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Digital Depression

Digital Depression: Information Technology and Economic Crisis

Copyright Date: 2014
Pages: 344
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  • Book Info
    Digital Depression
    Book Description:

    For decades society venerated advanced information and communications technologies (ICTs) as a source of economic rejuvenation and uplift. The financial crisis of 2007-08 shook such ideas. Originating in the United States, the driver of digital systems and services, the prolonged economic slump precipitated a perplexing historical outcome: a technological revolution wrapped inside an economic collapse. Dan Schiller analyzes the crisis tendencies of capitalism to root out the sources of this digital depression. From there he traces the economic re-composition wrought by ICTs, seeing them as a leading economic growth pole akin to the 1930s consumer industries that came out of the Great Depression. Finally, he lays out the present-day battles to capture and control digital technology and its growth. Demonstrating digital technology's central role in the global political economy and connecting it to the rise of worldwide financial, production and military networks, Schiller sets the digital communication industry in the context of intensifying geopolitical conflicts over the Internet. As he shows, the forces at the core of capitalism--exploitation, commodification, and inequality--are ongoing and accelerating within the networked political economy. Timely and wide ranging, Digital Depression blazes new ground in illuminating the role of information and communications within the political economy's developmental processes.

    eISBN: 978-0-252-09671-6
    Subjects: Technology, Economics, Business

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-xii)
  4. Introduction: A Contradictory Moment
    (pp. 1-10)

    Today’s financial and economic crisis originated, paradoxically, in the heartland of advanced information and communications technology (ICT): the United States. California, home to both Silicon Valley and Hollywood, was perhaps the hardest-hit U.S. state.¹ Late in 2013, San Jose, California—at the center of Silicon Valley—was cutting social services, leaving potholes in disrepair, and planning to strip city workers of health benefits.²

    It was not supposed to turn out this way. For decades we were told that ICTs constitute a source of general economic uplift. From the theory of postindustrial society, first advanced during the 1960s, to “new economy”...


    • CHAPTER 1 Network Connectivity and Labor Systems
      (pp. 13-26)

      The direct historical precursor of our own moment is not the Great Depression, but the early to mid-1970s. I borrow from David Harvey,¹ Vijay Prashad,² and others in arguing that the response to the recession of the 1970s was profound; and that this response set us on a course that eventually led on to the crash of 2008. My account departs from theirs in emphasizing how these decades brought forward information and communications technology as the beating pulse of capitalist development; and I situate this shift into networks within three encompassing trends—in production, finance, and U.S. military activity.


    • CHAPTER 2 Networked Production and Reconstructed Commodity Chains
      (pp. 27-42)

      We must learn to set the growth of digital networks within the lengthy and complex process of capitalist globalization. The roots of transnational corporations (TNCs) reach back to the seventeenth century, but TNCs became capital’s dominant expression during the twentieth. One spur was that the productive capacity of manufacturing industry was bursting through its previous limits. There were others: readier access to cheap labor and natural resources, and an improved ability to administer distribution and marketing in tempting foreign markets. National restrictions, such as patent laws, quotas, tariffs, and other barriers to exports, also motivated big U.S. companies to establish...

    • CHAPTER 3 Networked Financialization
      (pp. 43-56)

      Financialization denoted another formative aspect of the rise of digital capitalism in response to the crisis of the 1970s. Information-processing equipment and software were assimilated into a financial system that operated both as an instrument of class power domestically and a pivot of capitalist expansion and imperial control internationally. Network-enabled financialization, however, again possessed contradictory momentum: it was a bearer of crisis rather than of stable accumulation.

      Financialization evolved out of multiple impulses. One spur came as millions of workers who experienced wage repression were brought to depend on debt for immediate consumption as well as for housing and automobiles,...

    • CHAPTER 4 Networked Militarization
      (pp. 57-70)

      A third great vector of reorganization originated in government spending for the United States’ unmatched military and intelligence programs. Digital capitalism was cast as a permanent, pervasively militarized social formation.

      This was not because spending on weaponry was a recent development. Between the fireballs that devastated Japan at the end of World War II and President Truman’s decision to send U.S. military forces into Korea, the nation’s political economy had been rebuilt as an armamentarium within which ICTs acquired ever-growing importance. Two fuels streamed together to feed this process. The first was a political countermovement by capital and its allies...


    • CHAPTER 5 The Historical Run-Up
      (pp. 73-82)

      Wide-ranging changes in production, finance, and military spending drew impetus from capital’s response to the crisis of the 1970s; across this span, corporate profit strategies were renovated around networks’ ever-increasing capacity for connectivity and dispersed collaboration. “This was not the first time that overproduction and competition engendered efforts by elites to rejuvenate the market system,” I wrote in 1999, “but the pivotal role accorded to information and communications as a solution was unprecedented.”¹ A fourth vector of structural transformation may be glimpsed at the epicenter of an emerging digital capitalism: the communications industry.

      Violent technical and institutional changes convulsed the...

    • CHAPTER 6 Web Communications Commodity Chains
      (pp. 83-114)

      I commence myappraisal of Web-oriented communications commodity chains with networks and access devices: an expansive, malleable infrastructure. Layered into this infrastructure are services and applications powered by other intermediaries, vendors of everything from operating systems, browsers, search engines, and social networks to program content.¹ Recomposition continued at a frenzied pace across this great range throughout the digital depression, signifying capital’s scramble to open and to occupy high-profit boxes.

      Behind the retail end of contemporary communications—the side that we experience as consumers—lies a sprawling telecommunications infrastructure. Kindles allow us to download books and other texts through Amazon’s behind-the-scenes arrangements...

