Supranational capitalism: The present struggle of nation states
“Facebook is a technology company, not a media company”[1] this word are taken from a speech of the Founder of Facebook and current CEO Mark Zuckerberg. He was insisting on that because Facebook was charging to priming fake news and the US government has been charged Facebook to being guilty of this crime, however, they were acquitted of the charges. After the San Bernardino attack, the FBI requested Apple to break the encryption of an iPhone that belongs to one of the shooters and guess what happened; Apple refused that request. By considering those two examples, we can see how those companies are holding power even against state organism. They just made some improvements on those issues Facebook claimed they were going to change their algorithm and Apple declared some of the specified data will be shared with them if it needed. We’ll be seeing how state phenomenon had changed throughout the capitalist era and then as a result of these changes how tech companies become to act as a state. At last, we’ll be looking through today’s circumstances, that is, how states/governments react to giant tech companies.*
*The story was published on January 4th, locus of the last topic has been changed and thus republished on July 30.
- The Nation States and Globalization
With the rise of globalization and neoliberal economy, almost all dynamics of nation-state and market conditions have changed and evolved to present conditions. Economic productions, social relations, understanding the state organism are some of the things that we can count, also, as said in the “Poulantzas at The Millennium” article, “Knowledge and information have become far more central to economic production and social relations, but the locus of the relation between power and knowledge has moved out of the nation-state.” realizing the power concept and economic production have changed as well. (Carnoy & Castells, 2001) Of course, networked computer systems, advanced telecommunication, information-based technology, and fast transportation systems were leading to the root of globalization and the knowledge and information era as well. In order not to deviate from the subject and to draw a general portrait, I can summarize this part as follows: The rapid development of technology and the adoption of a liberal economy are important to understand how the market conditions and the power of the big tech companies are gaining.
In this process, as a result of information society and globalization, nation-states tried to form alliances and dominate markets, but as a result of globalization, developing technology and flexible market conditions, today’s giants managed to take their first place in the market. Even they began to act like states in many ways, but they were lucky since they seized to chance to rise worldwide and touch upon every individual life which is not possible for a state right now. Just imagine one of the tech giants and think about how much you see their logo or how much time/ money spent for them in a day, in against, states are not working like that and this is the reason they are not spread worldwide in economic terms. Of course, you’ll ask the question all of those company is depending upon the US in a way and isn’t that meaning when some of them use Google it’s related to the US? In my opinion, the answer is an absolute no, since those companies have begun to act like a mere organism which is not depending on a state anymore but individuals and masses just like a state. Remember the case of Apple they refused the request of the FBI and showed masses they are not fully managed by the state or depend on it.[2]
Briefly, changes in economic condition and technological improvements in the last decade, those leader companies had doubled their profit, but what are the exact causes of these changes and improvements at all? First of all, technological improvements and globalization have created a new concept for us which is “platform capitalism”. In basic words, Platform Capitalism is “a business model of creating market trading platforms, extracting vast amounts of data and seeking monopoly.” (Srnicek, 2017) Besides dominating big market share, they have begun to dominate political life and individual life as well, also, we can presume that the public sphere is vanished in this decade by the domination of tech companies. All in all, those tech companies now accused of being active as a state since taking overring their social roles and controlling the economic and political life in some ways. Now, let’s go some deeper.
- Tech companies become to act as a state, a weakness of democracy:
As “The big five” or so-called “frightful five” get stronger in the market and fill up the vault, they begin to act like more states. It would be wrong and absurd to establish a statement as if they had turned the monopolistic tools of state on themselves, or a nation-state would end, but because they started to work with the state to protect their monopolies. Giving an example would it be clear, think about past communication departments of states all over the country’s communication network was handled by the government but today media companies- or how they call themselves as a tech company- take over that from state organism. Farhad Manjoo, who is an American Journalist, explained in an interview with some other specific examples like “These companies are going to be building the future of transportation in the United States, in the world. You know, they’re building self-driving cars. They’re building drones. They’re building kind of the infrastructure of the United States — the infrastructure of the next 20, 30, 40 years in ways that we used to look to kind of governments to do.” as you can see there are various areas that companies were handed over from the governments. (Manjoo, 2017)
At the beginning of the era, it has giving particular advantageous for governments since those companies also improve the worldwide market share for governments as well. In the case of the US, regulators were not seeing them as a threat but a good chance of dominating the global market, so they did. However, in this gaining power process states lost their independence in some ways. Even when we look present prime ministers, they also have many connections with those corporations, their right hands are placed into the board of director staff or have a direct linkage with them. Lobbying has put more pressure on states than ever before. With the rise of the radical right in today’s conditions, states, especially the United States, of course, increase their power, but at the same time, companies continue to grow. Corporates use their money and growth advantage to control small but successful start-ups, those frightful companies, as we talked in the class, continue to grow both vertical and horizontal growth.
