Annotations ¶
The historic mutation of capital that I am highlighting has already happened but, caught up in our pressing dramas, from debt worries and a pandemic to wars and the climate emergency, we have barely noticed. It is high time we paid attention!
If we do pay attention, it is not hard to see that capital’s mutation into what I call cloud capital has demolished capitalism’s two pillars: markets and profits. Of course, markets and profits remain ubiquitous – indeed, markets and profits were ubiquitous under feudalism too – they just aren’t running the show any more. What has happened over the last two decades is that profit and markets have been evicted from the epicentre of our economic and social system, pushed out to its margins, and replaced. With what?
Markets, the medium of capitalism, have been replaced by digital trading platforms which look like, but are not, markets, and are better understood as fiefdoms. And profit, the engine of capitalism, has been replaced with its feudal predecessor: rent. Specifically, it is a form of rent that must be paid for access to those platforms and to the cloud more broadly. I call it cloud rent.
Hesiod was composing poetry at around the same time as Homer. His Works and Days had a salutary cooling influence on Dad’s enthusiasm for iron and, more generally, technology:
I wish I did not have to live among the people of the Fifth Age [the Iron Age], but either had died earlier or been born later.For now truly is a generation of iron who never rest from labour and sorrow by day or from perishing by night … But, notwithstanding the good mingled with their evils … [this generation] will know no favour for those who keep their oath or for the just or for the good … strength shall be right … the wicked will hurt the worthy … bitter sorrows will be left for us mortals, and there will be no help against evil.2
According to Hesiod, iron hardened not only our ploughs but also our souls. Under its influence, our spirit was hammered and forged in fire, our brand-new desires quenched like the hissing metal in the smith’s cauldron. Virtues were tested and values destroyed just as our bounty burgeoned and our estates expanded. Strength begat new joys but weariness and injustices too. Zeus would have no choice, Hesiod foretold, but to one day destroy a humanity incapable of restraining its own, technologically induced, power.
My father wanted to disagree with Hesiod. He wanted to believe that we humans could become the masters of our technology rather than enslave ourselves and one another with it. When Prometheus stole fire, symbolising the white heat of technology, from Zeus on humanity’s behalf, he did so in the hope that it would lighten up our lives without burning down the Earth. My father wanted to believe we could make Prometheus proud.
By the time I was twelve or thirteen, it was clear to me from our ongoing conversations that Dad’s love for iron’s magic – technology – and for Einstein’s physics – the contradictory duality of all things – had something to do with his left-wing politics, for which he had spent several years in prison camps. My hunch was confirmed when I came across the text of a speech delivered by the same person who had first formulated the notion of historical materialism: Karl Marx. It was as if Dad had been speaking the words: In our days, everything seems pregnant with its contrary: Machinery, gifted with the wonderful power of shortening and fructifying human labour, we behold starving and overworking it; The newfangled sources of wealth, by some strange weird spell, are turned into sources of want; The victories of art seem bought by the loss of character.3
But unlike Hesiod – or indeed the moralists of our own era – Dad did not feel he had to take sides, to be either a technophobe or a tech-enthusiast. If light can have two contradictory natures, and if all of nature rests on a binary opposition, then hardened iron, steam engines and networked computers could also be, simultaneously, potential liberators and enslavers. And so it is up to us, collectively, to determine which of the two it will be. That’s where politics comes in.
Well before I read a word that Marx or any other economist had written, I thought I could discern several dualities buried deep in the foundations of our societies. My first inkling of such a duality hit me one evening when Mum complained to Dad that, at the fertiliser factory where she worked as a chemist, she got paid for her time but never for her enthusiasm. ‘My wage is crap because my time is cheap,’ she said. ‘My passion to get the right results the bosses get for free!’ Soon after, she resigned and got herself a job as a biochemist at a public hospital. A few months into the new job, she told us happily: ‘At least at the hospital I love that my efforts benefit patients, even if I am as invisible to them as I used to be to the factory owners.’
Those words stuck with me. Mum had inadvertently introduced me to the duality of waged labour. The wage she was paid for her time and formal skills (her certificates, degrees) reflected the ‘exchange value’ of the hours she spent at work. But that’s not what injected true value into whatever was being manufactured in her workplace.
That was added to what was produced at the factory or the hospital through her effort, enthusiasm, application, even flair – none of which were remunerated. It’s like going to watch a movie at a cinema: the ticket price you pay reflects the movie’s exchange value, but that is quite separate from the pleasure it gives you, which we might call the ‘experiential value’. In the same way, labour is split between commodity labour (Mum’s time, bought by her wage) and experiential labour (the effort, passion and flair she put into her work).
To illustrate labour’s second nature, the experiential labour that my mother first alerted me to, consider the brilliant idea conjured up by a group of brainstorming architects employed by a multinational construction firm. Or the positive vibes a waiter emits on the restaurant floor. Or a teacher’s tear of joy when a challenged pupil solves a difficult maths problem. None of these can ever truly be commodified. Why? Because no monetary reward can prompt a moment of true inspiration, no genuine smile can be bought, no authentic tear can be shed for a price. In fact, any attempt to do so would immediately negate them. Indeed, bosses who try to quantify, price or commodify experiential labour will sound like the fool who yells at you: ‘Be spontaneous!’
What I call experiential labour, the part which can never be sold, Marx called simply labour. And what I have labelled commodity labour, Marx defined as labouring power. But the idea is the same: ‘What the working man sells is not directly his Labour, but his Labouring Power, the temporary disposal of which he makes over to the capitalist.’5 Imagine my joy, then, when I discovered that, based on labour’s two natures, Marx had erected a whole theory of capitalism.
For herein lies capitalism’s secret: the uncommodifiable sweat, effort, inspiration, goodwill, care and tears of employees are what breathe exchange value into the commodities that employers then flog to eager customers – this is actually what makes the building or restaurant or school desirable.
