“Digital Age: the changes in economy, society, politics”

by Yiannis Tolios, Dr. Economist,
Coordinator of Marxist Research Center “MAXOME” of Athens
Publications “TOPOS”, April 2021, Athens, pages: 432,  toposbooks.gr 

  1. Digital technologies and neoliberalism

The development and diffusion of digital technologies, in the context of the domination of the neoliberal model, marks significant reorganizations and changes in economic and social life, while reproducing the main contradictions of the capitalist system. In particular, the fourth “industrial revolution” is based on the development of “robotics”, “artificial intelligence” (AI), “new communication networks” (5G), “Internet of Things” (IoT), “cyberspace”, “big data analysis”, “crypto-currencies”, “digital platforms”, “cloud computing”, “genomics”, “smart agriculture”, “3D” printing and various other applications. Each of these “industries of the future”[1] creates opportunities and at the same time poses risks, especially in the areas of employment, working conditions, security, in widening social and regional inequalities, the violation of personal data and democratic rights, etc.

More specifically the application of “robotics” and “artificial intelligence” is expected to affect many working-places and professions (manual workers in industry, construction, raw material mining, agriculture, office workers, public administration, employees in retail stores, drivers in various modes of transport, telephone sales, tax services, data analysts, etc.).[2] On the other hand, jobs that require creativity, teamwork, initiative, social contacts, etc. will increase. According to a report by the McKinney Institute in 2017, it is predicted that by 2030, more than of 800 million employees worldwide are at risk of losing their jobs. Of these, 250 million in China, 100 million in India and 80 million in the USA, while 400 million workers will have to find new jobs.[3]

The crucial problem which arises is that “digitals technologies” are developing in the context of the free market and neoliberal globalization policy and they mostly benefit the owners of large digital multinational corporations and much less the wage-earners. Another feature, according to a UN special report,[4] is that telecommunications and information companies (TICs) not only link businesses to all industries, but also change traditional job creation patterns, intangible assets their cash equivalents, which are in a higher proportion of the total assets.

  1. Digital multinationals and “digital imperialism”

To further highlight the profile of digital multinational corporations, the “UNCTAD” of the United Nations has compiled a detailed ranking of the 100 largest companies in 2015 in two large separate groups, taking into account their degree of digitization, international footprint and economic relations between them.

The first group of 100 companies, divided into four sub-groups, includes the “purely digital players” of the Internet (digital platforms and digital solution service providers) operating entirely in a digital environment. In essence, we are talking about a small groupe of large digital multinationals that operate and trade through the Internet and have “search engines”, “social networks” and other kind of platforms. In the “purely digital players”, we also have “Digital solutions”, another group of companies which make electronic and digital payments, offer “cloud computing services” and various other digital tasks. The same first group (section) also includes the so-called of “mixed players”. These are primarily e-commerce platforms that combine a digital and a physical (tangible) dimension. In the same category of “mixed players” we find the “digital content” companies, a group that distributes goods and services in digital form, including “digital media” such as video and television, music, e-books and games, as well as data etc. Digital content can be delivered over the Internet, but also through other channels, such as cable TV. In total, the 100 multinationals of the first group, had in 2015 total sales of 762 billion and total assets of 1,543 billion dollars!

The next of 100 companies include the “Information Technologies” (IT) companies that sell “hardware” and “software”, as well as telecommunications companies. The group of companies manufacturing electronic devices and computer components (hardware) include multinational companies, while in this second section there is a group of “software production & IT services” multinational companies. Finally in the second group of 100 largest multinational ITCs are also providers of telecommunications infrastructure and connectivity. This is a group of large multinational corporations, which play a crucial role in the process of transition to the digital age. In total, the 100 multinationals of this unit had in 2015 total sales of 2,892 billion and total assets of 4,582 billion dollars.[5]

The “x-ray” of the two major groups of digital multinationals (100 & 100), shows that they hold a strong position in the list of major multinational corporations, which has only been strengthened in the last five years. Based on “revenue” (sales) and “assets” (total capital), we could say, that the first group of digital multinationals, plays the role of “war cavalry” that gives the “speed of movement” to the digital age, while the second on is the “heavy artillery”, which supports the advance forward! However, for a comprehensive picture of the changes taking place in the life of modern capitalism, we still need to look at some critical aspects and in particular the role of the top digital monopolies in economic, social and political life. According to the 2018 data, frome the 25 largest companies, 15 were based in the USA, 3 in the EU (Germany, England, Ireland), 3 in Japan, 2 in China and 1 in South Korea and Taiwan. Of course, the financial strength of the groups is greater, if we calculate the network of dozens of subsidiaries, both in the country of establishment and other countries and regions of the world. The emergence and empowerment of multinational digital technology giants is a product of intensive capital accumulation process (concentration and centralization, mergers & acquisitions, intense stock market speculation, intensive exploitation of workers and consumers, high profitability, etc.). The top of the multinational digital technology companies it is a small elite of five giant companies which forming the “internet oligopoly”, the five grate “digital sisters” with the informal name “G.A.F.A.M.” (Google, Apple, Facebook, Amazon, Microsoft).[6] The dominance of large multinational digital enterprises, which summarizes the basic features of monopoly capitalism (imperialism) of the digital era, has a negative impact on economic, social, political life and international relations. Lack of control enables them to manipulate “public opinion”, violate “personal data”, “surveillance” the public and private lives,[7]  intensify geopolitical controversies over sovereignty (trade wars, sanctions, cyber-attacks, militarization of digital technologies, etc.).

