Tag: economy

The Silicon Valley Global Warriors: From Neoliberalism to Geopolitics

Two books have been published over the past five years that analyze the political and economic relationship between the big tech corporate sector and the U.S. national security state. The first, written by Ho-fung Hung, Clash of Empires, offers an explanation for why the U.S. national security state pivoted away from an economic engagement strategy with China toward a strategy of militarized confrontation. Hung points out that there was always a push from the U.S. national security state, or the military-industrial complex, to categorize China as a security threat and to oppose renewal of China’s most-favored nation status as early as the 1990s. The geopolitical interests of the U.S. state was reinforced by the interests of firms in the U.S. that perceived themselves to be especially vulnerable to trade with China, such as steel and aluminum, and those firms that did not have any investments or plans for investments in the China market. They were joined by U.S. labor federations such as the AFL-CIO, which also opposed renewing China’s MFN status. However this coalition during the 1990s was out-financed and outmaneuvered by a much more powerful cohort of domestic lobbyists representing leading sectors of global capital. This group of transnational capitalists spent big and worked with Chinese political officials to mount an effective lobbying campaign that included ATT, GE, IBM, ExxonMobil, Automobile companies, farm businesses and even sectors of the military-industrial complex that were interested in pursuing more aggressive sales of aircraft (Boeing) and satellites (Hughes) to China.

However, this balance of political forces favoring economic engagement with China changed dramatically after the global capitalist crisis of 2008, for reasons that are detailed and analyzed by Nick Srnicek in his book, Silicon Empires, Polity Press, 2026. Both Hung and Srnicek locate this shifting political landscape to a calculation by transnational capitalists that the engagement strategy with China was becoming too costly by the 2010s, a realization that emerged gradually but ultimately explains why the U.S. national security state pivoted toward a strategy of militarized confrontation.

What is most striking from Srnicek’s book is the careful documentation of how both the U.S and Chinese governments facilitated the rise of their respective big tech sectors by policies that enabled these sectors to consolidate into large-scale oligopolies and to expand their reach as global powerbrokers. The U.S. took the lead here by handing big tech decades of publicly subsidized telecommunications infrastructure for free in the 1990s, then encouraging big tech’s global expansion through aggressive backing from the U.S. government, which included domestic and global support for deregulation of the big tech sector.

This tech-state relationship was initially built around U.S. support for China’s entry into the World Trade Organization by 2001, which provided added momentum to transnational capital to expand foreign direct investment in China, which emerged as the global leader in the production of a wide range of manufactured goods, but was initially quite dependent on U.S. global tech firms for investment in high-tech global value chains. U.S. foreign investors adapted well to their circumstances, massaging their political relationships to the Chinese political and economic elites to pave the way for billions of dollars in annual profits.

At the same time, the Chinese government was adopting a very light regulatory touch to their own big tech sector, whose product innovation and extreme consolidation of ownership was encouraged and facilitated by the state. From the mid-2000s, as growth began to slow in traditional manufacturing sectors, “local governments, especially in coastal provinces, began to take up a model of development based around science and technology” (Srnicek, 83). Srnicek goes on to add:

“Tech firms increasingly became a core part of the restructuring of the Chinese economy as the focus became to develop into an innovation-driven economy. This approach solidified in 2015, with support for the digital economy becoming the core priority of the state, and in 2016, China’s 13th Five-Year Plan (2016-2020) deemed ICT to be the highest priority sector and placed innovation at the forefront of its strategy. As in the United Stares, a coalition of interests solidified between the tech elites and the political elites over this period. The merger of state and platform capitalists can be seen, for instance, in the growing inclusion of tech leaders into the governing bodies of the state-with a number of tech CEOs becoming members of the National People’s Congress” (84).

