Will information goods undermine capitalism? (2024)

From the February 2024 issue of the Socialist Standard

Information goods are goods whose value derives not from physical characteristics but from the information they convey. In many cases they can simply be copied or downloaded without any cost to speak of (apart from the time spent doing this). Moreover, there is no obvious upper limit as far the volume or quantity of these goods is concerned. They are intrinsically non-scarce or non-rivalrous and, also, ‘non-destructible’ – unlike a physical good.

For instance, by accessing a piece of music on YouTube or an article via Google, you are not denying anyone else the possibility of doing the same. This may very well not be true of a physical good. If I take the last loaf of bread off the supermarket shelf you will, sadly, have to go without at least until the next delivery.

A further characteristic of information goods is that while they have very low or zero marginal costs, their fixed or amortised development costs tend to be particularly high. This cost structure is rather different from the traditional cost structure pertaining to physical goods and, thus, calls for a somewhat different pricing strategy.

Given the non-rivalrous nature of information goods, their zero marginal costs, and the technical ease of capturing or pirating such goods (perhaps in contravention of copyright law), an internet-based business might decide that the most pragmatic thing to do would be to simply abandon the idea of charging for the information goods or service it makes available to its customers. However, while it costs you nothing to have a Facebook page or use the Google search engine this does not mean these commercial entities don’t generate enormous revenues (and profits) for themselves in some other way. In fact, both these entities currently make billions of dollars in profits and even more in revenue. Primarily their revenues derive from advertising (and the copious use of algorithms to more effectively target individual users to benefit their advertisers) though there is also a growing secondary source of revenue in the form of various ‘virtual goods’ or Cloud-based services.

The point is that unless a business like Google was able to make a profit under capitalism it would simply not exist. You and I would not then be able to use its search machine. Being able to freely make use of this facility is contingent upon Google making a profit in the first instance.

As a matter of fact, making this facility free to its users is actually a rather clever way of generating a massive revenue flow through advertising and thus securing a handsome profit into the bargain. People using this facility are a captive audience as far as the advertisers are concerned with adverts being tailored via algorithms, as mentioned, to our own particular tastes and online viewing habits. How many of us would even consider using a Google search engine if we had to pay for it? One suspects only a miniscule fraction of its current users.

Dominated by Big Tech

It is not difficult to see why this kind of commercial activity based on the provision of information goods has come to be absolutely dominated by a tiny handful of very large corporations that have nearly all become household names in their own right. These corporations have the wherewithal to afford the very high development costs incurred. They have the economic clout and reach to shape the industry to suit themselves. For advertisers too, the large size of these corporations has distinct advantages; it provides a platform that enables them to cast their net much more widely – and efficiently – than would otherwise be the case.

Of course, not all information goods are free to the public. Far from it. Internet-based corporations, like Meta (Facebook) and Alphabet (Google), may be able to provide a free service to the public but only because they can cover the enormous, fixed costs all this involves, and make a profit, by making an even larger sum of money primarily in the form of advertising revenue.

However, in the case of other internet-based businesses we see a somewhat different model in place. The information goods and services they provide are not free but are commodified. This is apparent in the case of paywall sites for some online journals or newspapers or else, streaming services like Netflix or Disney. Still other internet-based businesses such as Amazon are engaged in the retailing and distribution of actual physical goods and thus depart even more from the conventional cost structure of businesses purely concerned with the distribution of information goods and services.

However, regardless of the kind of business we are talking about or the type of good it is peddling, the bottom line for any business in a capitalist economy is the need to make a profit. There is no such thing as a free lunch in capitalism. Somebody somewhere ends up having to pay the bill.

Developments like artificial intelligence, the internet of things, robotics and even 3D printing and desktop manufacturing are revolutionising the costs of doing business and shifting the emphasis from tangible to intangible assets. Physical goods are, so to speak, increasingly taking on or incorporating more and more of the qualities or aspects of information goods even though they obviously can never transcend their essential status as physical goods. Or to put it in a nutshell – you can´t have software without the hardware that goes with it

For this reason (and others) information goods are not, and can never be, free in some absolutist sense in a capitalist society as might be inferred from the fact that they – or some of them – can be downloaded effortlessly and without cost to your computer screen; they come with a price (even when the price is not necessarily paid by the consumer but the advertiser in this case).

Too easily beguiled

Some are too easily beguiled by the notion that we are moving, or already have moved, into something called an ‘information-based’ economy. It is the very nature of such an economy, they imagine, stemming from the intrinsic nature of information goods themselves, that has somehow supposedly changed the basic rules of the game, so to speak.

Tom Stonier, for instance, argued in The Wealth of Information: A Profile of the Post-Industrial Economy (1983) that:

‘Whereas material transactions can lead to competition, information transactions are much more likely to lead to cooperation. Information is a resource which can be truly shared’.

Superficially, this sounds all very plausible. One thinks of the crucial role of R&D in industry. A lot of the work of scientists involves collaborating with other scientists and sharing information through peer-reviewed journals and so on. This comes across as all very cooperative and civilised, indeed. Being a ‘non-rivalrous good’, information can be universally shared at virtually no cost. No nasty competition is required.

Its very abundance, goes the argument, means that an information good fundamentally breaks with the logic of the market itself. ‘Plenty’ undermines the rationale for attaching a price tag to a product and, thus, the idea of exclusively owning this product – in this case an information good. Insofar as a price tag is still attached to such a product this can only be explained, it is argued, by the fact that the provider is seeking to perversely, and quite unnecessarily, exclude others from freely using it. The motive of the provider is simply one of self-gain to be achieved by such means as patents and copyrights. In other words, they are asserting an unjustifiable monopolistic hold over the product in question in an age of potential plenty.

Indeed, this, it is sometimes suggested, is precisely why ‘late-stage capitalism’ is today dominated by the existence of virtual monopolies – or, more precisely, oligopolies. Prices are no longer explicable in the conventional terms of supply and demand. Rather they are imposed by diktat by the price makers – namely, those industrial giants striving to enlarge their share of the market in which they operate – to the detriment of price takers, the consuming public.

The basic idea that information technology is – allegedly – more and more bent on subverting the rationale for a market system is a recurring theme in books like Leigh Phillips and Michal Rozworski´s The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism (2019). Capitalism, according to them, is being progressively hollowed out from within and what remains of it is but a brittle shell that seeks to needlessly confine and imprison the new life forms it has given birth to. These represent its arch nemesis: in particular, information technology.

Such technology, goes the argument, by enabling the application of so-called ‘centralised planning’ within the corporation and, by extension, the suspension of market principles – has the potential to transform society along ‘socialist’ lines or at least, provides us with a model of what such a future society would look like. This in itself is a questionable proposition in some ways, but it is also one that seems fundamentally at odds with the pre-eminent role of big corporations today in promoting market imperialism and commodity fetishism.

We should be more cautious in our assessment of the potential impact of information technology and not get too carried away with fanciful notions of the imminent arrival of what has been dubbed ‘fully automated luxury communism’ (FALC). There is no reason to think that information technology or the enhanced role of information as a factor of production, will somehow in and of itself pose some kind of existential threat to capitalism.

This should be obvious from the standpoint of capitalist businesses. The idea that they would somehow resign themselves to economic suicide seems inherently implausible. Under capitalism, generally speaking, technological innovations tend not to be taken up and developed by businesses if there is no prospect of making a profit by doing so.

Robin Cox

Blogger's Note:

Leigh Phillips and Michal Rozworski´s The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism was reviewed in June 2019 issue of the Socialist Standard.

Technofeudalism? (2024)

Book Review from the January 2024 issue of the Socialist Standard

Technofeudalism: What Killed Capitalism. By Yanis Varoufakis. Bodley Head. 304 pages.

Following up on his Explaining capitalism to my daughter, this latest book from Yanis Varoufakis takes the form of a poignant imagined conversation with his recently deceased father. It seeks to answer his Dad’s question about the internet: ‘Now computers speak to each other, will this make capitalism impossible to overthrow? Or might it finally reveal its Achilles heel?’ His answer is that they have overthrown capitalism, in favour of what he terms ‘Technofeudalism’.