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In addition, in the context of the neoliberal model of capitalism, digital technologies lead to extreme forms of flexible labor relationships, to increase part-time employment and intensify the exploitation of the working class. Especially the new forms of employment (teleworking, ‘crowdworking’, ‘clickworking’, ‘cloudworking’, ‘trask-rabbit’, ‘crowdsourcing’, ect), tend, step by step, to become a “normal” condition in developed countries.[8] The new employment conditions bring to the fore a new generation of workers who earn € 100 per month and are employed for 4-8 days in total, as well as a growing percentage of workers who earn € 400 per month, while trade union rights and trade union action, becomes very problematic.

Such a development does not create promising prospects for production, neither for the workers. The increase of the social product and the increasing difficulty of its reproduction, due to the decreasing purchasing power of the employees as consumers, raise a critical question for the viability of the capitalist system itself. Of course, this contradiction will not lead to an automatic collapse of the system. However, it inevitably intensifies its basic contradiction between the social character of production and the private-capitalist form of appropriation of its results. This makes objectively more visible and above all, more urgent, the need to overcome the dominant neoliberal capitalist relations, towards a new, more historically progressive, economic and social post-capitalist organization and advance society.

  1. Capitalism of “surveillance”

Digital technologies offer new weapons in the competitive struggle between capitalists, while at the same time strengthen the mechanisms of control and subjugation of wage-labor. In particular, digital companies use “information” (data mining and especially the embezzlement of personal data), as a raw material for the preparation of forecasts and targeted advertising aimed at commercial exploitation and profit maximization. An integral part of reliable forecasts that approach the limits of certainty, are the techniques and means of influence to “modify the behavior” of users (consumers, employees, etc.), to desired economic choices and actions. At the same time, however, the techniques of “behavioral modification”, in addition to the economic pursuit of profit maximization (sales promotion and increase rate of profit), extend to other areas of social life, first of all to the political field.

Here we have the phenomenon of systematic monitoring of citizens’ behavior and the implementation of mechanisms for manipulating public opinion. The phenomenon of “personal data” interception through the use of digital technologies has taken on unprecedented proportions, effectively undoing fundamental democratic rights and the quintessence of representative democracy. Two high-profile cases (Snowden and Assange) have brought to the fore the crucial issue of the use of digital technologies as a new mechanism for surveillance and espionage and the abolition of personal secrecy in order to support the dominant system and serve the strategic plan of imperialist powers to preserve their dominant position in the world!

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At the same time Internet, and various digital applications are creating a virtual “cyberspace”, the importance of which is growing and is a new field of geopolitical contradictions. The nature of cyberspace is fundamentally anarchic and the absence of a supreme international regulatory authority makes users vulnerable to “cyber-attacks”. When these attacks are carried out by one state or state service against another, then they acquire the character of a “cyber war”! Cyber-war is a form of “hybrid war” and “asymmetric threats.” The growing importance of “cyberspace”, combined with the growing importance of digital technologies in the economy, directly affect the field of correlation of geopolitical forces and military power between countries. That is why there is a growing trend of militarization of cyberspace, which is now considered the “fifth area of ​​war” (in addition to land, sea, air and space).

  1. The prospects of an alternative Futures

In essence, the development of digital technologies and the productive forces in general, highlight the fact that the historical boundaries of the dominant capitalist relations of production, exchange, and distribution of income have been virtually exhausted and that a new system of economic organization is a vital necessity for the benefit of all members of society. Under these circumstances, two alternatives are schematically arisen! The first is linked to the maintenance of income and wealth accumulation in the hands of the ruling elites, who live a privileged life in isolated communities, while the vast majority of the population lives – below the poverty line – a life of social exclusion. At the same time another small group, moving between the two poles, enjoys a relatively comfortable life. The second is the promotion of a model of post-capitalist organization, in contrast to the current dominant neoliberal model, which will take advantage of the possibilities offered by automation and new technologies, focusing on the economy to meet the growing and changing social needs, cultural renaissance and care for the environment.

Overcoming “dystopia” and moving to “utopia”, is a matter of political struggle of the social forces that are of vital interest in such a process. The “vehicle” for moving towards this “alternative future” is to promote a “transitional program” of socialist perspective, by implementing radical social changes. This program will at the same time facilitate the creation of a wider front of political and social forces of wage-labor and friendly social strata, which will realize its goals. The international solidarity of the wage labor force and the popular strata is a crucial element of its success!!!

