Wall Street vs. Silicon Valley

[Rafiq]

Now, before we begin, we should all already have an idea of the nature of how inter-connected these two leviathans are, we know they don't exist in a vacuum.

However, to what extent is the power of each inversely related to the other? The bourgeoisie is not a monolithic bloc - there are different sections which often times have competed historically (i.e. industrial vs. finance capital, ETC.) - to what extent is there an antagonism between the tech-elite and 'Wall street' as far as societal hegemony is concerned?

Or, even if there is no antagonism, to what extent has Wall Street's power waned in the face of the growth of technological capital? Furthermore, one should revive the category of rent here - Zizek, as well as some users here in the past have pointed out that new forms of rent have accounted for the growth of Silicon Valley, and not simply ultra-exploitation as it was in the past. This also leaves some interesting avenues of discussion to be opened regarding the relationship between the transition to a rent-based society and the new-found cultural fascination with pre-modern phenomena, Game of Thrones, Star Wars, ETC.

Nothing encapsulates this relationship more than how finance capitalism even operates today: Information technology sustains even the means by which a capitalist is able to invest, buy and manage stocks, and whatever you want. We don't question the underlying substrate of this - this information technology is monopolized privately, which means that today to a certain extent even the bankers, capitalists are subsumed by these new post-modern barons of technological capital. The differences between other dependencies that which capitalists rely on, i.e. "Couldn't you also make the same argument for oil companies, because they are equally relient on them?", are not sustained by relations of rent. Oil is a tangible commodity that can be bought and sold - the same cannot be said for the digital world, for the internet, for software, these are rented out - and furthermore, the hardware used to access them is merely the means by which one accesses it. The digital sphere is IRREDUCIBLE to tangible commodities like iphones, computer hardware, for these are merely the instruments of accessing them.

Do we even live, in other words, in an era of finance capitalism anymore? Our standards of what constitutes the essential basis of life has been outpaced by recent developments - as I said in a previous thread, we don't even question the 'technological' background of our lives, it is there like nature. The point is not to question it in such a worthless, cliche'd way: Of how it makes us even more subservient or immersed in capitalism, but to question to what extent they represent the emergence of a new capitalist class whose profit is derived from rent, or the monopolization of basic necessities for the participation in a modern society, a kind of neo-feudalism?

[Bala Perdida]

I'm don't think this is answering your question, but living in the valley you see all sorts of weird shit like this. First you got those first gen techies, you know. All the internet people, security software engineers, all that. Then you got the next gen which is more socially geared. All the social media websites, search engines, email providers, video services. Now you see these types trying to branch out into the regular workforce. All aspects of life. Go on South Bay Craigslist or even most of the SF bay area Craigslist and you see a shit-ton of job listings claiming you can work when you want, pick your own schedule, make an average of $20/hr. It's these new service networks like Uber, Lyft, DoorDash. Now they're getting into office cleaning, handyman work, residential cleaning. All over. They promise you all of these 'benefits' but they're actually 'hiring' you under a contract that takes away basic perks of working. Such as overtime and employer paid taxes. They make you sign forms claiming you're your own employer so you pay twice the taxes as a regular employee, and you don't qualify for overtime. Plus you can be dropped from the network at any point because they technically never 'hired' you. Also this is putting several other workers in the same industries in danger of loosing their jobs. Having fully employed workers undermined by contracted workers. Plus having these fuckers around is gentrifying the hell out of the bay area. These techies are dangerous and they keep expanding.

[Mr. Piccolo]

I'm don't think this is answering your question, but living in the valley you see all sorts of weird shit like this. First you got those first gen techies, you know. All the internet people, security software engineers, all that. Then you got the next gen which is more socially geared. All the social media websites, search engines, email providers, video services. Now you see these types trying to branch out into the regular workforce. All aspects of life. Go on South Bay Craigslist or even most of the SF bay area Craigslist and you see a shit-ton of job listings claiming you can work when you want, pick your own schedule, make an average of $20/hr. It's these new service networks like Uber, Lyft, DoorDash. Now they're getting into office cleaning, handyman work, residential cleaning. All over. They promise you all of these 'benefits' but they're actually 'hiring' you under a contract that takes away basic perks of working. Such as overtime and employer paid taxes. They make you sign forms claiming you're your own employer so you pay twice the taxes as a regular employee, and you don't qualify for overtime. Plus you can be dropped from the network at any point because they technically never 'hired' you. Also this is putting several other workers in the same industries in danger of loosing their jobs. Having fully employed workers undermined by contracted workers. Plus having these fuckers around is gentrifying the hell out of the bay area. These techies are dangerous and they keep expanding.

One thing I notice about a lot of these new service jobs is the way that they are promoted as a form of liberation from stuffy corporate jobs. Precarious work is being packaged as hip and a form of liberation. The consumers of these services also see it as some kind of blow to privileged sectors of the economy.