One may protest that there is many a factory populated by uninspired, joyless, robotic workers producing tin cans or gadgets worth more than the cost of paying the workers. True. But this happens only because employers cannot buy the effort put in by unskilled, manual labourers. They can only buy their time, during which to pressurise them, in a variety of ways, to work hard and to sweat. The point here is that this blue-collar sweat, exactly like the waged architect’s flair, can never be directly bought or sold. This is, indeed, the secret power of employers: to extract any surplus, either from highly skilled or from uninspired, repetitive, robotic work, they must pay for their workers’ time (commodity labour) but cannot actually buy their sweat or flair (experiential labour).
You might think it extremely frustrating to employers that they cannot buy the architect’s eureka moment, the waiter’s spontaneous smile, the teacher’s tear directly, without which their employee’s work produces no value. On the contrary, employers resemble the customer who bought a jacket for a thousand dollars only to find two thousand dollars sewn in its lining. Indeed, if they don’t, they go bust!
When I first encountered this revelatory explanation of capitalism’s secret, I found it captivating: to think that capitalists owe their profits to an inability, to the impossibility of buying experiential labour directly. And yet, what a boon to suffer from such an incapacity! For it is ultimately they who pocket the difference between the exchange value they pay employees in exchange for their commodity labour (wages) and the exchange value of the commodities created thanks to their experiential labour. In other words, labour’s dual nature is what gives rise to profit.
the more I thought of capital the more convinced I became that, like light and labour, it too featured two natures.
One is commodity capital, e.g. a fishing rod, a tractor, a company’s server, or any good that is produced to be used in the production of other commodities. Capital’s second nature, however, is nothing like a commodity. Suppose I discover that I possess tools you need in order to produce the stuff for your family’s survival, such as the aforementioned fishing rod, tractor, server. Suddenly I have acquired the power to make you do things, for example to work for me, in exchange for the use of my tools. Capital, in short, is both a thing (commodity capital) and a force (power capital) – just as labour is split between commodity labour and experiential labour.
Many years later I chanced upon this sentence written by Einstein himself: ‘It is important to understand that even in theory the payment of the worker is not determined by the value of his product.’
It appeared in an article entitled ‘Why Socialism?’, published in May 1949. Reading it, I breathed a sigh of relief. No, I had not been taking liberties with Einstein’s insights, after all. He too believed that capitalism’s essence was the splitting of labour into two incongruous natures.
In the same way that Einstein had ended our illusion that time stands outside, and apart from, space, Keynes wanted to stop us thinking of money as a thing, as simply another commodity, that stands outside, and apart from, our other activities in markets and workplaces.
Today, we are bombarded with a phantasmagoria of idiocies about money. Clueless politicians invoke penny-pinching metaphors to justify self-defeating austerity. Central bankers facing both inflation and deflation resemble the proverbial ass, both thirsty and hungry, who collapses because it can’t decide whether to drink or to eat first.
Crypto enthusiasts invite us to fix the world by embracing the ultimate money-commodity form: Bitcoin and its various offspring.
Big Tech is creating its own digital money with which to lure us deeper into its poisonous web of platforms.
I can think of no better defence in the face of this orchestrated obfuscation than Keynes’s (Einstein-derived) advice: stop thinking about money as something separate from what we do to each other, with each other, at work, during play, in every nook and cranny of our social universe. Yes, money is a thing, a commodity like any other.
But it is also something much bigger than that. It is, above all else, a reflection of our relation to one another and to our technologies; i.e.
the means and the ways in which we transform matter. Or, as Marx put it poetically:
Money is the alienated ability of mankind. That which I am unable to do as a man, and of which therefore all my individual essential powers are incapable, I am able to do by means of money. Money thus turns each of these powers into something which in itself it is not – turns it, that is, into its contrary.6
Landlords could choose to lease land for a price reflecting the amount of wool it could produce. The evicted serfs could choose to offer their labour for a wage. Of course, in reality, being free to choose was no different from being free to lose.
As feudalism receded, economic choice arrived but was as free as the one offered by a mafioso who, smilingly, tells you: ‘I shall make you an offer you cannot refuse.’
By the middle of the nineteenth century, the thinking of Marx and other foundational left-wing thinkers was all about freeing us.
Specifically, in this era, it was about freeing us from a Dr Frankenstein-like failure to control our creations – not least, the machines of the Industrial Revolution. In the ageless words of The Communist Manifesto: a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. 7
So, how did we get to the situation, today, where ‘libertarian Marxist’ sounds like a joke?
The answer is that, sometime in the twentieth century, the left traded freedom for other things. In the East (from Russia to China, Cambodia and Vietnam), the quest for emancipation was swapped for a totalitarian egalitarianism. In the West, liberty was left to its enemies, abandoned in exchange for an ill-defined notion of fairness. The moment people believed they had to choose between freedom and fairness, between an iniquitous democracy and miserable state-imposed egalitarianism, it was game over for the left.
On Boxing Day in 1991, I was visiting Athens to spend a few days with my parents. As we chatted over dinner in front of that same red-brick fireplace, the red flag was being lowered above the Kremlin.
Thanks to Dad’s communist past and Mum’s social democratic leanings, they shared a common mood. They knew that, on that very night, history was marking not just the demise of the Soviet Union but also the end of the social democratic dream: of a mixed economy, in which government provided public goods while the private sector produced plentiful goodies to satisfy our whims – all in all, a civilised form of capitalism where inequality and exploitation were kept in check in the context of a politically mediated truce between the owners of capital and those who had nothing to sell but their labour.
Circumspect, though not glum, the three of us agreed we were witnessing a defeat made inevitable once our side had lost the conviction that capitalism was iniquitous because it was inefficient, that it was unjust because it was illiberal, that it was chaotic because it was irrational. Falling back to basics, I asked Mum and Dad what freedom meant to them. Mother replied: the ability to choose your partners and your projects. Father’s reply was similar: time to read, to experiment and to write. Whatever your definition might be, dear reader, being free to lose in a variety of soul-crushing ways can’t be it.
‘This is a game changer,’ he said. Struggling to dial up a woefully slow Greek internet provider, he asked me the killer question that ultimately inspired this book: ‘Now that computers speak to each other, will this network make capitalism impossible to overthrow? Or might it finally reveal its Achilles heel?’
