Blame Profit, Absolve Technology?

Another day, another Big Tech controversy. As I write these words, the UN’s Security Council has just finished a briefing in which it was told that Big Tech can’t be trusted with AI, and that commercialised research is a ‘threat to international peace, security and global stability’. A quick glance at the last 24 hours of news headlines and I can see that The Australian just published an article entitled ‘Big tech is exploiting our kids for profit’, Business Insider ran one called ‘Business model fueling Silicon Valley tech companies may be illegal’, and TechWire Asia has reported on the 219,709 people who have been laid off by the major tech companies this year.

Then there’s Meta’s boring Threads roll out and the twitching decline of Twitter; the writers and actors striking against AI and miserable offers from producers; the negative effects of algorithmic feeds on mental health and algorithmic neo-Nazi amplification; rampant inequality and the posturing of billionaire man-child emperors; crumbling crypto-pyramid schemes and the crash of Silicon Valley Bank; deadly drone strikes and automated apartheid; Robodebt and the slow-motion social disaster of the so-called ‘gig economy’. And on it goes. In short, things are bad and getting worse, rapidly.

As such, there is certainly something to the idea that we are in the midst of a generalised process of ‘enshittificaiton’, as Jeff Sparrow noted in a recent piece published by The Guardian. He began this article by exploring the ways in which both Twitter and Threads are worse now than either company’s offerings in the mid-2000s. To make his case, he squarely blames the tech company’s profit motive for stifling innovation and claims that that ‘tech itself plays a relatively minor role’. Implicit in this argument is the common leftist attitude that technology and its productive forces can be separated from their uses and social contexts. Yet as these new technologies continue to pile atop each other, that belief may be more difficult to cling to.

Placing blame on the profit motive also simplifies how the tech sector actually functions. Currently, the big tech companies’ stocks are at absurd levels: Apple, the present top of the pile, has a market capitalisation of over US$3 trillion. That’s about the same as the staggeringly large amount of money that the US spent on its war on Iraq. Such immense figures are only possible after years of qualitative easing and the money-supply revolution spearheaded by the US Federal Reserve in its unimaginative attempt to band-aid the broken global economy after the Global Financial Crisis. Massive amounts of this money ended up in an increasingly bloated investment sector—banks, asset management firms, hedge funds, superannuation funds—all in the service of the rich and the very rich. Stock ownership follows an exponential curve, with the vast majority of people on earth owning none at all and the richest of the rich owing mind-boggling amounts. The big investment institutions then use the ‘free money’ handed to them by the Fed to ramp up the prices of tech shares and thus the on-paper wealth of their rich customers. This is to say that the Big Tech sector is an immense speculative bubble, and one that has begun to totter now that the tap of qualitative easing has been shut off following the COVID-19 spending spree.

Yet much of this doesn’t take the form of traditional profit-making. For example, Meta does not pay dividends to its external investors. This is the same for many tech companies, not to mention the ones that have never even made a profit, such as Uber, which lost US$9.14 billion last year. They are not directly providing profits to external capitalist owners; rather, their gift to inequality comes through the unstable circuits of speculative finance. In this zone, accumulation is more important than profit. Buying shares gives the tech companies the power to grow, but they don’t give profit back to the owner of shares—unless the owner chooses to sell these shares, and even then, they cannot sell too many at once, otherwise their value can plummet, as happened when Meta lost US$230 billion of value in a single day in 2022 (which is about the same as the total market capitalisation of Toyota). Furthermore, tech companies tightly control how much ‘profit’ they claim to make, treading a line between reassuring investors of their power over the future and resisting calls to pay out any dividends, or to let their investors have too much influence over the running of the business. Much of the money they churn through gets spent on stock buy-backs in an attempt to push their value higher, and tremendous amounts go into their real game—technoscientific research and development—as I outlined in an article published last year by New Left Review. This technoscientific research is the distinctive source of their power, and one of the features of cybernetic capitalism. It makes plenty of money, but its goals are not reducible to this, driven as it is to dominate nature—to reorganise it even at a molecular or subatomic level. The explicitly stated goal of colonising space is more about conquest, and in the case of the work on AI, about trying to create artificial life, or even build an entity with god-like intelligence. The hubris is staggering.

This is not to say that profit doesn’t matter, but rather that it is more complex, abstract and systematic than it is often presented as being. Indeed, if profit-seeking was actually running the show, major parts of the current tech sector would have long ago gone the way of the Concorde—an achievable technology but with no supply-demand congruence. Massive stock prices insulate the big tech companies from the need for profit, allowing them to lavishly fund research, acquire potential competitors, engage in legalised corruption (i.e., lobbying) and so forth.