He’s not the first to claim the end of capitalism in a form of new class society. In this case, his analysis is based on several strands. ‘Cloudalists’ (as he terms the owners of social media platforms and web services, like Amazon or Meta) have inserted themselves as an essential part of the market, both in acting as middlemen to merchants, as well as producing demand, and so are able to demand rent from productive capitalists.

To do this, they use the free labour of ‘technoserfs’, ie, all of us who feed the data streams of these cloudalists in our free time through interacting with these platforms and teaching them all about ourselves. The cloudalists, he claims, do not make profits, they rely on asset appreciation, fed by the money creation by governments that cannot afford to let the quantitative easing process ever end.

There are several flaws in this thinking. Firstly, rent is not an inherently feudal notion, although it is the form by which aristocrats managed to convert their assets to cope with the advent of capitalism. At feudalism’s height, an aristocrat did not get his income from owning estates, but because of his rank, and the subordination of people below him: he was free to demand their surplus product (which was anything beyond that which they needed to live on).

As commodity production became more generalised it became easier to accept money payments. The aristocrat’s estates were transformed into a type of property. When commodity production led to capitalist production, it became possible to turn the rental claim into a demand for a share of surplus value produced. This is the type of rent ‘cloudalists’ extract, it still depends on the exploitation of waged labour.

Their position as middlemen is exactly the same as when Woolworths held a prime spot on the high street, and was able to make profits by being the first port of call for many shoppers who, seeing the goods displayed, might find new things they wanted to buy. All the ‘cloudalists’ have done is concentrate this capacity into fewer hands to ensure that the surplus value comes their way.

Similarly, that we are ‘cloud serfs’ is inaccurate, we are not giving a surplus of our product to the owners of Amazon, it is an externality, a primary accumulation, something that has always been a part of capitalism. The search for things that can be gathered for free and turned into commodified wealth has always been a part of the way capitalism amasses wealth (most notably and horrifically in the form of mass enslavement of Africans in the 17th and 18th centuries).

Even the notion that these tech companies don’t need to make a profit anymore is suspect, as we’ve shown in these pages before, the likes of Jeff Bezos and Bill Gates arguably structure their wealth to avoid showing any income (and thus avoid taxation), likewise massive companies are adroit at showing little or no taxable profits: that doesn’t mean that surplus value has not been extracted, it simply means the accounting categories can be manipulated to disguise it.

As he shows, this has led to massive concentration of capital ownership: three companies, Vanguard, BlackRock and State Street ‘effectively own American capitalism’. These are investment funds: ‘Together, the Big Three are the largest single shareholder in almost 90 per cent of firms listed in the New York Stock Exchange, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola’. They are a vehicle for passive investing, and although they do concentrate the wealth, the competition between firms comes to be attractive to such investment.

Of course, there are political implications to this: concentration of wealth is concentration of political power, and the need for the owners of stock to keep the nominal asset value up does drive the political decisions of governments; but what Varoufakis analyses is just the ongoing rivalry between owners of different types of capital to get their hands on a share of the surplus value. What ‘cloudalists’ do is concentrate and generalise the cloud of surplus value. The tendency of capitalist production is to divorce prices from values, ensuring returns go to those who own the most capital. What Varoufakis is analysing is not the downfall of capitalism, but its purest application.

Pik Smeet

The internet and capitalism (1) (2000)

From the January 2000 issue of the Socialist Standard

Just over 30 years ago in October 1969 the first email was sent, and the world took no notice. Even in 1990, in Megatrends 2000, the authors Naisbitt and Aburdene failed to mention the Internet. After ten more years, the world is still largely unprepared for the scale of the communications revolution overtaking it. According to Andy Grove of Intel: “The Internet is like a 20-foot tidal wave coming, and we are in kayaks.”

The Global Internet Project (GIP) (http://www.gip.org), a collective including AT&T, Sun, Visa, Fujitsu, BT, IBM and Deutsche Bank, believes that the Internet explosion will be good for capitalism, a “cause for unambiguous celebration” as they put it in a recent report. The figures they have supplied illustrate the explosive colonisation of cyberspace.

In 1980 there were just 100 Internet host computers. The World Wide Web did not exist in 1991. In 1992 there were just 100 web sites. In 1996 there were 10 million host computers. Today there are 120 million hosts, 250 million users in hundreds of countries, there are uncountable millions of web sites, and the Web is growing by 300,000 new pages every seven days. The amount of information on the Internet has reached a level almost beyond human comprehension, and it doubles every year.

Gold fever has been evident at the stock exchange, with Internet company values being grotesquely over-inflated and largely responsible for the share price bubble. Start-up companies with no assets and no profits have been valued at millions. Oddly, there exists an uncanny parallel with the overvaluation of RCA shares in the, then, new technology of radio prior to the Wall Street Crash in 1929 (Money Programme, BBC2, 24 October). As then, Internet company valuations are also likely to be wiped out, but this won’t stop them in the long run. The speed of growth is breathtaking, and contributes to the speculative hysteria. The accountants just can’t keep up. Mobile phone sales were not even included in GDP figures until 1998, while there is still no reliable estimate for Internet sales, although GIP puts it at about $6.6 billion for this year.

In October of last year, Tony Blair announced to a startled population that 100,000 computers would be made available to poor families, at just £5 a month. The significance of a move to put even the poorest online should not be underestimated. Meanwhile, huge pressure is being brought to bear on BT to make Internet calls free, as they are in the USA. If they don’t, somebody else will. Callnet UK announced the first such, free and no strings, service in late October. A rash of similar services is expected to follow. The expense of being online is rapidly heading downwards, to almost zero, as capitalism anticipates a cyber-bonanza of sales that will make free calls, even free computers, more than worthwhile.

Falling costs

Capitalism is rushing with orgiastic zeal headlong into cyberspace. The prospect of global reach for free is the Holy Grail of any business, and the “technology of the ether” can make transaction costs so small as to amount to their elimination. “What market can ignore transaction costs, when there is one that has none?” says Michael Vlahos of the Progress and Freedom Foundation. The potential savings are enormous in other areas too. The cyber-based company of the future may need far fewer staff, no premises, little capital expenditure, tiny running costs, no stock or warehousing, and have no distribution overheads. Yet they will be more efficient than any business has ever been before.

“By putting everyone on the Web accessing information in both directions internally and externally,” says Barry Demak of Cadence, “we suddenly had a cohesive view of our markets, customers, and technologies—it all started coming into focus for us. And if you compare the cost and time to train the sales force, and factor in the difference in time to market, the returns are awesome” (Quoted in GIP).

There is a revolution in advertising and marketing theory too, as technology makes possible the placement of tailored advertising on the screens of specific customers. XTV, the new wave smart video, not only records the TV programmes it knows you’ll like, it gives you bespoke personalised commercial breaks too (Observer Business, 7 November). Every user’s every movement on the Internet is a piece of valuable marketing information. Now the talk is of “infinite stratification” of demand and “micro-niches”, of industrial mass-based society being remoulded by an individualistic assortment of micro-demands and micro-viewpoints, with customised low-volume production replacing the conveyor belt. Already the biggest engine of growth in the US, so-called Mom and Pop stores, will proliferate in cyberspace, the one place they can really compete with the big players. Here they can use “knowledge robots” or “knowbots” to roam the Web, create customised reports and newspapers, find specific products at the best prices, and even negotiate on behalf of the trader and customer.

As the expense of being online plummets to near zero, the speed of connection is soaring. The slow modem is obsolete as fibre-optic lines no thicker than a human hair with a trillion bit per second transfer rate are being installed in the US at the rate of 4000 miles per day, while in Britain BT is promising nationwide permanent ADSL links (50 times faster than modems) within two years. Project Oxygen plans to lay ocean-floor optical cables across the Atlantic, while satellite data broadcasting offers wireless Internet connection. Bandwidth (the bottleneck of the data exchange process) doubles every year. Bill Gates in 1994 predicted “we’ll have infinite bandwidth in a decade’s time”. Information will before long be able to travel at almost literally the speed of light.

In consequence of all this, there is an orgy of buyouts and alliances as capitalism races to reconfigure its entire business system, including everything from Hollywood to hard drives:

The business of computing (hardware, software, and services), communications (telephony, cable, satellite), and content (publishing, entertainment, advertising) are . . . collapsing to create a new industry sector. This new media industry is the engine of the new economy and will be critical to leading a successful transition. The rise of this new sector and the transformation of corresponding markets is forcing every company to rethink its very existence . . . (Don Tapscott, author and chair of Alliance for Converging Technologies).