Caught up in my own projects and dramas, I never got round to answering Father’s question. When I finally decided I had an answer for him, Dad was already ninety-five and finding it hard to follow my musings. And so, here I am, a few years later, only a few weeks after his passing, composing my answer – belatedly, but I hope not in vain.
In an episode of Mad Men, the television series on the rise of advertising in the 1960s, the legendary creative director Don Draper coaches his protégée, Peggy, on how to think of Hershey, a chocolate bar that their firm is peddling. Draper’s marketing philosophy perfectly encapsulates the spirit of the times: ‘You are the product. You, feeling something.’ Or, as James Poniewozik interprets Draper’s line in Time magazine: ‘You don’t buy a Hershey bar for a couple of ounces of chocolate. You buy it to recapture the feeling of being loved that you knew when your dad bought you one for mowing the lawn.’1
The mass commercialisation of nostalgia Draper alludes to marked a turning point for capitalism. While the big issues of the 1960s were the Vietnam War, civil rights and the institutions that might civilise capitalism (Medicare, food stamps, the welfare state), Draper was putting his finger on a fundamental mutation in its DNA.
Efficiently manufacturing things that people craved was no longer enough. Capitalism now involved the skilful manufacture of desire.
Capitalism had begun as a relentless drive to put a price on things that once had no price: common lands, human labour, all the stuff that families once produced for their own consumption – from bread and home-brewed wine to woolly jumpers and various tools. If there was something that humans shared and enjoyed but which had no price and mattered to us only for its intrinsic or ‘experiential value’ – like granny’s handcrafted tablecloth, or a beautiful sunset, or a beguiling song – capitalism found a way to commodify it: to subjugate its experiential value to an exchange value.
It was in the nature of the beast. Capitalism is synonymous with the triumph of exchange value because it is the only value that can be crystallised into more capital. Just as the Borg in Star Trek depend on assimilating the biological and technological distinctiveness of other species for their survival, capitalism has taken over planet Earth by assimilating wherever possible any experiential value it encounters into its exchange value chain.
Having assimilated every resource, crop and artefact it could, capitalism has since gone on to commodify the airwaves, women’s wombs, art, genotypes, asteroids, even space itself. In the process, the experiential value of all things is reduced to a dollar sum, a commercial asset, a tradable contract.
capital is born out of the capitalists’
inability to buy experiential labour directly
Draper’s genius, meanwhile, is to grasp, and to confront, the paradox of commodification. Yes, capitalism must commodify everything it touches. But at the same time, high exchange value, and thus serious profits, depends on failing to do so fully. If it is to avoid the fate of a school of predators that devours its prey so efficiently that it starves to death, capitalism relies on there being an endless supply of experiential values for its exchange values to trounce and cannibalise. It must always be discovering and commodifying what has so far escaped it.
Smart advertisers do exactly that: they tap into emotions that have previously escaped commodification in order to capture our attention. And then they sell our attention to an entity whose business is to commodify whatever experiential value was hiding in our soul, fleeing commodification. With his Hershey bar speech, Draper lays bare a crucial aspect of how, soon after the war, capitalism reached its golden age. How could the profits keep flowing once everything has seemingly been commodified already?
Draper’s answer: through the triggering of uncommodified emotions deep inside us.
Thus a Hershey bar becomes the simulacrum of a dead father’s caress. Bethlehem Steel is rebranded as the spirit of the American polis, with the steel product symbolising the New World’s own Iron Age. When Draper and Peggy visit a Burger Chef outlet, they discern the possibility of a television advertisement that promotes the chain as an opportunity for families to be reunited around its plastic tables – away from the family home where togetherness is no longer possible because everyone’s attention has been arrested by … the television.
So what did capitalism look like before this great transformation occurred? And how did this transformation take place?
Once James Clerk Maxwell had written down the equations linking electrical current to magnetic force, it was only a matter of time before someone like Thomas Edison would turn them into the electricity and telegraph grids that ultimately begat the networked, top-down, mega-corporations we know today – pushing the bakers, butchers and brewers of early capitalism to the sidelines. The problem was that none of capitalism’s early institutions – specifically, its banks and share markets – were ready for such corporate empires. Simply put, the banks were too small and too fragile and the share markets too thin, too illiquid, to provide the kind of funds Edison needed to build his famous Pearl Street power station, let alone the rest of his electricity grid.
To produce the rivers of credit necessary to fund the Edisons, the Westinghouses and the Fords of early-twentieth-century capitalism, small banks merged to form large ones and lent either to the industrialists directly or to speculators eager to buy shares in the new corporations. That’s how electromagnetism transformed capitalism: while its grids would go on to power mega-firms and its megawatts translated into mega-profits, it also created the first mega-debts in the form of vast overdraft facilities for the Edisons, the Westinghouses and the Fords. And it led to the emergence of Big Finance, which grew up alongside Big Business in order to lend it monies borrowed effectively from the future: from profits not yet realised but which Big Business promised to deliver. These wagers on future profits funded not only the construction of Big Business’s grids and production lines but an almighty froth of speculation as well.
With the birth of commercial television, the technostructure appended a boisterous attention market to its labour market. The dual nature of labour was now coupled with the dual nature of the spectacle: on the one hand, a cultural product with large experiential value but no exchange value, and on the other the captured attention of viewers with substantial exchange value but no experiential value.
By the early 1960s, the commodities that made real money were no longer the ones that prevailed in some Darwinian struggle for existence within some competitive market. No, the products that adorned every home were the ones that the Drapers and the executives of the conglomerates fashioned together in meetings at the technostructure’s skyscraper offices. There, over lots of smoking and drinking, they jointly decided the prices, the quantities, the packages and even the feelings imparted by capitalism’s leading products. Whereas capitalism had come to life by turning feudalism’s societies-with-markets into decentralised market societies, the rise of the technostructure transformed American capitalism from a decentralised market society into a centralised economy-with-markets. It was precisely what the Soviet planners had always hoped to achieve, but failed.
And there’s the irony. In the 1960s, a decade marked by an ideological and nuclear clash between America and the Soviet Union that almost blew up the world, Soviet planning principles were implemented with remarkable success in … the United States. Irony has seldom taken a more effective revenge over earnest ideology.
