World Socialist Radio - David and Goliath. Competition and “Enshitification” (2026)

Adapted from the April 2026 issue of the Socialist Standard

David and Goliath. Competition and “Enshitification” by The Socialist Party of Great Britain

In modern capitalism, so-called “Davids” (like startups) often win by using strategies backed by huge financial power, such as venture capital. Companies deliberately sell at a loss to undercut competitors, drive them out, and dominate the market—after which they worsen their service or raise prices, a process described as “enshittification.” These outcomes aren’t exceptions but built into capitalism itself: success tends to come not from better products but from access to capital and market control. What looks like an underdog victory is often just another form of concentrated power, meaning consumers and workers ultimately lose out as competition disappears and conditions deteriorate.

Taken from the April 2026 edition of The Socialist Standard.

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Pathfinders: David and Goliath (2026)

The Pathfinders Column from the April 2026 issue of the Socialist Standard

Possibly one of the least attractive neologisms of the modern tech era is the word ‘enshittification’. But its coiner, science fiction author and post-scarcity activist Cory Doctorow, doesn’t much care. It’s an ugly word for an ugly thing. And once you are aware of it, you can’t unsee it, because it’s everywhere.

It all starts with a basic and age-old capitalist conundrum. How, as a manufacturer or service provider, can you come to dominate the market and crush all the competition? If you are hopelessly naïve, you might plan to do it by having the best quality product. An easier way, as practised by the likes of Amazon, Uber, Shein, Temu, and many others, is to borrow vast amounts of venture capital (VC) in order to sell at a loss, for long enough to undercut and wipe out the opposition. Then, when you’re the last company standing, the fun can really start.

Your VC-funded product doesn’t need to be perfect, just better and cheaper than the rest. People will flock to it, never suspecting a thing. After all, don’t we live in a world of limitless improvement? That’s how capitalism works, right?

And thus, you conquer the market by making your customers 100 percent happy. You’ve hit peak product. Nothing to change. Nothing more to do. Just sit back and watch the direct debits roll in.

In theory, anyway. Degrowthers and Doughnutters argue that the finite planet can’t afford infinite growth, but what if the economy could achieve a ‘sweet spot’, neither growing nor shrinking, that observes environmental boundaries? All manner of sustainable social benefits could flow from that. It’s a seductive idea. But capitalism is not a static system. It has its own laws of motion. Nobody has the choice to stand still. If you’re not racing ahead, you’re losing ground to the competition. Eat their profits, or they’ll eat yours. If the system isn’t racing ahead, there are no new profits to attract new investments. It either grows, or it withers.

And let’s not forget that you achieved peak product and market dominance at a loss. First you need to claw back those losses, and then your Silicon Valley VC investors will want a big fat return on top. But you’ve already maxed out the market. Where do you go from there? The answer, the only possible answer, is enshittification. Here’s how it works.

You’ve locked in your customers and killed the competition, so now you can price-gouge them. But it doesn’t stop there. Instead of one-off sales, you force subscription models on them so that they have to keep paying forever. If you run a streaming service, open up new income by riddling it with adverts your customers have to pay extra not to see. If it’s a social media platform, collect oceans of personal data to sell to third parties. If you own a phone product, issue updates that make it progressively ‘laggy’ until the customer surrenders and buys a newer model. If you own an electric car company, entice buyers in with fancy software services and then save money by shutting them down. If you own an operating system, design a new version that won’t work on existing computers, forcing everyone to chuck theirs in landfill and buy a new one. Cram it with unremovable resource-draining bloatware and charge extra for a ‘premium’ clean version. Build in intrusive and interfering AI that nobody asked for, with forced logins for simple desktop tools. Add a handy ‘Recall’ function that photographs their desktop every second, including all their passwords, website visits, personal messages, Tinder profiles and online banking details, and stores that information in your company servers where it’s a target for hackers. Ignore the protests. You know what your customers need better than they do. And besides, you’ve fired all your human customer service reps so now the whingers and wailers have to navigate a tortuous odyssey through concentric rings of automated responses and AI chatbots. In short, start with customer satisfaction, end with customer extraction, which Chinese scammers call ‘pig-butchering’. Lock in the suppliers too, and repeat up the chain.

Windows 11 is getting furious blowback for being enshittified. Users are turning in disgust to Linux, which is free, has no viruses and runs on any old machine with a fraction of the resource requirements. Others are resurrecting the antiquated Windows 7, now topping lists on pirate bittorrent sites. Piracy itself, once neutralised by the ease and reach of ad-free Netflix, is now resurging as the streamer market has fractured into a proliferation of platforms, each demanding your money while thrusting ads at you. The subscription model backfires as customers adopt the same cynicism as the corporations: ‘If buying is not owning, then piracy is not stealing’. The double standards are obvious to many: ‘If people downloading a song are criminals, what are the CEOs of AI companies using the entire internet to train their LLMs?’.

Last month the Norwegian Consumer Council released a video of someone cutting holes in socks, and sawing legs off tables to make them wobbly. The video was part of a global campaign to draw attention to the ‘deliberate degradation of a service or product’, urging politicians to take action against enshittification, including enforcing data protection, breaking digital monopolies, and giving consumers ‘more power to control, adapt, repair and alter the products they already own’. The council admits it’s a David and Goliath battle, ‘but… David won in the end, right?’.

Doctorow isn’t claiming he’s discovered some new phenomenon. He’s savvy enough to know how the world works. Enshittification is not just about how profit sabotages tech development, making things worse instead of better. It’s really a metaphor for capitalist production itself, which has generated eye-watering wealth yet imposes poverty on billions. In this version of the bible story, David is the bad guy, the tiny rich elite, while Goliath is the world working class, the sleeping giant that needs to wake up.

Paddy Shannon

The Capitalist Class. By Karl Kautsky (continued) (1909)

From the January 1909 issue of the Socialist Standard

[Continued from the October issue]

Specially translated for the Socialist Party of Great Britain and approved by the Author.

8.— Increasing number of large concerns, combines.

If the extension of a concern forces its owner, the capitalist, to engage officials in order to lighten his task, the increase in the surplus-value due to the extension recompenses him for that expenditure. The larger the surplus-value, the more of his functions is the capitalist able to transfer to officials, until he has at last rid himself entirely of his managersLap, so that he has left only the “anxiety” of advantageously investing that part of his profit which he does not consume.

The number of concerns that have arrived at such a condition increases from year to year. That is proved most clearly by the growing number of Joint Stock Companies, where, as even the most superficial observer must recognise, the person of the capitalist has already ceased to be of any importance, only his capital being significant. In England 57 Joint Stock Companies were formed in 1845, 344 in 1861, 2,550 in 1888, and 4,735 in 1896. There were 11,000 companies, with a share capital of over £600,000,000 actively engaged in 1888, and 21,223 companies with a share capital of £1,150,000,000 in 1896.

It was considered that by the introduction of the system of share capital, a means had been found to make the advantages of larger concerns accessible to the small capitalists. But, like the system of credit, the system of share capital, which is only a particular form of credit, is, on the contrary, a means of placing the capital of the “smaller fry” at the disposal of the large capitalists.

Since the person of the capitalist can be dispensed with as far as his undertaking is concerned, anybody possessing the necessary capital can embark in industry, whether he understands anything about the particular trade or not. Hence it is possible for a capitalist to own and control concerns of the most varied kind, having perhaps no connection one with the other. It is very easy for the large capitalist to obtain control over Joint Stock Companies. He only needs to own a large proportion of their shares—which can easily he purchased—in order to make the undertakings dependent upon him and subservient to his interests.

