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Digital Capitalism: Networking the Global Market System

Author: Dan Schiller
Publisher: Cambridge, MA: MIT Press, 1999
Review Published: June 2000

 REVIEW 1: On-Kwok Lai

First, I am pleased to see your site's review of Digital Capitalism, and that Professor On-Kwok Lai is stimulated there to engage with the arguments I make in the book. There is a real dearth of serious discussion about the history and contemporary significance of the Internet, and we must do everything possible to encourage it.

I want to make just a few observations about Professor Lai's review, beginning with the question of "under-theorization."

These days there is, in my judgment, too much theory chasing around after problems. This is not in any way to dismiss the significance and, indeed, the centrality, of theory (actually, my previous book, Theorizing Communication, comprises an intellectual history of theory in the communication field!). It is, rather, to suggest that today the status of theory as such is frequently mistaken.

Theory, it seems to me, at least in the area of sociocultural studies, must develop in relationship with historical analysis. The only theory worthy of the name is that which engages at a deep and continuing level with what we know about historical development in particular areas of social practice.

The first two chapters of Digital Capitalism provide a historically grounded account of network development, first in the U.S. and then transnationally. The effort is to show that the growth of what is now often termed a "neoliberal" framework for policymaking in the networking field stems from forty years of movement in this direction, principally on behalf of a wide range of the largest U.S.-based corporations. In addition, there is an effort to explain why big companies began to place ever-greater importance on networked business processes: to underwrite the continuing process of accumulation. Likewise, I give substantial attention to the effects of this ascending neoliberalism in the global arena, as supposedly multilateral institutions are enlisted in the campaign to expand business freedom via networks -- at the direct expense, as I also show, of the prior and often inadequate system of "welfarist" telecommunications provision. In these chapters, finally, attention is also given to the huge expansion in global telecommunications provision that has occurred, mainly within the context of this new neoliberal policy framework.

What is the theory used here? In terms of industry organization, it is that business users of telecommunications, rather than carriers, comprise the documented center of policymaking gravity. This is an important point: usually, critics of capitalism in telecommunications point to "monopoly" at the provider-end as the emblematic and limiting problem. At a deeper level, the theory used here specifies that the process in which we find ourselves is, indeed, one of capitalist expansion. The telecommunications system has been and is being reorganized across the world, so that a few thousand corporations can mobilize labor power cost-efficiently within increasingly transnational production and sales chains. Along the way, tens of millions of middle-class households are obtaining newfound access to network systems and services. Where will the process end or, perhaps better, where will it experience difficulties? I give examples of how the very process of financially-organized expansion is creating some new vulnerabilities within the system. In the third and especially the fourth chapter of Digital Capitalism, finally, I show that the process of expansion around networks is about deepening the capitalist market -- and I document entry points which an organized critical opposition might take up.

What, beyond this, would Professor On-Kwok Lai like "theory" to do?

Second, as regards "ethnocultural" spaces. I do not really understand in what sense it can be said that "capitalism" has not been successful in colonizing or claiming aspects of such "spaces." Is the charge that, after all, culture remains a resource for opposition and struggle? If so, then I am in qualified agreement (culture is not pristine but conflicted). But is that the issue? -- I cannot tell.

It is the case that the modes by which digital capitalism tends to approach, and selectively to incorporate, cultural difference are being reorganized in profound ways. But this owes not to some immanent ethos, in my view, but rather to the fact that the establishment of digital capitalism on a world scale is predicated not only on the continued expansion of huge units of transnational capital -- Time-Warner, News Corporation, etc -- but also on the constitution of national capital, often for the first time, throughout much of the world. How? As I also show, through the massive and unprecedented privatization wave that has transformed telecommunications in fifteen years from a state-operated service to a more fully market-based operation. In addition, the opening of audiovisual (read: television) markets throughout scores of countries to corporate capital investment has made additional opportunities for capital to be constituted. In turn, the mode of organization of digital capitalism is via transnationally organized partnerships, joint-ventures, and other industrial linkages, binding national capital into a supranationally organized system spearheaded by transnational companies. This in turn means that we are seeing the development of a "two-track" approach to marketed culture: an English-language blockbuster tier, extending the long dominance of U.S. cultural exports to the world; and a rapidly growing tier of non-English language "localized" cultural production. The latter is still typically channeled and controlled by the restructured business complexes that typically combine transnational and national capital.

Of course there may be exceptions. In my judgment, however, it is the general trend that is profoundly important -- and unmistakable.

Finally, as to the documentation on which Digital Capitalism rests: I would not read too much into the fact that I make abundant use of newspapers in supporting my account. It's not really an irony that a book about networking and cyberspace should make use of print media: we live in a multimedia informational environment, and we may expect to for a considerable time to come. Reifying the technical differences between print and networks, furthermore, evades the fact that "print" itself is now increasingly based on versions of the same digital network technologies that are metamorphosizing into a general infrastructure for otherwise disparate media products and genres.

Dan Schiller

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