The Internet, Capitalism, and the State

Robert McChesney’s Digital Disconnect (New Press, 2013) is an informed and engaging account of the internet’s history and likely future within the context of corporate-dominated U.S. society. Yet while the book is a useful catalog of the disturbing and sometimes bizarre attributes of today’s internet, its onus on the internet’s relationship to commercialism and advertising – as opposed to labor – as well as its pluralist conception of a “corrupted” state hijacked by corporations precludes a more thorough and critical analysis.

Commercialism on the internet, as in other arenas, has undoubtedly become more intense and intrusive. McChesney traces this evolution by looking at the internet from its military-created National Science Foundation Network days to the early 1990s, when a strong anti-commercial online culture defended a free and open public sphere, to its more recent exponential growth and privatization. To be sure, McChesney shows the eventual oligopolistic corporate dominance of the internet was hardly predetermined (Google currently governs 70 percent of searches, Amazon sells 70-80 percent of books online, and the top 50 out of 773,000 websites, according to Matthew Hindman, account for 41 percent of all internet traffic, with the top seven dominating). Indeed, McChesney recounts how the traditional media monopolies were horrified by the seemingly intractable obstacles to profit posed by the early internet: its unique elimination of barriers to entry (anyone could start a website); the difficulty in forcing users to pay for ubiquitous online content; the apparent impossibility of enforcing copyrights due to the ease of copying and distributing content, and the difficulty in ensuring that users would watch advertisements when they had infinite alternatives.

In short, the internet, for a moment at least, eliminated scarcity, which McChesney notes is a precondition for profit. Faced with this apparently existential threat, and facilitated by Bill Clinton’s 1996 Telecommunications Act which enabled media cross-ownership and thereby paved the way for the reemergence of the old monopolies in a new sphere, media giants like Disney, GE, Time Warner, and Viacom went on a buying spree. In a coordinated effort to generate scarcity, the major media owners have since sought to establish “walled gardens” like Facebook, in which entry costs (e.g. fees, or personal data in this case) are effectively extorted via the isolation and inconvenience (some jobs require Facebook membership) of exclusion. Seeking “‘enhanced surplus extraction effect’ – that is, the increased ability to fleece those walled within… the giants are vying to be digital company stores in a national or global company town.”

Media conglomerates (and the state) have additionally manufactured scarcity by radically extending copyright coverage. McChesney notes that, libertarian mythologies aside, the market for non-exclusionary or nonrivalrous goods could not function without government intervention (notwithstanding Napster-founder Sean Parker’s memorable observation that the music industry had become a water-seller in a downpour, advising record producers to sell “umbrellas” instead). While the original aim of copyright protection was to encourage production through ensuring incentives, present-day media corporations, McChesney digitaldiscontinues, benefit from what are in effect “government monopoly protection licenses” in perpetuity, halting production, competition, and creativity while generating artificially high prices for consumers. Nothing since 1920 has been added to the public domain, as media companies, rather than the artists they claim to protect, are guaranteed “rent” via copyright-cum-monopoly protections decades beyond the life of the artist.

Advertising on the internet also initially presented an obstacle to both websites in need of funding and advertisers seeking ways to sell to users. Whereas three television networks were originally able to exert relative leverage on advertisers with few other options, the internet’s profusion of websites has decisively shifted the advantage to the advertisers, forcing a surfeit of revenue-hungry sites to compete with one another over relatively scarce funding. Within this highly competitive context, websites are working to attract profitable advertising by using cookies to monitor visitors’ site visits and activities, collecting user data that sites sell to advertisers who then target users with highly personalized – and more effective – ads.