Finally, it must be stated that generally, large capital increases more rapidly than small capital, because the larger the capital the greater (under otherwise equal conditions) the total amount of profit, and hence also tli,o income (revenue) which it yields ; again, the smaller the proportion of the profit consumed by the capitalist for his own use, the larger is the portion he is able to add as new capital to that already accumulated. A capitalist whose undertaking yields him £500 a year, will, according to capitalist ideas, be able to live only modestly on such income;. He will be fortunate if he succeeds in putting by £100—one-fifth of his profit—a year. The capitalist whose capital is large enough to yield him an income of £5,000 is in a position, even if he consumes for himself and his family five times as much as the first mentioned capitalist, to turn at least three-fifths of his profit into capital. And if the capital of a capitalist happens to be so considerable that it yields him £50,000 a year, it will be difficult for him, if he is a normal being, to use for his living one-tenth of his income, so that, though indulging in luxuries, he will easily be able to save nine-tenths of his profits. While the small capitalists have to struggle ever harder for their existence, the larger fortunes increase by leaps and bounds, and in a short time reach enormous proportions.

Let us summarise all this : the increase in the size of the undertakings : the rapid growth of the larger fortunes ; the diminution in the number of undertakings ; the concentration of a number of undertakings into one hand, and it then becomes clear that it is the tendency of the capitalist mode of production to concentrate the means of production, which have become the monopoly of the capitalist class, into ever fewer hands. This development is ultimately tending towards a state of things where all the means of production of a nation, nay, even of the civilised world, are becoming the private property of a single company, which is able to dispose of it at its discretion; a state of things where the entire economic structure is welded into one gigantic concern, in which all have to serve one single master and everything belongs to one single owner. Private property in the means of production in capitalist society leads to a condition where all are propertyless with the exception of one single person. It leads, indeed, to its own abolition, to the dispossession of all, to the enslavement of all. But the development of capitalist commodity-production leads also to the abolition of its own basis. Capitalist exploitation becomes contradictory, if the exploiter can find no other purchasers of his commodities than those exploited by him. If the wage-workers are the only consumers, then the products embodying the sxirplus-value become unsaleable—valueless. Such a condition would be as terrible as it would be impossible. It can never come to that, because the mere approach to such a condition must so intensify the sufferings, antagonisms and contradictions in society that they become unbearable, that society collapses if the development has not previously been steered into a different channel. Bui if this condition will never be reached, we are rapidly drifting that way, indeed, more rapidly than most imagine. For while on the one hand the concentration of the separate capitalist concerns into fewer hands is proceeding, on the other hand with the development in the division of labour the mutual dependence of the seemingly independent undertakings is growing, as we have already seen. This mutual dependence, however, becomes more a one-sided dependence of the small capitalists upon the larger ones. Just as most of the seemingly independent workers carrying on home industries in reaity are only wage-workera of the capitalist, so there are already many capitalists having the appearance of independence, yet subservient to others, and many capitalist concerns that appear to be independent are in reality merely branches of one huge capitalist undertaking. And this dependence of the smaller capitalists upon the larger increases perhaps more rapidly than the concentration of the various concerns in the hands of the few. The economic fabrics of capitalist nations are already to-day, in the last resort, dominated and exploited by a few giant capitalists, and the concentration in the hands of a lew firms is little else than a mere change of form.

While the economic dependence of the great mass of the population upon the capitalist class is growing, within the capitalist class itself the dependence of the majority upon a minority (decreasing in number but ever increasing in power and wealth) becomes always greater. But this greater dependence brings no more security to the capitalists than to the proletarians, handicraftsmen, petty traders, and peasants. On the contrary, with them as with all the others, the insecurity of their position keeps pace with their growing dependence. Of course, the smaller capitalists suffer most in that respect, but the largest capital, nowadays, does not enjoy complete security.

We have already referred to a few causes of the growing insecurity of capitalist undertakings, for instance, that the sensitiveness of the entire fabric as far as it is affected by external disturbances, increases ; but as the capitalist method of production intensifies the antagonisms between the different classes and nations, and causes the masses facing each other to swell and their means of combat to become ever more formidable, it creates more opportunities for disturbance, which give rise to greater devastations. The growing productivity of labour not only increases the surplus-value usurped by the capitalist, but it also increases the amount of commodities which are placed on the market, and which the capitalist is compelled to dispose of. With the growing exploitation competition becomes more intensified, as does also the bitter struggle of investor against investor. And hand in hand with this development there proceeds a continual technical evolution ; new inventions and discoveries are unceasingly going forward, and in so doing destroy the value of existing things, thus making not only individual workers and single machines, but entire plants of machinery and even whole industries superfluous.

No capitalist can rely upon the future ; none knows with certainty whether he will be in a position to retain what he has acquired and leave it to his children.

The capitalist class increasingly splits up into two sections: one section, growing in number, has become quite superfluous economically, and has nothing to do but squander and waste the increasing mass of usurped surplus-value that is not used as fresh capital. If one calls to mind what we have mentioned in the previous chapter regarding the position of the educated in present society, one will not be astonished to find that by far the greater number of the rich idlers are throwing their money away on mere coarse pleasures. The other section of the capitalists, those who have not yet become superfluous in their own undertakings, is decreasing in number, but their anxieties and responsibilities increase. While one section of the capitalists is decaying more and more owing to idle profligacy, the other section is perishing by never-ceasing competition. But the insecurity of existence of both sections grows. Thus the present method of production does not permit even the exploiters, even those who monopolise and usurp all the tremendous advantages, a complete enjoyment of them.

The great modern crises, which now rule the world market, arise from over-production, and are the consequence of the anarchy necessarily connected with the production of commodities.

Over-production in the sense that more is produced than is required can take place under any system of production. But, of course, it can do no harm if the producers produce for their own use. If, for instance, a primitive peasant-family harvest more corn than they require, they store up the surplus for times of bad harvest, or in the case of their barns being full, they feed their cattle with it, or at the worst leave it on the field.

It is different in the case of the production of commodities. This production (in its developed form) presupposes that nobody produces for himself.

[To be continued]

Behind the label (2004)

Book Review from the December 2004 issue of the Socialist Standard

Not on the label by Felicity Lawrence, Penguin, £7.99

Most of us are probably aware that our food is not quite what it’s cracked up to be, even if it’s not all junk food. But in this book, the Guardian’s consumer affairs correspondent shows just how unhealthy much of what we eat is and why it gets to be that way.

   

One important point made relates to the dominant position of the supermarkets, especially the large chains. They can squeeze the profits of the companies who produce the food, sometimes asking suppliers to pay to have their products on the shelves or in some prominent position. In addition they effectively dictate what we can buy, or at least what range of goods we can choose from when we shop. With their absurd ideas about the kind of food that is acceptable to consumers – such as specific sizes of green beans or Brussels sprouts – they cause an awful lot of decent food to go to waste.

   

Their enormous distribution centres are not real warehouses, since food is only kept in them for short periods: the idea is that it is delivered and then sent across the country to stores in as rapid a turnover as possible, leading to vast numbers of lorries speeding up and down the motorways. And, according to Lawrence, there is evidence that the more miles fruit and veg travels, the lower its vitamin content. Such constant replenishment of the distribution centres relies heavily on casual labour, often undertaken at rock-bottom rates in appalling conditions by migrant workers, a supply of labour that can be turned on and off like a tap, as the supermarkets constantly change their demands for food. It is a workforce that ranges from Portuguese workers in East Anglia to Moroccans in Spain.

   

A further consequence of the retailers’ power is that the suppliers work on decreasing profit margins, and often cannot even afford to get rid of waste (such as diseased carcasses) properly. Chicken factories are now enormous production lines, where a single infected bird can cause thousands to become contaminated with campylobacter. Unwanted skin is made into chicken nuggets, while chicken for sandwiches and ready meals is commonly adulterated with water (plus various additives to keep the water in, including cow waste).

