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Home 2016 Volume 68, Issue 05 (October) The Internet and Monopoly Capitalism

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REVIEW

TheInternetandMonopolyCapitalism
by Daniel Auerbach and Brett Clark
Topics: Internet , Media , Political Economy ~ Places: Global

Robert W. McChesney, Digital Disconnect: How Capitalism Is

Turning the Internet against Democracy (New York: New Press,
2013), 299 pages, $27.95, hardcover.

Without question, the Internet has had a profound

D A isa
doctoralcandidatein
sociologyattheUniversityof
Utah.B C isan
associateprofessorof
sociologyattheUniversityof
Utah.

inuence on the world. As with most technologies, debates

rage over whether this development has been positive or
negative. Celebrants proclaim with utopian fervor that a
new age of democracy has arrived, allowing for
decentralized communication, challenges to corporate control, and mass public participation in

the most important decisions confronting humanity.1 Skeptics point to the ways the Internet has
spread ignorance and misinformation instead of knowledge, undermined the ability of artists to
earn a living, and exacerbated isolation, unhappiness, and alienation.2 While these arguments
illuminate the potential benets and drawbacks of the Internet, they tend to ignore or disregard
the larger political economy within which the Internet exists. In DigitalDisconnect:HowCapitalism
IsTurningtheInternetagainstDemocracy, Robert W. McChesney transcends these one-sided
engagements, oering a nuanced analysis of the development of the Internet within the context
of monopoly capitalism, revealing both the limitations of this technology in its current state and
its massive potential.
McChesney focuses on the tensions and contradictions arising from the Internets place within the
larger political economy. Capitalism shapes the development of technology, while the latter also
inuences social relations and interactions within society. The Internet, while presenting some
challenges to the capital accumulation process, has becomeon the wholesubsumed under its
dictates. The Internets potential to add to public wealth has been largely directed to increase

private riches.3 Through his historical analysis, McChesney traces the commercialization of the
Internet, the ongoing degradation of journalism, and the threat to democracy. These trends follow
the long-term dynamics of monopoly capital. Nevertheless, he argues, the present moment is a
critical juncture, where the conditions exist for revolutionary change, which would by necessity
involve transforming the political-economic system and the Internet.
The Internet, McChesney writes, is the culmination of government-subsidized-and-directed
research during the post-World War II decades, often by the military and leading research
universities (99). The decentralized and open technology of ARPAnet, a key predecessor to the
Internet, was largely the creation of researchers and scientists on the fringes of corporate and
military institutions. According to McChesney, it was because of this very openness that ARPAnet
initially held little interest for large monopoly telecommunications corporations such as AT&T.
They found such pursuits, at that point, to be unprotable (100). It was not until the mid-1990s
that the Internet was transformed from a public service (as NSFNet) into a private good, subject to
the dictates of exchange value and market forces. This transformation has had a decisive impact
on who has access to information, what information is most accessible, and the content of the
Internet.
Corporate control over the Internet, according to McChesney, was the result of four pivotal
factors: corporate-dominated policy-making in the 1990s; unclear policies regarding the
regulation of the Internet; the neoliberal political culture of the 90s; and the Internet bubble of
the late 90s, which made it seem as if the Internet was ripe for further privatization (10408). By
allowing private interests to take control of the development and design of the Internet, the
optimism of a once anti-commercial endeavor turned into a juggernaut for capital accumulation,
with substantial social consequences. The Internet was turned into a means to satisfy the needs
of capital, rather than the public. With the aid of existing government-sponsored monopolies, the
telephone and cable industries were in sole control of the cables and other infrastructure
necessary for Internet access. Changes in the legal designation of cable modems as information
services instead of telecommunication services allowed monopolistic cable and telephone
companies to dominate the Internet Service Providers (ISP) market. Further consolidation of
monopoly control followed. In the 1990s, the ISP market was much more competitive, with a large
number of providers. By the mid-2000s, this landscape had changed. McChesney notes that
approximately 20 percent of U.S. households have access to no more than a single broadband
provider, and all but 4 percent of remaining households has, at most, two choices for wired
broadband access (112). Thus, the majority of households eectively do not have a choice when
it comes to accessing the Internet.
The subsumption of the Internet under the dictates of capital accumulation has generated a
number of contradictory social consequences. For example, even as access to online information
and entertainment becomes more widely available, and theoretically open to everyone, actual
access remains deeply unequal. As of December 2010, in the United States, 40 percent of
households did not have access to broadband connections in their homes. When disaggregated,
the divisions become starker: 80 to 100 percent of houses in wealthier neighborhoods had
broadband connections, while households in impoverished sections of the same city, had
connection rates roughly half that of their rich neighbors (117). Broadband connections are
becoming a necessity, as more content turns toward data-intense formats, such as video
streaming, that require faster Internet connections. In regard to an international digital divide, we