One can easily envisage the telecommunications companies becoming the new giants, eclipsing all others as one box does everything and all bills are paid through one tele-account. Yet talk of “boxes” is itself an obsolescent concept, as Xerox have perfected “e-paper” (Observer, 22 August) and research continues towards wristwatch computers and even brain implants, giving rise to talk of “synthetic telepathy” in the more distant future. And as science revolutionises the Internet, so the Internet is revolutionising science. With the spatial decoupling of the scientist from the task, the so-called “collaboratory” is born, enabling multiple users to share a single physical resource, enhanced productivity with no travel time, and participation by experimenters in multiple, geographically-distributed projects. Remote science not only levels the playing field for researchers, it also offers more rigorous standards of specification, note-taking and reproducibility of results. Capitalism’s R&D department is as excited as the Accounts department and the Board of Directors.

Yet despite all this breathless enthusiasm there may be serious problems for capitalism inherent in this revolution. That the marriage of the state and the capitalists is fraught with mutual suspicion is evident from their attempts to reach a solution to the problem of devising a code to keep details secret (see GIP report on House of Lords Encryption Summit, 1997). The capitalists want a system which is unbreakable, for customers will not expose their bank details in an unsafe medium, and corporate secrecy remains essential in a competitive market. However, the state cannot afford to allow it, citing terrorism as its pretext, and demands a master key for every code. The capitalists respond that they don’t trust governments not to use these keys for their own unsavoury purposes, such as interfering in business, and back and forth it goes. At present it seems unlikely that the state will get its way. It could probably happily do without the Internet altogether, but conversely, capitalism needs the Internet, possibly as much as it needs the state, given that local lawmakers are anyway creating a global maze of parochial laws and regulations that offer nothing but obstructions and impediments to the progress of capital. The cry of “free the market” is heard everywhere from boardroom to newsgroup to government office, and legislators do not seem to be winning.

Price-less information 

There is a worse problem. Information, as a buy and sell commodity, carries a curse unknown to any other type of commodity. In the words of an old computer hacker slogan, “information wants to be free”. When one disgruntled ex-employee of a software firm recently posted the company’s products on a free website, the site was closed down in two hours. Yet twenty minutes would have been enough to start mirror sites containing the free software, at a stroke wiping out the firm’s profits. It is worth recalling what really makes a commodity—it is restriction of access. Air is just about the only use-value in existence which is not yet a commodity, in other words it has no exchange value. If access cannot be restricted to a good, money cannot be charged for it. The unique property of information is that you can make infinite exact copies, you can “steal” it without removing the original, or leaving any trace of the “theft”. Just as the music industry had to learn to live with music piracy (which of us does not have pirate tapes on our shelves?) so the information industry must live, not only with piracy, but an extremely short shelf-life. The price of any information commodity will tend towards zero more rapidly than any other commodity. The traditional product-cycle will contract to a single, sharp peak and steep descent. Whereas capitalists now salivate over a presumed bonanza this short-term pay-out will give way to a cut-throat and dog-eat-dog business world characterised by a falling rate of profit and a desperate race to stand still.

Impossible though it seems, it gets worse for capitalism. The goose could be laying a golden bomb. Unlike any other sector of production, the knowledge-producing sector which produced the Internet has always incorporated a strong ethical tendency towards free distribution—the gift economy. In a far-sighted study of Internet sociology, Richard Barbrook’s essay on Cyber-communism (Link) argues powerfully that a knowledge-rich society will increasingly tend to share rather than sell, just as socialist common ownership is a logical adaptation to material abundance. In an ethical reversal, it is selling, not piracy, which will be seen as anti-social. All in all, capitalism would appear to be staking its future on a commodity it can never control:

  The scarcity of copyright cannot compete against the abundance of gifts . . . At the cutting edge of modernity, the exchange of commodities now plays a secondary role to the circulation of gifts. The enclosure of intellectual labour is challenged by a more efficient method of working: disclosure.

Barbrook foresees the collapse of production and market relations in the same way as other business observers have been worrying for years about the “technology paradox” of “zero cost production” in industry (Business Week, 6 March 1995). As the computer world gapes at the meteoric rise of a new operating system called Linux, designed by a student as an antidote to the “bloatware” of Microsoft and, more to the point, given away free as “Open Source”, there does indeed seem to be some basis for the optimism of the gift economists. The implications for the future of capitalist market relations are huge and contentious. There are no guarantees that capitalism will drown in its own Third Wave, but equally there are no guarantees that it won’t. But as if this wasn’t enough, there arises a new problem which has no precedent and for which no avoidance strategies have yet been devised. In the knowledge explosion, what happens when we know too much?

Paddy Shannon

(In Part Two of this three-part series, Paddy Shannon explores the consequences of the information revolution for the ideological foundations of capitalism.)

Link to Part 2

Capitalism and the Internet (2): The Internet and Ideology (2000)

From the February 2000 of the Socialist Standard

Link 1

  The Internet is being hailed as a saviour by both capitalists and anti-capitalists alike. Rarely has any technology been so universally viewed as a holy grail by sworn mutual enemies. Who is right? Will it destroy capitalism or rejuvenate it?

At the Christopher Columbus school in Union City, New Jersey, a dustbin school with a dropout rate as high as its pass rate was low, an experiment was conducted in 1993. Each student was given a home PC and taught online, with both teacher and parent training to assist. The dropout rate fell to near zero, the daytime attendance rate rose to near perfect, and test scores rose 10 points higher than the NJ state average, in every subject. (http://www.gip.com).

Though schooling is unlikely ever to be entirely online, for social reasons, the possibilities of education in general via the Internet are nevertheless enormous. Traditional education—in real time—relies on too many ingredients being present in the right order, amount and quality. Virtual schools can tailor classes to individuals to a far higher degree of precision. Night school does not have to be at night, or local, or regular, or in one place, or reliant on one teacher. Educators have literally a world of resources to draw upon, while self-educators have the best access to knowledge of any generation that has existed. The establishment of the global knowledge network which we are now seeing has been aptly described by Douglas Rushkoff as “the hard-wiring of the global brain” (Cyberia 1994). Education, once the province of the rich and jealously guarded by them, is being democratised at an unprecedented rate. And ideology cannot change without a change in education.

Education is also about debate, and the lack of a public domain or sphere in which to discuss ideas has been held to be a key factor in late 20th Century ideological stagnation (Habermas, Schneider, Rheingold, quoted in Alinta Thornton’s Masters thesis, University of Sydney, (Link). Now, however, Usenet, the global network of mailing lists and newsgroups, is becoming an organic encyclopaedia and coffee house which permits debate on every issue 24 hours a day. As the Romans had the Forum, so we have Usenet. It is the new theatre in the war of ideologies now heating up. Good ideas will spread there. Bad ones will die there. Usenet is where theorists become activists, and where activists learn their theory. Capitalist ideologues are going to have to work harder in future, for educated populations cannot be fobbed off with fairy tales. They start to expect things their forebears didn’t even imagine. They start to make demands.

The DD Digerati

The first demand is more democracy. Capitalism in its advanced form relies on a model of liberal democracy to get the best out of workers, but it has to take a chance on them asking for too much. Now, governments from Britain to Malaysia to Costa Rica are “enthusiastically” experimenting with virtual council meetings and online voting in an effort to keep abreast of the public expectation of more open government. That this enthusiasm is ambivalent is shown by the fact that many of these same governments are also trying to legislate controls into the Internet—unsuccessfully as it happens. The cybergeek contingent—the “digerati”—are excitedly lyricising about running society with Direct Democracy instead of representative government, which they somewhat naively imagine was a democratic expedient imposed by geographical and other practical limitations.

Astonishing technical advance

Nobody who comprehends the class struggle will believe for an instant that the rich will allow Direct Democracy—except where it can’t do any harm and where it might bore us stupid with trivial decision-making. However, the expectation of more democracy is an important and empowering development nonetheless, for it represents a line of convergence with socialist thinking and away from the leadership mentality which plagues radical thinking. When it becomes loud enough, it will be a sign that the working class is gaining a little self-respect at last.