   

Returning to supermarkets, you may have been impressed by the ‘in-store’ bakeries that a lot of them have. In fact, many of these just finish off bread that has been made and partially baked elsewhere. White sliced bread is often sold at a loss, to get people into the shops. Most of it is made by the thoroughly nasty-sounding Chorley-wood bread process, which involves air and water being added to the dough, plus fats to stop the bread collapsing. Ready meals, which have massively increased in popularity over the last few years, are high in processed fats, sugars and starch. Modified starch also plays a big part in low-fat yoghurts, which are not as healthy as they sound. Did you know that a “strawberry-flavoured” yoghurt has at least some strawberry content, but a “strawberry-flavour” yoghurt does not?

   

The kind of food available to workers has changed dramatically over the last few decades, with curries and pastas that were not previously available now regularly finding their way to our gullets. But that certainly does not mean that people now eat better and more healthily. Lawrence makes it clear that considerations of profit are what drive the way the food industry works. Her suggestion is to shop on three principles: local, seasonal and direct. But a better answer is to establish a system of society where food is produced for need not profit.

Paul Bennett

Age of corporate greed (2025)

Book Review from the December 2025 issue of the Socialist Standard

Vulture Capitalism: How to Survive in an Age of Corporate Greed. By Grace Blakeley. (Bloomsbury Publishing) ISBN 9781526638069

The aim of this book is to demonstrate its idea that ‘Life under capitalism means living in a planned economy, while being told you are free’. As such, the author makes a strong case that capitalism is not defined by ‘free markets’ but by the existence of a class of owners and a class of workers.

As the author notes, most of this is not new thinking, and that she is drawing together well-known texts in academic circles and bringing them to a popular print market. Indeed, a concise bibliography, rather than scattering references in end notes, would have been useful.

Using many examples, such as Boeing, WeWork, Blackrock, she shows the mix of personal perfidy and structural power that characterises contemporary capitalism. She states ‘Large powerful firms are able, to a significant extent, to ignore the pressure exerted on them by the market and instead act to shape market conditions themselves’. As evidence, she shows the efforts these powerful firms go to control and influence political institutions to achieve these ends.

The nub of her case is that these corporations are practically monopolies. Monopoly does not mean the complete elimination of competition, but it does mean that price is not the only route to capitalists competing. She notes that monopolies appear not to have a totally free hand on pricing, and would rather cheapen the costs of labour they employ, rather than price-gouge the market.

This is a point she under-develops, and she could have noted that the class competition will always remain within capitalism: the capitalist class collectively exploiting the working class, and then fighting among themselves by various means (legal, financial, criminal) to get a cut of the profits raised. But this would have blunted her emphasis on monopoly capitalism.

She ends by looking at examples of ‘democratic planning’, finding real world examples of alternatives to the corporate capitalist planning. These range from Allende’s ‘Project Cybersyne’ in Chile, to Preston council, Jackson Missouri and Blaenau in Wales. Unfortunately for her argument, many of these examples rely on isolated powerful individuals, rather than mass movement; but her central point stands that there are real world examples of attempts within capitalism to engage in democratic planning that show how a different world could be organised.

She does acknowledge that, ‘More planning does not, then, equal less capitalism. The only way to get less capitalism is to constrain the power of capital,’ and that political action would be required to attain that (let alone abolish it).

The book is engaging and entertaining, and provides a useful contribution and perspective to building the case for common ownership. She is commendably clear, in her conclusion, that widespread consciousness of the need for change and our capacity to organise society for ourselves is needed in order to make the change.

Pik Smeet

The Capitalist Class. By Karl Kautsky (continued) (1908)

From the October 1908 issue of the Socialist Standard

Specially translated for the Socialist Party of Great Britain and approved by the Author.

7.—Increasing number of large concerns, combines.

Besides the competitive struggle between handicraft and capitalist industry there is the struggle between large and small capitalist concerns. Each day brings a new invention, a new discovery, the application of which enhances considerably the productivity of labour.

Each step in such progress causes a smaller or greater depreciation of existing industrial machinery or plant, necessitating replacement of them and often extension of the particular industrial concern ; and anyone lacking the capital necessary for that purpose becomes sooner or later incapable of competing and goes under, or is compelled to turn with his capital to some trade in which the smaller concern is still in a position to compete against the larger ones. Thus competition in industry on a large scale causes overcrowding in petty industry, with the result that ultimately, handicraft is ruined even in the few trades in which petty enterprise was hitherto able to meet competition to some extent.

The large industrial undertakings become ever more extensive and enormous. From moderately large concerns, employing hundreds of workers, they develop into gigantic establishments employing thousands (spinning-mills, breweries, sugar factories, iron works, etc.) The smaller undertakings tend to disappear: industrial development leads, from a certain point, not to an increase but to a continual decrease in the number of undertakings on a large scale.

But that is not all. The economic development leads also to the concentration of an ever greater number of undertakings into the hands of a few—either as the property of one capitalist or that of a capitalist association, which economically is only one person (a juridical person).

Several ways lead to that concentration.

One way is the endeavour of the capitalists to exclude competition. In the previous pages we have learnt that competition is the moving force of the present system of production; it is in fact the moving force of the production and exchange of commodities. But although competition is necessary for the entire society of commodity production, each single owner of commodities would like to see his commodities in the market without competition. If he happens to be a possessor of commodities in great demand or of a monopoly, then he is able to raise the prices above the value of his goods ; then those requiring his commodities are entirely dependent upon him for a supply of the same. Where several sellers appear in the same market with commodities of a similar kind, they can artificially create a monopoly by amalgamating and practically forming one single seller. Such an amalgamation—a combine, ring, trust, syndicate, etc., is naturally the sooner possible the smaller is the number of competitors whose opposing interests have to be reconciled.

In so far as the capitalist mode of production causes the extension of the market and the number of the competitors on the same, it makes the creation of monopolies in commerce and industry more difficult. But in every capitalist branch of industry there arrives, as already mentioned, sooner or later the moment, from which its further development leads to the diminution of the number of undertakings in that branch. From that moment the branch of industry developes more and more towards trustification. The time of maturity can be hastened in any given country through safeguarding its internal market against foreign competition by protective tariffs. The number of competitors for this market is thereby diminished and the amalgamation of home producers takes place, thus enabling them to create a monopoly and to obtain a greater share of the wealth produced in consequence of “protection.”

Within the last twenty years the number of combines, by which the production and prices of certain commodities are “regulated,” has, as we know, increased, particularly in the countries of protective tariffs—United States, Germany and France. Wherever it comes to combination the various concerns, which are amalgamated, form practically a concern under one management, they being very often in reality brought under one unified management.

It is indeed, the most important, and from the standpoint of carrying on industries, the most indispensable commodities, namely, coal and iron, whose production, sooner than that of other commodities, falls under the control of combines. Most combines extend their influence far beyond the branches of industry monopolised ; they make, in fact, all the conditions of production dependent upon a few monopolists.

Simultaneously with the endeavour to combine the various undertakings in a certain branch of industry into one, the endeavour grows to amalgamate into one also, various undertakings in different branches of industry, because in some of these concerns tools or raw materials are produced which are required for the carrying on of production in one or other of these various undertakings. Many railway companies possess their own coal mines and engineering works ; sugar factories endeavour to grow a portion of the beet-roots used by them ; potato growers establish their own distilleries, and so on. And there is a third way : that of combining several undertakings into one, the simplest of them all.

We have seen that the capitalist has had to fulfil very important functions under the present system of production. However superfluous these may be under a different organisation of production, yet under the domination of commodity production and private property in the means of living, producing on a large scale is now possible only on capitalist lines. And for that purpose it is necessary, if production is to proceed and the products are to reach the consumers, that the capitalist step in with his capital and apply it advantageously. Although the capitalist does not produce, does not create any value, he plays an mportant part in the present economic relations.

