Markets, Subjects, and The State

Three stories of technology policy from a multipolar world

It’s been a big, weird couple of weeks for global technology policy.

Earlier this month, the European Court of Justice (ECJ) struck down Privacy Shield, a major law governing data transfer between the United States and countries within the European Union. On Wednesday, the CEOs of Google, Amazon, Facebook, and Apple testified before the House Judiciary Committee’s antitrust body on the subject of their power and influence within the US competitive landscape. And yesterday, Trump announced that he plans to ban the video-sharing app TikTok, built by an American subsidiary of the Chinese company ByteDance under national security concerns.

Taking these three stories as windows, we can see major open sites of conflict around 3 core policy concerns which different world powers seem to be weighting in different ways. Though the U.S., the EU, and China all manage all of these concerns in their technology policy, in broad strokes these stories can show the contradictions that seem to be most salient for each: namely the United States’ focus on technology policy as a means of enforcing market relations, the E.U.’s mobilization of technology policy to produce and govern the behavior of rational subjects, and China’s concerns with the fundamental role of the technology sector in the governance and organization of the State.

The United States and the development of fair markets

The U.S. antitrust investigation can be seen as a useful lens in which to understand the key priority of American law makers with respect to technology giants like Google and Amazon: the interest of the United States legal apparatus in developing ideal market relations and preventing monopoly development. Though the hearings touched on a variety of topics, the nearly six-hour session seemed often to trend towards not the internal labor relations of these companies but rather mostly toward these company’s outsized effects on the markets they operate within. The idealized “affected parties” of the hearing were, generally, not the contractors policing traumatic content on YouTube and Facebook or Amazon’s warehouse employees operating under COVID-19, but rather small-businesses whose operations were distorted by the markets that these companies have set up.

For example, a variety of questions were asked of Jeff Bezos about Amazon’s policy toward third-party sellers operating on the platform as “internal competitors”, of Mark Zuckerberg on Facebook’s habit of copying the product design of other companies, and of the strange incentives created by Apple and Google controlling app marketplaces on their iOS and Android platforms while also offering products that compete on those marketplaces.

When data privacy and collection concerns were brought up they were largely framed in the context of competitive advantage: for example, the single line of questioning on Google’s adherence to the EU’s General Data Protection Regulation was specifically focused on the impact of GDPR on the ability of advertisers to move away from Google advertising campaigns onto those run by Google competitors.

“In order to comply with GDPR, Google must retain control over more user data and restrict the ability to combine this user data with other platforms that can conduct cross-platform analysis,” said Rep. Kelly Armstrong (R-North Dakota). “It seems as if that ultimately limits the ability of advertisers to make comparisons between Google-based campaigns and non-Google-based campaigns.”

Stratechery’s Ben Thompson has written on the historical differences between the US and EU’s approaches to antitrust regulation, where US law has typically focused on consumer-impact rather than enforcing competition. This is much harder to make an argument around for modern aggregators which gain power by funneling demand rather than supply, but in this hearing you can definitely see the trend of lawmakers towards concerning themselves with the role of these major companies upon the markets they operate within.

This all points towards a particular history of the United States as the dominant power within the neoliberal project of extending market relations to further and further domains. There are concerns generally about the powers these tech companies have, but rather than their totalizing power being bad on its own terms, lawmakers tend to be constrained in the way they can discuss these issues. Google, Apple, Facebook, and Amazon being large is here not a problem because of the dangers of corporate overreach into American lives, but rather because of the measurable normative harm these companies have on a functioning market, a problem which the US legislative apparatus is then tasked with approaching in that limited scope.

The European Union and the rational subject

Though, as mentioned, the European Union has of course engaged in major antitrust enforcement against major tech companies (one of which is discussed in another helpful Stratechery post), something that the EU’s policy considers which simply doesn’t seem to be on the radar of the US in the same way is the direct focus on the rights and sovereignty of an independent and rational subject.

Of course, the capitalist mode of production dominant in both the US and the EU require the production of a sovereign subject who is free to dispose of their labor power at will. But where the US state apparatus seems to accomplish this specifically through the extension of market relations and the production of mass culture, the concerns of how a neoliberal subject should be developed are far more codified into European law.

Though American tech regulation handled largely by the Federal Trade Commission is mostly about consumer fairness and choice (which are enforced through the state’s role in setting up markets), European regulation actually defines the rights and formal boundaries of the subject through its own regulation. Where in America the state creates the markets which create the subject who then enters the markets, the EU’s approach under the General Data Protection Regulation is far more explicit about the state’s role in defining the role of how a well-developed subject should operate.

This can be seen in GDPR’s basic unit of governance being not a company operating within a market as in the FTC approach, but rather specifically through the idea of a “data subject”, defined in the law’s text as:

An identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person;

Where in US law, the processing of data as part of a market relation is seen to be legal by default as long as it follows fair consumer practices, GDPR states that “processing [of personal data] shall be lawful only if and to the extent that at least one of” a few explicitly-outlined legal bases for processing is met, for example explicit consent or legal requirements.

The general idea here, then, is that it is the role of the state in the EU to not simply define “good market outcomes” but actually to define the horizon of subjectivity that the population will operate under as they navigate and rationalize about their own life.

At first glance, EU’s approach to consumer privacy can be seen as progressive — and, indeed compared to the US’ approach of venerating the Small Business Tyrant, it may be! But it must be understood that the EU is still ultimately a superstructure that governs a collection of capitalist entities to develop the free flow of finance capital. Therefore, the EU’s development of an individualized, rationalized “subject” still fits within the imaginative horizon of capitalist production.