Through “targeted advertising,” “persuasion profiling,” “sentiment analysis,” and “commercializing friendship” (a specialty of Facebook, which uses users’ “likes” to sell products to one’s “friends”), online advertising has radically expanded the intensity and intimacy with which media consumers are commodified. As Bruce Schneier notes, ‘“Google has great customer service. Problem is, you’re not the customer.’” Advertisers are, and the massive market for users’ personal data is only matched by the advanced and insidious technology that extracts it. Traditional standards of privacy have been demolished as Skype contains technology to ‘“silently copy’” our conversations while Smartphones track us and communicate our location and personal details to third parties whether we know it or not. Needless to say, the government – otherwise neutral or “corrupted” in McChesney’s account – has collected incalculable sums of personal data, stored in its colossal Utah database for indeterminate future use. And whereas the Stasi was famously overwhelmed by its abundance of collected data, this government is developing far more sophisticated processing technologies, making it an understatement to note that the police state is here and it is locked in.

Notwithstanding the book’s clearly written tour of numerous issues characterizing today’s internet, from the effective demise of net neutrality via Smartphones to the multiplication of cloud computing, McChesney’s account is diminished by a dubious conception of the state that leads to an inadequate analysis of capitalism and, thereby, a flawed prescription. McChesney sees the state that developed the internet in neutral terms – as opposed to the rapacious corporations who seek to take its helm – without noting that the internet was designed to distribute and maintain data in the event of nuclear war. That is, at its earliest stage, the internet represented the state’s irrepressible drive to sustain a system of power that among other things produced the conditions for a global holocaust. The state soon after presented – as it did with 19th century land-grants to the railroads – the internet to the market, whose privatization would generate the tax revenue that the state could never create on its own. It is unclear why McChesney believes that the state needed to be “corrupted” – Congress “is under the thumb of big money” – in order to make this self-serving decision. The internet has never existed apart from state exigencies; and though these exigencies can be varied and fluid, it takes a liberal leap of faith to assume that the well-being of its subjects is one of them.

By contrast, Alexander Galloway’s Protocol, focusing on the military origins of the internet, shows that, as Eugene Thacker writes in the introduction, “control has existed from the beginning.” Rejecting the ubiquitous metaphor of the internet as a “network,” Galloway shows how the internet’s governing protocols (Transmission Control Protocol and Internet Protocol) distribute information horizontally among different computers while, at the same time, the internet’s Domain Name System governs internet addresses through vertically regulating this horizontal information. By eschewing the prevailing “network” metaphor in favor of a more literal and concrete description of the internet’s vertical-horizontal system of control, Galloway is able to describe a standardizing internet code that, among other things, problematizes popular notions of internet “connectivity,” “collectivity,” and “participation.”

Specifically, Galloway shows how the benefits of connectivity, collectivity, and participation are inseparable from their opposites; new possibilities for action have simultaneously produced new capacities for control. For instance, Galloway recounts how the communications company Verio permanently disconnected the activist troupe The Yes Men from their server and thereby their website following the activists’ anti-corporate prank targeting Dow Chemical regarding the Bhopal disaster. The benefits of connectivity are inseparable from a new dependency and vulnerability created by state and corporate power’s capacity to disconnect whomever it chooses. This capacity to disconnect users from the internet, at least in terms of the state, has been intrinsic to the medium long before corporations came onto the scene.

And while McChesney cogently discusses capital’s zero-sum game with labor, this understanding does not adequately inform his proposal of a government voucher system as a means to subsidize journalism. Defining journalism – which is undoubtedly experiencing crisis – as a public good, McChesney proposes that taxpayers be allowed to allocate 200 dollars per year to the online non-profit journalism site of their choice, comparing his plan to government funding for public schools while invoking the legacy of Jefferson and Madison’s support for newspaper subsidies to make his case.

