“Open, good. Closed, bad. Tattoo it on your forehead”: Placing the technology sector in social and economic history

I’m currently reading Thomas Frank’s One Market Under God, a remarkably prescient book published in 2000 which has a lot of insight into contemporary cultures of technological evangelism. The book is concerned with what Frank sees as a transition in American life from a form of populism predicated on cultural reaction to one grounded in the worship of the market. It’s possible I’m primed to see this analysis as prescient because I’m working my way backwards through his books and One Market Under God contains the seeds of an analysis that he developed over the next sixteen years.

Nonetheless, I think we can learn much about our present circumstances by looking back to this transitional point in the roaring 90s which saw the origin of the rightward turn of social democratic parties, mass digitalisation and the first Silicon Valley gold-rush. What I’m increasingly preoccupied by is how these events were intimately connected. In other words: how do we place the ascendancy of the technology sector in social and economic history? To my surprise, Thomas Frank’s book actually addresses this question more straight-forwardly than any other I can think of apart from Platform Capitalism, though of course many accounts address these issues without systematically investigating them.

Despite the 1990s being hailed as an era of democratisation driven by a booming economy, Frank insists that we recognise that “The booming stock market of the nineties did not democratize wealth; it concentrated wealth” (loc 1973). But this chimera of continually ascending stock prices, grounded in the rampant speculation of the dot com boom, helped license an ideological transition that Frank describes on loc 2027:

both parties came around to this curious notion, imagining that we had somehow wandered into a sort of free-market magic kingdom, where ever-ascending stock prices could be relied upon to solve just about any social problem. Now we could have it all: We could slash away at the welfare state, hobble the unions, downsize the workforce, send the factories to Mexico—and no one would get hurt!

The ideological work involved in maintaining we had entered a new era of perpetual growth, beyond boom and bust, relied upon the mystique of the internet. It heralded the dawn of a new world, the end of old certainties and a constant horizon of possibility to be invoked in the face of those exhibiting an anachronistic scepticism. From loc 1659:

And yet, since the moment the Internet was noticed by the mainstream media in 1995, it has filled a single and exclusive position in political economy: a sort of cosmic affirmation of the principles of market populism. “Think of the Internet as an economic-freedom metaphor for our time,” wrote bull-market economist Lawrence Kudlow in August 1999.45 “The Internet empowers ordinary people and disempowers government.” And we were only too glad to do as Kudlow instructed us, to think of it in precisely this way. In fact, so closely did the Internet and market populism become linked in the public mind that whenever a pundit or journalist mentioned the Web, one braced oneself for some windy pontification about flexibility, or the infinite mobility of capital, or the total and unappealable obsolescence of labor, government, and any other enemy of the free-market enterprise.

Somewhat more prosaically, the companies of Silicon Valley became emblems of a new anti-elitism, with the old formalities of corporate life being replaced by a hierarchical ethos that lionised the entrepreneur for their authentic living, often expressed in ‘working hard and living hard’. The practice of paying stock options in lieu of wages became a cypher for shareholder democracy, an idea which was seized upon as legitimating what were in reality vicious attacks upon the security of labour. However as Frank points out on loc 2063, the reality of this in Silicon Valley was presented misleadingly as a sign of a brave new workplace culture rather than a familiar self-interest:

It may have been fun to imagine what these enchanted options could do in the service of economic democracy, but in point of fact their powers were almost always directed the other way. Options did not bring about some sort of “New Economy” egalitarianism; they were one of the greatest causes of the ever widening income gap. It was options that inflated the take-home pay of CEOs to a staggering 475 times what their average line-worker made; it was options that made downsizing, outsourcing, and union-busting so profitable. When options were given out to employees—a common enough practice in Silicon Valley by decade’s end—they often came in lieu of wages, thus permitting firms to conceal their payroll expenses and artificially inflate the price of their shares, pumping the bubble still further.17 Options were a tool of wealth concentration, a bridge straight to the nineteenth century.

What seems hugely important to me here is the recognition that the vast concentration of wealth that took place in the 1990s was deeply tied up, structurally and culturally, with the first wave of mass digitalisation brought about by the dot com bubble. The nature of that entanglement still isn’t as clear to me as I would like, but I’m increasingly confident in my claim that the analysis of digitalisation needs to be an integral part of the analysis of capitalism from the 1970s onwards.

As important as economic history is though, it’s crucial that we also understand the cultural dimensions to this process. What I really like about Thomas Frank is his commitment to taking business bullshit seriously. From loc 1787:

It is worth examining the way business talk about itself, the fantasies it spins, the role it writes for itself in our lives. It is important to pay attention when CEOs tell the world they would rather surf than pray, show up at work in Speedos rather than suits, hang out in Goa rather than Newport, listen to Stone Temple Pilots rather than Sibelius. It is not important, however, in the way they imagine it is, and for many Americans it is understandably difficult to care very much whether the guy who owns their company is a defender of family values or a rave kid. But culture isn’t set off from life in a realm all its own, and the culture of business in particular has massive consequences for the way the rest of us live.

Our contemporary discourse of ‘disruption’ and ‘innovation’ was nurtured in the business commentary of the late 1990s. By examining its origins, we can see the political context of this way of thinking and speaking about technology much more transparently than is the case if we examine contemporary instances of it. To close with a quote from Peter Schwartz, quoted on loc 1321:

Open, good. Closed, bad. Tattoo it on your forehead. Apply it to technology standards, to business strategies, to philosophies of life. It’s the winning concept for individuals, for nations, for the global community in the years ahead.