This dazzling design, America’s Global Plan to remake Europe and Japan in the imagine of its technostructure, led to capitalism’s Golden Age. From the war’s end until 1971, America, Europe and Japan enjoyed low unemployment, low inflation, high growth and massively diminished inequality. The New Dealers’ job was almost done. And it was done in a way that even the staunchest Republican moguls appreciated. Turning to Mad Men for one more symbolic insight, there is a scene where Conrad Hilton, the hotel mogul, shares with Don Draper his true ambition, which encapsulates the spirit of this Global Plan: ‘It’s my purpose in life to bring America to the world whether they like it or not. You know, we are a force of good, Don, because we have God.’
By 2007, humanity’s total income had risen from $50 to $75 trillion – a decent 33 per cent increase over five years. But the sum of bets in the global money market had gone up from $70 to $750 trillion – a rise in excess of 1000 per cent. That’s when I lost you. Or, more accurately, it is when we agreed that the numbers had gone mad, an arithmetic reflection of capitalism’s hubris.
How had these mad numbers come about? What drove them?
One way to answer this question is technical: it involves a description of financial instruments such as options (or derivatives) – the weapons of potential mass financial destruction, as Warren Buffet called them – which were the occasion, if not the cause, of the immense financial bubble that burst in the calamity of 2008. 4 These instruments, known as options, had been available under Bretton Woods, but it was only once Bretton Woods had died that bankers, liberated from their New Deal chains, were allowed to bet on the stock exchange, first with other people’s money and, later, with money – effectively conjured from thin air – lent in astronomical sums by the banks to … themselves.
Conjured from thin air? To be clear, yes. Most people think that banks take Jill’s savings and lend them to Jack. That’s not what banks do. When a bank lends Jack money, it does not go into its vault to check it has enough cash to back the loan. If it believes Jack will return the loan, plus the agreed interest, all the bank needs to do is add to Jack’s account the number of dollars it lends him. Nothing more than a typewriter or, today, a few keystrokes on a keyboard are necessary.
Now, if the Jacks of the world use their loans judiciously to make enough money to repay the loans plus the interest, all is well. But it is in the nature of banks to accommodate too many Jacks eager to borrow increasing amounts to keep paying each other more and more, while the banks collect huge profits from funding such a giant Ponzi scheme. Inevitably, this financial house of cards collapses – at which point the little people are crushed by global capitalism’s falling debris, as witnessed in the aftermath of 1929. Bretton Woods was designed to prevent such greed-fuelled recklessness from bringing humanity to the brink of another Great Depression, indeed another world war, ever again. But once it was gone, the bankers were free to run amok – again.
But there was another reason why the dollar’s hegemony grew: the intentional impoverishment of America’s working class. A cynic will tell you, quite accurately, that large quantities of money are attracted to countries where the profit rate is higher. For Wall Street to exercise fully its magnetic powers over foreign capital, profit margins in the United States had to catch up with profit rates in Germany and Japan. A quick and dirty way to do this was to suppress American wages: cheaper labour makes for lower costs makes for larger margins. It is no coincidence that, to this day, American working-class earnings languish, on average, below their 1974 level. It is also no coincidence that union busting became a thing in the 1970s, culminating in Ronald Reagan’s dismissal of every single unionised air traffic controller – a move emulated by Margaret Thatcher in Britain who pulverised whole industries in order to eliminate the trades unions that inhabited them. And faced with a Minotaur sucking most of the world’s capital into America, the European ruling classes reckoned they had no alternative but to do the same. Reagan had set the pace, Thatcher had shown the way.
It is one thing for our dreams to go unfulfilled. It is quite another to sense that our unfulfilled dreams, our frustrated desires, have been manufactured by others. The more our mass-produced cravings are satisfied, the less satiated we feel. The greater the capacity of the technostructure to stir the passions, the greater the void within when they were served.
In the end, though, it was neither the hippy left nor the libertarian right that disintegrated the Global Plan. It was the work of functionaries who had served the technostructure well. We know this from the horse’s mouth, the former New Dealer who was at the centre of the 1971 Nixon Shock and who, between 1979 and 1987, chaired America’s central bank, the Fed. In a 1978 speech at Warwick University, Paul Volcker explained succinctly and cynically what they were up to: ‘[A] controlled disintegration in the world economy is a legitimate objective for the 1980s.’
That’s exactly what the Nixon Shock was meant to do: just as a controlled implosion brings down an unwanted skyscraper, Bretton Woods was demolished to make way for America’s Global Minotaur.
Lest you have any doubts, Volcker’s own words, from the same Warwick speech, say it all: [B]alancing the requirements of a stable international system against the desirability of retaining freedom of action for national policy, a number of countries, including the United States, opted for the latter …
The controlled disintegration of the old planned system and its replacement with the recalcitrant Minotaur was always going to hurt American workers. After decades of a hard, step-by-agonising-step slog up the socio-economic ladder, they were unceremoniously thrown off it and back to the pit of subsistence wages. How else could ever-increasing American deficits coexist with reinforced US
hegemony and a fabulously richer American elite?
In practice, Volcker’s controlled disintegration of the old system required, beyond the neutering of trades unions, an engineered recession in order to reduce workers’ bargaining power and the elimination of the shackles that President Roosevelt had slapped on bankers to restrain their recklessness. These were prerequisites for the Minotaur’s rise. But they were also big political asks with worldwide repercussions. As with every systemic transformation that hurts countless people, the cruelties necessary to bring it about had to be bathed in the light of a liberating, redemptive ideology. That’s where neoliberalism came in.
Neither new nor liberal, neoliberalism was an uninteresting hodgepodge of older political philosophies. As a piece of theory, it had as much to do with really-existing capitalism as Marxism had to do with really-existing communism: nothing! Nevertheless, neoliberalism delivered the necessary ideological veneer to legitimise the assault on organised labour and to promote the so-called ‘deregulation’ that let Wall Street rip. Along with it came the revival of economic theories that humanity had, rightly, ditched during the Great Depression – theories artfully assuming that which they claimed to explain, such as the grand lie that deregulated financial markets know best.
