The Biggest Digital Companies Are Decimating the Economy
Digital monopolies end up destroying the marketplaces they depend on
Growth was easy when there were new territories to conquer, resources to take, and people to exploit. Once those people and places started to push back, digital technology came to the rescue, providing virtual territory for capital’s expansion. Unfortunately, while the internet can scale almost infinitely, the human time and attention that create the real value are limited.
Digital companies work the same way as their extractive forebears. When a big box store moves to a new neighborhood, it undercuts local businesses and eventually becomes the sole retailer and employer in the region. With its local monopoly, it can then raise prices while lowering wages, reduce labor to part-time status, and externalize the costs of health care and food stamps to the government. The net effect of the business on the community is extractive. The town becomes poorer, not richer. The corporation takes money out of the economy — out of the land and labor — and delivers it to its shareholders.
A digital business does the same thing, only faster. It picks an inefficiently run industry, like taxis or book publishing, and optimizes the system by cutting out most of the people who used to participate. So a…