see contrasting results. By 2019, it is estimated that approximately 51 percent of the global
population will be online. While this gap remains vast, it pales in comparison to the divide
associated with connected devices (which includes such things as cell phones, tablets, and smart
appliances). In 2014, in North America, there were, on average, 6.1 connected devices per capita.
In Latin America, this number is as low as two connected devices per person, while the Middle
East and Africa remain at around one device per person. As the Internet of things grows, those
who are able to access the web through various devices are able more eectively to utilize the
advantages of the Internet compared to those who have fewer gadgets.4
Another consequence is that the monopolization of ISPs has a tendency to limit and slow
innovations in the quality, speed, and accessibility of broadband access, due to lack of
competition. Companies like AT&T and Verizon enjoy exclusive license to large swaths of the
electromagnetic spectrum that they allow to lie fallow, so that other ISPs cannot use them (115).
As noted above, most areas in the United States have only two real choices for their ISPs;
consequently, the United States has one of the most expensive broadband systems in the world,
compared to other wealthy nations (114).
There are two other major eects of monopolies on the trajectory of the Internet: the patent grab
and the mass proliferation of advertising. Both of these are necessary requirements for
accumulating capital in a realm where information is, potentially, freely available. In Internet
telecommunications as in other industries, owning patents is quickly becoming a primary means
for protecting monopoly power. In a sentence that echoes Paul Baran and Paul Sweezys
argument in MonopolyCapital, McChesney writes that patents halt the [innovation] process, but
they are fantastic for protecting entrenched monopoly power, litigation costs notwithstanding
(134). Large companies such as Google, Apple, Microsoft, and Amazon have tens of billions of
dollars available to purchase patents and build further barriers to entry (137). In 2011, Google
spent $12.5 billion on buying Motorola Mobility, not for its existing technology, but primarily to
take ownership over the companys 17,000 patents (134). This proprietary control allows
companies to lock consumers into using only their products while transferring power over future
development from the intellectual commons to the realm of private wealth.
Capitalism, of course, requires continuous accumulation and growth, and freely available services,
such as most websites, represent a barrier to this process. Advertisingwhich U.S. companies
may write o on their taxes as a business expensehas accordingly become a necessary tool for
monetizing and commercializing the Internet. To access free online services, users enter into an
often unspoken deal in which they must surrender their personal information. As Bruce Schneier
has put it, If something is free, youre not the customer; youre the product.5 Websites serve as
sources of information and entertainment, but also a means to collect massive amounts of data.
As McChesney notes, all of our online habits are recorded through our various devices to
generate more targeted advertisements (157). One particularly damaging consequence of this
process is the severe narrowing of the range of information and ideas available to Internet users.
The data collected on each individual is used to create specic lters that limit exposure to the
variety of information potentially available online, while personalizing everything from sales
pitches to videos to news stories as part of the hyper-commercialization of the Internet for the
sake of capital accumulation (15758).

