Remember back in the fifties when intellectuals (like Herbert Marcuse) were handwaving that lowered costs and increasing efficiencies from the automation of manufacturing would afford a nearly universal leisure society in a single generation? In what should have been a surprise move to no one, the destruction of organized labor by outsourcing first to the feudal remnants of the Confederacy and then to the global South made it possible instead for plutocrats to capture all the wealth generated by the stunning gains in efficiency made possible by automation and hence this development contributed to the present crisis of anti-democratic wealth concentration.
Remember back in the naughties when intellectuals (like Yochai Benkler) were handwaving that lowered costs from the digitization of publication and distribution infrastructure would afford rapid democratizing global development on the cheap? In what should be a surprise move to no one, it has instead afforded still greater wealth concentration through the duplication and replacement of existing enterprises and then the facilitation of monopolies among the ruins.
From RJ Escow's
latest piece in Salon
Our society runs on a digital myth, which says that the
technology-based economy is different... not subject
to the principles of mathematics and human nature that govern the rest
of our lives. This myth tells us... we use services like Google and Facebook for
“free.” ... Amazon is following a
decades-long model for the tech industry. It begins with the rollout of
cheap or “free” services -- typically based on the efforts of others --
offered at minimal cost in order to capture a monopoly share of the
market. Once that monopoly is obtained, the tech vendor uses it to
extract usurious and typically unanticipated costs...
That’s
the story of Microsoft’s operating system...
Bill Gates... acknowledges, he and his
associates built MS/DOS by “taking Digital’s manual and writing my
operating system.” IBM offered other operating systems with its
new PCs... to mollify
the Justice Department’s antitrust division... But the Gates/IBM product was offered for
only $40, while users who wanted CP/M were required to pay $240. The
die was cast. In his 1999 ruling against Microsoft, Judge Thomas Penfield Jackson [found that] ... Microsoft possesses monopoly power in the market for... operating systems... protect[s] its operating
system monopoly, utilizing a full array of exclusionary practices... harmful to innovation and to consumers... How do you quantify the jobs, consumer savings or new
revenues... lost because of innovations that never took place? ... Then there’s the human cost of product
inefficiency... protected from competitors who
might design a better product...
The
monopoly strategy is the tech industry’s deep, dark secret... Despite
its self-promoted reputation for “disruption” and invention,
Microsoft’s monopoly approach is Silicon Valley’s real business model... Although it was never distinguished by smart
design or ease of use, Facebook moved aggressively to capture a
monopolistic share of the social media market. Then came the ads, the
interference, the invasions of privacy... YouTube, like Facebook, never generated its
own content. It built its monopoly position by offering free access to
the creative work of others. Once firmly established on its monopolistic
throne, it began forcing viewers to watch advertisements before viewing
videos.
That’s the model: First lure them in and establish your monopoly, then monetize. YouTube
is now owned by Google, which also commands a monopoly share of its
market... [L]ike its peers, it has relied
heavily on government-funded technology (the Internet, computers,
smartphones) and government-funded research to capture its monopoly
share. It has used its monopoly to redirect users’ attention, and to
exert frightening levels of control over users’ experience of the world... “Uber,” which recently
distinguished itself by earning an “F” rating from the Better Business
Bureau... is following the path laid down by its forebears:
First, identify a core market. Second, establish a monopoly position.
Then capitalize on that position... Amazon isn’t a monopoly or monopsony in anything
except books -- yet. But it has demonstrated through its actions that it intends to become
one in every market it serves. It has used its enormous cash flow --
cash flow based on government-provided tax breaks -- in order to act
proactively and ruthlessly to eliminate future competitors. While it’s
far from a monopoly in diapers, for example, it used its revenue base to
engage in brutal price competition with Diapers.com (which it then
acquired).
This strategy could be described as “serial monopoly”
and “serial monopsony.” It enters a market, leverages an economic
advantage (sales tax exemptions, revenues from other product lines) and
then preys on competitors until it reaches something like a monopoly
position... In one way the serial monopolists are a new creature,
spawned from technology that allows them to enter new markets without
initially manufacturing or warehousing the merchandise themselves. In
another sense theirs is an old tactic, one that would have been familiar
to the railroad tycoons who were setting the price of grain in
19th century America... Silicon Valley represents a set of values
that is amoral by commonly held standards. It’s rapidly taking control
of the distribution systems for music, literature and arts. And it’s
increasingly manipulating our access to information, even as it absorbs
an ever-increasing share of our economy. Scoff at the word “monopoly” if you like. But if these developments don’t concern you, you’re not paying attention.
5 comments:
> From RJ Escow's latest piece in Salon. . .
>
> Bill Gates... acknowledges, he and his associates built
> MS/DOS by “taking Digital’s manual and writing my
> operating system.”
Say what? Is that "Digital" as in "Digital Research"
or "Digital Equipment Corporation"?
In either case, it's not true. Microsoft **bought**
Tim Paterson's (Seattle Computer Corporation's) QDOS
("quick and dirty operating system" for the Intel 8086/8088),
which was in turn a reimplementation of Digital Research's
CP/M (for the Z-80/8080), which was in turn based on
Digital Equipment Corporation's RT-11 (for the PDP-11).
In any case, lots of "Digitals'" manuals, mostly pre-dating
Bill Gates' ownership of the OS.
> Silicon Valley represents a set of values that is amoral
> by commonly held standards. It’s rapidly taking control of
> the distribution systems for music, literature and arts.
> And it’s increasingly manipulating our access to information,
> even as it absorbs an ever-increasing share of our economy.
> Scoff at the word “monopoly” if you like. But if these
> developments don’t concern you, you’re not paying attention.
Wot, you don't like The Future? Tough tuna fish, Charlie!
To quote somebody in Jerry Pournelle's _Oath of Fealty_,
"Consider it evolution in action."
Or go study Ayn Rand, or something. ;->
The confusion no doubt results from my skimming -- I thought I'd captured the main points while still inviting folks to click the link to the whole piece. It may be that Eskow is simplifying the history a wee bit around the edges as well.
Interesting that just about all silicon valley execs are of the "Liberal" persuasion. Then again, money talks and ideology takes a walk regardless of your world view.
I don't agree with either of your observations. Neoliberlism as an advocacy either of elite-incumbent technocracy or of market fundamentalist pieties is a right-wing reactionary political position. Clintonian liberalism was about as liberal as Eisenhower Republicanism. I agree that money is corrupting, I agree that it has corrupted both political parties, but I disagree that this trumps ideology or that this makes the parties equivalent to one another. Such facile observations usually justify the usual consumer acquiescence to the status quo with the added insult of self-congratulatory pseudo-radical preening.
> Tech "Disruption" Is Monopoly Money
From today's Times:
http://www.nytimes.com/2014/10/26/books/review/james-risens-pay-any-price.html
---------------
$20 billion was sent to Iraq with little or no oversight and without
any clear direction on how it should be spent. Most of this money was
flown from East Rutherford, N.J., in bricks of $100 bills. Pallets of
cash were distributed at will. . .
====
Boy oh boy! That was right in my back yard. I'm surprised it didn't
warp the space-time continuum on Route 3.
"I feel a great disturbance in the force."
No, that's just $20 billion, in bricks of $100 bills, parked
in a warehouse over at Teterboro Airport.
;->
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