But data is, of course, only valuable through its collective nature — the ability of data analytics to provide statistical analysis of trends or even generate insights about individual behavior depends on the ability to analyze a population at large. Just as Marx identified a contradiction between the social nature of industrial production, and the private ownership of the fruits of that production, the EU attempts to govern over a similar contradiction between the social nature of Big Data analytics and the private impact those analytics have on individual consumers for the benefit of large corporations.

China and the role of the state

Finally we come to the third player in this trifecta of technology policy, the People’s Republic of China. I’d argue that a useful lens to approach technology development within China would be through China’s negotiation of the fundamental role of the state in advancing technology under a socialist market system.

I’ll start by stating that the invocation of the boogeyman of a “totalitarian communist State” is a trap that I will attempt to avoid in this analysis. And I think an analysis of Chinese tech policy through the lens of the state could be seen at first blush to fall into that pattern.

But when I suggest that we should analyze Chinese technology development through the lens of state power, I don’t suggest that this state power is inherently more repressive or problematic than that of the US or EU!

What I mean is that the role of the US and EU state is relatively firmly established — to mediate the class contradictions inherent to capitalism in order to preserve them in service of the capitalist class. Therefore our objects of analysis for the US and EU should attempt to understand by what process they perform that function.

But China as a socialist power has a different stated role for the state, namely to act in service of the working class in the development of the conditions needed to end capitalism. Whether you believe China follows this stated role or not is an open question! But I’d argue that looking at China’s technology policy through this lens opens up an interesting set of questions about how China negotiates the role of capitalist development within its “socialist market economy.”

There is the sort of American State Department/NED lens on the role of the Chinese state in directly controlling and governing its population, where much of the discourse around technology focuses on a narrative of China as an oppressive and controlling evil bureaucracy. (See discussion of China’s internment of members of the Uyghur muslim population in the Xinjiang Autonomous Region, China’s increasing plays for economic and political control over Hong Kong, and even the narratives that have developed of a dystopian “Social Credit” system spread across Chinese society).

Regardless of the sometimes dubious factual nature of claims made by explicitly Western-intelligence-backed “human rights” bodies, it’s hardly controversial among socialists that the state serves inherently as a repressive body — the view is simply that in a socialist economy the state that is formed serves this function in order to guide development for the benefit of the working class. So where the American state’s use of a repressive apparatus tends to be laundered through covert agencies like the CIA and NSA (not to mention private surveillance!), the more open nature of the Chinese state’s functions make it an easier object of analysis to reach to.

And indeed, the role of technological development in the Chinese state’s repressive apparatus is an interesting lens to view the situation through! A general rule that I tend to use (based on my admittedly limited view) is that technological application of state power from China is often more powerful but more limited in scope than outside observers tend to assume. The Communist Party structure of China provides a decent amount of regional autonomy to governing provinces along specific parameters, meaning that technology is often applied to address specific social problems rather than in service of some all-seeing eye approach. The “social credit system”, for example, has tended to be less of a single apparatus than a framework which different governing bodies can apply in their own ways, for example to address issues where businesspeople who owe significant debts are living lavishly by restricting their access to accommodations on flights and high-speed rail.

And, of course, it’s simply not true that China itself is not in the process of developing data privacy legislation!

But I’d argue that another very interesting complication within the Chinese state is the much more nuanced and tense relationship the state is placed in with regards to the development of technology capital itself. Where in the EU and US, it’s hardly controversial to say that the EU and US has structures which push it into the direction of creating the conditions for capitalist development, in China the same statement will set off an argument from a dozen different types of Marxists all arguing about the nature of Chinese society.

As one of only a few openly socialist countries, China faces an interesting predicament for how to operate under the global capitalist mode of production while still moving towards the establishment of socialism. In State and Revolution, Lenin outlines his interpretation of the process by which revolution would actually proceed into the establishment of socialism, largely drawing on some of Marx/Engels’ later works including Marx’s Critique of the Gotha Program and Engels’ Socialism, Utopian and Scientific. In all these works, the authors are clear that they do not expect the end of capitalist relations to be established in one fell swoop or based on a society designed in advance by those who want an end to capitalism (generally referred to as “utopian” socialism), but rather would need to emerge out of the real movement of the working class.

Lenin expands on Marx’s idea of the “revolutionary dictatorship of the proletariat”, arguing that by necessity the organized proletariat must establish a temporary state apparatus in order to suppress the capitalist class while developing the machinery and other productive forces far enough to make capitalist development fully obsolete. It is only once capitalists have become obsolete that the state is no longer necessary to enforce the development towards socialism.

Since Deng Xiaoping’s Reform and Opening Up in the late-1970s, China has taken a turn away from collectivism and towards a “market socialist economy” under this pretense, whereby market relations were established with the goal of developing China’s productive forces. As a result, the role of capitalism and market relations within China has taken on a sort-of funhouse mirror effect — for example, one of the richest men in the world, Alibaba’s CEO Jack Ma, has reportedly been a Communist Party member since the 1980s.

Here we see the strange and contradictory relationship China has with capitalist development in general, and with the technology industry in particular as an engine of that development. It seems facile to say “any society with billionaires at a given point in time is inherently uninterested in the end of capitalism”, but of course similarly one must acknowledge the strange and distorting impact that situation has on the ability of the Communist Party of China to adequately guide socialist development.

Though none of these observations are universal, and any major world power must deal with basically all of these complications and issues, I think looking at the core tension at play in the technology regulation sector is a useful lens toward understanding the relationship that each of these state apparatuses have toward the development of capitalist relations. Through seeing what bubbles to the top, we can better see the core contradictions living below the surface.