At around the same time, in the late 1970s, the first personal computers began to enter engineering, architecture and, of course, finance. The joke then was that to err is human but to mess things up seriously one needs a computer. Sadly, in high finance it was no joke.
Back in the 1980s I remember a famous economist saying sarcastically that everywhere he looked he ‘saw’ the productivity gains brought on by computers – ‘everywhere’, he continued, ‘except in the productivity statistics’. He was right: just as the early generation of computers saved no paper, since we tended to print anything important out (often twice!), so too they did little to boost industrial output. But the computer did have an enormous impact on finance. It multiplied the complexity of financial instruments by hiding the ugliness within them. And it allowed for their frantic trading to accelerate almost to the speed of light.
Can you now see how, by 2007, the world of finance had managed to place bets worth ten times more than humanity’s total income?
Three were the handmaidens of this motivated madness: the torrents of money rushing to the American Minotaur, the computer-generated complexity of financial derivatives, and the neoliberal faith that markets know best.
explaining how technological change shattered the existing social order, propelled history, and engendered progress, accompanied by Hesiod-like lamentations of what had been lost.
Which means what exactly? It means that what begins with us training Alexa to do things on our behalf soon spins out of our control into something that we can neither fathom nor regulate. For once we have trained its algorithm, and fed it data on our habits and desires, Alexa starts training us. How does it do this? It begins with soft nudges to provide it with more information about our whims, which it then tailors into access to videos, texts and music that we appreciate. Once it has won us over in this manner, we become more suggestible to its guidance. In other words, Alexa trains us to train it better. The next step is spookier: having impressed us with its capacity to appeal to our tastes, it proceeds to curate them. This it does by exposing us to images, texts and video experiences that it selects in order subtly to condition our whims. Before long, it is training us to train it to train us to train it to train us … ad infinitum.
This infinite loop, or regress, allows Alexa, and the great algorithmic network hiding in the cloud behind it, to guide our behaviour in ways superbly lucrative for its owner: having automated Alexa’s power to manufacture, or at least curate, our desires, it grants its owners a magic wand with which to modify our behaviour – a power that every marketer has dreamed of since time immemorial.
This is the essence of algorithmic, cloud-based, command capital.
Titok. Yt.
the reason the steam engine changed the world, rather than ending up a showpiece in some ruler’s landscaped garden, was the epic raid on the common lands that had preceded its invention: the enclosures. The singularity we now call the Great Transformation – the name given by the great theorist Karl Polyani to the birth of the market society over the course of the nineteenth and early twentieth centuries – involved precisely this sequence: first the plunder of the common lands, made possible by brute state violence, and only then Watt’s splendid technological breakthrough.
A strikingly similar sequence gave birth to cloud capital: first, the epic ransacking of the internet commons, made possible by politicians, and then a sequence of spectacular technological inventions – from Sergey Brin’s search engine to the dazzling array of today’s AI applications. In short, in the last two and a half centuries, humanity has had to reckon with two singularities, neither of which required machines to attain sentience. Rather, each required a comprehensive plunder of a commons, a complicit political class, and only then a marvellous technological breakthrough. That’s how the original Age of Capital transpired. And that’s how the Age of Cloud Capital is now dawning. Telling the full story of how this happened will help explain how cloud capital gained its unprecedented powers.
What is unimaginable today made perfect sense at the time.
America was transitioning from its War Economy to the realities of the Cold War. Even the most ardent free-marketeers understood that planning for a nuclear confrontation with the Soviet Union was too important to be left to market forces. As the nuclear arms race gathered pace, the Pentagon chose centrally to finance the design and construction of a network of decentralised computers. Its single purpose? To work out how to make different silos housing nuclear weapons communicate with each other, and all of them with Washington, without a central hub that a Soviet nuclear bomb could take out in one go. That’s how history’s greatest ever antinomy came about: a US government-built and -owned, non-commercial computer network that lay outside capitalist markets and imperatives but whose purpose was the defence of the capitalist realm.
It is in the nature of financiers to gamble with the money clients ask them to process on their behalf, even if they only get to handle it for a few minutes. That’s how they turn a profit. Their only constraints are the alertness of their clients and the occasional snoopings of a financial regulator. That’s why complexity is the financiers’ friend – for it allows them to disguise cynical gambles as smart financial products. Is it any wonder, then, that from the start financiers loved computers? As described in the previous chapter, from the late 1970s onwards bankers shrouded their debt-fuelled bets in layers of computer-generated complexity that made the gargantuan risks invisible and their own profits correspondingly vast.
By the early 1980s, the financial derivatives on offer were built on algorithms so complex that even their creators stood zero chance of fully comprehending them.
And so it was that, decoupled from the mundane world of physical capital, legitimised by the ideology of neoliberalism, fuelled by a new virtue called ‘greed’, shrouded in the complexity of their computers, financiers reinvented themselves – not without some justification – as masters of the universe. In that universe, where algorithms had already become the financiers’ handmaidens, the original, commons-like, internet stood no chance. New Enclosures were only a matter of time.
And yet, astoundingly, our digital identity belongs neither to us nor to the state. Strewn across countless privately owned digital realms, it has many owners, none of whom is us: a private bank owns your ID codes and your entire purchasing record. Facebook is intimately familiar with whom – and what – you like. Twitter remembers every little thought that caught your attention, every opinion that you agreed with, that made you furious, that you lingered over idly before scrolling on. Apple and Google know better than you do what you watch, read, buy, whom you meet, when and where. Spotify owns a record of your musical preferences more complete than the one stored in your conscious memory. And behind them all are countless others, invisibly gathering, monitoring, sifting and trading your activity for information about you. With every day that passes, some cloud-based corporation, whose owners you will never care to know, owns another aspect of your identity.
