%, where sovereign state bonds could not offer more than 2-3% interest rates, AI and digital platforms are the way to steam the global financial capitalism and to offer the coveted financial gains. Who else is behind it? Mainly sovereign investment funds of countries having financial surpluses, like I mentioned with Saudi Arabia, Abu Dhabi also pumped 15 billions in the afore-mentioned fund, Bahrain also considers joining and China and Singapore, as major investors in AirBnB.
To come to the second point, it is to note the way those global digital platforms displace local economies. It is not only about that, although the huge amount of Uber scandals everywhere around the globe could be convincing in thinking so. The bigger danger is to fuel the national capitalism against the digital global, as it is already the case. Bold reactions could be like those in Munich, where local authorities, given the negative effects on affordable housing due AirBnB third party rental, pushed the company to disclose their data, or in Barcelona, where Chief Innovation Officer, Francesca Bria, strives to engage local community in making technology working for social good.
What is the take-away from all that? The needs of digital platforms and implicitly those of new technological endeavours, embodied mainly by AI and the quest to connect everything with everything, will walk in the footsteps of global finance and the new model of surveillance capitalism and will not diffuse democratically to all social layers without political action.
Which left-wing answer can we have to that? First of all is to deconstruct the myth that the Internet along with the new digital economy will bring the promised escape from authoritarian governments, centralized and controlled communications, or remake democracies in the form of a new shared-economy. Not at all! Financial capitalism can be as oppressive as autocratic politics. Furthermore, if technological oligopolies, digital-privacy abuses, our elections being compromised on the back of our data or watching the new ambitious digital start-ups being financed with “dirty” Saudi money, are not fearful enough, maybe we should worry about a new form of digital capitalist nexus.
Here I would like to get to the third point. Scandals like the one with Cambridge Analytica, or Google’s Maven Project, or Amazon selling users’ data to police department, are only the top of the iceberg. The threatening aspect here, especially for the peripheral economies in Eastern and Southern Europe, highly sensitive to job automation and digitalization, is that we’ll get to a social dystopian paradigm where only two options could be left: either we are employed by those oligopolies (directly or indirectly) or we are providers of data for them. Those who don’t fit into this picture are left at the edge of lumpen-proletariat.
We can hope for a “revolt from within”, coming from the employees of those oligopolies, forcing their management to stop murky deals, like it was indeed the case. That would nevertheless tackle only part of the problem leaving the complete setup untouched. We can also reclaim our data back via local urban solidarity, as Evgeny Morozov suggests here.
A Digital Charta, like the one drafted by a handful of German intellectuals, human rights activists and politicians, though a drop in an ocean, is a good start. It is helpful in the way that it sets a yardstick in matters of civil rights in this new constellation. A political agenda to holistically consider this, assumed by a left-wing party should be the answer in the long run.
Photo: The left needs to understand better the essence of the new digital economy (source: Flickr, CC BY 2.0)

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