Conspiracy Against Capitalism

[John Simkin]

Ever since I created my website in 1997 I have believed that the web has the power to change the nature of capitalism. For example, in 1997 I had been running a small educational publishing company for ten years. I had made use of new technology to keep my costs to a minimum. In this way I was able to sell my books cheaper than those of the multinationals. Between 1984 and the early 1990s the company was highly profitable.

Then Rupert Murdoch entered the educational publishing industry by buying Harper Collins. He decided to employ a strategy that would wipe out the competition. At this time, virtually all school textbooks were printed in black and white. This enabled publishers to test the market by having initial print runs of 2,000. If the book was successful you might say, print 5,000. Even if the book did not sell well and was never reprinted, you could still make a profit from it.

Murdoch decided to raise the stakes by printing these textbooks in colour. Other publishers had rejected this idea because they could not see how they could persuade the schools and colleges to pay the extra costs of buying books in colour. Murdoch solved this problem of selling the books for the same price as those in black and white. He did this in three ways: (1) Used printing companies in the Third World; (2) Had print-runs of over 30,000; (3) Worked on very low-profit margins.

Consumers obviously prefer colour to black and white and within a few months Harper Collins had began to dominate the market. Other educational publishers had no option but to follow Murdoch’s example. This of course changed the scale of investment in a new book. The multinational players could afford to do this, but the small independents went out of business.

New technology had created my business in 1987 but had destroyed it within ten years. That is the nature of technology. Sometimes it favours the individual entrepreneur and sometime the multinational. However, when I discovered the web I realised that this new technology favoured the individual over the large institution. It reminded me of the story in the New Testament:

"Late in the afternoon the Twelve [disciples] came to him and said, ‘Send the crowd away so they can go to the surrounding villages and countryside and find food and lodging, because we are in a remote place here.' He replied, ‘You give them something to eat.' They answered, ‘We have only five loaves of bread and two fish - unless we go and buy food for all this crowd.' (About five thousand men were there.) But he said to the disciples, ‘Have them sit down in groups of about fifty each.' The disciples did so and everybody sat down. Taking the five loaves and two fish and looking up to heaven, he gave thanks and broke them. Then he gave them to the disciples to set before the people. They all ate and were satisfied, and the disciples picked up twelve basketfuls of broken pieces that were left over." (Luke 9:12-17)

When you produce a book and then sell it, the book goes from your possession. That is the nature of capitalism. You can only remain in business if you make a profit from selling the goods you have produced. However, when you give away information on the web it still remains in your possession. It is like Jesus giving away his bread and fish.

This is why Murdoch and other successfully capitalists did not grasp the importance of the web when it arrived. He could not see how he could make a profit out of the web. The multinationals tried the idea of subscription sites but they could not make it work while people like me gave their information away for free. In certain areas of the economy, such as the communication industry, the web poses a serious threat to capitalism. The mass media has always been controlled by the wealthy and powerful. I believe that the development of the web will undermine this idea. In fact, I believe it will eventually revive our threatened democratic system.

[Mark Stapleton]

This is why Murdoch and other successfully capitalists did not grasp the importance of the web when it arrived. He could not see how he could make a profit out of the web. The multinationals tried the idea of subscription sites but they could not make it work while people like me gave their information away for free. In certain areas of the economy, such as the communication industry, the web poses a serious threat to capitalism. The mass media has always been controlled by the wealthy and powerful. I believe that the development of the web will undermine this idea. In fact, I believe it will eventually revive our threatened democratic system.

Interesting post, John.

I agree with your suggestion that the web is threatening the global capitalist structure. It has become a real threat to those wanting to manipulate all we see and hear. The media is reluctant to discuss issues which could be harmful to their interests, so these issues become taboo. The war on drugs is one example. Here the mainstream media owners stand to lose from changes in the laws so genuine debate is replaced with fear and sensationalism. Unfortunately for them, the explosion in internet blogs and forums has allowed the public to discuss these issues and reach conclusions independent of mainstream media involvement. The mainstream media is losing its grip on moulding public opinion. Its refusal to openly discuss issues it deems harmful to its interests is the media's problem, not the public's problem.

