The Digital Economy Is Capitalism at Its Worst
Corporations are more able than ever to extract what little value people have left
Instead of bringing widespread prosperity, the digital economy has amplified the most extractive aspects of traditional capitalism. Connectivity may be the key to participation, but it also gives corporations more license and capacity to extract what little value people have left. Instead of retrieving the peer-to-peer marketplace, the digital economy exacerbates the division of wealth and paralyzes the social instincts for mutual aid that usually mitigate its effects.
Digital platforms amplify the power law dynamics that determine winners and losers. While digital music platforms make space for many more performers to sell their music, their architecture and recommendation engines end up promoting many fewer artists than a diverse ecosystem of record stores or FM radio did. One or two superstars get all the plays, and everyone else sells almost nothing.
It’s the same across the board. While the net creates more access for artists and businesses of all kinds, it allows fewer than ever to make any money. The same phenomenon takes place on the stock market, where ultra-fast trading algorithms spur unprecedented momentum in certain shares, creating massive surpluses of capital in…