This desire for insatiable growth can be seen both as democracy itself and as a desire that paves the way for anti-democratic paths. As if the small firms realize that they won’t have any chance like the freedom to grow, they will have no purpose then, but they are also anti-democratic because the corporates, which has grown enough, will be the basis of unfair competition and they will go to buy small firms to be sure they are the mere winner. So, I can’t argue that they are the essence of democracy or democratic system but capitalism is sure. This growth of tech companies is not only considered only in terms of economic terms but also has impacts on every individual life. Those companies are collecting our data and selling those data to advertisers or using those data to catch advertisers on their platforms. This is exactly what Shoshana Zuboff determined in her “The Age of Surveillance Capitalism” today’s capitalism approach commodify individuals and sees them as a meta. However, Zuboff also warning us about surveillance capitalism threat our democracy and freedom as well. (Bridle, 2019)
- How State Organism / Governments react to them:
As I talked a few times above, the US government has not regulated those companies at the beginning of the decade and those companies seized a chance to enormously growing up. Despite not preferring to regulate, the US government has been holding a secret weapon for an emergency which called so “Antitrust Law”. In US history this law passed from congress a few times and each time this law used to giant parent companies are settled apart. But how? The “Sherman Act of 1890” was passed to fight against the operations of cartels and it prohibited price-fixing activities which were done by Standard Oil Company. Standard Oil Company has belonged to John D. Rockefeller and his company has been holding 90% of the market share. With the antitrust law, it separated and the oil cartel was damaged for the first time. After the Sherman Act for the second time, the law passed in 1914 which is the “Clayton Act” and this time law restrained mergers and acquisitions of an organization via abusing monopoly power. (Schrepel, 2017) Last antitrust law occurred in 2000 against Microsoft Company and Bill Gates have charged for unfair competition and the trial court ordered Microsoft to split into two organizations and taking precautions for future misbehaviour. I told them because it’s crucial to see what antitrust suggested and done to those companies.
By considering those historical parts, you should ask yourself how markets would react to this kind of big verdict. Probably, it wouldn’t be good in my opinion and this is the reason such knowledge individuals and politics don’t let them happen in today’s circumstances. Just look at what Robert Bork suggests in his “The Antitrust Paradox” book that was postulating the main goal of antitrust law as, is making consumer protection and welfare, however, those kinds of big problems were the benefit for the consumer. (Bork, 1978) For example, Microsoft was sharing their Windows 95 serial codes for free to enhance their market share in against IBM or today we can see Facebook, Google and others all are free to use.
This is one of the most talked-about issues in the 2020 elections in the United States. Democrat candidate Elizabeth Warren repeats the rhetoric that we will divide these firms into her speeches and interviews. But the truth must be a bit different from what is said that almost all Democrats cannot agree with what Warren said when they agreed to do something about this monopolization. Most of them emphasize the idea that in a softer language, at least they will be taxed according to their income and their growth will be prevented by doing that. Also, as stated in the CNBC’s news “Democratic presidential candidate Elizabeth Warren’s tax plan includes a wealth tax of 2% on wealth over $50 million and 6% over $1 billion.” (Frank, 2019) Somewhat, there are critics on paying taxes by their income both from millionaires and politics. Some millionaires are supporting that system instead of breaking apart and some of them strongly oppose any kind of income tax. According to a survey which is conducted by CNBC in December 2019, 43% of millionaires are opposed to that idea, whereas, 55% of Democrats support that idea. (Figure 1)
Presently, there are pended 8 federal, 6 local and 2 congressional research and investigation cases that is dominantly include antitrust law and a few privacy issues.[3] At last, as I said, can antirust be a paradox in itself and can it be applied today as it has not changed over the years?
In this respect, my opinion is the possibility that it can be agreed with companies to avoid economic damage. Facebook has recently decided to put its logo on the platforms it had previously purchased. However, some has been arguing that they had done because of promoting themselves on other platforms since nobody uses Facebook anymore except our grandpas. Here, I have two arguments for that one of them is why does Facebook need to be promoted like this? Does it make any difference using Instagram rather than Facebook? Even, youth don’t use Facebook directly, they have Instagram, WhatsApp accounts and they are still connecting their Facebook addresses if a website has an option like that. In my opinion, it might not be related to promoting themselves but taking precautions for something. This means they know something will happen, but in this race, while the state wants to get rid of the least damage economically, companies can make all kinds of moves when they have nothing to lose
[1]cf. https://www.cityam.com/mark-zuckerberg-insists-facebook-not-media-company/
[3] [1] The numbers of case and investigations have taken from The New York Time’s website
see. https://www.nytimes.com/interactive/2019/technology/tech-investigations.html
References
Bork, R. H. (1978). The Antitrust Paradox: A Policy at War wit Itself. New York: Basic Books.
Bridle, J. (2019, February 02). The Guardian. Retrieved December 26, 2019, from The Age of Surveillance Capitalism by Shoshana Zuboff review — we are the pawns: https://www.theguardian.com/books/2019/feb/02/age-of-surveillance-capitalism-shoshana-zuboff-review
Carnoy, M., & Castells, M. (2001). Globalization, The Knowledge Society, and the Network State: Poulantzas at the Millennium. Global Networks.
Frank, R. (2019, December 23). CNBC. Retrieved December 2019, from Millionaires support a wealth tax — as long as they aren’t getting taxed: CNBC survey: https://www.cnbc.com/2019/12/23/millionaires-support-a-wealth-tax-as-long-as-they-arent-getting-taxed.html
Manjoo, F. (2017, October 26). How 5 Tech Giants Have Become More Like Governments Than Companies. (T. Gross, Interviewer)
Schrepel, T. (2017). A New Structed Rule of Reason Approach for High-Tech Markets. Boston, Massachusetts: Suffolk University . Retrieved from Wikipedia: https://www.wikizeroo.org/index.php?q=aHR0cHM6Ly9lbi53aWtpcGVkaWEub3JnL3dpa2kvVW5pdGVkX1N0YXRlc19hbnRpdHJ1c3RfbGF3
Srnicek, N. (2017, September 20). The Progressive Policy Think Tank. Retrieved December 26, 2019, from The challenges of platform capitalism: understanding the logic of a new business model: https://www.ippr.org/juncture-item/the-challenges-of-platform-capitalism