The second demand is a new agenda. As the organisational ability of “wired” protesters is now increasingly on a par with that of governments, as we saw with J18 and N30 and may see again with Mayday 2000, a new sense of potency seems to be sweeping through the radical mind. We don’t have to take it lying down. Corporations are not invulnerable. Individuals can be held to account. Even an entire social system can be challenged, as disparate and sometimes frankly deluded single-issue activists coalesce under the gravitational pull of common experience into what may yet become an embryonic anti-capitalism movement. Instead of being a passive consumerist mass, we can learn to think of ourselves as a proactive team of individuals. The Internet is creating a climate of new possibilities that cuts away at the dead growth of apathy and spawns a new idea: the network consciousness, a concept of interactive, interlinked human nodes in a vast, decentralised and co-operative process, a foretaste of working class consciousness.

Custodes custodiamus

Schooled however in the old thinking, we might conclude that the state will take over the Internet and use it as a new and terrible weapon of control over the working class. Accepting that they have always won in the past, we can only imagine that they will always win in the future. Is there not now a CCTV camera on every street corner? Do they not have their satellites, listening stations and Cray computers monitoring every move, purchase and phone call we make? Well, they may do, and those dedicated to underground criminal or insurrectionary activities may indeed worry about this, but there is something here for the monitors to worry about too—we can also watch them.

The near-level playing field of the cybersociety means that whatever they can do to us, we can do right back to them. This mutual integrated surveillance is already taking place, as US state governors now find themselves and their domestic affairs interrogated by an international brigade, and the government of Mexico finds its attempts to quietly crush the Zapatistas constantly harried and hamstrung by the unwelcome attention of the global online community. Amateur video of Rodney King helping police with their enquiries started the LA riots, and protesters now typically tool up with camcorders, laptops and mobile phones. Anything one protester discovers, all soon know. Governments, like the burglars they are, hate to work in the spotlight, and now it isn’t only the news media which are directing the beams. This is a game we can all play. Quis custodes custodiat? Answer: we do.

Bomb damage

Much is made of government censorship, and governments can certainly close down any website they don’t like. But only temporarily. Just as the forerunner of the Internet, ARPANET, was devised by the military to route around bomb damage to any node, so the Internet can equally route around censorship damage. Besides, the Net is global, whereas governments are local, and what one government dislikes another will frequently allow or ignore. China, so keen to imprison radical Internet users, is nevertheless in a minority of one where censorship is concerned, and its control of internal information flows is haemorrhaging at a thousand different points.

Monitoring of users worldwide is easily countered by the rapid growth of “anonymiser” sites (e.g. www.anonymiser.com), which strip out your personal details and let you roam without fear of identification. Autocensorship software is notoriously unreliable and it is easily outmanoeuvred. Besides, the rich themselves are not keen on government control. A book called Friendly Spies quotes the IBM office in Paris as having done a set of experiments to demonstrate the fact that the code keys they were required to share with the French government were being used for industrial espionage purposes (quoted in GIP).

It may not be states we have to worry about. The omniscient state may be an obsolescent dinosaur in any case, as capitalism militantly embraces the ‘free’ market and multinationals grow so powerful that “an estimated one quarter of all world trade now consists of sales between subsidiaries of the same firm” (Alvin & Heidi Toffler, War and Anti-War, 1993).

  “The flow of information into or out of a nation can no longer be effectively controlled by the state; information is everywhere and accessible. To participate in the burgeoning economic benefits of world commerce means adopting practices that undermine state control . . .” (Carl Builder, Strategy analyst, RAND Corporation).

Riccardo Petrella, a former science and technology director at the European Commission, predicts the collapse of the nation state and the rise of a ‘hi-tech archipelago’ of city-states in conjunction with multinational companies, while Warren Christopher, former US Secretary of State, predicts “5000 countries rather than the hundred-plus we have now” and George Yao, Singapore deputy PM, foresees the disintegration of China into hundreds of city-states. (Quoted in Toffler).

Today, cutting edge; tomorrow, garbage

Were this to occur, it must be a disaster for fascist ideology, since it gives the nationalists just what they think they want, and lets them choke on it. People might fight for the right to be called Basques, Latvians or Chechens, but it is hard to imagine them fighting over Coke or Pepsi in the same way. In any case, war is likely to become increasingly hard to justify when the global working class is just that, global. Much of the hate propaganda necessary to stoke public sympathy for a war will be impossible to foist on an internationalised class which works together, online, every day of the week.

The String Vest of Secrecy

Even secrecy is on the wane in the future, if one believes the former science adviser to President Reagan, G. A. Keyworth. Pointing to the fact that traditional intelligence gathering has been on the monumental scale (the US Government produced 6.3 million classified documents in 1992 alone) and involves a huge industry of chaff sorting and “analysis paralysis”, he says: “The price of protecting information is so high that classification becomes a handicap”. Meanwhile Robert Steele of US Intelligence, a critic of the secrecy industry, says: “The hidden costs of secrecy are so immense they often outweigh the benefits by a wide margin.”

Steele and others argue for an open system, with very little secrecy. It is surprising what is already in the public domain. Larry Seaquist of US Naval Intelligence reports that they get more useful information from one Internet PC than all their private and highly secret SPARC workstations put together. There are already few things which are really secret, even if we might wish they were. An underground nuclear cookbook called Basement Nukes prompts Michael Golay, professor of nuclear engineering at MIT, to say: “What’s classified today is how to build a good weapon, not how to build a weapon.” In a wider sense, the Internet will by its nature militate against the holding of secrets, for risk-free disclosure is a button-press away for any individual and information sharing has long been the accepted mode of transaction online. The global brain, one might say, will steadily illuminate its own dark areas. Capitalist ideology, insofar as it depends on secrecy, is due for a hammering.

Paddy Shannon

(Next month: we continue the discussion of the impact of the Internet on capitalist ideology.)

Link to part 3

GLITCH 

As if to prove that computer technology is not infallible, in Part I of this series the first two paragraphs on page 9 of the January Socialist Standard , were garbled as a result of the unexplained introduction of material from another article. The garbled passage should have read:

Yet talk of “boxes” is itself an obsolescent concept, as Xerox have perfected “e-paper” (Observer, 22 August) and research continues towards wristwatch computers and even brain implants, giving rise to talk of “synthetic telepathy” in the more distant future. And as science revolutionises the Internet, so the Internet is revolutionising science. With the spatial decoupling of the scientist from the task, the so-called “collaboratory” is born, enabling multiple users to share a singe physical resource, enhanced productivity with no travel time, and participation by experimenters in multiple, geographically-distributed projects.

Our apologies to readers and the writers—Editors. 

Capitalism and the Internet (3) (2000)

From the March 2000 issue of the Socialist Standard

Link to Part 2

Despite a clear tendency towards enlightening social relations, the Internet does not promise to give revolutionaries their socialist society on a plate. In fact, it offers us the parallel “disinformation revolution” as well. Unlike misinformation, disinformation is deliberate.

 Although mass propaganda can be expected to decrease quantitatively, customised propaganda may increase qualitatively. Propaganda and spin could become more, not less, powerful, as mass media gives way to “mess media” and a proliferation of micro-channels, micro-markets and perhaps micro-cultures makes the targeting of disinformation against selected individuals more feasible. It’s as if the ultimate dream of the free-marketeers is of six billion separate Earths, a doppelganger for each of us, and consensus or revolution impossible in any of them. But humans aren’t so easy to control, nor communication so easy to stop. The right-wing utopians forget about our critical faculties and our propensity to gossip amongst ourselves:

The hypnotic spell of years of television and its intense public relations is broken as people learn to deconstruct and recombine the images intended to persuade them. The result is that the population at large gains the freedom to re-examine previously accepted policies and prejudices” (Rushkoff, Cyberia, p.55-6).

Micro-propaganda just isn’t going to cut it unless we collectively agree to brick up our windows and doors and never go out. Realistically, the ideology of capitalism will not be able to rely on permanent, large-scale disinformation. The best it can expect is to muddy the waters.

The danger of participation is that there are . . . thousands of potentially critical eyes watching every entry. A faulty fact will be challenged, a lie will be uncovered, plagiarism will be discovered. Cyberspace is a truth serum (Rushkoff, p.18).