The language of Silicon Valley has a radical sound to it even if the actual ends are not necessarily good for workers. In my own experience this makes it harder to criticize the Valley than say banks or oil companies because people will say that you are just fighting for entrenched interests and holding back progress.

[Antiochus]

I think its a generality (and true) that as of late, and I could be getting this completely wrong, capitalists are ever shifting the burden back onto workers using new propaganda.

As listed above, many "new" companies like Uber and so forth, do not operate as a single concise entity. Rather they are decentralized conglomerates that still perform labor extraction, but bypass virtually all modern labor laws and make it seem to the average person working for them that he is an "entrepreneur".

This goes a bit deeper. Can someone with information post how exactly "franchise" businesses have grown in respect to traditional corporations? I don't think this is something particularly 'new'. The Capitalism of the 19th century gave way to corporate capitalism for example.

This will, I think, continue to escalate. The main engine of Capitalism is energy. Most of the energy today is a tangible and exhaustible (oil, coal, natural gas etc...). But what happens when humanity (if it can) shifts to inexhaustible sources of power (wind, solar, fusion, more reliable fission etc...)? The only logical conclusion for the Capitalist is rent.

[Mr. Piccolo]

I think its a generality (and true) that as of late, and I could be getting this completely wrong, capitalists are ever shifting the burden back onto workers using new propaganda.

As listed above, many "new" companies like Uber and so forth, do not operate as a single concise entity. Rather they are decentralized conglomerates that still perform labor extraction, but bypass virtually all modern labor laws and make it seem to the average person working for them that he is an "entrepreneur".

Exactly. You hear this all the time about workers having to be "entrepreneurs" which is just a fancy way of describing precarious labor conditions. What is sad is that so many working people buy into this propaganda and end up blaming themselves for their own misery if things don't work out.

[Rafiq]

The language of Silicon Valley has a radical sound to it even if the actual ends are not necessarily good for workers. In my own experience this makes it harder to criticize the Valley than say banks or oil companies because people will say that you are just fighting for entrenched interests and holding back progress.

One should assert that one could have said the same about the Communists in the 19th century regarding criticism of the emerging bourgeoisie, and furthermore, the Communists of the Comintern regarding their criticism of new finance capitalism, entrenched interests in both cases being the ancien regime and later industrial capital.

[Sewer Socialist]

You know, this form of employment is one I'm pretty familiar with, having been a bike messenger. Many companies operate with a model of being always-hiring, which works out great for them and bad for the worker when they pay by commission - that being the dominant model of compensation in the Eastern United States messenger industry.

For the employer, this means there will always be someone sitting around, hungry to complete a run, even if the company hasn't hired a competent dispatcher. For the employee, this means that, technically, if there were enough work to do, you'd be earning as much add the company told you that you could earn when they hired you. Of course, that rate is never realized, because as soon as they get that busy, they make sure to hire another ten people. In reality, you spend your day sitting around and waiting to be assigned something to do so you might make some money.

These new companies do it through an application for a phone, dispatched by someone who lives on another city and completely unaware of a local understanding beyond that which is afforded by Google Maps. There is no office, no venue to meet your co-workers, no easy way to organize yourselves. Even if you did, no one plans on sticking around long enough to be so invested in the job as to stick their neck out to change anything - the best they hope for is a new job.

[ComradeAllende]

Do we even live, in other words, in an era of finance capitalism anymore? Our standards of what constitutes the essential basis of life has been outpaced by recent developments - as I said in a previous thread, we don't even question the 'technological' background of our lives, it is there like nature. The point is not to question it in such a worthless, cliche'd way: Of how it makes us even more subservient or immersed in capitalism, but to question to what extent they represent the emergence of a new capitalist class whose profit is derived from rent, or the monopolization of basic necessities for the participation in a modern society, a kind of neo-feudalism?

It depends on how you view the "eras" of capitalism. Finance capital continues to have a large (some would say exaggerated) role in modern capitalist societies, with profit levels returning (and surpassing) pre-crisis levels. Growth is steady, profits are high, and financial capitalists continue to exert their interests on poorer developing nations. Yet the culture has moved on; Wall Street no longer controls popular conceptions of business like it once did. Digital technology and its entrepreneurial style has asserted itself in modern culture. Whereas before we were encouraged to become studious accountants and market-analysts (even if we had other jobs), now we are urged to become more "creative" and "entrepreneurial" in our activities.

[Sinister Cultural Marxist]

First, we should identify the kinds of tech service companies burgeoning in Silicon Valley. They each have a distinct business model, relationship to labor and relationship to finance capital. In each case, they are still dependent on finance.