    • CHAPTER 7 Services and Applications
      (pp. 115-124)

      By the time of the Time-Warner–AOL merger debacle that rang out the old millennium, the likelihood had evaporated that the existing multimedia companies might simply take over the new digital systems and services. Instead, to their surprise, these conglomerates found themselves on the defensive. Muscling in on their turf were not just broadband and mobile internet operators, such as AT& T, Verizon, and Comcast but—less predictably—well-financed outsiders and upstarts: from Netscape and Yahoo! to Google, Apple, Amazon, Microsoft, Facebook, and Netflix.¹

      It was not only media moguls who were caught out. That the entrenched conglomerates might be...

    • CHAPTER 8 The Sponsor System Resurgent
      (pp. 125-141)

      Advertisers abhor a vacuum. Realms of practice from which they are excluded comprise, for consumer products manufacturers and their affiliates in the specialized industries of marketing and advertising, an onerous cultural white space—because such zones obstruct or resist or are merely indifferent to their selling efforts. If such an area of cultural practice becomes popular, drawing large groups coveted by marketers and giving them reason to occupy themselves for extensive periods, then these limits become positively menacing. Advertisers aim, in principle, to reach most-needed audiences, anytime and everywhere; this translates into a demand to turn cultural white space into...

    • CHAPTER 9 Growth amid Depression?
      (pp. 142-148)

      Did the metamorphosis of communications around Web commodity chains establish an exception to the contradictory pattern detected in part I? There, we found that network-enabled reorganizations of manufacturing, finance, and war production eventually led on to a further episode of crisis. Did the U.S. information and communications industry exhibit a different directional pattern? This industry’s own investment in ICT and software was greater than that of manufacturing, or banking, or indeed of any other sector: $80.5 billion, or 28 percent of the total in 2011.¹ Might these expenditures, further augmented by outlays made in other national markets, signify that a...


    • CHAPTER 10 A Struggle for Growth
      (pp. 151-160)

      The digital depression gave no sign of abating. In some places and at some moments, authorities were able to contain the crisis—but not yet to resolve it. Far from being regenerated, the circuits of the political economy that carried the malady functioned largely as they had. Even as the slump became prolonged, however, fresh wellsprings of profitmaking accumulation continually emerged around network equipment, services, and applications.

      Who—which companies, which states—would cultivate and control these coveted centers of emerging comparative advantage? Internet connectivity had been woven into the global political economy, enabling new commodities, altering state policy, and...

    • CHAPTER 11 “A New Foreign Policy Imperative”
      (pp. 161-169)

      Several interlocked U.S. Executive Branch initiatives were organized during the digital depression in a loosely coordinated effort to affirm and bolster U.S. policy for the extraterritorial internet. This endeavor claimed a high priority. Cyber issues, declared Secretary of State Hillary Clinton in her announcement of the administration’s International Strategy for Cyberspace, constituted nothing less than “a new foreign policy imperative.”¹ The Department of State’s contribution to this policy program was to project a refurbished rhetoric of human rights centered on what Secretary Clinton in 2010 hailed as “internet freedom.”² The stepping-off point for what became a concerted State Department initiative...

    • CHAPTER 12 Taking Care of Business: The Internet at the U.S. Commerce Department
      (pp. 170-184)

      A displacement of U.S. policy authority had been effected around the internet’s emergence. The Federal Communications Commission, an independent federal regulatory agency established during the New Deal, had overseen nongovernmental network system development beginning in 1934. A series of FCC decisions during the 1960s and 1970s was fundamental to the commercial rollout of packet switching services, and indeed to the commercialization of the internet during the 1990s. To accelerate and widen the deployment of computer communications on the terms demanded by corporations and trade associations, however, the FCC had paradoxically relinquished much of its own jurisdiction.¹ When the internet was...

    • CHAPTER 13 Beyond a U.S.-centric Internet?
      (pp. 185-210)

      The geopolitics of today’s internet are powerfully illuminated in a concurrent Commerce Department undertaking concerning the Domain Name System (DNS) that is used for internet communications. Undertaken and conducted as an extraterritorial projection of U.S. policymaking, this Executive Branch proceeding was extraordinary for transforming into a venue where other countries mounted a concerted diplomatic challenge to U.S. power. The resulting stalemate, furthermore, threatened to give way when, soon afterward, U.S. power over the DNS experienced a disruption as unexpected as it was severe.

      The DNS was formalized in the 1980s (and further elaborated in 1994),¹ as the U.S. Defense Department...

    • CHAPTER 14 Accumulation and Repression
      (pp. 211-228)

      A sustained and often secretive mobilization by the U.S. Executive Branch engendered little-known challenges to the existing internet by elements of the United States military and security establishment. The issues pertained to cyber-conflict, as it came to be called, in which, akin to air power decades before, network-enabled weapons launched a far-reaching reappraisal of strategic imperatives.

      The 1990s and the decade that followed witnessed scattered cyberattacks, occasionally quite serious ones.¹ Estonian banking and government Web sites were struck during May 2007 byan assault supposedly perpetrated from within Russia. Israel reputedly used cyberweapons (or, perhaps, a hardware-based Trojan horse?) to knock...

    • CHAPTER 15 From Geopolitics to Social and Political Struggle
      (pp. 229-246)

      The historical movement of the political economy is shaped both within and beyond a top-down, state-oriented geopolitics. The dispositive and dynamic factor is the political balance of social forces both within particular societies and globally.

      “Can the capitalist class reproduce its power in the face of the raft of economic, social, political and geopolitical and environmental difficulties?” asks David Harvey. He believes that it may, but that this will come about, if it does come about, only as an outcome of social and political struggle. In order for capital’s class project to succeed, Harvey explains, there will “have to be...

  8. Notes
    (pp. 247-348)
  9. Index
    (pp. 349-362)
  10. Back Matter
    (pp. 363-364)