Monocultural studies 

As global monoculture advances upon us in the real world of Wal-Mart and McDonalds, cyberspace , in contradistinction, is going the opposite way by reinventing diversity. There is a double irony at work. First, the right-wing free marketeers parade their hypocritical “cult of the individual” as a justification for a sociopathic mentality of self-centred consumerism, while at the same time making every effort to destroy cultures and reduce individuals to a grinding uniformity of alienated clones. Second, their own system is producing an atomised multicultural cybersociety which may yet undo their work. Where capitalism tried to keep us apart while making us the same, cyber-capitalism will have the effect of bringing us all together while making us different.

Trouble at’ McMill 

Yet if this view of capitalism’s future seems to have a rosy tint, it’s probably a bloodstain. There is likely to be a ferocious and global scramble for the ever-decreasing number of real jobs in the hi-tech labour market. The “digerati” may get excited about their hi-tech utopias but the future looks grim for workers. The former proletariat may become the future sophisticated “cognitariat” (Toffler), but they are going to be mostly underemployed part-timers battling each other for short contracts. Meanwhile the rest of the population will presumably be fighting for work in leisure malls, call centres and other dispiriting and low-paid McJobs. And when things get really bad, workers tend to wake up from the American Dream and smell a rat. Carl Davidson, editor of Cy Rev, a “Journal of Cybernetic Revolution, Sustainable Socialism & Radical Democracy”, sounds a warning:

 In 1992 the size of the world labor force was something like 1.76 billion people; by 2025, if current trends stay more or less what they are, the world labor force is going to be 3.1 billion people. That means every year for the next thirty years the world economy needs to create 38 to 40 million new jobs. And it’s got to do that at a time when the main technological trend is going in the opposite direction of net job liquidation” (http://www.eff.org/pub/Publications/E-journals/CyRev).

What then of free-market philosophy, this wonderful doctrine from two centuries ago which thinks capitalism would work fine and dandy if the stupid politicians would just go away? Free-market capitalists think the poor don’t matter and will obligingly roll over and die, but when the first riots start, these same capitalists will remember pretty quick what they were paying the state for in the first place. Civil unrest may be most cheaply staved off by bread and circuses, and excuses, as it once was in ancient Rome, but for these angry modern workers the bread will have to be good and the circuses had better be terrific, since the excuses, as usual, will be lousy.

Virtual Unreality 

Of course, the entertainment will be awesome, if nasty, after capitalism’s tastes. Frighteningly convincing graphics and sensory experiences will create seamless mirages, a virtual unreality that might forever close the door to political change. Certainly it is curious to note that technology has brought the “circus” ever closer, from arena to stage to screen to TV to PC monitor. Ultimately we will watch our little mirages on “drop-down” corneal displays, a final triumph of the circus as it climbs right inside our heads. Better still, with full-body virtual reality, the viewer gets to climb right into the ring. But for all that, the charade, however mindbending, has to stop sometime. Circuses pall, just ask any overworked clown. Humans will never really lose sight of the distinction between real and virtual, unless they can be made to forget that they are rational animals. Besides, so much of their reality is patently bullshit that nothing short of mass lobotomy could disguise it.

Credo Greedo

And bullshit is what lies at the heart of capitalist ideology. Even capitalists themselves believe it. On Page One of every school economics textbook it says that resources are limited but wants are unlimited. As wants are satisfied, new wants always appear. Now if this were true, socialism would be impossible. Relying on this anti-human and quite unsubstantiated prejudice the capitalists, knowing the extremely short shelf-life of information commodities, expect to be able to produce new commodities indefinitely, to replace old ones that have become free or nearly so. Yet here is their mistake, for wants are not infinite. As more things become free (for example, MS Explorer, Netscape, Winzip, Apache, Acrobat, Linux and a thousand other useful programs) they expect us to keep paying for upgrades, assuming we will always want more, but we won’t. Instead, we will reach a satisfaction threshold. And then, we’ll just start expecting everything else to be free too. And why not? With modern robotised manufacturing, costs are falling in all sectors of commodity production. If they cost next to nothing to produce, why should we pay at all? Kevin Kelly, founder editor of Wired, doesn’t see a problem for capitalism in this, and argues that businesses should give their products away for free, in order to reap later returns:

Ubiquity drives increasing returns in the network economy. The question becomes: what is the most cost-effective way to achieve ubiquity? And the answer is: give things away. Make them free (New Rules for the New Economy, Fourth Estate, 1998).

One can only hope that all capitalists, convinced of our insatiable natures, are daft enough to follow Kelly’s advice, and indeed many companies are doing just this, and not just with software, (free mobile phones, free calls, free satellite decoders). Even if this loss-leader strategy just makes a loss, it plants another expectation in the public mind, and subtly undermines its own creators. Things can be free. There is such a thing as enough. Abundance does exist.

It may be that the sacred cows of capitalism and property society will be sent to the slaughterhouse one by one. Even that feared and revered symbol of ultimate power, the coin, may lose its lustre, its relevance reduced to a meaningless abstraction. Where once we bartered real things like sheep or sacks of salt, then paid with iron bars, gold ingots or copper coins, then latterly with decorated scraps of paper, now we will be held to ransom by mere electronic digits. The case for abolishing digits may not seem so far fetched in the future when nobody handles real cash anymore and the fetishised idol no longer has even a visible face.

The Socialist Virus

As well as the notion of insatiable greed, the ideology of capitalism also rests on the notion of natural inequality, the cult of the leader and of the expert. The better educated workers become, the more this cult suffers. As contempt for our politicians rides as high as voting figures sink low, the idea that we must rely on the unique expertise of superior individuals is beginning already to look decidedly comical. But in the wired network consciousness, where “no-one is as smart as everyone” (Kelly, p.14) the expert and the leader may become positively antiquated concepts. The days may be dying when the “ignorant masses” can be led, misled and mystified by some “social elite” who know better. Instead, the wired world may experience a new renaissance of democratised creative thinking, as good ideas begin to spread through the ports and wires of a billion terminals, the electronic synapses of a revolution: “You don’t attack the monster. You infect him, like a virus.” (Rushkoff, p142). And small ideas can grow big in cyberspace, as Kelly, in a backhanded paraphrase of William Morris, makes clear:

 The network economy has set into motion the power of hobby tribes and informed peers . . . The law of increasing returns can feed a small interest into a mid-sized interest. Whereas once there was a lone fanatic for every notion, now there is a devoted website for every fanatic notion; soon there can be 10,000 fellow enthusiasts for every fascination (Kelly, p.105).

Internet disinformation

Yet disinformation remains for the time being the best weapon against workers. When the truth can no longer hide in the dark, the logical thing is to dazzle us with data. It doesn’t even have to be false data, just so long as it’s irrelevant and it wastes precious time. And as the Nobel economist Herbert Simon points out: “What information consumes is rather obvious. It consumes the attention of its recipients. Hence a wealth of knowledge creates a poverty of attention.” (Kelly, p.59). The grim truth is that this crude strategy will probably work, for a while at least. According to the Critical Art Ensemble, who may be perhaps thinking primarily in the short term, the vast majority of Internet users will be passive consumers, rather than active participants:

They will be playing computer games, watching interactive TV, and shopping in virtual malls. The stratified distribution of education will act as the guardian of the virtual border between the passive and the active user, and prevent those populations participating in multi-directional interactivity from increasing in any significant numbers (Alinta Thornton, Ch.5, http://www.wr.com.au/democracy/thesis1).

If this sounds depressing, one has to remember that it is a conservative estimation of human behaviour as it is now, schooled into a passive consumption of goods, news, ideas and entertainment. If there is one key hallmark of pre-internet mass society it is probably this conditioned passivity. Our pre-internet generation cannot in all fairness be expected to adapt thoroughly to such a major cultural innovation, and will certainly fail to exploit its real long-term potential. A second-generation wired society is likely to be very different, more individualistic yet better integrated, more critical and proactive, and with higher expectations. The longer capitalism lasts, the more bolshie the workers are likely to become.

