Market forces are not inherently moral ones.
The information technology revolution has changed the structure of our economy, as well as the structure of our daily lives. With this change has come a new ideology. Springing up on the West Coast of the United States and spreading throughout the developed world, we might call this ideology “technocapitalism.” Over the last two decades, technocapitalism has attracted trillions of dollars of capital, animated by a fervent belief in inevitable progress driven by information technology. Business leaders, investors, and government policymakers are increasingly influenced by the fundamental ideas of this ideology, shaping the structure of our economy. But for all the hype and optimism about the future that technocapitalism has generated, history shows us that more technology is not always the solution to technological problems, nor are market forces always the best way to address deeper societal crises. Society will need to impose some direction.
Though technological progress provides industrialized nations with near-universal increases in standards of living, it also brings side effects such as labor shortages, increasing wealth inequality, and artificial scarcity.
A central premise of technocapitalism is that technological innovation is the fundamental driver of history. Adherents of this ideology believe, consciously or not, that it is technology that determines the shape of social life and the fate of civilizations—rather than the actions of individual humans, coordinated groups, cultural trends, or structural forces. Furthermore, they believe that technological innovation is necessarily created by private enterprise, and in particular through the institution of the startup, funded by private venture capital funds. This worldview has found no greater proponent in recent years than the investor Marc Andreessen, who, for example, wrote an essay crediting the technology industry with “saving the world” during the COVID-19 pandemic, going so far as to predict that the introduction of remote work through Zoom, Slack, and other apps was “a permanent civilizational shift.”
This ideology is unsurprisingly most common among those who work in the technology and venture capital industries, particularly in Silicon Valley but also in secondary tech hubs like Seattle or Austin. To explain their beliefs, technocapitalists will often point to Moore’s Law, which states that the number of transistors on a microchip should double every two years. This idea is often generalized to mean that technological advancement occurs at an exponential rate, with accompanying exponential decreases in costs. Many commercial technologies have indeed followed this pattern of improvement but technocapitalists extrapolate this process of exponential, technology-driven progress further to encompass all parts of society, not just technological progress. This view does not fully capture the complex and highly evolved relationship between technology, society, and economics. In the wake of the Industrial Revolution, the increasing complexity driven by globalization, bureaucracy, and automation has given rise to an economic system in which theories such as Moore’s Law no longer scale. Though technological progress provides industrialized nations with near-universal increases in standards of living, it also brings side effects such as labor shortages, increasing wealth inequality, and artificial scarcity.
Global wealth is increasingly concentrated, with 1% of the world’s population controlling approximately 46% of all wealth. This wealth gap persists both despite and because of technological progress: economic surplus driven by increased technological capabilities concentrates wealth at the top rungs of society. This is because owners of large fortunes and creators of intellectual property reap the largest financial returns, even as new technology increases standards of living. Yet many technologies can be radical social equalizers despite their effect on wealth concentration, due to their accessibility and wide adoption. A study of 120 countries between 1980 and 2006 found that a 10% increase in access to broadband could increase GDP by up to 1.3%, and these technologies are ever-easier to employ and distribute. Similarly, it is possible that technological solutions could mitigate catastrophic risks such as climate change, which would have a profound impact upon future global standards of living.
Though technology is a powerful equalizing force, if money is involved, someone always stands to profit.
Technocapitalists believe that innovative technology can be used to bypass restrictive socioeconomic conditions. In this view, intellectual property (in the form of patents or inventions) is the backbone of social progress. Intellectual property (IP) is commoditized and distributed via corporations, but in a manner that appears to upend the stakeholders-first corporate ethos.
Technocapitalism is the “innovation economy”: the ecosystem of entrepreneurial organizations, startup accelerators, and grant funders, all of which provide the infrastructure for quasi-utopian social hacking experiments. In response to global crises, the technocapitalist economy acts as a benevolent experimental force, generating solutions from corporate money but often taking revenue from traditional corporate stakeholders, such as department stores and newspapers. Because the driving force of wealth and progress is a matter of information and social systems rather than physical infrastructure and material goods—as seen most clearly in “platform” companies like Uber or Airbnb—many otherwise intractable problems are overlooked. Despite these pro-social aims, technocapitalism is potentially too tied to the capitalist model to fully deliver on them. Throughout history, free market capitalism has led to the social issues that technocapitalism now seeks to address. Technocapitalist interventions may prove little different, allowing corporations to participate in a superficial charade of social change rather than addressing the root problems. Though technology is a powerful equalizing force, if money is involved, someone always stands to profit. Exactly who, in this case, is a matter of debate.
Though the mercantilist era is often described as the ‘Age of Discovery,’ it would be more accurate to describe it as the age of trade.