For many, life under constant surveillance is intolerable. They rebel at the thought that Big Tech knows us better than anyone should. I sympathise but, to be honest, I am less worried about what they know and far, far more worried about what they own. To do anything in what used to be our digital commons, we must now plead with Big Tech and Big Finance for the ability to use some of the data about us that they own outright. To wire money to a friend, to subscribe to the New York Times, or to buy socks for your granny using a debit card, you now have no option but to give something of yourself in return: perhaps a small fee, perhaps not, but always a piece of information about your preferences, sometimes a bit of your attention, usually your consent to be monitored further (and ultimately brainwashed) by some Big FinTech conglomerate that will help you verify to itself, or to some similar outfit, that you are … who you are.
How different would the internet be without these New Enclosures? Imagine what you could do if you owned your digital identity and could prove who you are without relying on the combination of a bank card and a corporation like Uber or Lyft that processes that card and all your subsequent travel data. In the same way GPS pinpoints where you presently are, you would have the opportunity to broadcast over the internet: ‘My name is George, I am on the corner of Aristotle and Plato Streets, and I am heading for the airport. Anyone wishing to bid for my ride?’ Within seconds you would receive a multitude of offers from people or outfits licensed to carry passengers, including sage advice from the municipal transit authority like ‘Why not take the metro, located three minutes’ walk from where you are, and much faster than any car can meander its way through traffic?’ Alas, you can’t do this.
In the world of Internet Two, shaped by the New Enclosures, you are routinely forced to hand over your identity to a part of the digital realm that has been fenced off, such as Uber or Lyft or some other private company. When you request a ride to the airport, their algorithm dispatches a driver of its choice with a view to maximise the exchange value the company owning the algorithm extracts both from you and the driver. These New Enclosures enabled the plunder of the digital commons which drove the incredible rise of cloud capital.
Take Amazon’s Mechanical Turk, which the company describes as a ‘crowdsourcing marketplace that makes it easier for individuals and businesses to outsource their processes and jobs to a distributed workforce who can perform these tasks virtually’. But let us call it what it is: a cloud-based sweatshop where workers are paid piece rates to work virtually. Nothing is happening there that Karl Marx had not fully analysed in the twenty-first chapter of the first volume of his Capital, where he stated: ‘Piece-wages become … the most fruitful source of reductions in wages and of frauds committed by the capitalists.’ Precarious piecework, Marx added, is ‘the most appropriate to the capitalist mode of production’. Hear, hear!
As we speak, dazzling algorithms are mapping out the tens of thousands of molecules in key proteins in superbugs that threaten to kill or debilitate us. Once these proteins are fully decoded, the algorithms proceed – again without human input – to design exotic antibiotics that kill the superbug – a scientific triumph for the ages.
What is there to stop a similar algorithm from designing a global supply chain that bypasses warehouses or factories in which trades unions seem likely to succeed in organising workers? Trades unions could be snuffed out before they are even formed.
Don Draper is perhaps Romanticism’s last poster boy. He treated science with suspicion and computers with disdain. He idealised nature and loved hitting the road in his gargantuan Cadillac. He lived and breathed individualism. He luxuriated in nostalgia. He adored women until they fell for him – at which point he bolted. He feared emotions because he saw them as the ultimate repository of insights into the human spirit. And he used his talents to commodify this melange of memory, sentiment, fickleness and insight so as to extract from consumers monies they might have otherwise kept for themselves.
His algorithmic double Alexa may be no romantic but cloud capital monetises our emotions more effectively than Don ever could. It tailor-makes experiences that exploit our biases to drive consumption, and then it uses our responses to hone those experiences yet further. But that’s only the beginning. Besides modifying our consumer behaviour in ways Don Draper would marvel at, and perhaps be appalled by, cloud capital has a far more impressive trick up its sleeve: it can command us to put work directly into its own reproduction, reinforcement and maintenance.
Consider what cloud capital consists of: smart software, server farms, cell towers, thousands of miles of optic fibre. And yet all of this would be worthless without ‘content’. The most valuable part of the stock of cloud capital is not its physical components but rather the stories posted on Facebook, the videos uploaded to TikTok and YouTube, the photos on Instagram, the jokes and insults on Twitter, the reviews on Amazon or, simply, our movement through space, allowing our phones to alert Google Maps to the latest spot of traffic.
In providing these stories, videos, photos, jokes and movements, it is we who produce and reproduce – outside any market – the stock of cloud capital.
This is unparalleled. Workers employed by General Electric, ExxonMobil, General Motors or any other major conglomerate collect in salaries and wages approximately 80 per cent of the company’s income. This proportion grows larger in smaller firms. Big Tech’s workers, in contrast, collect less than 1 per cent of their firms’
revenues. The reason is that paid labour performs only a fraction of the work that Big Tech relies on. Most of the work is performed by billions of people for free.
Sure enough, most of us choose to do this, enjoy it even.
The digital revolution may be turning waged workers into cloud proles, who live increasingly precarious, stressful lives under the invisible thumb of algorithmic bosses. And it may have replaced Don Draper with extraordinary behaviour modification algorithms, hidden behind elegant tabletop appliances like Alexa. But that’s not the most significant fact about cloud capital. Cloud capital’s singular achievement, a feat far superior to either of these, is the way it has revolutionised its own reproduction. The true revolution cloud capital has inflicted on humanity is the conversion of billions of us into willing cloud serfs volunteering to labour for nothing to reproduce cloud capital for the benefit of its owners.
‘Enter amazon.com and you have exited capitalism. Despite all the buying and the selling that goes on there, you have entered a realm which can’t be thought of as a market, not even a digital one.’
Imagine the following scene straight out of the science-fiction storybook. You are beamed into a town full of people going about their business, trading in gadgets, clothes, shoes, books, songs, games and movies. At first, everything looks normal. Until you begin to notice something odd. It turns out that all the shops, indeed every building, belong to a chap called Jeff. He may not own the factories that produce the stuff sold in his shops but he owns an algorithm that takes a cut for each sale and he gets to decide what can be sold and what cannot.
If that were all, the scene would evoke an old Western in which a lonesome cowboy rides into town to discover that a podgy strongman owns the saloon bar, the grocery store, the post office, the railway, the bank and, naturally, the sheriff. Except that isn’t all.
