It’s often said that the defining feature of globalization is that corporations become more important and more powerful than nation states. If that is true, one can only think of digitization as globalization on steroids. How else to make sense of the fact that in the first six months of 2017 just four American technology firms Alphabet, Facebook, Amazon, and Microsoft—have seen their stock market value rise by an amount greater than the GDP of oil-rich Norway?
Were one not to count their massive and unprecedented stock gains, one would see that the global economy has barely recovered from the crisis of 2007–08: much of the growth since then is to be attributed solely to the speculative bets placed on these firms by yield-hungry investors. Technological utopianism might be an empty ideology but it surely pays off—at least in the short-term. Venture capital—an industry that grew out of Cold War science funding and prospered in the 1990s—is no longer the sole gatekeeper to the digital riches.
Many other investors, from sovereign wealth funds in Singapore and Kuwait to traditionally conservative players such as pension funds, are increasingly eyeing opportunities in the tech sector, many of them for the sole reason that no other sector or investment opportunity promises yields as high. Contrary to political scientist Francis Fukuyama’s predictions, history has not ended but the economy might still very well be finished—or so many investors appear to believe. Yet, even when the global economy might be struggling, the tech sector, so goes the logic, will always outperform other industries: by disrupting one moribund industry after another, introducing new, previously untapped efficiencies through automation and artificial intelligence, and commodifying assets—from houses to power drills—that, previously, were hardly integrated into the global market.
That this highly economistic and investor-orientated framework undergirds the dominant discourse of the digital age is itself indicative of just how peripheral and inessential considerations of democracy—and, more broadly, of democratic politics—are to the masterminds of that very digital age. Beset by the eventual, very painful consequences of neoliberal policies, which were seen as inevitable and absolutely essential measures to revive the struggling global economy in the early 1970s, policy-makers are now taken hostage by both the technology industry and the technology discourse. Thus, the Internet, above all, but also its multiple cognates, from Big Data to the sharing economy, have become both the goal and the strategy to attain it.
As a result, we are exposed to a barrage of upbeat sloganeering about the power of digital technology to transform the economy, turning everyone into a successful entrepreneur. But we’re also ushering in a new form of privatized politics and a new form of privatized welfare, where a set of powerful technology intermediaries—the very same companies whose stock value is now going through the roof—will be responsible for an even greater share of activities that traditionally have lain outside the market.
Promises vary from country to country but they all boil down to the same set of seemingly uncontroversial “pragmatic” interventions. For example, democratic politics itself ought to be disrupted so that citizens can choose politicians the way they choose films on Netflix: armed with data about candidates and how exactly they respond to our needs and tastes. Crowdpac, a prominent political startup founded by the one-time senior adviser to former UK Prime Minister David Cameron, makes it possible. Or we might be told that the wealth of data accumulated by the tech giants can lead to new models of privatized digital welfare that will produce enormous savings for the public sector. Think of Alphabet’s DeepMind unit partnering with UK’s National Health Service to analyze the health data of millions of British patients in order to identify early signs of kidney disease. Or think of companies like Uber and Airbnb that, each in their own way, pitch themselves as a tiny part of the parallel welfare state as well. The former promises to use data and efficiency in order to dramatically reduce prices for customers while giving a more flexible (and profitable) way to earn an income for drivers. The latter promises to turn each and every home into a permanent ATM machine that can give a nice regular income bonus to those lucky enough to have a place to live in.
Underpinning all of this are a few tacit assumptions about the distribution of power in the digital age. On the one hand, the functioning of this new system, in which both political and economic power is delegated to big technology firms, assumes that there’s no redistribution of data, let alone a drastic legal change in the ownership regime for data. Citizens are not to inquire into why it is that companies like Alphabet or Facebook have come to be the owners of an extremely valuable resource that even mainstream publications like The Economist or Financial Times recognize as the “new oil.”
Consequently, while citizens are not formally excluded from participating in the new systems of digital governance—after all, they may yield more data for some firms—it’s evident that the contributions they will be able to make will be tiny and inconsequential. Thus, while Alphabet and Uber are building self-driving cars using the data produced by their users to hone their Artificial Intelligence (AI) systems, citizens are encouraged to believe that they, too, can become the next Alphabet or Uber merely by inventing a clever app in their free time. Despite the positive rhetoric of the last few decades, innovation has not been democratized. What has been democratized is trivial innovation which produces no structural effects on how society organizes itself.
Worst of all, the artificial intelligence that is produced along with all of this, in the hands of just a few powerful players is bound to create rather perverse consequences for society at large, especially since the overall vector of change across the economy is that of automation. Consider a problem like cyber-security. It’s no secret that many citizens as well as public institutions increasingly find themselves under cyber-attacks, many of them demanding a ransom, as has been the case in the high-profile WannaCry ransomware attacks earlier this year.
There is good reason why such attacks are seen as possible security holes in the software sold by commercial vendors as well as sophisticated hacking tools developed by our own governments in order to break into the devices and inboxes of people they’d like to monitor: such tools were bound to find their way to the Darknet. And it seems that they did, as a string of such tools recently published by WikiLeaks demonstrates.
The situation is bound to get worse with the transition to the Internet of things—which would essentially ensure that hackers could now attack not just our computer but virtually every connected device in our home. What then is the solution? It might as well be applying a healthy dose of AI in order to distinguish attacks that are truly malicious from those that are trivial.
Technology firms, in fact, are already advertising their capabilities in this field, insisting that it’s only through AI that such attacks can be fended off. In fact, Microsoft has even been calling for a new Digital Geneva Convention, where governments would empower technology firms to be the actors responsible for resolving such attacks to begin with. Granted, they would not be doing this for free, but be expanding their already lucrative security and consulting practice. Thus, we have a very odd situation: technology firms and governments, having created many of the vulnerabilities that made cyber-attacks possible in the first place, now would strike numerous commercial deals in order to have the private sector protect both public institutions and citizens from malicious hackers. What is this if not the privatization of security and the undoing of the fundamental assumption of the democratic state—i.e. that security is a public good provided to everyone via their taxes, and not something to be left to the mercy and whim of private circumstance?
Digitization, as long as it unfolds as the Big Tech giants want it to and doesn’t break down with the structural constraints imposed on it by the overall crisis of capitalism and globalization, will not serve the democratic agenda. Even if an occasional exception to this rule would, every now and then, make the commentariat write another paean to the democratic potential of social media or Big Data.
A far more likely outcome of digitization if it stands its current course would be re-feudalization—rather than democratization—of society. For there’s no better term to describe the ultimate consequence of empowering a set of rapacious and predatory private institutions while tying the hands, or outright destroying a set of institutions founded on the ideals of justice, solidarity, and socialized risk.