Here in Australia the conservative Howard Government is in freefall in the polls. The illusion of great prosperity which has been trumpeted by Howard and gleefully echoed by our mainstream media is being ignored, according to all the polls. Howard is 14 to 20 percentage points behind and rapidly falling. Despite all the best efforts of the mainstream media to reverse this trend, it appears the Australian people have already made up their collective minds and are ignoring the increasingly desperate efforts of Howard and the corporate media. The corporate media's frustration with this state of affairs is palpable, but they have only themselves to blame.

Edited September 10, 2007 by Mark Stapleton

[John Dolva]

John, I agree and 'disagree',

The disagreement is from experiencing the net from the days of bulletin boards and also from studying the history of the net plus a couple of observations regarding particular social events.

Microsoft products are undoubtedly the major interface between the net and most people. They have a parochial. parasitic and domineering drive. IOW the net as experienced by the 'average' user is 'filtered'. More and more proprietary utilities and sites that are readily accessible (perhaps only about 30% of the real potential net for most people) are under some measure of control and subtle censorships.

The net started as a military project by the US government and quickly many educational institutuons saw the potential in rapid information sharing. As the awaresness spread and ordinary people started to realise the potentials the mlitary withdrew and fromed a new separate net. For quite some time the net and the utilities and sites were produced to enhance this potential with little regard for profits.

We all know the utter nuisance of spam and such like, but not many realise that the net they are experiencing is actually a minor part of it and then often loaded with subtle controls. It's possible to 'break' these barriers and experience more of the net, sometimes at risk depending on wher one lives. For example in China and other places the backbones are monitored and filtered. There are ways around it but only to the 'savvy' and sometimes the brave. (or foolish).

This drive towards a controlled net continues in step with increasing its commercial nature.

Lately the US air force has launched a new division viewing cyberspace as a real arena of warfare.

Back in the days of Solidarnosc' , at a critical moment when Walenska was still free and the Government was threatened with nationwide strikes they simply cut the phone lines dividing the country in half and reasserted control.

During the height of the Inavsion of Iraq, the web sites from Baghdad became 'jammed'.

Pull the plug and there is no net. We're back to CB's, signal drums, ham radio, pirate radio, and smoke signals while the pwers to be remain at top level realtime communication. IOW the net is there but for the grace of...

This is significant as it by simply being so introduces a measure of self control, there is a line and its firming up, you choose to step across and you may face consequences.

The logical evolution through monitoring, lining, DOS's, et.c. and a profit motive threatens the net as we knew it.

I think a time will come when grandparents will have their kids on their knees telling stories of how, once, a long time ago, we had a space where we were free.

Edited September 10, 2007 by John Dolva

[Christopher Hall]

"This is why Murdoch and other successfully capitalists did not grasp the importance of the web when it arrived. He could not see how he could make a profit out of the web. The multinationals tried the idea of subscription sites but they could not make it work while people like me gave their information away for free. In certain areas of the economy, such as the communication industry, the web poses a serious threat to capitalism. The mass media has always been controlled by the wealthy and powerful. I believe that the development of the web will undermine this idea. In fact, I believe it will eventually revive our threatened democratic system."

I hope that the web will continue to revive the exchange of ideas, unfettered by economic loyalties, influences and relationships, and the fostering of debate.

However, that it poses no threat to capitalism, even though it clearly poses a threat to certain sectors of the mass media, which is a good thing.

The web has been a great thing for capitalism (e.g. Amazon.com, my personal weakness).

Some sectors hit it right, and others decline from its free exchange of information and ideas.

The media, or the Fourth Estate (as it was formerly known), was able to unilaterally control the scope of the public discourse, which was an unfortunate cornering of the market on ideas and debate.

Now, however, when it makes a mistake, its error is seized on by bloggers, who frequently challenge the offender so boldly that he or she has to make a correction or retraction.

Talk about a healthy change of course.

Edited September 11, 2007 by Christopher Hall

[John Simkin]

A book has just been published about the impact that the internet is having on capitalism: Wikinomics: How Mass Collaboration Changes Everything. The book has its own website:

http://www.wikinomics.com/

Readers have created a wiki:

http://www.eu.socialtext.net/wikinomics/index.cgi

I found these two sections especially interesting:

http://www.eu.socialtext.net/wikinomics/in...d_the_classroom

http://www.eu.socialtext.net/wikinomics/in...is_and_politics