But the larger a capitalist undertaking grows, the more necessarv it becomes for the capitalist to transfer part of his increasing business functions either to the other capitalist undertakings or to his own paid officials whom he employs to carry out some of his duties. It matters nothing from the economic standpoint whether these functions are fulfilled by a wage-worker or a capitalist: they do not become of a value-creating character by the fact that the capitalist has them attended to by someone else, that is to say, that as far as they do not create value, the capitalist has to pay for them from surplus-value. We here get to know a new way of drawing upon surplus-value tending to the diminution of profit.

[To be continued]

Fiscal fatuity. (1908)

From the September 1908 issue of the Socialist Standard

Mr. Chiozza Money is a ‘cute man ; but he nods at least as often as Homer. Just now he is engaged in making “One Hundred Points for Free Trade,” or rather, one hundred points against Protection, in the Daily News. This is one of them :

“The Protectionist theory is that imports, especially imports of manufactures, cause want, unemployment, and pauperism.

Well, every year India imports large quantities of manufactured goods, and nearly all of them are imported from the United Kingdom.”

***

Mr. Money might have found—it would have been a difficult job, but he might have found—a happier example. In India the people die literally like flies from “want, unemployment, and pauperism” and their results. The onus is on the Free Trader to explain the absolute unredeemed impotency of Free Trade in “our great dependency.”

***

The Protectionist is of course in no better case. He has to explain why “want, unemployment and pauperism” are rampant in every industrial country where his pet nostrum is in operation. Protectionist and Free Trader are alike unable to face the facts. They have to resort to all sorts of mean and pitiable dodges to escape facing facts. From a working-class standpoint there isn’t the worth of a tinker’s anathema between them or their precious systems.

***

Poverty is the result of certain definitely ascertained causes. Fiscal schemes do not remotely affect those causes. The workers are poor because they have no control of the product of their labour and are, therefore, robbed of the great proportion of it. Free Trade or Protection may, in certain cases and under certain conditions, result in a particular trade or trades receiving a fillip. To that extent there might be more work available. But that would also necessarily mean more robbery. And the workers are poor because they are robbed.

***

Besides, the fillip must in the nature of capitalist things die down. Supply would overtake and outstrip available demand. There is not a single commodity in general requisition that the present machinery of production could not satisfy the effective demand for several times (often hundreds of times) over. Given the fillip and competitive machinery would be working at breakneck speed to be first in the market with the goods. Result : overproduction, slump, unemployment, starvation and the miseries necessarily attendant thereon.

***

The process is characteristic of free trade and protected countries indifferently. If the worker is employed he is robbed. That is the unalterable condition of his employment. He must make a profit for his master. If he is not employed he starves. In either case he is no more than a pawn in the competitive game. He is dependent upon the fluctuations of the market—upon the employer who works him at top speed until he has produced too much, and then throws him off until the surplus is exhausted.

***

The waste, necessarily the accompaniment of this competitive game, is only obviated under capitalism through monopoly. With one source of supply the output may be regulated to the demand. But Free Trader and Protectionist alike shriek (publicly) against monopoly, and howl dismally against waste. They are just mean dodgers or abnormal ignoramuses—they want to eat their cake and have it. The trust (monopoly) is the perfection of production. The trust stage is inevitable. It will produce most economically. It will save labour. It will mean more unemployment. And it is inevitable—Free Trade or Protection notwithstanding.

***

Mr. Money’s note has lured me into an article. I am sorry ; but I am a victim of circumstances. I intended no more than a par. But the fiscal folly of the Free Trade Moneys and the Zollverein Wilsons always cause me to curse privately and slam publicly. They are so dam silly ! The whole point is that “want and unemployment and pauperism” are inevitable under capitalism ; that although Free Trade or Protection may conceivably give an impetus to a certain trade it cannot absorb the available labour, and even if it could, labour would still be robbed ; that there is no explanation of the poverty problem other than that given by the Socialist; that there is no solution other than that offered by the Socialist.

***

The working class of every capitalist country in the world is in a state of chronic “want, unemployment, and pauperism” because it does not own the wealth it alone produces. It doesn’t own the wealth because the land and machinery of production are owned by the capitalist class. It never will own its product until it owns and controls this land and machinery. And it never will own and control the land and machinery until it thoroughly understands its own position and the conditions of change, and has organised its forces for the specific object of effecting that change.

***

The work of the Socialist Party as against Tariff Reformer, Social Reformer, Fiscal Laissez Faireian, or what not, is, therefore, the education and organisation of the working class for the overthrow of capitalism through the capture of the powers of government in order to secure the product of labour from being annexed by the capitalist class. Virtually the working class is in possession of the machinery of production since the whole process from top to bottom is in working-class hands. The workers now require to assert their possession and secure it, and at the same time the result of their toil, by the control of the fighting arms through political conquest. Simply that.

Alegra.

Pathfinders: Bad apples (2025)

The Pathfinders Column from the August 2025 issue of the Socialist Standard

There’s a popular saying, origin uncertain, that ‘America innovates, China imitates and Europe regulates’. That’s not true anymore in the case of China, which is leading from the front these days in AI and green tech. But Europe continues to live up to its reputation, last month by fining Apple and Meta €500m and €200m respectively for certain dubious business practices deemed to be in breach of the 2022 Digital Markets Act (DMA), the EU’s attempt at levelling the online playing field. The European Commission declared that Apple was guilty of anti-competitive behaviour with its App Store, specifically by ‘restricting app developers in their ability to inform customers of alternative offers or marketplaces that could be found outside its own and steer them towards purchases.’ Meanwhile Meta had erred by introducing a ‘consent or pay’ model which invites users to take out a monthly subscription or else let Meta hoover up all their Facebook and Instagram user data for sale to third parties (BBC news, 7 July).

The Meta model is a typical example of how firms exploit audience capture. They’ve got their customers hooked, so now’s the time to take the piss out of them with extra charges. It’s a bit like what the big streaming services have been doing lately by introducing adverts into paid subscriptions, and then inviting subscribers to pay extra to go ad-free, all in the name of ‘choice’. But is Meta really offering a choice? One might suspect that the real deal is ‘pay up and we’ll plunder your data anyway.’

Apple have always been known for being control freakish and attempting to lock their customer base into their own exclusive ecosystem, including a special patent-protected charging cable that no one else is allowed to make and which doesn’t work with any third-party device.

People say that capitalism drives brilliant technical innovation, but when you look at the way this happens, ‘brilliant’ is not the word that comes to mind. It is chaotic, spontaneous, unplanned and secretive, with profligate waste and duplication. Under the pressure of competition, each developer adopts a walled-garden approach, for the sole purpose of protecting future profits. Most will eventually fail, and the few successes which do emerge are of course incompatible with each other. Producers have every incentive to maintain this incompatibility, make their products impossible to repair, lock in customers, and oppose any move towards component standardisation. In the ensuing market battle, the ultimate victor may not be the best technical product but the one with the biggest marketing muscle. When you decide to ‘let a thousand flowers bloom’, you can end up with a cactus instead of an orchid.

Take electric cars, for instance. What’s deterring buyers, apart from up-front cost, is range anxiety related to lack of charging infrastructure, and long charge times. The real problem is the vast range of models, sizes and batteries being produced. Logically, producers could have cooperated in the first place to produce just one standard battery for all cars, together with standardised quick-replacement mechanisms, so you could swap them out at any garage in mere minutes. But capitalism doesn’t do logic. That’s not to say that EV battery standardisation won’t ever happen, but the battle for profits comes first, and never mind the waste.