McChesney paraphrases Paul Krugman’s discussion of Michal Kalecki to argue that government job programs would be opposed by business merely because “if the public realizes that the government has the resources to establish full employment, the realization would undermine the notion that the central duty of government is to create a climate in which business has confidence in the system and therefore eventually invests to create jobs.” Here McChesney psychologizes the economy in suggesting that it is people’s attitudes that prevent government job creation, not the fact that government jobs decrease unemployment and thereby increase the cost of labor. In proposing effective government subsidization of labor, McChesney ignores the manner in which we arrived at our current moment. Capital, faced with reduced avenues for profit, decided that US labor is too costly, and it will only invest in it again when that cost is reduced or “corrected.” If the government slows this correction through adding public jobs, the private sector will likely continue to sit on its capital depriving the state of its tax revenue, et cetera. McChesney’s assertion that “inequality” has “corrupted” the political system obscures the fact that it is the system that produces inequality, as well as “special interests,” in the first place; so why seek to return to an earlier state, when we know where accumulation eventually goes? And if half of the government wants to eliminate PBS and “Big Bird,” what likelihood is there that this same government would support a massive job subsidy plan? And if through some miracle this proposal were adopted, what would stop the perennial and relentless government backlash from rolling it back – especially when the next recession comes around.

The FCC indeed rejected McChesney’s plan for being too “radical,” but the point is that if we are trying to generate systemic change it is not nearly radical enough, as it is based on some of the same premises that are part and parcel of the media propaganda McChesney so skillfully criticizes. Indeed, McChesney believes that markets have a place in the “good society” – notwithstanding their inexorable drive toward expansion – and asserts that a lack of economic growth threatens democracy. But is it not the uncritical obedience to economic growth that has us subordinating life to the market in the first place? And is it not the very fact that journalism is collapsing due to its unprofitability a valid reason for rejecting a system that insists on the primacy of profitability? Why fight a reactive and rearguard battle to establish what would be a precarious niche instead of rejecting capitalism – the system of not merely corporations but private property and profit – itself?

Whereas McChesney compares his voucher proposal to the “public good” that is public education, this again reflects an undeservedly optimistic view of government. Or, insofar as public education is a “public good” it is one that meets the needs of not “society” but society under the state, as it houses youth, indoctrinates them in individualist and nationalist ethos, rewards punctuality and obedience, and grades and divides them in accordance with society’s brutally unequal division of labor. Education, as it currently exists, is an incubator of inequality and should hardly be invoked as a model for resource distribution. Moreover, as evidenced in Chicago, New York, and the rest of the country, public education is on the chopping block, as charter schools believe that they can train students just as well as the government and turn a buck while they’re at it. Even the young U.S. government’s decision to subsidize newspaper postage, which McChesney extols, was inseparable from the nascent state’s desire to cultivate a national consciousness within a diffused federalist system. Again, the “public good” here is inseparable from the good of the state.

McChesney’s focus on internet commercialism and personal data collection is important, but this consumerist orientation leads him to overlook one of the biggest stories of the internet under capitalism: the proliferation of unpaid social production. The internet has masterfully channeled users’ “free time” toward “hobbies” that produce websites’ content. Facebook and dating sites are of course mainly composed of users’ photos, personal descriptions, commentary, and musings. Similarly, the owners of Yelp have made a fortune via the unpaid restaurant reviews of its millions of contributors, who simultaneously serve to discipline restaurant workers (for free!) via consumerist ideology. Online newspapers and sports sites have become far more interesting by soliciting readers’ comments, whose frequent thoughtfulness, wit, and learnedness often provide more compelling reading than the original content. So not only are we being advertised to and having our personal data taken while we’re on the internet, we’re also working for free to make sure that there’s an internet at all. Through such personally intensive and infinite productivity, the internet has opened whole new spatial and temporal arenas for profit, not only through the radically increased shadow work of maintaining our online networks and bringing work home with us – which McChesney briefly addresses –  but also through redefining how we conceptualize our relationship to social reality itself.

Notably, the further transformation of ourselves into permanent commodified profit-producers by the internet is not connected to telecommunication “special interests” corrupting the government. It is a mere symptom of a capitalist system that benefits, and is in turn entirely supported by, the state.

Joshua Sperber lives in Brooklyn and can be reached at


Joshua Sperber teaches political science and history. He is the author of Consumer Management in the Internet Age. He can be reached at