The bleak scenario of digital technologies, leading to further mass unemployment and social exclusion, is neither fatal nor inevitable. When asked whether there was a risk of robots taking jobs and rising unemployment, astrophysicist Steven Hawking bluntly replied, “fear capitalism and not robots”, adding that “machines can produce anything we need, but the issue is how the results are shared”.[9] In the previous “industrial revolutions” similar dilemmas had arisen to a lesser extent and realistic answers were given. On this basis, we can still claim that the dilemma between “robots” and “jobs” is a pseudo-dilemma, given that with less working time and a fair distribution of income and wealth, there is virtually no other obstacle than the denial of ruling elites to accept this solution. Particularly in the context of the transitional program, the implementation of a package of measures for the movement of societies towards the “historically necessary future”, as Marx noted, is of particular importance. Such key measures related to digital technologies are:

Immediate reduction of working time to 6 hours a day and 30 hours in total per week, without wage reduction, increasing employment and reduce of unemployment, as well as increase in wages depending on increasing labor productivity. Establish measures to protect employees on digital platforms and extend collective bargaining agreements to all employees in the digital field. Protect the health and safety of the working people in the process of work and ensuring fundamental labor and trade union rights.  The development and diffusion of digital technologies in the economy in the context of a development plan instead of being left to the mechanisms of the free market. In addition the adaptation of the education and training system, with the aim of upgrading the skills of the workforce in digital applications, as well as lifelong learning programs for the entire population. The development and use of digital technologies should serve the social needs (public goods, social services, public infrastructure, etc.) concerning the vital needs of the many, instead of the luxurious consumption of the few.

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Strict control of the “dominant position” of large digital companies and democratic regulation of the market by combating “monopoly practices” and public control of big enterprises offering public goods.  Taxation of the profits of multinational digital technology companies for revenues from advertisements and services provided, in the country where they are created, based on development, social and environmental criteria.  Effective measures should be implemented, in order to protect “personal data” from secret services and the commercialization from private bodies and companies. The establishment a code of conduct in digital “media” and social networking and strict control of digital monopoly in manipulation practices. Transfer of governance of the Internet and the web to multilateral bodies that will ensure democratic transparency, under the supervision of a special body of the UN. Signing of an international agreement to ban the use of the “Internet” in cyber-attacks and it’s transformation into a field of tension and Cold War confrontation. Finally, the development of a united resistance movement to prevent the negative effects of the action of the digital giants type “GAFAM” to workers and society, in conjunction with strengthening the international solidarity of trade unions, scientific associations and popular movements, to promote social transformations, that pave the way for a perspective future.

  1. Some conclusions

The great technological changes and the transition to the digital era are accompanied by various interpretations of “deification” and “demonization” of the consequences. The absolutization of both, positive and negative consequences, is a product of the “deterministic” consideration of technological changes (in “optimistic” and “pessimistic” their expression), instead of the “dialectical consideration”. Consequently, what is first inferred from the development and diffusion of digital technologies in the economy and society is whether they aim at serving man and his social needs, as well as the protection of the environment, instead of maximizing profits for the benefit of the few, as in the conditions of neoliberal capitalist globalization.

It therefore highlights the need to develop resistance in order to prevent the implementation of measures which are against the fundamental rights of working people. At the same time it is important to claim measures and arrangements that express the vital interests of wage-labor and the wider popular strata, both in the fields of digital technologies, economy and society, as a hole, in connection to the radical transformation of the “existing order of things” towards a post-capitalist organization, taking into account the particularities of each country or group of countries. The creation of a radical political organization or front of social and political forces, that it will function as a power for social change and as a vehicle for the transition of society towards the “historically necessary”, is a critical factor in opening the way to a promising eco-socialist perspective and advanced society!

[1]. Ross Alec (2016), “The Industries of the Future”, Simon & Schuster, Inc., USA

[2]. Papakonstantinou Petros (2020), “Humans and Robots, The Challenges of Artificial Intelligence “, published by” Livani “, Athens, Greece

[3]. McKinsney Global Institute, A Future for works: Automation, Employment and Productivity, Jan.2017, https://www.mckinsney.com

[4]. UNCTAD, World Investment Report 2017, “Investment and the Digital Economy”, pp. 159-160

[5]. The complete ranking of the top 200 digital multinationals in two distinct sections is contained in the special Annex of the UNCTAD, World Investment Report (2017), Investment and the Digital Economy

[6]. Comprehensive analysis of creation and function of the “digital oligopoly”, see Smyrnaios N. (2018), “The Internet Oligopoly”, pub. Midnight Publications, Athens, pp. 49-106

[7]. Zuboff Shoshana, (2019), “The Age of Surveillance Capitalism. The fight for a Human Future at the New Frontier of Power”, Public Affairs, Hachette Book Group, USA

[8]. Travlos-Tzanetatos Dimitris (2019), “Labor law in the fourth industrial revolution” published by Sakkoula. Athens, Greece

[9]. https://www.pinterest.co.uk/, October 16th, 2015

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