How technocapitalism killed the nation-state

Viewpoint: As tech giants usurp the roles once carried out by governments, some are now richer and more powerful than many countries.
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Just over a decade ago, Google placed a bid to acquire Waze, an Israeli digital map service, for a whopping $966 million.  The price, well above what its competitors Facebook and Apple were prepared to pay for the app, set a record for the Israeli computer industry. Why did Google want to buy Waze so badly that it was willing to overpay for the acquisition? 

Waze is a complementary app to Google Maps: It offers drivers less busy routes in real time. It’s very similar to Zipdash, which Google bought in 2004. Together with Keyhole and Where 2 Technologies, they became the building blocks of Google Earth and Google Maps. Google could have easily designed its own system using the technology it already owned, but it bought Waze because it did not want the Israeli company to fall into the hands of Facebook or Apple, who could have used it to compete with Google’s mapping system.

But it was even more than that. Having a monopoly of digital space representation goes well beyond ad revenue streams that the Google Maps app can produce. Mapping has always been a tool of power. Even in today’s digital age, those who control it exercise it freely and to their own advantage. The digitization of space has only added an extra layer between the masses and geography, what I call the Techtitans.

In 2003, before it was bought by Google, Keyhole signed a deal with the CIA-funded governmental venture capital firm In-Q-Tel. The firm had become aware of EarthViewer, an application of Keyhole that allowed zooming in to satellite pictures, when U.S. TV news networks had applied it to visualize battlefields during the war in Iraq. The investment gave access to the new technology to a government agency that handles maps and satellite imagery for U.S. military and intelligence units. 

Far from democratizing the world, the technological revolution gave birth to a new, extremely profitable sector of capitalism in the form of a global oligopoly.

Digital mapping may have stripped the state of the monopoly of spatial representation, but it has not altered its grip on its use. According to the BBC, during the war in Iraq, Google was accused of censorship when it swapped in alternative imagery of Basra after the British government said insurgents were using Google Earth to target its soldiers. In 2014, WIRED published satellite pictures of a structure in the desert in southern Saudi Arabia. The images came from Bing Maps, an application that Microsoft owns, and were rumored to illustrate that the CIA had built secret drone bases in the region. The corresponding satellite images from Google Earth showed only desert sand. 

The U.S. government, military and intelligence have been among Google Earth’s largest customers since its launch. One should add that they have also supplied valuable data: Most of the early imagery shown in Google Earth was commercially available pictures from U.S. military satellites.  

The digitization of space representation did not democratize geography. Instead, it became yet another example of how capitalism hijacked the technological revolution. In the U.S., it had crystallized in a new industrial model. In Silicon Valley, a plethora of start-ups had blossomed and a swarm of venture capitalists, angel investors and lawyers, many with Wall Street pedigrees, and all operating under the umbrella of capitalism, were busy shaping them using money and patents. Competition was rife and often ruthless, not only among Techtitans but among everybody. By the beginning of the last decade of the millennium in the United States, the magical egalitarian moment of the technological revolution had already passed.

From the 1990s onwards, the technological revolution moved from the United States to Europe to Asia. By the time it reached countries like Vietnam and Thailand, the Techtitans had become so powerful they could block any competition either through acquisition or simply by copying new ideas without major consequences. They had the money, they had the technology, they had the lawyers, the bankers, the engineers. And they controlled the global market. 

Far from democratizing the world, the technological revolution gave birth to a new, extremely profitable sector of capitalism in the form of a global oligopoly. During the pandemic, with a market capitalization of over $4 trillion, the five largest American tech companies — Google, Amazon, Facebook, Apple and Microsoft — symbolically outperformed the GDP of Germany, the fourth largest economy in the world. Against this scenario, a transfer of sovereignty from the old-fashioned nation states to tech companies was inevitable. 

The Treaty of Westphalia of 1648 established the nation state as the sole sovereign entity to regulate territories that still exist today. According to the new construction, the territorial identity of the nation state mirrors the national identity of the population that inhabits it. The nation state is, therefore, the political expression of people who speak a common language and share the same ethnicity and the same territory. In exchange for the recognition of a common ruler, people receive protection from the state. The monarch guarantees law and order and national security. 

The digitization of space and the rise of the Techtitans have weakened the interdependency of territory, nation state and population. 

Geographically, the territory defines the area in which the nation state performs its tasks. They include the management of a postal system to facilitate centralized governance, the printing of money, and the provision of public accounting to curb fraud. In the eyes of the citizens, all of these duties spring from the social contract negotiated with the monarch, an agreement upon which the legitimacy of the nation state rests, a social contract that our seventeenth century ancestors symbolically signed. 

As proved by war in Ukraine, the essence of the nation state is still linked to its territory, and the state retains the power to limit liberties within its borders — including access to the internet, as happened in Russia during the invasions of Crimea and of mainland Ukraine. 

However, the digitization of space and the rise of the Techtitans have weakened the interdependency of territory, nation state and population. 

