A ‘you didn’t build that’ look at digital capitalism

In The Political Economy of International Communications: Foundations for the Emerging Global Debate about Media Ownership and Regulation, Robert W. McChesney and Dan Schiller expand upon and reiterate many of the ideas introduced earlier by Schiller in Digital Capitalism: Networking the Global Market System. Oddly enough, as I was reading both texts, the election-season sound bite that kept finding its way into my head was President Obama’s oft-intentionally-taken-out-of-context phrase “you didn’t build that.”

Perhaps this is because one point Schiller and McChesney make quite clear is that transnational communications conglomerates have built their astronomical profits with none other than the help of the government, whether through its investment in educating the workforce, its development of telecommunications infrastructure, or its neoliberal policies of increased deregulation. As a counterpoint to the “we built it” mentality of most corporations, Schiller and McChesney make an impressive case for just the opposite, arguing that “the state has always been a crucial and necessary player” in establishing systems of communication, beginning with the Postal Service and continuing with our modern networked society:

Not only did the United States Postal Service constitute the young nation’s original—and highly dynamic and expansive—telecommunication infrastructure, but postal subsidies, which predate the revolution and are important to this day, likewise stimulated the rise of the newspaper and magazine industries. Other federal funding flows underwrote development of stage-coach, railroad, steamship and air transport industries in succession (John 1995). Government printing contracts subsidized the partisan press until the middle of the nineteenth century (Smith 1977). Libraries and public schools purchased books and created a readership for them (Gilmore 1989). Copyright, allowing authors limited right to monopolistic control over their output in exchange for their contributions to the public domain, was considered such an important policy that it was written into the Constitution. Without the government-sanctioned and enforced monopolies provided by copyright, the modern commercial communication system as we know it would be unthinkable (Vaidhyanathan 2001) (Schiller and McChesney 2).

In his book, Schiller adds to this idea by tracing the otherwise “unthinkable” origins of the internet to the Cold War military-industrial complex, concluding that the internet’s emergence “had nothing to do with free-market forces” (Schiller 8). A dramatic shift occurred, however, as a new and aggressive telecommunications corporate policy agenda “demanded nothing less than an autonomous sphere of corporate network applications that was essentially free of regulatory oversight and was parasitic on the existing telecommunications network” (Schiller 5).

Thus, by granting internet service providers a “cross-subsidy … borne by ordinary voice users of the local telecommunications network,” the government created an environment in which the internet “effectively cannibalized ‘past and present investments in the local phone infrastructure’” (Schiller 31). This “you didn’t build that” ethos is further expanded in The Political Economy of International Communications, in which Schiller and McChesney repeatedly drive home the point “that there is nothing ‘natural’ about neoliberal globalization” (Schiller and McChesney 24). Quite the opposite, it

requires extensive changes in government policies and an increased role for the state to encourage and protect certain types of activities. The massive and complex negotiations surrounding NAFTA and the WTO provide some idea of how unnatural and constructed the global neoliberal economy is. Or consider copyright, and what has come to be considered intellectual property. There is nothing natural about this. It is a government-granted and enforced monopoly that prevents competition. It leads to higher prices and a shrinking of the marketplace of ideas, but it serves powerful commercial interests tremendously (Schiller and McChesney 24).

The astronomical growth of digital capitalism (including its corresponding astronomical profits) is undeniably indebted to a solid history of neoliberal policies, most notably deregulation and “upward” redistribution of wealth. The result? A “relentless downward pressure” on the social wage, draconian cuts to government and social programs, and “direct political attacks on trade unions” (Schiller 207). In short, digital capitalism has “strengthened, rather than banished, the age-old scourges of the market system: inequality and domination” (209). And yes, sadly, we helped build that.

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