Recent EU regulations have been an attempt to override the jarring contradiction between what producers do for profit and what people actually want. So for example, there are regulations to ban designed obsolescence, ban greenwashing, and enforce a ‘right to repair’. These are all worthy enough measures from an environmental perspective, but they are likely to damage the bloc’s overall competitiveness with the less scrupulous USA and China. The Wall Street Journal tartly responded with a 2024 article entitled ‘Europe Regulates Its Way to Last Place‘.

So it was that in 2022, in an effort to reduce much electronic waste due to the multiplicity of different charging cables, the EU put a stop to Apple’s proprietary Lightning port and forced the firm to change its Euro-market products to use the industry-standard USB-C charging port. Now Apple are hopping mad about the new DMA fine over its restrictive App Store, and have lodged an appeal. Perhaps they will argue that if the ruling were applied to offline traders, Tesco would be legally bound to advertise Sainsbury’s products, Asda to advertise Aldi, and so on.

Apple boss Tim Cook reportedly got on the whine-line to US President Donald Trump to complain about all this, presumably in the hope that Agent Orange would put the squeeze on the EU mandarins via more tariff threats. Trump might be less than enthusiastic though. He is thought to be greatly dischuffed at Cook’s polite but steadfast refusal to cave in to his demand that Apple ‘reshore’ all its production facilities to the US. From Cook’s perspective, this would be an utterly bonkers move which would cut a gigantic hole in Apple’s profits, given that US workers cost a lot more than Chinese or Indian ones. Moreover, it would require several years of intense planning, making it scarcely worth consideration given that Trump’s effective time in office could expire as soon as November 2026 with the US mid-term elections. So, appeal or not, Apple may decide to suck it up and pay the fine. €500m is a drop in the bucket to Apple, and a lot cheaper than eviscerating a $3tn empire just to give Trump a few good headlines.

If capitalism really worked in humanity’s benefit, there wouldn’t be any need to keep making laws to curb its natural tendencies. All capitalist producers are bad apples in this sense. Meanwhile attempts at regulation can often mean states or trading blocs are shooting themselves in the foot in terms of global competitiveness. The world has long since socialised production. What it now needs to do is socialise ownership and control of that production too. If it doesn’t, the spiralling chaos will continue, with disastrous prospects for humanity and the planet.

Paddy Shannon

Letter: Landlords and capitalists (1949)

Letter to the Editors from the August 1949 issue of the Socialist Standard

(We have received the following letter from Mr. C. Stowasser, Manchester, who writes on the notepaper of the “Henry George School of Social Science.” Ed. Comm.)

Dear Sir,

In the interesting article of your May issue, “A Budget Secret Revealed,” you made one or two statements which I would like to comment on. In the first place you implied that the subsidy system should have been extended by increases of subsidies on foodstuffs. There are two points to be made on this: (a) subsidies, like taxes, ultimately come for the most part out of the pockets of the workers; (b) subsidies instead of increasing production merely help to increase land rents and are therefore of benefit to the landlords only. In the second place you implied that all incomes should be equalised. Now, although I sympathise strongly with this idea, 1 should like to point out that even if there was a completely equal distribution of wealth in this country it would only raise workers’ wages by about five pounds per annum. So you see the question is really and truly mainly one of production and redistribution. Now what all Socialists fail to see is that full production can only be achieved when we break down that all powerful barrier, the Land Monopoly. As you well know, since there is no tax on the site-value of land, the landowner is able to withhold valuable town land from use and by so doing creates a tremendously high monopoly value of land. Is it any wonder that there is poverty and unemployment when the community must pay a toll, amounting to as much as £500,000 or £600,000 an acre in the case of towns, for the right to use land. If we taxed landowners on the positional value of their land all landowners would be forced either to use their land fully or sell cheap—there would be full employment and plenty of houses—the exploitation of the worker would cease. Your paper shows clearly that autocratic planning does not bring prosperity—why don’t you go one step further and proclaim that true freedom can only come by giving all men access to the land through the taxation of land values.

Yours sincerely,

C. Stowasser, B.A. Comm.

Reply:

Our correspondent reads into the article he criticises (“A Budget Secret Revealed,” Socialist Standard, May) implications that were not suggested or intended, and that were in fact expressly disowned. He assumes that we are in favour of an increase of the subsidies on foodstuffs, and that we “implied that all incomes should be equalised.” He is quite mistaken. The S.P.G.B. stands for the abolition of capitalism and the establishment of Socialism. We hold that there are no ways in which capitalism can be made to function in the interests of the working class. We do not say that the Labour government in general and Sir Stafford Cripps in particular have followed a wrong budgetary policy and that all would be well if they followed some other policy. As we pointed out in the article,

“Budgets are the financial arrangements made for the conduct of the capitalist state and it is childish muddle-headedness to ask that they be transformed into ‘Socialist’ budgets.”

Having taken on the job of administering capitalism “they are forced within very narrow limits to do those things that capitalism requires.”

On the question of equalising incomes our correspondent is equally wide of the mark. Under capitalism incomes come from wages or from the ownership of property and they vary greatly in amount. Socialism is not a scheme for making them equal. Wages and incomes from property-owning will both disappear under Socialism. The principal way in which Socialism will lessen the labour and increase the consumption of those who under capitalism are the working class will be by cutting out the enormous waste of labour inseparable from capitalism.

Having disposed of one correspondent’s misconceptions about Socialism now let us look at his scheme for reforming capitalism by the levying of “a tax on the site-value of land.” This is not a working-class issue but a hangover of the conflict of interests between landowners and industrial capitalists. It is not even a vital issue to the capitalists any longer. When the land was monopolised by a relatively small number of big landowners the industrial capitalists suffered the mortification of having to give up to the landowners a large part of the proceeds of their exploitation of the workers. They resented it and would have liked to escape that burden. The result, however, would have been to increase the profits of the capitalists; it would not have lessened the exploitation of the workers. But in the past half century landownership has undergone great changes. We read in the Sunday Express (20/3/49) that whereas “less than 50 years ago 2,500 private landlords shared between them over half of Britain, today, according to the Ministry of Agriculture, there are only 469 estates of more than 1,000 acres left.” The government itself, the Local Authorities and the nationalised industries have vastly increased their holdings of land and much land is now owned by farmers: “of Britain’s 370,508 farms, a third are now owner-occupied. ” Also much land is now owned by estate companies and industrial companies and the writer in the Sunday Express states that the Prudential alone owns land valued at £35 million. These changes have taken place but they have not in the least improved the position of the working class.

In a leaflet that our correspondent sends us we arc assured that the scheme he recommends would “provide public revenue without hampering industry,” and that the burden would fall only on the landlord. But nowhere are we told why the working class should object to the landlord receiving part of the proceeds of working class exploitation without also objecting to the industrial, commercial and financial capitalists receiving a much larger part. According to official estimates the receivers of rent from land and buildings took £430 millions in 1948; but the profits of traders and partnerships amounted to £970 millions, and the trading profits of companies were £1,639 millions. In 10 years the percentage of the total national income going to receivers of rent has fallen from 8.5 per cent., to 4.4 per cent., while the other two groups of exploiters have increased their percentage from 21.2 per cent. to 27 per cent. This may please the capitalists but it is no concern of the working class.

The S.P.G.B. urges the workers not to interest themselves in the internal squabble of the exploiters but to work for the abolition of all exploitation.

Ed. Comm.

Portrait of a Monopoly: The British Match Industry (1953)

From the July 1953 issue of the Socialist Standard

“The arrangements we have described above form a complete and integrated monopoly . . . and the system as a whole operates, and is likely to operate, against the public interest as respects the supply both of matches and of match-making machinery.”

In these forthright terms the Monopolies Commission sums up its report on the British match industry, the sixth and latest of its investigations into restrictive practices in the United Kingdom.