To understand the economic landscape that made technocapitalism possible, it is important to begin with the historical movements that gave rise to capitalism in the first place. The Enlightenment of 18th-century Europe was the critical period in which the power of capital began to take hold. Prior to this point, the West was largely agrarian, with estates sustained by the labor of the serf class. The Enlightenment brought about a redefinition of societal power structures. During this period, figures such as Rousseau and Locke invented social contract theory, which stated that individuals freely consent to organize into states, voluntarily sacrificing certain rights in exchange for the protection of others under the law and ultimately the persistence of the social order. At the same time, the emergence of mercantilism—the economic policy of maximizing a nation’s exports while minimizing imports—began to increase global connections, tying the social order and its products directly to national power. Ocean voyages for the purposes of trade increased, and international commerce agreements were established by the growing merchant classes. Though the mercantilist era is often described as the ‘Age of Discovery,’ it would be more accurate to describe it as the age of trade. This trade was often the first step on the path to conquest and colonial subjugation.
In a profound change from agrarian economies, the primary source of value under mercantilism was not basic subsistence, but production. Instead of economies centered on farming, mercantile commerce generated value by serving as an intermediary, with natural resources processed and refined for export in for-profit enterprises. By maximizing exports and minimizing imports, a state could reduce its deficits via tariffs, and in the process promote colonial expansion and enforce imperial hegemony. Mercantilism’s success as a protectionist doctrine was based upon a large, employed population that contributed to the nation’s system of trade, as participation in labor was tied directly to the persistence of the state.
Under mercantilism, the foundations for capitalist ideologies began to form. Competition was the driving force of a mercantilist economy, with governments safeguarding proprietary tools and equipment against export, using their role as the sole possessors or producers of these goods as a means of capital exclusivity. The foremost aim of trade during this period was the accumulation of gold and silver, as there could only be a fixed amount in circulation. The movement of valuable resources through global economies was almost a direct stand-in for conquest. A country drained of value was unlikely to wage war, whereas a country flush with it could ensure its own supremacy. The total wealth of the world was considered stable; it could only be tugged in various directions by enterprising states.
The work of Adam Smith was central to the establishment of the era of free trade. In The Wealth of Nations, Smith refuted the idea that a nation’s security was tied directly to the size of its treasury, and that total extant wealth was fixed. Instead, Smith argued that free trade benefited all parties more than the hoarding of resources, and that protectionist policies should decrease in developed economies. Complex systems of manufacturing and commerce introduced interdependency to the market, distributing ownership and allowing for greater efficiency. These changes led to the interconnectedness of global supply chains today, as demonstrated by current international reliance on China and India for raw materials processing.
A natural result of this system is that profits are concentrated amongst industries experiencing high demand…
The movement of wealth under this system is varied, with inequality decreasing in certain parts of society and increasing in others. Participation in sequential industrial production increases wealth among poorer countries, though this process does not necessarily determine the distribution of wealth between richer countries. In this manner, the advancement of industry determines where wealth is concentrated. Smith urged the decoupling of government and industry to facilitate this process of wealth distribution. The free market described by Smith self-regulates when functioning properly, with industries growing and shrinking based on demand. A natural result of this system is that profits are concentrated amongst industries experiencing high demand, but this is viewed as an expected byproduct of market efficiency: the population freely chooses where to spend, and this freedom of choice concentrates wealth in corresponding sectors of the economy.
Smith did not only view the function of a free market as a demonstration of individual wills; he also considered it to be demonstratively moral in nature. His theory of the “invisible hand” posits that the individual in a capitalist system will instinctively make choices for the greater good. Smith believed these decisions to be a matter of divine providence, but the theory still works with religious motivations removed: individuals acting in their own self-interest will facilitate social benefits, because everyone wants to live well, and in this way the will of the individual is a reflection of the will of a society. This isn’t far from social contract theory, in that it frames the individual as opting into a social code to improve their quality of life in balance with the rest of society. This idea was extrapolated by figures such as Kant and Montesquieu into the concept of doux commerce, or ‘capitalist peace’ which stipulates that as commerce becomes the dominant philosophy of developed nations, war becomes undesirable or simply unprofitable. Further development of this theory holds that economically inter-reliant states are unwilling to court conflict at the risk of alienating foreign investors. As Steven Pinker observes: “when it’s cheaper to buy things than to steal them, people don’t steal them. Also, if other people are more valuable to you alive than dead, you’re less likely to kill them. You don’t kill your customers or your lenders, so the arrival of the infrastructure of trade and commerce reduces some of the sheer exploitative incentives of conquest.”
Later in his career, Smith introduced the idea that the value of goods was not fixed but rather was determined at the time of sale. Products were exchanged for more than they had previously been worth due to the value of procuring, transporting, and retailing them. As a result, Smith distinguishes between the value of “productive labor” (material goods) and “unproductive labor” (services) with regard to national economic growth. Productive labor increases net societal wealth, whereas unproductive labor does not. Here, Smith touches on a concept we will revisit: the market for intangibles. The accumulation of excess capital can enable a shift from the production of goods to service industries. This is because services are not effective for rapid capital accumulation, but can generate additional value from capital created by goods production in times of prosperity.
