The New Monopolists

“Bit Tyrants – the Political Economy of Silicon Valley,” by Rob Larson, 2020

This is a readable study of the development of the big five internet companies – Facebook, Google, Microsoft, Apple and Amazon.  They are familiar entities that many live their lives through. Even this site is hosted by Google Blogger.  It looks at the ‘network effect’ that allowed these 5 to become monopolies / oligopolies, now among the top capitalized corporations in the U.S.  It details the development and character of each tech corporation.  It shows how government and universities were the creators of seminal parts of the internet, not the private pirates that took this technology and made money on it.  It looks at these behemoths’ relationships with politics and also their semi-struggle with the telecoms over ‘net neutrality.’  It even suggests a solution – a socialized internet that takes these utilities away from private capital and puts them under public and worker control.

Yeah it’s even entertaining and familiar, as we’ve been partly living in the personal computer world since 1980, or at least I have.   Larson uses humorous insults and word-play to rib the tyrants who run the five – Zuckerberg, Gates, Jobs, Page and Bezos.  They all had or have certain personal abusive styles that are almost cartoonish for CEOs.  As he says:  “they are a bunch of phony, power-mongering monopolist douchebags and the new core of the global ruling class.”  These are the new ‘cool’ oil, steel and railroad robber barons.  Larson looks at the conditions for the blue collar (the literal sweatshop) and white collar (the velvet sweatshop) workforces in each company, not ignoring the labor question.  He describes the various rebellions within each company around various issues like surveillance, military work and sexual harassment or the ‘suicide strikes’ at Foxconn.

Essentially, if you create a tech platform and attract users to it, even if you are losing money, eventually that platform can dominate, even permanently.  This is the ‘network effect.’  The penalty – lock-in - for leaving a platform becomes greater as time goes on as most of us have experienced.  Monopoly law in the U.S. is weak, only focusing on price collaboration but allowing ‘merit-based’ monopoly.  Microsoft is the only one that lost a monopoly case in the U.S. courts, which led Gates to create his ‘non-profit’ foundation to distract attention from Microsoft’s indictment for trying to monopolize the browser market.  But Microsoft was not broken up or socialized under Bush.  At bottom what these companies represent is no more a ‘New Economy’ than the South is a ‘New South.’

These 5 companies control most of the news advertising ‘sales effort,’ browser searches, cloud computing, personal hardware, on-line sales, operating systems and software suites, so their power is no small thing.  They are now moving into fiber lines and entertainment.  Not to mention the politicians from both parties they also own.

Larson contrasts Apple’s focus on controlling all their software to Microsoft’s open software as one reason why Apple lost the computer wars.  This pattern continued to be a route to success for the others, and even Apple adopted it partially on the iPhone.   He shows how each entity bought from small private outfits or took technology from public entities and refined it for the personal computer market.  Some of the things developed by the military, universities or paid by government programs like DARPA that they took were:

*Wifi

*The Internet

*GUI (graphic interface)

*Chips

*TCP/IP protocols

*Hypertext

*HTML programming language

*URL locations

*Cell networks

*Touch screens

*Hard drives

*Lithium ion batteries

*LCD displays

*Dram memory caches

*Signal compression methods

*Cell communication standards

*BASIC programming language

*Social networks

*Search engines

*Artificial intelligence

*World Wide Web

*Processors
*Siri and other voice activated search programs

I.E. just about every significant advance in technology came from government or public programs. 

Larson examines the battle between the tech giants and the telecom companies (Verizon, ATT, MCI etc.) over ‘net neutrality.’  He notes that the ‘support’ for net neutrality by the Big 5 weakened as they themselves began to create the data ‘pipes’ through which the internet travels, joining their erstwhile enemies.  He humorously mentions that no issue becomes a big deal in a capitalist country unless capitalists line up on both sides of it.  This reflects the conflicts between the Democratic and Republican parties too.  As part of this Larson describes the Obama administration’s closeness with Google, though Silicon Valley gives money to both parties depending on the election, mostly leaning to Democrats.  Silicon Valley is full of libertarian billionaires who have distain for the government until they don’t, which is why they spend so much money lobbying and controlling politicians.

In the end Larson says that these entities should become socialized as public utilities, owned and controlled by their workers and society.  A refreshing change to most analyses of the tech industry.  Of course how this is to come about is left unmentioned.

Other prior reviews on this subject, use blog search box, upper left:  “The New Dark Age – Technology and the End of the Future,” “Shrinking the Technosphere” (Orlov); “Fully Automated Luxury Communism” (Bastani); “The New New Thing – A Silicon Valley Story” (Lewis); “Zombie Capitalism,” “Cypher-Punks” (Assange et al.); “Inconspicuous Consumption,” “Cyber-Proletariat,” “Ponzi Unicorns,” “In Letters of Blood and Fire – Work, Machines and the Crisis of Capitalism”( Caffentzis).

And I bought it at May Day Books!

Red Frog

June 2, 2020

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