The information now made public by the Commission throws revealing light on the way monopolies develop and operate, and on how they are maintained. It shows also what profitable ventures they can be for those capitalists able to form them and keep them going successfully. Drawing on the Commission's report, and using it to illustrate the practices common to all monopolies, let us examine the monopoly that has grown up inside the British match industry.

The Foundations of Monopoly

The first objective of any company seeking to carve out a monopoly must be to obtain control over the production and distribution of the particular commodity it is interested in. It must make itself, for all practical purposes, the only firm in the industry. In the British match industry, one company has succeeded in doing this.

This company is the British Match Corporation, otherwise known as B.M.C. Formed in 1927 as a holding company from the amalgamation of Bryant and May (and its subsidiaries) with Masters. Ltd., it is today responsible for almost the whole of the British home output of matches—about two-thirds of total consumption.

Linked with B.M.C. is another monopoly—the Swedish Match Company. Older readers may remember it in connection with the activities of Ivar Kreuger, the Swedish millionaire—speculator. It is this combine, with ramifications throughout the world, that provides the. remainder of the matches required in the U.K. These imports, it should be noted, are in turn controlled and distributed in this country by B.M.C. Taking home production and imports together, it is therefore obvious that B.M.C. is in almost complete control of the British market; for the mathematically-minded, the exact proportion is 92 per cent. These figures show clearly that the essential foundation of a monopoly—a stranglehold on output and distribution—has been most successfully obtained by B.M.C.

Also to be noted is the fact that Swedish Match, with 30 per cent. of the Ordinary shares in is actually its largest single shareholder. With this voting power behind it, it can of course wield considerable influence should the need ever arise.

Preserving a Monopoly

It is difficult enough to succeed in establishing a monopoly: it is even more difficult to maintain it and keep it thriving.

First and foremost, there must always be a careful watch for possible rivals. These must be rooted out quickly and dealt with ruthlessly. The record shows B.M.C. and Swedish Match to have been adept at this and it is most interesting to see how both partners have played their part in dealing with the threats of competition that have arisen from time to time.

On the home front, B.M.C. has made use of two methods, both very simple and both very effective. The first has been to undersell its competitors by offering cheaper brands of imported matches at reduced prices in selected areas whilst keeping the general level of its prices unchanged. In this way it has succeeded in keeping down competition at very little cost to itself. The second and perhaps even better method has been to charge its competitors high prices for essential raw materials, of which it again happens to be the sole controller. On this particular point the Commission found that B.M.C. was charging its competitors 77 per cent. more for certain chemicals than its own subsidiaries.

The part played by Swedish Match has been just as effective, by virtue of the fact that in its turn it has a monopoly over the machinery used in match-making. This has been more than enough to keep potential large-scale competition in check, as the following will show.

In its report the Commission mentions that two attempts have been made by other firms to start manufacturing matches on a large scale. The first of these was the Co-operative Wholesale Society, which in 1932 thought of setting up its own factory. In the subsequent negotiations in which Bryant and May became involved, the Society was actually offered some shares and Debenture stock in B.M.C. This offer was not taken up, and in 1936 the Society came to a definite decision to begin the manufacture of matches on its own account. Its efforts in this direction were completely unsuccessful as it found itself unable to obtain the necessary machinery. In 1938 it approached Bryant and May for permission to use certain machinery the rights in which, it understood, were held by that firm. The reply, which can hardly have been unexpected, was: “we hardly think you can expect us to assist you to obtain machinery which is destined to replace some, at least, of the goods we have hitherto supplied to the Societies.” Instead they proposed a deal between the Society and one of their subsidiaries, whereby profits would be divided between the two. This proposal was rejected by the Society, and it made a further attempt to get the necessary machinery. It was again unsuccessful.

Yet another concern tried for five years prior to 1934 to start manufacture on a commercial scale, again without success. In this year a most remarkable letter was sent to B.M.C. from the President of the Diamond Match Company of America (he was also a director of B.M.C. and of Bryant and May) reporting that he had arranged for some “friends” to employ an American technical expert who happened to be already under contract to this concern. The agreement reached with this expert included an understanding that he would “tactfully and earnestly work to discourage” the concern. His “consideration” for this agreement was $600 per month, to which Diamond had agreed to contribute one third, and the letter asked B.M.C. to make a contribution. This letter is so revealing of what goes on behind the scenes where monopolies are concerned that it is worth reproducing in full:—

"I have arranged to have friends employ Mr. . . . . on some experimental work that has nothing: whatever to do with the British Match Industry and will not affect to the slightest degree any of the operations abroad in which you are interested. My friends have had to reach a definite understanding and make a confidential agreement with [Mr. . . .]. which under no condition must be given publicity either here or in Britain. They have obligated themselves to pay him S600.00 per month. It is understood that [Mr.  . . .] may be called from the United States to work for . . . Ltd. [an English company]), and if he is called to go to England to do work for these people with whom he has a prior contract, he will not be paid by my friends. It has also been agreed, however, that he will tactfully and earnestly work to discourage . . . Ltd., that he will do nothing to get out of his contract with [. . . Ltd.] which would encourage them to hire some other expert or have machines made for them elsewhere. If he succeeds in discouraging [. . . Ltd.] and in getting out of his obligation to these people, then he will work exclusively for my friends for a period of three years and during this period of time will not do any outside work for any other interest whatsoever. [Mr.  . . .] has told my friends that he personally is tired of the English company, who have been continuously deceiving him, putting him off, and have been unable to date to get responsible people on your side to go forward with matters as promised and outlined. [Mr.  . . .] thinks that in the near future that he will be able to drop all connections with [. . . Ltd.] and that [ . . . Ltd.] will cease to exist as a living match producing possibility.

“In confidence, permit me to say that of this S600.00 my Company will contribute one-third of this monthly amount just so long as [Mr. . . . ] does no work whatsoever for [ . . . Ltd.] or any company interested in match making in Britain or Canada. Do you care to make any contribution in this matter?"—Report, page 120.

The result of this appeal was that B.M.C. also agreed to make a contribution of one-third. It continued making regular monthly payments until May, 1943, by which time, presumably, no further trouble was to be expected from the concern in question.

The Rewards of Monopoly

Finally we come to consider the rewards of monopoly. They are indeed substantial and worth all the effort put in to obtain them. On the manufacturing side, for example, Bryant and May's profit before the war averaged 35 per cent. annually, and that of its main subsidiary (Moreland) 45 per cent. The average profit of Masters was about 26 per cent. In 1950, according to the Commission's calculations, Bryant and May's profit was 16 per cent., Moreland's 34 per cent., and Masters' 30 per cent., the lower figures reflecting the operation of Government price control. On the import side, where distribution only is involved, pre-war profits averaged 10 per cent. dropping to 4½ per cent, in 1950.

The Commission’s strictures on B.M.C's costs and profits were most severe:

"The profit on sales of all three B.M.C. manufactures whose costs were examined was very high before the introduction of statutory price control, and the profit of the two lower cost manufacturers was still very high, having regard to the relative slight trading risk. B.M.C. has told us that it is its policy to make as much profit as it can, and that in its view competition insures that the prices charged are fair. Since it is clear that B.M.C. has taken all possible steps to eliminate competition, with marked success, and there is, in our opinion, virtually no competition in this trade, this safeguard is illusory, and it is not surprising that profits have been high.

“We conclude that there is scope for the reduction of both costs and profits of B.M.C. and that it is unlikely that either would have remained as high as they have if there had been any effective competition.”

The Commission’s Remedy

The remedy put forward by the Commission is, not unexpectedly, a dose of State intervention. Some of its members, however, disagree on the strength of the dose to be administered. Three of them, who state their views in a minority report, are all for a more “drastic” remedy than that prescribed by the other members of the Commission. This, they suggest, should take the form of a Government buying agency, armed with exclusive powers to buy all matches, whether home-produced or imported. In effect, they seek to oppose a monopoly seller with a monopoly buyer.