This theory held throughout the Industrial Revolution, which was enabled by technological progress in automation. The Industrial Revolution expanded the role of private industrialists as the primary architects of economic growth and concentration. Surplus became a widely achievable effect of industry, and increased mechanization led to finer divisions of wage labor and an expansion of the working and middle classes. Protectionist economic policies were mostly abandoned in favor of globalization as the value of exchanging goods and services began to outweigh the value of their use. Capital in this period was worth more than labor, which led to an increase in the per capita wealth and a corresponding reduction in wages, with wealth increasingly concentrated in the upper classes. This wealth gap persists today, despite a temporary amelioration between the 1940s through the 1970s. Industrialized countries now lead in economic inequality. 
The effects of the Industrial Revolution can be viewed from both optimistic and pessimistic perspectives. One side argues that increased access to wages in the lower classes raised standards of living by allowing for increased market participation and self-determination. The other side argues that increased access to wages lowered standards of living by making the livelihoods of ordinary people dependent on market dynamics far beyond their control. Admittedly, there have been very few times in history in which some level of economic stratification did not exist; it is a natural second-order effect in economies in which demand exists at all. Yet the rise of surplus capital made wealth increase for the upper classes much faster than it did for the lower classes—and stay that way. Itinerant, generalist laborers did not have many options for social mobility. Though the suffusion of wages into general society did more to distribute wealth than the generational inheritance of property, the benefit for the lower classes was increased mobility within their limited economic bracket. The atomizing force of the free market, which used individuals rather than families or other social groupings as its basic unit of account, also reduced socioeconomic security by replacing careers passed down generation-to-generation with employment dependent on market demand. Though employment data is scant for this period, it has been noted that even among older workers employment tenure drops during periods of high industrialization.
Of course, the free market was never fully uncontrolled. Though relatively low taxation and enforcement helped England industrialize quickly, this did not happen because of the power of unfettered supply and demand—it was planned. The Banking Act of 1826 restricted banks from issuing their own banknotes and encouraged the formation of joint stock companies. Additional lawmaking expanded these companies’ ability to acquire limited liability. This all served to increase access to capital, giving nascent industries a boost. By contrast, after the Great Depression, England left the gold standard and decreased the value of the British pound, forcing an economic stimulus by increasing domestic demand and putting more money into circulation.
In more recent decades, monetarism has been used to control the supply of money in circulation to stabilize the economy. Monetarism is the function by which the economy is now “bailed out” after periods of recession, though such an artificial condition is subject to diminishing returns unless permanent reforms are instituted. This is one of the factors that Smith’s “invisible hand” fails to recognize: it does not account for the externalities of monetary policy. Governance steps in to course-correct the economy after periods of crisis; rarely does the economy course-correct itself. This is close to the rebuttal of the invisible hand popularized by economist Joseph Stiglitz, who argued that some regulation is necessary for the market to function; otherwise it would be overrun by side effects such as runaway environmental pollution, stagnant research environments, or issues of intellectual property. The market innovates around the restrictions of the government and the government enables the market to avoid damaging externalities. Reciprocity is needed for either to function sustainably.
In Adam Smith’s conception, the free market is a liberating force for society. This liberal view holds that the more choice people have in the market, the more they are naturally empowered to do good for the world. Yet free market capitalism has inequalities built into it as a matter of routine. Free trade may allow consumers an unprecedented level of access to consumer goods and the income needed to purchase them, but simultaneously restricts access to the surplus capital that is generated. In this way, the benefits of free market capitalism are heavily subjective.
Technocapitalism is comparable to the theories of early liberal economics described above. At the core of its ideology is a similar belief that the machinery of wealth—that is, the technological innovation spurred by private enterprise—is what drives social progress. The Silicon Valley entrepreneurial class first began to believe in technology’s potential to catalyze social change in the 1990s. Having witnessed early online communities bring people together in novel ways, this new techno-optimism held that a knowledge-based, technology-driven economy could oust the capitalist mode of production. Instead, it was thought that the course of progress would promote a stateless, collaborative counterculture similar to that of the 1960s, but with a sense of the possibility of the transcendence of humans from the merely physical world to a higher state, enabled by advanced technology. This new line of thinking was perhaps best exemplified by the cyberactivist John Perry Barlow’s 1996 “Declaration of the Independence of Cyberspace,” in which, among other things, he declared that “we will create a civilization of the Mind in Cyberspace.”