Jeff owns more than the shops and the public buildings. He also owns the dirt you walk on, the bench you sit on, even the air you breathe. In fact, in this weird town everything you see (and don’t see) is regulated by Jeff’s algorithm: you and I may be walking next to each other, our eyes trained in the same direction, but the view provided to us by the algorithm is entirely bespoke, carefully curated according to Jeff’s priorities. Everyone navigating their way around amazon.com – except Jeff – is wandering in algorithmically constructed isolation.
This is no market town. It is not even some form of hyper-capitalist digital market. Even the ugliest of markets are meeting places where people can interact and exchange information reasonably freely. In fact, it’s even worse than a totally monopolised market – there, at least, the buyers can talk to each other, form associations, perhaps organise a consumer boycott to force the monopolist to reduce a price or to improve a quality. Not so in Jeff’s realm, where everything and everyone is intermediated not by the disinterested invisible hand of the market but by an algorithm that works for Jeff’s bottom line and dances exclusively to his tune.
If this is not scary enough, recall that it is the same algorithm which, via Alexa, has trained us to train it to manufacture our desires. The mind rebels at the enormity of the hubris. The same algorithm that we help train in real time to know us inside out, both modifies our preferences and administers the selection and delivery of commodities that will satisfy these preferences. It is as if Don Draper could not only implant in us desires for specific products but had attained the superpower instantly to deliver said products to our doorstep, bypassing any potential competitor, all in the interest of bolstering the wealth and power of a chap called Jeff.
Such concentrated power should scare the living daylights out of the liberally minded. Anyone committed to the idea of the market (not to mention the autonomous self) should recognise that cloud capital is its death knell. It should also shake market sceptics, socialists in particular, out of the complacent assumption that amazon.com is bad because it is a capitalist market gone berserk. Actually, it’s something worse than that.
‘If it ain’t a capitalist market, what in the sweet Lord’s name are we stepping into when we enter amazon.com?’ a student at the University of Texas asked me a few years ago.
‘A type of digital fief,’ I replied instinctively. ‘A post-capitalist one, whose historical roots remain in feudal Europe but whose integrity is maintained today by a futuristic, dystopian type of cloud-based capital.’ Since then, I have come to believe that it was a reasonably accurate answer to a hard question.
‘When things are this dismal, the Bank of England panics. And what have panicky central banks been doing since the crash of 2008? They print money and give it to us. And what do we do with all the freshly minted dough from the central bank? We buy shares, sending their price up. And if prices are destined to go up, only a fool would miss out on the action. A wall of printed money is surely on its way to us.
Time to buy!’ And buy they did, causing the City of London to defy the gravitational laws of capitalism.
The trend was not confined to London. As the pandemic began to rip through our communities, authorities on both sides of the Atlantic, in Japan and elsewhere, responded by doing a lot more of what they had been doing since the American Minotaur’s death in 2008: printing money to give to the financiers in the hope that it would buttress investment in business, thus generating stable jobs and preventing the economy from collapsing. It didn’t. Fearing that run-of-the-mill businesses would not be able to repay them, the financiers lent the central bank money only to Big Business. And Big Business either refused to invest or invested solely in cloud capital.
the technologies that spawned cloud capital have proved more revolutionary than any of their predecessors. Through them, cloud capital has developed capacities that previous types of capital goods never had. It has become at once an attention-holder, a desire-manufacturer, a driver of proletarian labour (of cloud proles), an elicitor of massive free labour (from cloud serfs) and, to boot, the creator of totally privatised digital transaction spaces (cloud fiefs like amazon.com) in which neither buyers nor sellers enjoy any of the options they would in normal markets.3 As a result, its owners – the
cloudalists – have acquired the ability to do that which the Edisons, the Westinghouses and the Fords never could: to turn themselves into a revolutionary class actively displacing the capitalists from the top of society’s pecking order.
In the process, the cloudalists – some consciously, others unthinkingly – have changed everything that previous varieties of capitalism had taught us to take for granted: the idea of what constitutes a commodity, the ideal of the autonomous individual, the ownership of identity, the propagation of culture, the context of politics, the nature of the state, the texture of geopolitics. The pressing question is: how did the cloudalists finance all this?
The early industrialists funded their factories, steamships and canals with the blood and sweat of African slave labour and loot from American and South Asian lands and peoples. Later, the Edisons, the Westinghouses and the Fords used monies conjured from thin air by private bankers who morphed into Big Finance in the process.
The cloudalists did something subtler and more impressive: they helped themselves to the rivers of cash that were being printed by the central banks of developed capitalist states.
It was nothing short of a coup. Imagine getting the world’s richest capitalist states to print the money that allows you to build a new type of capital stock. Imagine that this new type of capital stock comes with the inbuilt superpower to get billions of people to reproduce it on your behalf for free. Imagine further that this type of capital, funded by state monies and reproduced by citizens’ free labour, intensifies your power to extract surplus value from proletarians who are working for shrinking wages under worsening conditions – but also from capitalists forced to remove their wares from traditional markets and to sell them via your cloud capital. You wouldn’t even need to laugh all the way to the bank since you would be much wiser to keep your stupendous gains stowed in some digital wallet within your cloud capital empire rather than in an account with some pathetic banker.
It sounds implausible. How on earth did the cloudalists convince major central banks to fund them in this way? The answer is: they didn’t have to.
‘People on the right of politics believe that hard work aimed at private profit is the surest route to a wealthy and good society. People on the left don’t.’
Arithmetically, there is no difference: both rent and profit amount to money left over once costs are paid for. The difference is subtler, qualitative, almost abstract: profit is vulnerable to market competition, rent is not. The reason is their different origins. Rent flows from privileged access to things in fixed supply, like fertile soil or land containing fossil fuels; you cannot produce more of these resources, however much money you might invest in them. Profit, in contrast, flows into the pockets of entrepreneurial people who have invested in things that would not have otherwise existed – things like Edison’s light bulb or Jobs’s iPhone. It is this fact – that these commodities were invented and created and so can be invented and created again but better by someone else – that renders profit vulnerable to competition.