The majority of the Commission, however, are not impressed by this “drastic remedy.” In their opinion, it would lead to still greater rigidity in the trade and might not result in cheaper matches anyway. This latter Observation is certainly borne out by the results of State interference so far, and should be particularly noted by Labourites who so airily assume that State-control reduces prices. The majority’s preference is for a more thorough system of price-control on the part of the Government. This, they themselves admit, is only a partial remedy, and they agree that it would leave the present market-sharing arrangements between B.M.C. and Swedish match untouched.

Nobody can be very impressed with either of these remedies, not even the most ardent supporter of capitalism judging all issues by the direct and immediate effect they have on his pocket.

The Real Remedy

The Commission’s report is now with the Government, and it will be interesting to see what the Tory defenders of private enterprise and free competition finally decide to do with it. As for the Labour Party, hard up for policy and feeling rather out of things, they will probably do their best to blow it up to be something of much greater importance than it actually is.

For our part, we would make just one point. Monopoly is nothing new to capitalism; indeed it is inseparable from it. It is the logical outcome of the drive for profit, and experience has shown all over the capitalist world that as fast as one monopoly has been suppressed, another springs up elsewhere. The history of “trust-busting” in the United States is a perfect example of this. The remedy of bringing in the State does not put an end to monopoly; all it does is to replace private monopoly by the monopoly of the State. Whatever the advantages a State monopoly may have for the capitalist class, it is nothing for the working-class to get excited about. They should have had enough experience of the workings of State control by now to realise this.

Monopolies will disappear only when capitalism disappears. It is not monopoly, but capitalism, that is the issue. Socialism, the real remedy, will do away with both. When, as seems likely before long, the Labour and Conservative Parties create yet another storm in a teacup over what is to be done with the British match industry, workers should remember this.

Stan Hampson

Editorial: Exit Unrestricted Competition. (1908)

Editorial from the August 1908 issue of the Socialist Standard

Exit Unrestricted Competition. 

“The truth is that the assumption made by economists and by public opinion during the greater part of the last century, that unchecked competition would always secure the public the cheapest and most efficient service, is one which does not apply to railways, and which may be found in the future to be inapplicable to an increasing number of other businesses. The risks attending competition are too great.”—Morning Post.

Of course ! Unrestricted competition is a good thing, the thing upon which the greatness of the Empire has been built up and depended, the thing that made for stamina and fitness, that developed enterprise, and all the rest of it, until—until the risks became too great, until, that is, it ceased to pay. Now we drop the cant and go in for combines and the elimination of competitive waste, because that way lies the larger profit. If the maintenance of the ancient method spells the disintegration of the Empire —perish Empire ! Perish fitness, perish enterprise, perish everything, but leave us still our profits !

____________

Capitalist Concentration.

Some of the effects of this railway combine are already making themselves felt. In London the G.W.R. and the G.C.R. have managed to close eight town offices between them. Similar savings are being effected in other departments. A reduction of the Staff of the Railway Clearing House is rumoured and will inevitably occur. The L. & N.W.R. and the Midland Railway will find themselves in the position of being forced to take steps similar to those taken by the G.N.R. and G.C.R. (into which combination, by the way, the G.E.R. has now entered) and will take those steps gladly. Indeed, pooling arrangements have for a long period been in operation between the L. & N.W.R. and the Midland Railway, and a working agreement exists between the L. & N.W.R. and the L. & Y. Co.—a case of intelligent anticipation. Notwithstanding official denials, it is absolutely certain that an extension of this agreement is being arranged, and out will go more workers on to the labour market.

____________

The Struggle for Existence Intensifies.

Every economy means, as was pointed out in the last issue, displaced labour. Every move toward capitalist efficiency means a greater intensity of labour exploitation and a keener struggle for existence. The nationalisation of the railways offers no way of escape to the railway workers. As the capitalist Manchester Guardian points out in its article on Railway Alliances:—

“Prices on the Stock Exchange rise when such a scheme is announced and drop at the prospect of a continuance of present methods. We may expect, therefore, that when the time comes for the consideration of some larger scheme of national management our present railway proprietors and managers will be among the most convincing witnesses in favour of its economy and administrative advantages.”

Or, in other words, the capitalist class will itself be quite ready to appreciate the advantages of nationalisation because that means, under the present system, the conservation of their class interests. Better conditions for the workers, even for those the elimination of waste has spared employment, is a matter of very minor moment indeed, and then is conditional upon increased productivity.

____________

The Way Out.

No. Against the trend of commercial development toward concentration nothing can stand. No reform, no misnamed palliative, is of any avail to appreciably soften the grinding, crushing, devastating effect of its outworking upon the proletariat. There is no solution at all for the problem, no hope at all for the workers, outside Socialism. Only the Socialist Party has the message of good cheer. And the Socialist Party (that is, in England, the S.P.G.B.), while insisting upon the futility of any reform and the fatuity of the reformer, points out that capitalism, gorging itself to satiety with every increasing profit on the one hand, is perforce digging its own grave on the other. This concentration has effected the practical elimination of the capitalist himself from the sphere of actual production. The working class is in command of the workshop and the factory. The whole process of wealth creation is in the hands of wage earners. Socialism will give them the control of the product as capitalism has given them control of production. Only then will poverty cease to exist. Only then will the workers achieve their freedom. Meanwhile our business is to go forward, undeterred by the influences that astute capitalism has surrounded the Labour Leader with to his undoing, refusing to dabble with the pettifoggeries of the reform parties, that must spell no more than disappointment or apathy or both to the workers misguided enough to follow at the tail of such agitations,—to go forward with our work of preaching discontent, of explaining economic phenomena in the light of Socialist philosophy, of agitating, educating, and organising the working class until, recognising their position and their power, they accomplish the capture of political might in order that they may secure themselves in the possession of the means of living, and enjoy unmolested the product of their own toil.

Big Tech and the state (2025)

From the January 2025 issue of the Socialist Standard

What is Big Tech? How did it get so big? Has Big Tech got too big for the rest of the capitalist class?

Big Tech is a loose definition to describe the largest digital technology-based enterprises – it always includes Google (Alphabet), Facebook (Meta), Amazon and Apple. Microsoft is usually included now, sometimes Tesla, the electric car manufacturer, and Nvidia, the semiconductor manufacturer, and some perspectives will include the Asian firms: Baidu, Alibaba, Tencent, and Xiaomi – who by their nature and size fulfil a similar role.

As socialists we understand the integral role of technology in capitalism. In the Socialist Standard No 9 in 1905 we said:

‘The capitalist-class, the most revolutionary class that has ever oppressed human society, cannot increase its riches but by incessantly revolutionising the means of production by the never-ending introduction of new applications of the mechanical, physical, and chemical sciences to the industrial tool. Its thirst for inventions is so insatiable that it has created factories of inventions.’

Whilst most employees in Big Tech are supporting existing products rather than being inventors – factories of inventions seems like a suitable description of commercial research departments or startup companies.

And of course many years earlier Marx and Engels in the Communist Manifesto wrote:

‘The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society.’

Marx also wrote at length about Machinery and Modern Industry in Capital Volume 1.

Whilst many analysts of the left and right sides of capitalism have defined capitalism in our current era variously as platform capitalism, the app economy, surveillance capitalism, and techno-feudalism. The fundamentals of capitalism in terms of social relations are the same and the driving forces are the same, but they are right to recognise that capitalist enterprises have organised themselves differently from other eras.

Technology in perspective

We are not living in a world where most of society is working in information technology, but many use it as part of their jobs.