(1) Traditional hardware/software firms. These firms are the basis of the first tech boom in the 70s and 80s (or in the case of some like IBM, even earlier). The most prominent today are Apple and Microsoft, with Google getting in on the action too. Remember that these three companies are the most profitable and significant tech firms. Whenever you use a tech device, chances are you are using software produced or contracted by one of these companies, possibly on an Apple computer. Internet tech firms depend on both hardware and software to operate. While these companies are not as new as others, they are linchpins of the industry.

(1b) A subgroup of these companies primarily provide commercial software for other companies, instead of to consumers. These companies are like the industrial machinery companies of earlier eras, except they provide software.

(2) Social media firms. These firms, in particular Facebook (and Google to some extent), rely on user produced content and the desire for various people to remain in contact with one another. Their revenue stream is ad based, so their business model has something in common with major broadcasters and other forms of media which sell adds to finance the content they provide. For Facebook, they sell adds to finance the platform by which its many users can provide content that their friends, loved ones etc find attractive.

(3) "Disruptive" sharing economy platforms. These firms are exemplified by those like Uber, Airbnb, Postmates and Lyft. These firms claim to provide drivers, homeowners, bicyclists, or whoever else the right to either rent property or sell their labor in fields traditionally dominated by established firms, like Taxi companies or hotel chains. The service these companies offer is access to customers, in exchange for a portion of the cash received.

As others have identified, these companies rely on turning workers into pseudo-entrepreneurs - basically, precarious workers. One upshot, albeit a marginal one, is that the presence of multiple firms offering the same service (Lyft and Uber, for instance) allows for users to "work" for multiple firms. Of course, this gives them more options, but companies like Uber probably would not want to admit that the only real freedom they offer is the right to work for their competitors.

(4) E-commerce firms, like Amazon and Ebay. These firms are basically nothing more than giant, more efficient retailers that can easily undercut stores. While they are interesting in their own right, these companies have much more in common with traditional retailers. Now, we see traditional retailers like Walmart getting in on the e-commerce trend.

(5) Streaming companies, like Netflix and Hulu. These companies provide access to the content of others for a fee. They are, to an extent, a rent-based business model in that they control access to content

Amazon has been getting in on this business as well as Apple. Amazon and Netflix alike have moved from merely providing the content of others to offering their own content (shows like House of Cards, Transparent, Man in High Castle, etc)

(6) Firms who make "apps". These companies are the newest of the bunch, offering fairly limited and specific services which can be accessed from cellphones and other devices.

(7) Service providers, like Comcast and AT&T, which provide the means of accessing networks to begin with. These companies control the physical infrastructure on which the "new" economy depends - or at least, access to this infrastructure. This category is probably the closest to a traditional "rent model" in the tech world.

(8) Last but not least, you have Venture Capital, angel investors etc, which form the lifeblood of the Bay. This is where finance capital meets Tech, as Tech companies are dependent on initial heavy influxes of capital to develop and grow long before they will ever be profitable. This is a high-risk high-reward industry where many (most?) companies they invest in fail, but they only need a few success stories to gather incredible wealth for the investors.

To some extent, many companies like Apple or Google could be categorized as providing services which fall in several of these categories, but most companies specialize in a few areas.


With this crude taxonomy laid out, we can maybe begin to answer the question of how the balance of tech and finance plays out, and whether this indicates the rise of a rent-seeking model of capital. It seems some firms, particularly those like Comcast which provide the utilities themselves, are based on a rent model. Others like Amazon are more conventional retailers. Yet others are basically just companies that produce programs or media platforms. Lastly, there are some companies like Twitter which are massive but unprofitable, which raises serious questions about their sustainability.

I don't think this represents a dominance of rent over finance capital. For one thing, these companies remain dependent on investors and shareholders, who ultimately make a good deal of money off of their corporate decisions. What is perhaps more notable is the creation of a new hub of finance capital in those VC firms and others which seek out and invest in promising companies. These investors might not be a part of Wall Street, and need to operate near where the tech firms are. They focus on seeking out companies that provide a new, original service, as opposed to those which are merely just "profitable". In a sense then, it seems that finance capital has found new homes outside of the traditional hubs (NYC, London, Paris, Tokyo). It is ironic that the effect has been the creation of local centers of finance capital, considering the way that new communication forms should improve the ability of centralized hubs to invest. Investment in this "new economy" focuses more on intellectual capital in the form of "innovation" than on investing in long-established major corporations with lots of physical industrial assets.

As much as anything else, the new focus on investing in the "next big idea" gives the illusion of investing in radical (or, as liberal capitalists might use the term, "revolutionary") changes in production. These innovations are significant and life-changing, but they don't solve our current problems. They merely provide more efficient ways of gaining or sharing information, or alternatively, wasting time. Some, like Uber, offer a way to provide a service while skirting regulations. Regardless, I think the most major thing that these firms indicate is an increased intensification of technological growth more than a radically new way of organizing our economy.