Gone is the time when, to collect their rent, feudal lords employed thugs to break their vassals’ knees or spill their blood. The cloudalists don’t need to deploy bailiffs to confiscate or to evict. Instead, every vassal capitalist knows that with the removal of a link from their cloud vassal’s site they could lose access to the bulk of their customers. And with the removal of a link or two from Google’s search engine or from a couple of ecommerce and social media sites, they could disappear from the online world altogether. A sanitised tech-terror is the bedrock of technofeudalism.
Your life at the factory was, in short, neatly ring-fenced from your personal life.
It reflected a time when we thought that, if nothing else, capitalism had granted us sovereignty over our selves, albeit within certain limited parameters. However hard one had to work, you could at least fence off a portion of your life, however small, and within that fence remain autonomous, self-determining, free. Leftists, like us, knew that only the rich were truly free to choose, that the poor were mostly free to lose, and that the worst slavery was that of those who had learned to love their chains.2 Still, even we, capitalism’s harshest critics, appreciated the limited self-ownership it granted us.
For young people in today’s world, even this small mercy has been taken away. Curating an identity online is not optional, and so their personal lives have become some of the most important work they do. From the moment they take their first steps online, they suffer like Movatar from two perplexingly contradictory demands: they are taught implicitly to see themselves as a brand, yet one that will be judged according to its perceived authenticity. (And that includes potential employers: ‘No one will offer me a job,’ a graduate told me once, ‘until I have discovered my true self.’) And so before posting any image, uploading any video, reviewing any movie, sharing any photograph or message, they must be mindful of who their choice will please or alienate. They must somehow work out which of their potential ‘true selves’ will be found most attractive, continually testing their own opinions against their notion of what the average opinion among online opinion makers might be. 3 Every experience can be captured and shared, and so they are continually consumed by the question of whether to do so. And even if no opportunity actually exists for sharing the experience, that opportunity can readily be imagined, and will be. Every choice, witnessed or otherwise, becomes an act in the curation of an identity.
Possessive individualism has always been detrimental to mental health. Technofeudalism made things infinitely worse when it demolished the fence that used to provide the liberal individual with a refuge from the market. Cloud capital has shattered the individual into fragments of data, an identity comprised of choices as expressed by clicks, which its algorithms are able to manipulate. It has produced individuals who are not so much possessive as possessed, or rather persons incapable of being self-possessed. It has diminished our capacity to focus by co-opting our attention. We have not become weak-willed. No, our focus has been stolen.4 And because technofeudalism’s algorithms are known to reinforce patriarchy, stereotypes and pre-existing oppressions, those who are most vulnerable – girls, the mentally ill, the marginalised and, yes, the poor – suffer the outcome most.
If fascism taught us anything, it is our susceptibility to demonising stereotypes and the ugly attraction of emotions like righteousness, fear, envy and loathing that they arouse in us. In our technofeudal world, the internet brings the feared and loathed ‘other’ closer, right in your face. And because online violence seems bloodless and anodyne, we are more likely to respond to this ‘other’ online with taunting, inhuman language and bile. Bigotry is technofeudalism’s emotional compensation for the frustrations and anxieties we experience in relation to identity and focus. Comment moderators and hate-speech regulation can’t stop this because it is intrinsic to cloud capital, whose algorithms optimise for cloud rents, which flow more copiously from hatred and discontent.
You once told me that finding something timelessly beautiful to focus on, as you did by choosing to lose yourself among the relics of ancient Greece, is our only defence from the demons circling our soul. I have tried to practise this over the years in my own way. But in the face of technofeudalism, acting alone, isolated, as liberal individuals will not get us very far. Cutting ourselves off from the internet, switching off our phones, using cash instead of plastic may help for a while but they are no solution. Unless we band together, we shall never civilise or socialise cloud capital, and so we shall never reclaim our own minds from its grip.
And herein lies the greatest contradiction: to rescue that foundational liberal idea – of liberty as self-ownership – will therefore require a comprehensive reconfiguration of property rights over the increasingly cloud-based instruments of production, distribution, collaboration and communication. To resuscitate the liberal individual, we need to do something that liberals detest: plan a new revolution.
From today’s vantage point, it is fascinating to recall that to counter the left’s conviction it was the political right back then which embraced a form of relativism, cautioning against the moral certainties of social democrats, anti-Vietnam War demonstrators, civil rights campaigners, feminists, and arguing that things are more complicated, less black and white, than the unwashed hippies and their older communistic fellow travellers assumed. But once the red flag was lowered over the Kremlin in 1991, signalling the defeat of the global left, the tables turned entirely. Suddenly, it was the right that embraced unalloyed truths and non-negotiable virtues: the same reactionaries who had questioned that all peoples had a universal right to statehood or democracy became converts to their imposition (albeit selectively) at gunpoint. 9 The right presented its own new take on the ‘end of history’: not socialism, ushering in shared property and radical equality, but liberal democracy, free markets and possessive individualism. Meanwhile, the left obliged the right by abandoning all certainty and embracing the relativism that the right had just shed: the principle that we all have the right to be free from the extractive power of others transmuted into the principle that no one perspective is worth more than any other.
Tommaso Campanella published his own Utopia, The City of the Sun,
Thomas More wrote his eponymous Utopia
Another Now: Dispatches from an alternative present. 17
But herein lies the great power that cloud capital presents to its potential rebels: a capacity to build coalitions, organise and take action via the cloud.
Regex on the word union and woops no more organisingfor you cloud serf
Marx famously described our condition under capitalism as one of ‘alienation’, owing to our having no ownership of the products of our labour, to our having no say in how things get done. Under technofeudalism, we no longer own our minds. Every proletarian is turning into a cloud prole during working hours and into a cloud serf the rest of the time. Every self-employed striver mutates into a cloud vassal, while every self-employed struggler becomes a cloud serf.
While privatisation and private equity asset-strip all physical wealth around us, cloud capital goes about the business of asset-stripping our brains. To own our minds individually, we must own cloud capital collectively. It’s the only way we can turn our cloud-based artefacts from a produced means of behaviour modification to a produced means of human collaboration and emancipation.
Cloud serfs, cloud proles and cloud vassals of the world, unite! We have nothing to lose but our mind-chains!
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