The Office for National Statistics report UK Digital Economic Research: 2020 showed that using the OECD’s ‘narrow’ definition of the digital economy, digital products accounted for 5 percent of Gross Value Added (GVA) in 2020. Using the wider OECD definition, products significantly affected by digitisation accounted for up to 20.7 percent in 2020, down from a revised figure of 21.2 percent in 2019. This report showed that research, health, finance, retail, manufacturing and real estate industries are all larger than the digital products sector in terms of GVA.

You can’t eat technology for dinner, it doesn’t keep the rain off and you can’t ride it into town, but technology helps produce food, houses and transportation – more and more efficiently with every iteration. The massive amounts of quantitative analysis, the number crunching, and instant communication, has enabled production at scales and efficiencies not seen before.

Productivity figures from sweatshops in Cambodia, for instance, can be analysed in air-conditioned offices in California and decisions made and responses delivered in a matter of seconds.

Some of the Big Tech enterprises are in direct competition: Google and Facebook (which includes Instagram and Whatsapp) are selling ads, giving opportunities to platforms that want to gather information about you to puts ads right in your face. Google and Facebook are said to share a duopoly in online advertising.

Amazon is mainly known for its online retail and delivery business, but most of its operating profit is in ‘the cloud’ (tinyurl.com/yc2j3s4h) – that is data centres where it rents out disk space and computing power. Second in the data-centre business is Microsoft (MS), which is primarily about business software and operating systems (OS), and Google is also pushing into the data centre market.

Apple is primarily in consumer hardware including iPhones, iPads, laptops and desktop computers. In the developed world the iPhone is the dominant mobile phone technology. In the less developed world, Google’s Android OS dominates but the hardware comes from different suppliers.

How did big tech get so big?

Analysts have identified four phenomena that allowed Big Tech to emerge: deregulation, financialisation, globalisation and technological convergence.

Often cited as the key piece of deregulation that paved the way for social media was Section 230 of the 1996 US Telecommunications Act which stated:

‘No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider’.

Social media sites, it can be argued, are fulfilling the same role as paper publishers who are responsible for what they publish, but for social media after Section 230 it was considered that anything posted on them was ‘user-generated content’ – and users were responsible, not publishers.

Software rarely has the regulatory safeguards that physical products have – think of trying to sell a car with no brakes or a kettle that catches on fire. Fujitsu has paid private compensation for its part in the UK Post Office scandal and, unusually, is also facing criminal proceedings (tinyurl.com/u2xz9zx7). In July this year 8.5 million MS Windows servers were made inoperable due to a faulty software update from an anti-virus company. Delta Airlines, whose operations were massively disrupted, are suing the anti-virus company claiming the outage cost them $500 million, with 1.8 million passengers affected (tinyurl.com/4kaj3s2x). Only those who can afford to sue them will get any money back.

Perhaps ‘lack of regulation’ is a better term – it’s largely a case of legislation not being able to keep up with the rapid innovation of digital services.

The expectation of profits means big tech firms don’t have to look far for sources of investment, which means they can expand in-house, or alternatively acquire smaller firms to increase market share either by embracing or extinguishing a rival technology. A current example is OpenAI, owners of ChatGPT, with an estimated $2 billion in revenue in 2024, though yet to turn a profit due to the huge cost of training AI models (tinyurl.com/2cub8my8). Twitter, for example, made profits in 2018 and 2019, the first since its inception in 2012. Since Elon Musk took over and renamed it, revenue has fallen sharply and ‘X’ has massive debts (tinyurl.com/rbtsh74f).

Globalisation allowed Big Tech companies to minimise their tax burden and move production to places with lower wages. They often have European headquarters in low-tax Ireland. Many consumers are familiar with Microsoft’s Indian Tech Support call centre, while the Foxconn City Factory complex in Shenzhen, China, makes parts for Apple products, and a global army of content moderators work for Facebook and ChatGPT in less developed parts of the world.

Technical convergence basically means devices doing more and more and being linked over the internet. Whilst a telephone handset makes calls, a camera takes pictures, a torch shines a light and a computer runs apps, in a smartphone these roles are combined into one device. These hardware functions rely on software to work, providing apps through app stores, and gateways to other services such as shops, entertainment and games. Both Google Play Store and Apple App Store charge a fee to stock software in their stores, and up to 30 percent commission on app sales and in-app purchases. This is a part of what is known as platformisation (tinyurl.com/5ybrxmdv).

Too big?

Any casual follower of the industry will have noticed that the tide seems to be turning. The section on the Wall St Journal website providing advice for potential investors warns that:

‘Governments around the world are evaluating the impacts that massive tech platforms and social networks have on businesses and consumers. In the coming months, regulations in the European Union and the United States will likely take effect, pushing tech companies to prioritise data protection, harm reduction, the ethical use of AI, and commitment to sustainability goals.’

Over the years there have been a number of skirmishes but the 2023 EU Digital Markets Act, and the EU Product Liability Directive currently being revised to include digital technology, are more significant. A US federal judge ruled in August that Google had violated US antitrust (anti-monopoly) law by maintaining an internet search monopoly. In October the US Department of Justice said in a petition to the court that it may recommend dismantling Google’s core businesses, writing that:

‘That would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features — including emerging search access points and features, such as artificial intelligence — over rivals or new entrants.’

The Digital Markets Act (DMA) is an EU regulation that aims to make the digital economy ‘fairer’ and more contestable. It became applicable in May 2023. The DMA aims to ensure a higher degree of competition in European digital markets by preventing large companies from abusing their market power and by allowing new players to enter the market.

Twenty-two services across six companies – Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft – were identified as ‘core platform services’ by the EU in September 2023. The companies are known as ‘gatekeepers’ due to the ‘durable market position in some digital sectors’ and because they also meet certain criteria related to the number of users, their revenue, or size.

However, there have been accusations from US-based commentators that the rules were carefully constructed so as not to affect European companies and that it is purely about protectionism. As one example, Spotify, a Swedish company which trades on the New York Stock Exchange via a company in Luxembourg, could well have been on the list.

Almost 40 years after it came into force, the European Union is undertaking a major revision of the Product Liability Directive (Directive 85/374/EEC). The aim of this reform is to adapt ‘the standards to the conditions and needs of the digital single market’. To this end, software will in future be considered as a product.

The UK government prior to the general election this year also passed the Digital Markets, Competition, and Consumers Act (DMCC), a similar piece of legislation which surprisingly is the only one to include some protection for consumers, specifically for mis-selling and secondary ticket-pricing, such as the recent fiasco with the tickets for Oasis concerts.

We know there is a to and fro that goes on between lawmakers and Big Tech whilst the laws are being drafted, as Big Tech tries to make sure the legislation, if it has to exist at all, isn’t too damaging.

What’s in store for Big Tech in the future? Will we see monopolies destroyed, and how much will that affect the working class as a whole? Of particular interest to us is, how will it affect us as socialists?

Does it matter?

So in the current era of capitalism we have seen the immensely innovative system undergo great changes in the forces of production, and these changes are ongoing. Perhaps monopolies in certain markets will be broken, or perhaps it is a tendency for states always to be reactive and too slow.

As socialists the monopoly we are mainly concerned with is the monopoly that the capitalist class has over the means of producing wealth, and creating a socialist society where no such monopoly is possible, as everything in and on the world will be owned in common and managed democratically.

Here and now our job as socialists is to make socialists, and digital technology is a major method of promoting socialist ideas – so with changes in the platforms and networks we use there could be profound effects for spreading socialism. There might be profound effects if and when the socialist movement gets big enough to become a threat to capitalism, and when we do win there might be big consequences in having forces of production so complex and powerful at our disposal. Then the factories of invention will go from merely servicing the capitalist system to becoming communities for finding creative solutions to fulfil human needs.

PDH