Fabio Manganiello on Nostr: I don’t agree with some of Dave Karpf’s points in this article: of course an ...

I don’t agree with some of Dave Karpf’s points in this article: of course an essay pushes for some arguments over some others, and of course a political essay is mainly targeted to those who already sympathize with that political ideology. But some of his criticism of Varoufakis’ views over tech giants is quite spot on.

Varoufakis makes some very good points and has great rhetorical skills, but he indeed often sees the world only through the lenses of Marxist class struggles. His analysis of economic systems invariably produce the same orthodox Marxist diagnosis - problems are caused by inequality and class struggles, and the only thing that can restore a level playing field is a revolutionary escalation.

I don’t agree however with Karpf’s point that the rent-seeking behaviour of Amazon, Apple and the likes is just a slightly worse version of the malls of the 1990s - which were seen as a triumph of capitalism and consumerism, not as a return to feudalism. Malls never charged a 30% commission to shop owners over each sale. Malls didn’t buy all the land around to prevent shop owners from going somewhere else. The market of malls was actually competitive and relative healthy, and with relatively low entry barriers, not dominated only by a handful of players that had an absolute monopoly in their own segment and raised entry barriers as high as they could.

Malls were seen as a triumph of capitalism. But had we allowed them to grow without regulations and constraints, with merger over merger to vacuum all the potential competitors off the market, had we allowed them to buy all the land around them until there was no option for those who needed a piece of land than to rent it through them (or lease it “as-a-service”), had we allowed only 1-2 remaining brands to extort 30% of commission from vendors that were left with no alternatives, I have little doubt that today we would probably live in a world where Mall of America is a multi-trillion company that owns everything - from retail shops and franchises, to book stores, to news outlets, to IT infrastructure, and everything in between. Everybody would pay their rent to them for using any services that they need, with no alternatives available. Which is exactly the definition of a feudal economic system based on exploitation, with no incentives for innovation nor any risk-taking strategies. Which is exactly the situation where we are today with Amazon, Apple, Google, Meta, Microsoft and Nvidia. The writer doesn’t take an extra step to outline the next obvious corollary: capitalist systems, when unconstrained, consistently gravitate towards feudal oligarchies.

Karpf is right however when he says that a socialist-style revolution isn’t necessarily the only way out. Bold US regulation and monopoly break-up, along the lines of what was done in the past century by breaking up and constraining Standard Oil, and later AT&T, also proved to be effective. Or bold EU regulation along the lines of the GDPR first and the DMA then. Or lawsuits between titans along the lines of Epic v Apple. Or employees themselves pushing to unionize in spite of the ostracism from their management. But his analysis falls short of acknowledging the next corollary: the liberal and socialist pushes against big tech are complementary faces of the same coin.

Socialists criticize big tech because of the inequalities it creates, because of its absolute control over the means of production, because of its rent-seeking behaviour, and because those in charge are only accountable to those who provided them with capital.

Liberals criticize big tech because they believe in free markets where competition for customers drives businesses to innovate and build better products, and without that level playing field there are no incentives to prevent market consolidation and atrophy, and consumers left with worse products and no choice.

Those two economic models may disagree on many things, but they strongly agree on one thing: criticism against economic systems that revolve around feudal lords, as both the systems were born on the ashes of feudalism. The fact that criticism of big tech seems to unite so much both liberals and socialists is a strong indication that big tech may have many features of the pre-capitalist system that both socialism and liberalism were supposed to replace. Their arguments should therefore be treated as complementary, not as mutually exclusive.

https://links.fabiomanganiello.com/view/54