Tech, Capital, and #ResistCapitalism
I suppose we should thank the libertarian movement for providing an ideology for all the most pedantic, half-smart people on the internet to rally around. It serves as a kind of homing signal for people who took the obligatory praise of their grade school teachers as a lifetime pass to be as smug as they are stupid.
Ignoring the ludicrous premise that people should have to excise themselves completely from a system which literally governs how all basic resources are distributed before they can critique that system, there is a special idiocy required to believe that the incredible wealth generation that has occurred in Silicon Valley is the product of private capital firms and tech companies alone. This of course did not stop conservatives from doing so in response to the #resistcapitalism.
While Bors’ cartoon provides a succinct rebuttal to this specious reasoning, technology itself provides an even more robust and practical counter-argument. In addition to the direct link between active users and the valuation of tech firms, the scalability of so many start-ups requires tools that were produced and distributed using an anti-capitalist model.
Amazon’s CEO seems to live out the libertarian ethos. One of the largest drivers of Amazon’s continued growth has been Amazon Web Services. In the fourth quarter of 2016, AWS generated over 3.5 billion dollars (PDF) in sales, and is a hugely profitable part of their business. This revenue stream is particularly significant because it allows Amazon to support its project of accumulating market share, often at a loss, provided that AWS remains profitable. Surely this portion of their business is supported by tech infrastructure that Bezos and his crack team of engineers invented themselves from whole cloth. A system so powerful and robust that it propelled Amazon to a market cap of almost 300 billion. After all, this would have to be the case if we are to hold them to the same standards that internet libertarians so often try to force on leftists.
Alas, it is not the case. Just listen to Chris Shlaeger, director of software development at Amazon Web Services in an interview with Linux.com:
“We view open source as a companion to AWS’s business model. We use open source and have built many AWS services on top of open source technologies, like the Linux Kernel, Xen and MySQL.”
In fact, AWS has developed their own version of Linux, the aptly titled Amazon Linux, for use on their Amazon Elastic Compute Cloud (EC2). I certainly do not wish to denigrate the many talented engineers and developers who have made useful contributions to the Linux community as a whole through Amazon’s use of Linux. However, the maintenance of the Linux environment may present problems for the intellectual luminaries who are so quick to point out that tech companies are private enterprises. In the same interview, Shaleger outlines one simple way that Amazon contributes to the Linux environment: detecting bugs.
If we find a bug in the Linux Kernel we usually send the patch upstream. It’s much easier for us to ingest such fixes with the next Linux Kernel release than having to maintain our own patch sets with bug fixes.
A perfectly pragmatic reason, but by the standards forced on leftists, this would mean that every time AWS uses a patch that they did not find and fix themselves, they should give a portion of their hefty profits to whoever discovers this bug. Again, this is not the case, nor am I saying that it should be. I am merely trying to hold these beacons of capitalist innovation to the same standard that moronic libertarians seem to believe invalidates any critique of capitalism.
AWS is a particularly telling example because it provides infrastructure for a number of other prominent tech companies, including Netflix, Intuit, and Juniper. These companies rely on an operating system that has been deliberately distributed freely and openly and for which updates are freely given, in contravention of the sort of capitalism → innovation pipeline that so many of these internet idiots rely on.
In 2012 Huan Liu estimated that Amazon had almost half a million Linux servers running, and revenue growth would suggest that number has gone up considerably since then. Imagine how much Amazon would have to pay in licensing fees for each instance of the Linux kernel that they relied on to support AWS? Or if they compensated every person who contributed bug fixes to the Linux kernel? Looking back at Amazon’s history we see an even stronger link between open source software and Amazon’s tremendous success.
A CNET article from 2002 describes how Amazon saved big by switching to Linux:
Linux can cut costs in several ways. When a company first obtains the operating system, the software can be downloaded for free, or a single copy purchased from a company such as Red Hat or SuSE can be installed on as many computers as a company wants.
Curious when Amazon recorded its first profitable quarter? Q4 2002. According to CNN Money:
Amazon slashed operating costs in half in the quarter, enabling the company to cut prices on its core books, music and video business in exchange for higher volume, and helping put Amazon in the black for the first time.
I wonder where those operating cost savings came from?
The profits of tech firms and venture capitalists and the start-up potential that so many see as the panacea to the crisis of capitalism both rely heavily on a project that deliberately rejected the capitalist model. Of course this did not stop capitalists from adopting it to their own ends, and many significant open source projects have grown out of these capitalist projects. But they did not do it by themselves. It was the availability of a flexible operating system distributed for free that made it possible. This fact is something intellectually honest libertarians should have to reckon with more often, assuming of course the term “intellectually honest libertarian” isn’t an oxymoron (spoiler alert: it is).
Edit: This post has been altered because I’m a moron who can’t spot typos.