Farrar, Straus and Giroux

During the post-war boom, capitalism suppressed the development of the global south. The means by which it did so are clear and well documented.44 Unequal trade relationships forced much of Latin America, all of Africa and most of Asia to adopt development models that led to super-profits for Western companies and poverty at home. Countries that tried to reject these models, such as Chile or Guyana, had their governments overthrown by CIA coups or, as with Grenada, by invasion. Many found their economies destroyed by debt and by the ‘structural adjustment programmes’ the IMF dictated in return for debt write-offs. With little domestic industry, their growth models relied on the export of raw materials, and the incomes of the poor stagnated.
Globalization changed all that. Between 1988 and 2008 – as the chart shows – the real incomes of two-thirds of the world’s people grew significantly. That’s what the hump on the left-hand side of the graph proves.
Now move to the right-hand side of the graph: the top 1 per cent also see their incomes rise, by 60 per cent. But for everybody in between the super-rich and the developing world – that is for the workers and lower-middle classes of the West – there is a U-shaped hole indicating little or no real increase. That hole tells the story of the majority of people in America, Japan and Europe – they gained almost nothing from capitalism in the past twenty years. In fact, some of them lost out. That dip below zero is likely to include black America, poor white Britain and much of the workforce of southern Europe.

We have listed the factors that allowed neoliberalism to happen: fiat money, financialization, the doubling of the workforce, the global imbalances, including the deflationary effect of cheap labour, plus the cheapening of everything else as a result of information technology. Each seemed like a ‘Get Out of Jail Free’ card, allowing the ordinary karma of economics to be suspended. But as we have seen – and as most of us have experienced in some way – there has been a huge price to pay.

The interplay between supply and demand does not come into the price of an iTunes track: the supply of the Beatles ‘Love Me Do’ on iTunes is infinite.

The small number of companies that dominate each sector is striking. In traditional sectors you have usually four to six big players in every market: the big four accountancy firms; four or five big supermarket groups; four big turbofan makers. But the signature brands of info-tech need total dominance: Google needs to be the only search company; Facebook has to be the only place you construct your online identity; Twitter where you post your thoughts; iTunes the go-to online music store. In two key markets – online search and mobile operating systems – there is a two-firm death match, with Google currently winning both of them.

Firefox, an Open Source browser, has currently around 24 per cent of the global browser market.19 A staggering 70 per cent of all smartphones run on Android, which is also technically Open Source.20 This is in part due to an overt strategy by Samsung and Google to use Open Source software to undermine Apple’s monopoly and maintain their own market position, but it does not alter the fact that the dominant smartphone on the planet runs on software nobody can own.

Following the disaster John Perry Barlow, a cyber-rights campaigner who’d lost 95 per cent of his money, drew the harsh conclusion: ‘The whole dot-com thing was an effort to use 19th and 20th century concepts of economy in an environment where they didn’t exist, and the internet essentially shrugged them off. This was an assault by an alien force that was repelled by the natural forces of the internet.’ And he pointed out where the debate might go next. ‘In the long term it’s going to be very good for the dot-communists.’

Economists like to demonstrate the archaic nature of command planning with mind-games like ‘imagine the Soviet Union tried to create Starbucks’. Now, here’s a more intriguing game: imagine if Amazon, Toyota or Boeing tried to create Wikipedia.

Next, you need what Benkler calls ‘planned modularity’: that is, a task is broken up into chunks small enough for people to complete on their own and then submit the outcome to a wider network. A Wikipedia page is a perfect example: adding a snippet of info or deleting an erroneous one is a modular task that can be done from the top deck of a bus on a smartphone, or from a PC in the web café of a Manila slum.

If you think about it this way, the purpose of patenting the advanced HIV drug Darunavir can only be to keep its price at $1095 a year

But what if somebody did anticipate the information-driven fall of capitalism? What if someone had clearly predicted that the ability to create prices would dissolve if information became collectively distributed and embodied in machines? We would probably be hailing that person’s work as visionary. Actually there is such a person. His name is Karl Marx.