For now, like everything else in capitalism, any attempt at disinformation overload will work only partially and unreliably, if it works at all, and cannot depend on any conscious or systematic conspiracy by the owning class. Conversely, we as workers have no free ticket to easy victory through the Internet. When all is said and done, it is an instrument only, an “enabling technology”. The printed word didn’t liberate us either, but it made a huge difference, and so will this, if we learn how to use it properly. With the means of knowledge—the key to the means of production—now out of the private bag and in the public domain, it is fair to say that the working class has never been in a stronger position to take control of its own future.

Revolutions are made by people, not machines, people working together, people in communities. Much is made of supposed “online communities”, but it is precisely in the real physical world of community, rather than its ersatz virtual counterparts, that the revolutionary potential of the Internet may be storing up its greatest surprise.

Paddy Shannon

(Next month, in the concluding article, we examine the Internet and Community.)

Link to Part 4

Learning machines: Algorithmic Dreams (2020)

From the March 2020 issue of the Socialist Standard

The apparent brains behind the Johnson ministry, Dominic Cummings, has been ruffling feathers with a blog post [since deleted by the looks of it] calling for ‘data scientists, project managers, policy experts, assorted weirdos’. Tellingly, the posts are advertised via his blog, rather than the usual civil service recruitment routes, and applicants are asked to apply to a Gmail address. Cummings has form for trying to use personal accounts to circumvent freedom of information rules. This is all part of his ‘disruptive’ persona, looking to shake up the stuffy old civil service, and get things done:

  ‘We need some true wild cards, artists, people who never went to university and fought their way out of an appalling hell hole, weirdos from William Gibson novels like that girl hired by Bigend as a brand “diviner” who feels sick at the sight of Tommy Hilfiger or that Chinese-Cuban free runner from a crime family hired by the KGB. If you want to figure out what characters around Putin might do, or how international criminal gangs might exploit holes in our border security, you don’t want more Oxbridge English graduates who chat about Lacan at dinner parties with TV producers and spread fake news about fake news’.

It is a bit strange to complain of liberal arts graduates via citing a work of fiction, and tellingly, Cummings remembers the name of Hubertus Bigend, the uber-capitalist anti-hero of Gibson’s Blue Ant series, but not Cayce Pollard (‘that girl’).

He also wants data scientists to look at models of system change and dynamic modelling of viral information. Seemingly, Cummings wants to bring systems analysis and mathematical thinking into the heart of government. He’d have to be prepared to pay well, since those skilled with such talents can find good work in automated trading and business analysis in the City.

Maths not everything

The mathematics populariser Dr Hannah Fry took issue with Cummings’ call:

  ‘There is some truth to this – there are a host of government questions that could benefit from a more mathematical take. In everything from bin collection timetables to Brexit policy, I’d love to see more decisions made on the basis of evidence over instinct. The big-data revolution has transformed the private sector, and I wholeheartedly believe it has the potential to profoundly benefit broader society too’ (Guardian, 5 January).

She points out there are limits to using maths to model society, and that an understanding of humans must go alongside any such scientific modelling.

As Noam Chomsky has pointed out:

  ‘A vision of a future social order is in turn based on a concept of human nature. If in fact man is an indefinitely malleable, completely plastic being, with no innate structures of mind and no intrinsic needs of a cultural or social character, then he is a fit subject for the “shaping of behavior” by the state authority, the corporate manager, the technocrat, or the central committee. Those with some confidence in the human species will hope this is not so and will try to determine the intrinsic human characteristics that provide the framework for intellectual development, the growth of moral consciousness, cultural achievement, and participation in a free community’ (Language and Freedom).

Fry herself had addressed these questions in the Royal Institution Christmas Lectures (which should be available via YouTube by the time this article comes to print). In one of them she addressed the:

  ‘decade in which we learned the lessons of charging ahead without first carefully thinking about the ethics of forcing equations on to human systems. There were the stories about racist algorithms in the criminal justice system, and sexist algorithms designed to filter job applications. YouTube was accused of unwittingly radicalising some of its viewers. Indeed, some would argue that the world is still reeling from the consequences of mathematical equations gone awry, both during the time leading up to the 2008 financial crash and Facebook failing to consider the consequences of its newsfeed algorithms’.

She also explained, however, how algorithms are being taught to learn, through deep reinforcement learning, being ‘rewarded’ for successfully finding the correct result in their task, and ‘punished’ for failing. She demonstrated this via a pile of matchboxes that had been ‘taught’ to play noughts and crosses.

The problem, as with the racist and sexist algorithms, is that if the original data used to teach the algorithm is skewed: Fry, in her Guardian article, linked to an example of how Amazon’s recruitment algorithm had learned that most successful applications came from men, and thus decided that being male was a desirable quality in an applicant.

Resource allocation

Deep reinforcement learning, though, is a powerful tool. AlphaGo defeated a human grandmaster at the immensely complex Japanese boardgame ‘Go’ after teaching itself the game (this is radically different from when human programmers helped Deep Blue to defeat Gary Kasparov at chess).

‘Systems employing this approach have already been used to optimise system performance in areas including resource management, device payment optimisation and data centre cooling’ (Gemma Church, The maths problems that could bring the world to a halt).

Such systems are beginning to solve problems that have hitherto been considered computationally intractable: involving too many permutations and requiring too much processing time to be realistically solved using traditional computing techniques.

The capacity of such algorithms, Church points out, brings into play the possibility for them to handle resource allocation, to actively supply human wants in a real-time fashion:

  ‘Over the last few decades, researchers have developed a range of pretty effective mathematical solutions that can allocate resources across a variety of industries and scenarios so they can attempt to keep up with the daily demands our lives place on them. But when an allocation made at one time affects subsequent allocations, the problem becomes dynamic, and the passing of time must be considered as part of the equation. This throws a mathematical spanner in the works, requiring these solutions to now take into account the changing and uncertain nature of the real world’.

Amazon is already using the data it collects to train algorithms to anticipate what it needs to stock and ship. Amazon has to solve optimisation problems, trying to maximise use of its warehouses, while minimising its delivery routes and matching that with courier availability and flights, trains, etc. The trick with such immensely complex problems is not to solve them absolutely, but to approximate as closely as possible in a computationally realistic amount of time. It is this non-absolute characteristic that enables algorithms to steadily improve. The solution to the millions of variables in a delivery system is to look for good enough, not the perfect.

The algorithms that YouTube and Amazon use to recommend content to customers are changing and evolving in an ecosystem that drives them to improve and ultimately provide us with the goods and services we want. Effectively, producing a profit-driven, private planned economy.

Algorithms are unhuman, as per Serle’s Chinese room (see: en.wikipedia.org/wiki/Chinese_room) they can learn to follow a set of rules and respond to inputs, but they lack intentionality and the inherent structures of feeling and humanness that people possess. Humans are essential to working with algorithmic artificial intelligence to make it serve our needs, rather than that of the special form of Artificial Intelligence that is the capitalist firm. The computing resources are there to enable us to better model and predict chaotic systems, but they need a political determination on the part of us all to avoid them being used to service the needs of the ruling minority. We don’t need Cummings’ technocratic weirdos to change and shape our world, but we can use their ideas to improve our lives: but only if we are running society on our own behalf.

In the words of D.H. Lawrence:

For God’s sake, let us be men
not monkeys minding machines
or sitting with our tails curled
while the machine amuses us, the radio or film or gramophone.
Monkeys with a bland grin on our faces.

Pik Smeet

Blue chip (1989)

Book Review from the January 1989 issue of the Socialist Standard

Big Blue by Richard Thomas DeLamarter (Pan £4.99.)

Big Blue is IBM, the American computer company which is the world's most powerful and profitable corporation. For thirteen years it was the subject of an anti-trust case brought by the US government, which was eventually withdrawn by one of Reagan's puppets in 1982. DeLamarter spent eight years working as a government economist on the case, and this book is his interpretation of the evidence provided, based largely on material from IBM's internal files.

Different readers will no doubt draw different conclusions from the book: some may even see it as a recipe for how to run a successful company. What strikes a socialist reader is the amount of effort devoted by IBM simply to defeating competitors or would-be competitors, and their methods of maintaining and extending their power.

