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Can the Internet Democratize Capitalism?

Posted on Feb 22, 2014

jumpinjimmyjava (CC BY 2.0)

By Yanis Varoufakis

(Page 5)

In this context, the notion that the democratic deficit can be dealt with by some technological fix (i.e. some variant of e’democracy) is absurd. The Internet has granted the weaker and poorer their personal Speaker’s Corner within cyberspace but has not created an e’Assembly in which they can over-rule the powerful minority who control the economic sphere. An e’Mob has been created, even an e’Demos. But it has not been admitted into anything resembling a genuine e’Democracy.

Granted that e’Democracy is impossible now, could it become possible in the future? And if so, under what conditions? To materialise, e’democracy must help breach the two-century old divide between political and economic power by introducing direct political control of the production and distribution processes at the micro level; at the level of the enterprise. Is something like this possible? No and yes.

? No, because it is hard to imagine that the Internet can break down the monopoly of capital’s power over labour in societies where labour is chronically under-employed due to the structural failures of existing ologopolistic capitalism.

? Yes, because the Internet (and related technologies) can, potentially, break down the foundation of existing oligopolistic capitalism, precisely as the steam-engine spelled the end of feudal production and distribution processes.

In conclusion, this paper argued that the Internet’s democratising potential is understood best through an historical re-evaluation of democracy’s inner contradictions. Ancient Athens was characterised by such a delicious contradiction: the slaves’ unfreedom was pivotal in making citizenship particularly valuable for the free labourers. Their actual freedom depended on other people’s slavery. In modern times, citizenship and formal freedom are widespread but highly devalued. This devaluation partly explains why citizenship was spread so liberally around and, at once, foreshadowed voter apathy and the diminution of the political sphere. The burning question is: Can citizenship be simultaneously widespread and valuable?

The good news is that it can. The bad news is that for citizenship to be simultaneouly widespread and valuable, the political sphere must claw back much of the authority that it has lost to the economic sphere; first at the time of the Enclosures and, more recently, after the 2008 debacle. None of that ‘clawing back’ will result automatically from our splendid connectivity through Twitter, Facebook and various other Apps and Internet resources. They may give us voice but they will not grant us isegoria. To create isegoria, and thus to empower citizens broadly, our ‘connected’ social economy must not only allow rulers and citizens to communicate but should also feature multiple networks enabling consumers, labourers and innovators to form units of production which create and distribute value in a participatory manner; in a manner such that no one employs anyone and everyone contributes labour and ideas while being rewarded according to contribution but also need.

Of course this requires nothing short of a revolution in the foundations of capitalist production. It will not happen through idle chatter in the social media. If it happens, it will occur as the Internet undermines the currently dominant corporate model which relies on the segregation between non-labouring shareholders and labouring non-owners. Only when the capitalist type of firm loses its ‘evolutionary fitness’, due to technological Internet-based innovations, and gives its place to a new type of participatory production model, will the political and the economic sphere become integrated again in a manner consistent with democratic principles. Then e’democracy may be born as our e’Demos reclaims control of the economic sphere.


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