Chinese policy of state subsidies, light regulation, and promotion of rapidly consolidated tech sectors in the aftermath of the 2008 financial crisis accomplished many of the same outcomes already established in the U.S. Google, Amazon, Meta, Apple and Microsoft grew into global mega-giants in a deregulated and permissive legal structure backed by U.S. global geostrategic power. Likewise, the Chinese state did not apply the new Chinese antitrust law of 2008 against its large-scale domestic big tech platforms, but instead encouraged and facilitated their massive consolidation into domestic and global tech mega players. On the other hand, antitrust law was used against foreign investors, who were faced with more competition in China and upscaling by Chinese mega tech firms on a global scale. This was assisted by massive investments from Chinese firms such as Alibaba ant Tencent, who “spent between 80 and 100 percent of their revenue on investing between 2014 and 2019, whereas the largest big five U.S. tech firms invested only 30-66 percent of their revenue” (86).

This shifting geoeconomic landscape led to a pivot by U.S. mega-tech giants from cooperation with China toward a more confrontational approach, though there are still divisions within this sector as to how confrontational and how non-cooperative the U.S. should be regarding applying sanctions to the China market. The give and take between heightened militarized competition, increased U.S. sanctions by both the Trump and Biden Administrations and the willingness of exceptions to be carved out to ease or remove sanctions that negatively affect big tech firms is readily apparent in the Trump Administration’s decision to allow Nvidia to continue to sell its H200 AI chips to approved Chinese firms. However, the Chinese government refused to approve the purchases, opting instead to prioritize its own domestic chip technology.

The aggressive geopolitical competition between the U.S. and China is thoroughly interdependent with the global tech war between consolidated blocs of transnational capitalists who are aggressively competing for global market share. This has resulted in a shift from neoliberal strategies of transnational global integration of capital toward militarized geopolitical competition between imperial states that back competing blocs of transnational capital. Many of the same big tech firms that were critical of Trump’s China strategy during his first term have shifted in favor during his second term, due to both their reliance on the U.S. state to promote a deregulatory agenda at home and abroad and due to the fact that military spending is proving to be a lucrative way to support some of the enormous costs associated with large-scale and long-term investments in general purpose technologies associated with AI (Srnicek does a masterful job distinguishing among the different types of AI investments and the costs involved). As was the case with neoliberal capitalism, and all forms of capitalism, the U.S. and global publics are expected to bear the costs of these investment expansions, with the domestic and global battles over the construction of data centers emerging as a key arena of future class conflict. More on that topic to come in future blogs.


A Long History of Elite Domination: Haiti and Imperial Power

The following is the Preface that I just wrote for the forthcoming book by Professor Guy Metayer, titled The Role of Foreign and Domestic Elites in the Destruction of Haiti, to be published in hardback by Brill and in paperback by Haymarket Books. Guy’s peer-reviewed article written for the academic journal that I edit, Class, Race and Corporate Power (linked below), is being used as part of the documentation defending the legal case for retention of Haitian Temporary Protected Status in the Trump v. Miot case currently being considered by the U.S. Supreme Court.

https://digitalcommons.fiu.edu/record/2369?ln=en

Here is my Preface to Dr. Metayer’s book:

When I first met Guy Metayer as a PhD student at Florida International University, where I teach, I was impressed by his intellect, his passion and his longstanding commitment to social justice. He has demonstrated these qualities throughout his life, as a legislator in Haiti struggling against very difficult odds, as a graduate student at FIU working to understand how the global political economy has kept Haiti trapped, and most recently as a Haitian diplomat speaking truth to power regarding the kind of far-reaching changes that are needed in Haiti (and the world) for ordinary people to have a chance at a sustainable and livable existence.

This book is a culmination of Guy’s work and determined resilience over the past few decades. It shines a bright light over the historical power structures that have subjected Haiti to centuries of pillage by global and national elites, most recently through the rise of Haitian gangs closely tied to the long-standing domination of the upper one percent in Haiti over the country, a group whose position in power has been reinforced, enabled and propped up by U.S. Presidents and transnational capitalists willing to sacrifice Haiti’s domestic economy for the sake of expediting more profit opportunities for themselves.

Only the tactics of the U.S. and global elites have changed over the years. Their objectives have remained incredibly consistent. At first, when Haiti struggled mightily and successfully for their political independence from France by waging an heroic revolutionary war that became the envy of anti-colonial movements everywhere, the global powers that had a stake in maintaining a hierarchy of plunder and privilege waged a war on Haiti to punish it for having the temerity to defy the rule of the powerful. This meant oppressive debts and isolation combined with a “divide and conquer” strategy that relied on propping up dictators, courtesy of foreign interventions, the most lasting and impactful coming from an imperial U.S. that occupied the country from 1915 to 1934. During this time, the U.S. helped construct the military architecture in Haiti that would be further entrenched by U.S. military aid during the Cold War, where the U.S. worked closely with a Haitian elite that repressed its domestic population.