Contrary to the popular image (which the company has worked very hard to build), IBM's products are not particularly reliable or technically advanced. Prior to the development of computers, IBM had a big share of the punch card accounting machine market, which gave them a larger sales and repair network than any other rival. Even though Remington had the computer market to itself for a couple of years, it was IBM that captured the lion's share of sales by installing the new machines alongside the existing ones (on which they were at first partially dependent). The first IBM computers were deliberately priced to lose money and so undersell their competitors, who lacked the financial resources to reduce their own prices.

Having beaten off most of their rivals, IBM were able to keep their, dominant market share by exploiting software lock-in and price discrimination. Software lock-in refers to the fact that once programmes have been written for a particular type of computer system, and staff trained to operate it, a company will find it prohibitively expensive to switch to another system, and so will tend to stay with its original choice and simply add on updates, however inefficient they are. Price discrimination meant setting prices relatively low where there was competition (for example, for small-scale systems which would be a customer's typical initial purchase) but relatively high where there was no effective competition (extra peripherals or computer memory). IBM was quite prepared to be flexible in this respect, drastically cutting the price of memory when independent producers began to challenge its position, and to be threatening, dropping unsubtle hints about likely maintenance problems to customers who considered buying non-IBM equipment to add to an IBM system. The company's executives were also willing to use their influence with banks and finance companies to starve competitors of funds.

In the early sixties, General Electric began to win large orders for a computer specifically designed for time sharing (whereby different operations are performed concurrently). To boost its own sales, IBM announced a new machine, model 67, intended for time sharing, and at a low price. Model 67 never attained its proposed technical performance, but it did achieve the more important (for IBM) goal of killing off the competition. General Electric saw its sales drop off, and in 1970 ceased to make mainframe computers. The model 90 was another IBM machine that was designed and launched not as a technological advance, but purely to damage a rival company, in this case Control Data Corporation

In spite of the sometimes tedious amount of detail, DeLamarter's book provides an interesting look behind the scenes of capitalist business practice. It shows very clearly that profitability and "success" in capitalist terms have nothing at all to do with meeting people's needs.

Paul Bennett

From Handicraft to the Cloud: Part 1 of 2 (2012)

From the March 2012 issue of the Socialist Standard

As in the industrial revolution, progress in the computer revolution comes at a price.

Despite all the technological innovation, computing is all too often a frustrating and limiting experience. Is this because Google, Apple, Facebook or Microsoft are evil and lock down hardware, platforms, software and content? NO! Is this because we should all avoid proprietary software, even freeware in favour of mutual co-operative open-source projects such as Linux? Well this is barely half the story as can be seen when free open-source software is not immune to industry trends such as cloud computing, bloat, eye-candy, new version fetishisation and app stores. The elephant in the room is the broad historical trends in the industry which affect free software somewhat less than proprietary software and mirror the industrial revolution and tend to disempower, limit and alienate (in the Marxist sense) the end user. Software and personal computing suffers from class divisions.

2011 was another year of hype for cloud computing. In June 2011 Google launched the Chromebook and Apple announced iCloud. The Google Chromebook is no ordinary laptop, it relies on storing software and your data on Google servers. This is called cloud computing and has been considered the next big thing in IT by market experts for some years. The term ‘cloud’ is appropriate since its benefits are nebulous and it may also represent dark clouds on the horizon for personal computing.

The history of personal computing is almost as old as the first manned moon landing in 1969, and in technological terms, the personal computers of today are certainly more advanced. Why on earth is personal computing then, a frustrating and limiting experience? By 1965, Gordon E. Moore had predicted the rate of advancement in computer hardware (doubling every 18 months), which has proved largely accurate. By 1973, the first mouse-driven graphical user interface had been produced.  Niklaus Wirth observed that ‘software is getting slower more rapidly than hardware is getting faster’. This parallels Stanley Jevon’s observation over a century earlier that ‘advances in efficiency tend to increase resource consumption’. To find out why this is the case we have to look at the history of personal computing and its potential downfall.

‘A computer in every home’
The first million selling computer book was the Art of Computer Programming by Donald Knuth in 1968. Although it was an incredibly technical book, Knuth liked to stress the art aspect of the title, and it was certainly in stark contrast to the industry that it is today. In other respects, sentiments among computing enthusiasts would be familiar (especially to socialists) throughout history. In particular, The Hacker Ethic (Steven Levy, 1984, Hackers) which included such noble statements as ‘all information should be free’ and ‘access to computers should be unlimited and total’. This was not unusual for the time. Popular computing literature including magazines and books such as 101 Basic Computer Games (David H. Ahl, 1973) printed lines of code and encouraged users (especially children) to input the code to produce games. Most personal computers offered a command-line interface (even those with an additional graphical user interface) and were bundled with some form of the BASIC programming language, so named because of its ease of use and suitability for learning. The learning curve for using home computers was steep when compared with today but popular computing literature at the time helped make the curve somewhat more graduated. Despite its significance, very few writers have lamented the disappearance of BASIC, perhaps the most well-known article is titled ‘Why Johnny Can’t Code’ (David Brin, 2006).

As Neal Stephenson put it, in the beginning there was the command-line and Microsoft had the odd idea of selling operating systems. It was Apple Macintosh however, who introduced the first commercially successful graphical user interface with drag and drop capabilities and WIMP (Windows, Icons, Menus, Pointers) interface in 1984. Just a year later, the Commodore Amiga 1000 made colour, animation, sound and multi-tasking affordable to home users. Although the desktop metaphor for graphical user interfaces was used by rivals, the Amiga offered an indicator of the ethos of the time. It used the metaphor of a deeply-customisable workbench for its operating system. The desktop metaphor prevailed partly because home computers in the West evolved out of the office at a time when industrial capital was on the decline.  But also, the desktop prevailed over the workbench metaphor, because empowering users to control the means of production was gradually becoming an alien notion.

No single business seemed to be able to establish a hardware monopoly, let alone a software monopoly, that was unchallenged by rivals. In January 1986 PC Magazine reviewed fifty-seven different programs for word-processing. Even the most popular application software such as WordStar, AmiPro and WordPerfect was largely produced by small teams and in some cases individuals. The spirit of the age was described as the era of the bedroom programmer, although this is possibly a little exaggerated. Sharing software was widespread, computing magazines distributed cover disks with public domain and shareware software and users exchanged software in classifieds advertisements. Software developers might not have liked it, but magazines were an important channel for distribution. Acceptable software costs to users were generally regarded as the cost of the disk and this was the attitude in businesses as well as at home. The limitations of the hardware of the time meant also that developers were expected to optimize code to be as fast as possible.

Windows 95
The personal computer industry grew rapidly over subsequent years. By 1992, Amigas had fallen by the wayside. Ataris were cheaper and in 1993 could boast multi-tasking but by then it was too late. A monopoly position had already been established by IBM-PC compatible hardware and Microsoft consolidated their monopoly in software with a $300m launch of Windows 95. Although users may have been reluctant to embrace planned obsolescence, this was a time when the vision of ‘a computer in every home’ still involved selling hardware to first-time buyers.

The truth behind the hype was a little different, RoughlyDrafted.com (5 February 2007) comments:

 ‘From the mid 80s to the mid 90s, Microsoft amassed fortunes as an application developer for the Mac. Even in 1996, Microsoft reported making more money from Office–$4.56bn–than it did from all of its Windows sales combined–$4.11bn. Tying sales of Windows 95 to Office helped to boost sales of both. Microsoft pushed the new version of Office as a reason to buy Windows 95, and Windows 95 helped kill sales of rival applications, including the then standard WordPerfect and Lotus 1-2-3, neither of which were available or optimized for Windows 95 at its launch. By the release of Windows XP in 2001, Microsoft had swallowed up 98 percent of the OS market’

Innovation, but not for the masses

Although Windows 95 firmly established the desktop metaphor over rivals, this was the limit of its innovation and other enhancements were criticised as merely cosmetic. The successful introduction of encyclopedia software called Encarta on CD-Rom was regarded as cutting edge use of technology for encyclopedic content. That encyclopedias might not be traditionally editorially controlled and might instead be participatory by the next major Windows release was not anticipated by Bill Gates in his published book The Road Ahead in 1995 or its heavily revised 1996 reprint.