National postal systems no longer exclusively deliver the mail, which, instead, travels through cyberspace from one corner of the world to another on the wings of apps such as WhatsApp, Instagram, or Gmail. Cartography has ceased to exist as a service provided by the state; today, companies like Google and Apple control the spatial representation and produce sophisticated topographical maps that are used by the public as well as by state institutions including the military. The state is no longer the sole issuer of money: Its monetary sovereignty has been eroded by crypto currencies that are produced by software and circulate freely across the world. And territorial internet blockades can be circumvented using systems such as VPN. 

Far from empowering us, the digitization of space has plunged us into geographical anarchy, where each of us is offered a personalized spatial representation of the world in which we live. Geographical anarchy weakens the nation state and promotes social disintegration, polarization, and extremism. The true power of the monopoly of the digital representation of space rests in the gathering and verification of human data in real time and the conditioning that such information allows companies that process it to pursue. This is the magic wand of technology and this is also its darkest power. 

Far more valuable than gold or oil, human data is now the most desired raw material on earth, and private companies like Facebook, Google, or Apple are built to mine it in cyberspace. Against this background, society and democracy, the essence of the modern nation state, have been pushed out of sync with modernity. They have failed to understand the potential danger that the continuous empowering of tech companies poses to their survival. 

In the aftermath of 9/11, the U.S. and UK militaries in Afghanistan and Iraq employed a wealth of communication and marketing companies, such as Cambridge Analytica’s parent company, SCL Group, that specialized in big data mining, to help carry out psychological warfare (“psyops”). New technology coupled with defense industry intelligence empowered these companies further, making it possible in the following decade to apply the same surveillance and persuasion techniques developed by the military to influence electoral results, as the Brexit referendum and the election of Donald Trump have proven. 

No effort has been made to strip the Techtitans of their global data dominance. On the contrary, their business model of collecting and processing human data for profit and growth has only grown. Facebook has been the most dynamic in experimenting with ways to bring more people online—and thus to Facebook. One of these was a project referred to as Apollo, which produced good results in the Philippines. Facebook partnered with mobile phone provider Globe, the smaller of the country’s two dominant mobile companies, and offered free access to Facebook for mobile users who did not have a data plan contract. Within 15 months of its launch, Globe’s user numbers surged and overtook its rival and Facebook gathered millions of subscribers. In 2022, on the eve of the political elections in the Philippines, 67 million people in the Philippines used Facebook. 

A study conducted by Rappler, a Filipino news website founded by Nobel Peace Prize winner Maria Ressa, along with a group of fellow Filipino journalists, exposed the use of Facebook by the Marcos family to win the 2022 elections: “The Marcos network painstakingly seeded disinformation and reshaped the narrative surrounding the Marcoses on Facebook over the years prior to build ‘an entire fortress of Marcos supporters.’” 

The excessive power of these companies on the global market means that no government is capable of dismembering them.

In 2014, Facebook tried to apply the Apollo project in India. No country except China held the kind of potential that India did, and Facebook was banned in China. At the time, Facebook had about 100 million users in India, and the company projected its potential market to be several hundred million more. Based upon the literacy data, considered a good proxy for how many people could be online, Facebook looked at a potential market in India of about 700 million to 800 million users. 

With the government’s approval, Mark Zuckerberg offered to bring India online with the project On paper the proposal looked fantastic, but a close scrutiny of showed its true nature. A Guardian interview of Osama Manzar of the Digital Empowerment Foundation, a Delhi-based not-for-profit organization whose task is to bridge the digital divide in India, explains why. Manzar’s company had first “thrown its weight” behind, but quickly he changed his mind, realizing, as the Guardian puts it, “. . . what actually looked like: a threadbare platform that only allowed access to 36 bookmarked sites and Facebook, which was naturally the only social network available. There was one weather app, three sites for women’s issues, and the search engine Bing.”

Far from offering internet for all, aimed at transforming Facebook into the gatekeeper of the web for the hundreds of millions of Indians who were unfamiliar with what the internet was or what services it could provide. If implemented, Facebook would have controlled the internet in the entire country. Any tech company in such a strong monopolistic position would have been able to influence the future of the country and even dictate its own conditions to the government. Fortunately, this did not happen. Facebook stumbled into a dispute centering upon mobile phone net neutrality, i.e., the principle that phone companies and internet providers should not be allowed to prioritize certain sites and services, because such power could alter competition within the internet. As a result, Facebook was denied a license to operate internet services in India. 

The extraordinary speed with which technological innovation in the information technology sector has revolutionized all aspects of our life, including spatial representation, is one of the reasons why neither the state nor its institutions have stood in the way of the Techtitans. The excessive power of these companies on the global market means that no government is capable of dismembering them.

Adapted with permission from Technocapitalism: The Rise of the Robber Barons and the Fight for the Common Good by Loretta Napoleoni (Seven Stories Press, 2024). Napoleoni is an economist, journalist, and award-winning bestselling author.