Likewise, the move to absolve technology is worth investigating, not because it is distinct to Sparrow, but rather because it is a common trope in leftist commentary that does not help to clarify our conjuncture. The first part of this claim seems to imagine that these social media platforms could have progressed to greater and greater heights, if only their respective companies didn’t have to make money. While it is clearly the case that the profit motive is distorting, deranged and ruinous for a whole range of reasons—especially under conditions of monopoly capitalism and hyper-pervasive consumerism—it alone does not provide adequate explanatory power, even in a quickly written piece of commentary for a wide audience.

It is worth thinking this through via a rhetorical thought experiment. Imagine if Meta magically didn’t have to make money (but somehow still had huge financial support to maintain its vast infrastructure). The bloated salaries of upper management would be axed, and the 3.81 billion people who use Meta’s sprawling services—half of humanity—would be free from viewing compulsory advertisements. This would remove a tiny but glaring slice of inequality, and remove a key avenue for highly targeted consumeristic propaganda, both of which could only be welcomed. But then what? Would we still have widespread addiction to social media, and the spiking levels of loneliness, reported on almost daily, that have a strongly correlated/causal relationship with the use of such technology? Social media are fundamentally technologies of absence: they displace face-to-face relations—the primary way of relating to others for almost all of human history—with disembodied screen-based interactions. Relations of absence have a long history, but what matters here is the relative dominance of this way of relating, and the qualitative difference of the mediation of communication by black box technologies. An expert speaking on Radio National this week made this point by emphasising the importance of face-to-face interactions as being both constitutional to the kind of creatures people are and vital to combat the rapidly increasing sense of isolation people feel today. The problem here is not with the profit motive, nor with disembodied communication, but rather with the dominance of technologically mediated ways of interacting.

One insurmountable problem that would certainly persist to plague the tech sector, even if it was free of the need to make profit, is its oversized ecological consequences. It is a very deep illusion that computing machinery is weightless—that it somehow exists outside the web of life. This is a wilful blind spot that must be reckoned with if we are to cohabitat on this rapidly heating planet. Taking a properly materialist analysis to computers is needed to see the intense amount of energy embedded in digital technologies, and the scale of waste they produce. A small glimpse of this can be seen in some of the reportage on the intensely wasteful nature of Bitcoin, which uses annually 150 terawatt-hours of electricity—roughly the same as the entire country of Argentina with its population of 45 million people. If we zoom out of this one particular cryptocurrency to the broader globalised digital world, the amount of wasted energy, mined landscapes, polluted rivers and carbon-filled air, is dumbfounding.

The thing is, any form of networked computing machinery that could exist properly apart from capitalism-as-we-know-it would be completely and utterly different from the anti-social consumer-media conglomerates that dominate the present. What kind of socialist society would prioritise the intense efforts and resources needed to create technology that allows for the live-streaming of endless on-demand high-definition videos to atomised mobile devices? This dubious goal only makes sense in a hyper-individualised society that priorities a narrow, technology-fetishist ‘convenience’ and ‘consumer choice’ über alles. It takes a multi-generational social failure to produce the iWatch; an embodiment of inequality, alienation and unsustainablity in a single status symbol.

In the tech world profit acts as a great ‘enshittifier’, but we also need to think critically about the materiality of the technologies themselves: their embedded alienation and their resource-intensive and polluting nature. This is not to suggest that we could or should abandon computers entirely and hunt for food with stone axes, or whatever knee-jerk reaction Big Tech’s apologists like to come back with when faced with structural critique. Rather, we need a radically different relationship with technology: one that respects the human scale, that is localised and fair. This will involve major cultural transformations, changing the ways we practice everyday life, as well as a serious overhaul of the current structures of decision-making power—and a direct confrontation of the profit motive. This is no small task, but a key part of the challenge, and opportunity, is to develop interpretive frameworks that can cut into what is distinctive about our present predicament.

Big Tech Goes Ballistic

Richard King, 15 Jun 2023

The idea of an algorithmic catastrophe waiting for us down the road is from this perspective clearly limiting. The catastrophe is already here, and unfolding.

About the author

Timothy Erik Ström

Timothy Erik Ström is the editor of Arena Online. He is the author of the forthcoming book Cybernetic Capitalism (Verso), and his collected writings can be found at his website: The Sorcerer’s Apparatus.

More articles by Timothy Erik Ström

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