Many innovations after the achievement of software monopoly never reached the masses or if they did, many years later than when they first appeared. IBM OS/2 never replaced Windows 95, though some considered it more advanced. By 1997, an operating system called BeOS had been introduced with instant-on boot, 64-bit, journaling, indexing and metadata tags, but this too never reached the masses. The first 32-bit internet web browser, with FTP client, usenet group reader and internet relay chat (IRC) client was not from Microsoft but from Cyberjack in 1995. But by embedding Internet Explorer into Windows just as the internet was taking off, Microsoft was able to delay tabbed web browsing as standard (until 2006) which already existed in the relatively popular Netscape Navigator. Internet Explorer became so popular for about 5 years after 2001 that it felt no need to introduce a new version. By then it could no longer ignore the threat of Mozilla Firefox (loosely descended from Netscape) which was rapidly gaining market share.

At least, the marketing for new versions of Windows did claim to offer usability improvements and fix the many problems identified in previous versions rather than just eye-candy. What became clear beyond any doubt was that software was getting inflated at a rate roughly in proportion to each passing year (faster than Moore’s Law). Benchmarking tests are one way to test this, and are sometimes used in the independent computing press.

Bill Gates commented: ‘I’m saying we don’t do a new version to fix bugs […] We’d never be able to sell a release on that basis’ (Focus Magazine 23 October 1995).

The vision of ‘a computer in every home’ began to look dated. Instead, focus shifted to encouraging existing computer users to upgrade software. It suited hardware manufacturers that software updates should make older computers slower. Whereas the earlier trend was for first-time hardware sales to come packaged with software, now software sales (with artificial barriers)  would drive the need to buy new hardware.

Games also played a big part in driving early hardware sales of the first personal computers in the home. Games revenue eventually overtook the movie and music industry and games were even described as the leading artform of the era. The latest ‘Call of Duty’ game was the biggest entertainment launch ever in revenue terms. Games helped drive the industry upgrades but many users’ reluctance to upgrade persisted, and Windows sales through retail channels continued to decline. Planned obsolescence needed introducing more forcefully, and subscriber-computing and the internet was about to offer the opportunity to do it.

The emergence of viruses and malware on the burgeoning internet helped the software update industry. The idea of software spying on the user or otherwise compromising privacy, was something malware and viruses did, not legitimate software. Users owned their software and anything else was an alien concept. As one user on MSFN.org put it:

  ‘I will never understand why users tolerate or accept this. If an individual or company demanded that you prove that you did not steal your home or car, you’d eventually file some kind of complaint or harassment charges against them. If the same standards that are used for applications were applied to operating systems, XP and newer systems would be classified as spyware. Windows has been going in the opposite direction for some time, with each new version giving the user less control over what it does and less access to the data it stores.’

This comfortable position of around 90 percent market share could not be threatened by any rivals. Journalists of the computing press might have been tempted to describe the hardware and software monopolies as the end of home personal computing history. But to do so, would have been as foolish as Francis Fukuyama’s claim to have reached ‘The End of History’ a decade earlier.

DJW

Link to Part 2

Pathfinders: Acta of Desperation (2012)

The Pathfinders Column from the March 2012 issue of the Socialist Standard

Acta of Desperation

One of the more memorable jokes in Douglas Adams’ Hitchhiker’s Guide to the Galaxy was the one about the supercomputer which, on being asked the meaning of life, supplied the answer ‘42’. One of capitalism’s most profound illogicalities is its constant need to render unquantifiable things – like knowledge – in monetary terms so that its bean-counters can do their sums properly. It’s the same joke, only accountants don’t get the laughs.

NASA is pulling out of its agreement with the European Space Agency over the planned ExoMars Rover programme, citing lack of funds. It has already ceased supplying the International Space Station. Given that the ISS is the most expensive thing ever to have been built by human beings, this seems rather like spoiling the spaceship for a ha’porth of tar, but there’s a slump on and the purse-strings are being pulled tight. Science is worth the money, says Barack Obama’s budget, as long as it’s somebody else’s money.

The price of knowledge is being addressed in a different way by the recent signing by 22 countries of ACTA, the Anti-Counterfeiting Trade Agreement, which is the latest international attempt to establish base-line rules for protecting intellectual property rights (IPR). Internet traffic is international but regulations are national, meaning that information – and therefore profit – leaks away everywhere like water from a leaky bucket and national regulators can do nothing about it.

There has been outcry against this agreement, with protests in many European cities. Much of this is youth-based and centred on the idea that information ought to be free. Socialists ought to be sympathetic to this, given that we want everything to be free, but there’s something irritating about people who see no further than the one commodity they’re personally interested in. Instead of being quasi-socialist thinking, it looks like the self-indulgence of privileged young Westerners who don’t know the real meaning of poverty. To someone starving or homeless, they must look like a bunch of rich kids sulking and demanding free sweets.

Despite the surreal appearance of a Pirate Party in Sweden and now in the UK as well, most opposition is not based on some imagined ‘right-to-download’ but on the unarguable truth that, to accommodate the differences between the legislatures of various countries, this agreement is so necessarily general it opens barn-doors to the future enactment of a large array of repressive measures, including those relating to free speech. Pleas by ACTA’s defenders that such measures are not the intention are probably true at this precise moment, but this of course doesn’t guarantee that the thought will never cross their minds in the future. Any legislation which makes repression easier in principle should be opposed on principle.

The ACTA agreement contains provision for the prevention of counterfeit goods too, which, in the case of counterfeit medicines would, in theory, be a very good thing as they are a huge global problem. Whether it is really intended to focus on that market, which largely consists of poor people buying dud drugs because they can’t afford the real thing, or on the lucrative trade in bogus clothing, electronics and DVD brands, which involves flush westerners simply saving a few quid, we leave to the reader’s intelligent guess. It is significant that China doesn’t support ACTA, given that much of this counterfeiting comes from there. China, being a box-shifting manufacturer not a developer, tends to be intensely relaxed about intellectual property laws (see Apple Stuffing).

Against the naive assumption that, alone of all commodities in capitalism, information should be free, should be set the equally naive assumption by ACTA supporters that all ‘stolen’ goods represent a loss of earnings. That piracy costs the entertainment industry money is undoubtedly true, but how do you estimate the value of what people don’t buy? The likelihood is, if piracy were ever truly stamped out, the former pirates would not then happily go out and stump up fifteen quid for a new film or music CD. Instead they’d do without, or wait until it was cheap, and the industry wouldn’t gain much.

What ACTA is really about is not repression but manufacturers desperately trying to raise their profits in the middle of a slump while fending off attempts by poor consumers to undermine them. But other manufacturers can always cash in by doing the opposite. Cheap DVD players are now sold with USB connections, allowing you to play AVI format films from a flash-Rom memory stick. How the film arrived on that stick, and in that format, is a question that we socialists, not being pirates of course, must once again leave to the intelligent reader.

Golden Opportunity

It seems the Tory back-benches are mounting a revolt over the government’s spending on wind energy development, possibly because of the heavy subsidisation costs, or maybe because they don’t want bloody great wind farms all over their Cotswold hunting ranges. The government is committed to increasing wind energy from its present 2.2 percent to 15 percent by 2015, if it’s to keep to its internationally agreed environmental targets. Fat chance of that. More realistically, its keen environmental concern is in not being held to ransom by the Russian gas oligarchs, and there are only so many nuclear power stations it can foist upon us.

Aside from gales-into-gigawatts, alternative energy research is throwing up other possibilities. Interesting research into Microbial Fuel Cells at Bristol UWE recently claimed a world first in proposing urine as a revolutionary new fuel (BBC Online, 9 November 2011). Its stored energy potential may not be particularly high but it is free to collect in large quantities, and may well save on sewerage costs into the bargain. Above all it would then allow us to point out what we’ve known all along, that the state’s environmental energy policy is all wind and piss.

Apple Stuffing

Apple’s trade in China (see this issue) is not without its downside. Apple has just lost a case against the company Proview in a Hong Kong court over the worldwide rights to the name ‘iPad’, which Proview thought of but which Apple claims it bought off them for use in ten countries. Now it is going to a mainland Chinese court, but the Chinese state is going to be nervous about upholding an intellectual rights case on its own turf when it flagrantly violates them over everything else. When you lie down with the dragon you can get your wallet singed.

Paddy Shannon