As sections of this Haitian elite grew richer after decades of U.S. assistance, they outgrew their ties to Haiti itself and became part of larger networks of transnational power and privilege—at least that was the case for the richest of the Haitian elite, representing far less than one percent of the Haitian population. In this way, Haitian society was sacrificed in favor of those whose profits tied them to ventures that either bypassed Haiti entirely or were connected to Haitian impoverishment.

The rise of a transnational class of capitalists, whose wealth and power includes a narrow section of Haitian elites and powerbrokers, is a central theme of this important book. This includes Guy’s detailed account of how the U.S. deployed U.S. aid in the 1980s as part of a strategy to insert Haiti within a transnational system of capitalist accumulation that was to be accompanied by a “managed democratic” transition from military rule to elections. The U.S. never wanted Haiti to stray very far from its agenda here, having always been quick to block efforts by Haitians themselves to mobilize for electoral alternatives that went beyond the narrow confines of U.S. preferences.

In 1990, Haitians elected populist Jean Bertrand Aristide in an historic repudiation of the U.S. preferred outcomes of “managed democracy,” with Aristide representing what many Haitians saw as an opportunity to redistribute wealth and power from the Haitian elites to the masses. Haitian militarists, who alongside Haitian economic and political elites, opposed Aristide’s promotion of economic redistribution, overthrew Aristide in a military coup in 1991. Both Aristide and the military coup against him proved problematic for the U.S., Aristide with his support for redistribution of wealth and the coup for the instability that it posed to the U.S., triggering a refugee crisis that led to a U.S. political backlash in the important electoral state of Florida.

The Clinton Administration pressured an exiled Aristide to agree to several preconditions for his return, which included many of the neoliberal measures that are carefully documented in Guy’s book: a radical opening of the agricultural sector in Haiti by slashing tariffs, further decimating the rural economy and encouraging more internal migration to Port-au-Prince, an expansion of the industrialization strategy for Haiti with the expansion of assembly factories designed to insert parts of the Haitian economy within a transnational global production system dependent on cheap and exploited labor, and a pact with Haitian militarists and police forces to “keep the lid” on popular struggles for social justice in Haiti.[1]

What has emerged since has been an unrelenting war on capacity of the Haitian state and society by a global economic, political and security architecture that has continued to work for the benefit of the upper one percent of Haitian and global elites while deepening the crisis inside Haiti. What some have called the global NGO-industrial complex has seen foreign aid to Haiti funneled through a vast network of large-scale international aid organizations, bypassing Haitian grassroots groups in favor of perpetuating a dependency on bureaucratic non-profits whose goals are perpetual growth of their own organizations, not on improving Haitian resource distribution or governing capacity.[2]

Guy has written this book to carefully map out the consequences of centuries of plunder of Haiti, but also to offer hope for far- reaching economic, political, and social change that is necessary to reverse these dynamics. The importance of creating an alternative power structure in Haiti in which ordinary people have the capacity to make a living, to govern themselves and to break free of the constraints of elite rule, is developed extensively in these pages. The latest expression of the urgency of change is the rise of criminal gangs in Haiti, which as Guy shows cannot be separated from the larger structures of power that have long decimated the country. Guy’s book is intended to be part of efforts to challenge these power structures so that Haitian society can finally break free of the constraints that have long bound them. This is a necessary and critical intervention to be a part of. I am proud to contribute in a small way to this effort.

[1] I traveled to Haiti after Aristide’s return to power, which resulted in this publication: “Private Interests and U.S. Foreign Policy in Haiti and the Caribbean,” in David Skidmore, ed., Contested Social Orders and International Politics, Vanderbilt University Press, 1997.

[2] Ronald W. Cox, “U.S. Foreign Policy, Business NGOs and Low-Intensity Democracy,” Class, Race and Corporate Power, 2016, Vol. 4, No. 2.