The importance of Elon Musk in the new administration of the United States of America is arguably more significant than the return of Donald Trump. Musk, known to the world as an eccentric but hugely successful entrepreneur, actually comes from a family that had ties with fascist parties and supported apartheid. Yet, this is not the most important implication of the arrival of Musk in Washington D.C. Along with Musk, the entire top brass of tech-giant companies is bending before Trump. Does it reflect something more than the usual phenomenon of big business playing ball with big politics? There are analysts who believe that capitalism has entered a new digital phase that will bring about major changes in the economy, society and politics. It will eventually lead to the end of the liberal order, social democracy, market-driven capitalism, and representative electoral politics.
It is quite evident that we have entered an era of digital life where data is king. It is a new resource, like capital, from which income can be earned. Hence control over data is vital for power and profits. Data is, however, not a capital good in the strict sense of it being a produced means of production. Data is more like a common resource. Capitalism has always successfully priced non-produced goods like land, labour and, more recently, the cyberspace. New technologies, during the past three or four decades, have centred on the use of data not only for making life easier but also ensuring that newer means of income are created.
Indeed, data and the cyberspace have completely transformed our lives through the internet, social media, and ubiquitous devices like smartphones and laptops. Like land and labour, in this stage of transformation, capitalism was able to privatise cyberspace in a way akin to the famous enclosure movement in land that was associated with the Industrial Revolution. What has resulted through this change is the marginalisation of the twentieth-century, brick-and-mortar economy where producers manufactured goods and services and then sold them in more or less anonymous markets for profit. Here, business strategies were based on understanding customers, deciphering market changes, and introducing more efficient technologies.
That model of doing business has changed to a large extent. Organised, and even a large part of unorganised, production under capitalism has shifted to the mercy of companies like the Amazons of the world. There are just a handful of them but their control is pervasive. For instance, take the case of Jeff Bezos of Amazon. He completely controls, through algorithms, who sells what and who buys what on his platform. He does not produce anything. His control over transactions is far more than what the best trader in the old world would ever achieve. He knows what we might want to buy better than we ourselves do. His capital is the data we innocuously provide him for free when we browse or scroll through his website. This data is the capital that produces profits for him. The actual producer of the physical good remains at the mercy of Amazon in terms of the price he receives and the volumes he sells. Bezos earns the hefty margin he sets for himself. He does not own anything except a tiny part of cyberspace, the free data that we supply, and the cloud where he stores our data. This is far removed from the capitalism explained in the textbooks on economics.
How do these tech giants control us? Every time we scroll the internet, the company gets to know more about our preferences, our likes and dislikes, what makes us happy, what makes us apprehensive — in short; our thoughts as well as our emotions. This information is then used to suggest to us what we like. This enhances our trust. Gradually we accept what is suggested. There lies their control over us; not only our economic decisions but also our beliefs and values. We potentially become slaves of the continuously updating algorithm that maps our behaviour patterns. Social media teaches us that nothing is entirely verifiable as truth or falsehood. Hence, we create our own beliefs from what is shown to us.
Artificial Intelligence assistants know more about us than we can imagine about ourselves. In recent years, AI assistants have had their capabilities improved hugely. These entities can do things that they have been taught to do through machine learning. They can also overcome constraints that they were not taught. Their efficiency has been improved by copying patterns of the human brain where different nodes store different types of information. These AI entities are capable of improving what they are doing through autonomous learning, which gives them some attribute akin to human agency. This last part is what the tech programmers know the least about. Imagine what might happen if these entities became sentient too. The materialisation of the last attribute, though yet to come true now, is not impossible in the future. Hence, if I am searching Amazon to buy a sofa set, and my friend is doing the same on his device, the suggestions thrown up are likely to be quite different. This is not random; it is based on our past individual histories of browsing and transactions.
The essence of the new technologies based on AI is control. He who controls data controls our minds. The tech giants currently control it, but governments also have smaller datasets about us. Each side wants control over all of the data. Hence the fight over regulations. This is supposed to be the next big conflict in a capitalist society — not between capital and labour over the means of production and surplus but capital contending with the State for data and the rent it generates along with the power to control. This conflict has just begun to play out. Musk and others see a wonderful opportunity to resolve the conflict once and for all. Trump being considered an eccentric who does not understand the niceties of governance, let alone the power of technology, can be easily flattered into submission. The likes of Musk have thus decided to take over the government by taking control over its data. In the turbulent chaos that the Trump administration is creating, the transfer of data ownership is going to be easier since it would face less scrutiny. The new masters of the universe have arrived. Serious wealth is paving the road to serious power.
Globally, many of these traits are already visible elsewhere — in other parts of Europe and parts of Asia. The contradiction between technology and government will be played out differently in different nations. China would be the nation to watch closely. It is close on the heels of the US as far as technology is concerned. But the State is far from being liberal and democratic. Hence the control is likely to lie with the authoritarian State. The contradiction might unfold in different ways in parts of the world where indigenous AI is not developed. However, in the US, the die has been cast and the winner clearly visible. Musk, with his far-Right leanings, turns out to be ideally suited for leading the makeover to a new, claustrophobic version of capitalism.
Anup Sinha is former Professor of Economics, IIM Calcutta