Monopoly capitalism in general, and advertising in particular, have important implications for
journalism, as the Internet becomes the predominant medium of journalism. McChesney
consistently argues that rigorous, independent journalism is a public good necessary for a
democratic society wherein individual liberties are meaningful (17475). Here the paradox of the
Internets potential as a public source of knowledge and its actual development as a vehicle for
capital accumulation comes to the fore. Journalism, in the age of the Internet, could remove
barriers to entry, allowing for more diverse and critical voices to be heard and to collaborate with
one another. Furthermore, as the cost of digital distribution declines, so too could the cost of
running a news website. However, the prot motive of capitalism tends to undermine these
conditions, as attempts to monetize journalism become paramount and as advertising revenue
and social media visibility take precedence over challenging writing and reporting.
According to McChesney, the decline of journalism predates the Internet and can be traced in
large part to the broader monopolization of media, and particularly newspapers. In the 1970s and
1980s, as media corporations merged and consolidated, they found that an eective way to
increase the bottom line was to decrease editorial budgets, which was in turn accomplished by
eliminating journalists and closing news bureaus. Journalism was transformed from a craft
dedicated to informing citizens to another means of satisfying corporate investors. With the
movement of journalism to the Internet, this problem has worsened and taken on a distinct form.
Successful journalism, in the age of monopolization and the Internet, has been reduced to
producing an immense amount of material inexpensively (188). Online news sources are
compelled to collect vast amounts of information about their readers in order to determine what
content to display and promote. Based on this information, freelance writers hastily assemble
articles tailored to these popular search terms. Media companies, equipped with detailed
knowledge of their readers, then sell advertising placed next to or within each article.
In an age of sponsored content and promoted posts, the line between news and advertising is
increasingly blurred. Additionally, journalists are expected to write more while earning less, as
more content brings in more trac, which generates increased advertising revenue. This system
of exploitation tends to inhibit journalists from adequately investigating and reporting important
issues. Instead, they turn to the same sources of established information to produce what
amounts to a rehashing of other news sources. The prot motive of monopoly capital has
intensied in the digital realm, creating a journalism that remains relatively impotent in the face of
corporate greed and government ineptitude, helping reinforce the status quo.
Monopoly control over the development of the Internet has serious implications for the future of
democracy around the world. What could be a means of uniting people, a venue for alternative
viewpoints, and critically engaged journalism has instead become a site of hypercommercializationa tool to facilitate capital accumulation. Monopoly capital, with its tendencies
toward privatization of public goods, has narrowed innovation to suit the demands of prot. Such
constraints only exacerbate pre-existing inequalities, creating ever wider gaps between classes
and social groups. Meanwhile, a select handful of large monopolistic rms have become
gatekeepers to information. Online experiences are increasingly funneled to a select few
websites: in 2010, the top ten websites accounted for 75 percent of page views in the United
States (190). Finally, the problems of journalism are magnied under the advertising-driven prot
model of online news.

It is important to note that McChesney does not argue that technology itself is driving this
undemocratic process. Rather, it is the general tendencies of monopoly-nance capital, which
take on historically distinct forms, mediated through technology. McChesney shows the dialectical
tension between the social relations of monopoly capitalism and the technology through which it
develops, helping us see the Internet in its material and economic reality, unclouded by either
utopian optimism or obstinate pessimism. Furthermore, by virtue of this dialectical analysis,
McChesneys examination avoids the trap of technological or economic determinism, allowing him
and usto keep sight of the Internets liberatory potential. He insists that battles over the
Internet are of central importance for all seeking to build a better society (232).
We reside at a critical juncture, where new communications technology could be used to
challenge established systems; where advertising-driven content is increasingly questioned;
where social movements are ghting for radical change; and where political, economic, and social
crises are rife. For the digital revolution to be more than a rhetorical ourish, a social revolution
must triumph over capitalism, unleashing the potential of democracy.

Notes
1.

See Yochai Benkler,ThePenguinandtheLeviathan (New York: Crown, 2011); Clay Shirky,Cognitive

Surplus (New York: Penguin, 2010).

2.

See Shaheed Nick Mohammed,The(Dis)informationAge (New York: Peter Lang, 2012); Cliord
Stoll,HighTechHeretic (New York: Anchor, 1999); Sherry Turkle,AloneTogether:WhyWeExpectMorefrom
TechnologyandLessfromEachOther (New York: Basic, 2011).

3.

See John Bellamy Foster and Robert W. McChesney, The Internets Unholy Marriage to
Capitalism,MonthlyReview 62, no. 10 (March 2011): 130.

4.

Broadband Commission for Digital Development,Broadband2015:BroadbandasaFoundationfor

SustainableDevelopment (Geneva, Switzerland: UNESCO, September 2015), 26,
http://broadbandcommission.org.

5.

Bruce Schneier,DataandGoliath:TheHiddenBattlestoCollectYourDataandControlYourWorld (New

York: Norton, 2015), 53.

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