In this experimentalist economy, creativity would replace commodities, and would be distributed through online networks to consumers. In this way, innovative information (rather than surplus) could drive improvements in living standards. This ideology is exemplified by then-contemporary media such as Wired magazine or the anti-consumerist Adbusters, which also drew on the work of Canadian philosopher Marshall McLuhan, emphasizing aesthetic and cultural critiques of pop culture as a means of “escaping” from the capitalist mindset. This social movement is often categorized as a libertarian one, but it is ideologically distinct from the more culturally conservative tendency of the Tea Party movement and other right-wing subgroups that emerged during the 2000s.
A critique of this “dotcom neoliberalism” by Andy Cameron and Richard Barbrook titled "The Californian Ideology" suggests that the movement is simply technological determinism and cannot be considered radical at all. Since it originated with the technology industry’s elite such as Netscape’s Marc Andreessen or Microsoft’s Bill Gates, and was dependent on their for-profit technology, it could only serve to maintain the class rigidity of capitalism. In effect, these early stages of technocapitalism strengthened the privileged positions of its proponents, ultimately upholding Western capitalist hegemony. Cameron and Barbrook go so far as to say that Silicon Valley technological optimism is a form of reactionary modernism similar to that of Nazi Germany, with its rejection of liberal democratic values in favor of futurist social engineering.
There is a contradictory nature to this claim, in that Silicon Valley’s ideology is closely aligned with Enlightenment conceptions of economics, particularly those of Adam Smith. Both have in common an emphasis on the self-determination of the individual through market participation, as well as the idea that the system can regulate itself into producing social progress by the very nature of its existence. In this way, 1990s technological optimism embraces contrasting left- and right-wing ideas about the nature of progress. It needed capitalism’s mass-market distribution of products to enable the flow of information. Yet it found that same flow of information to be a usefully disruptive force, with the potential power to circumvent the woes of capitalist society. This conflict is still apparent in technocapitalism today.
These intangibles include intellectual property such as software products, or access to proprietary “platforms” like Amazon Marketplace or app stores. Technocapitalist products may be defined typically as “disruptive innovations,” in the words of Clayton Christensen: they are ideas that begin as inferior alternatives to existing offerings, and enter play either at the foot of the market or in a new market altogether. The underlying technology is significant because it can provide cost-effective, novel competition to ideas that are already in production. Research-intensive industries, such as computing and biotechnology, are at the forefront of these efforts. With public funding for scientific research on a steady decline since the latter half of the 20th century, private funding is increasingly needed for viability. In this environment, research must consistently prove its value to funders in order to persist. A well-known example of this, extrapolated from data gathered in the 1990s, is that over 75% of all medical research is privately funded. As a result, rare disease research relies disproportionately on private funding. This effect is mirrored in other fields, and has increased in proportion: between 2012 and 2016, academic-industry collaborations more than doubled globally. The pharmaceutical industry is notoriously fickle about what constitutes marketability and is therefore likely to pass over areas of research that are not clearly profitable.
Private funding can offer flexibility by bypassing public bureaucracy, and technocapitalist campaigns often emerge as efforts to reduce red tape. For example, when the Gates Foundation began funding research into experimental pandemic response efforts, their proposed solution until approximately 2015 was for a NATO-like organization to handle public health policy, and they worked extensively with the WHO and the GAVI vaccine alliance, a public-private enterprise. However, the WHO’s sluggish Ebola response between 2014 and 2016 prompted the Gates Foundation in 2017 to provide backing for CEPI, a vaccine research accelerator, and in 2020, the Gates Foundation’s COVID response efforts largely bypassed intergovernmental organizations, instead utilizing direct, private funding to pivot existing research initiatives into COVID testing trials. These redirections of private research provided data that outstripped the WHO by a critical few months before the FDA halted the program due to regulatory approval issues.
A cause for concern, however, is that private funding has private goals, and that this may impact trustworthiness of private research. Objective empiricism is questionable when it is connected to corporate objectives, and this has the potential to reduce public trust in the research process. Privately funded studies are demonstratively more likely to reach conclusions that favor sponsors’ interests. One analysis of medical industry funding found that privately-funded research is four times more likely to provide a favorable assessment of a drug than publicly-funded research. It also appears that the public is, generally speaking, in on the plot. A meta-analysis of pharmaceutical trials suggests that trials with disclosed financial ties to industry are perceived as “less interesting, important, relevant, valid, and believable” than those without financial disclosures. Though a consistent quantitative effect is difficult to document due a limited sample size, a significant portion of patients and clinicians may feel that disclosed financial ties reduce research quality, and can discourage patients from participating.
Notably, corporations themselves are also experiencing a reduction in internal science funding. The proportion of corporate funding allocated toward the research side of industrial R&D dropped from 28% in 1985 to 20% in 2015. The same review of scientific publications found that the rate of papers being published by corporations dropped significantly between 1980 and 2010, indicating that it is most cost-effective for companies to rely on existing data as opposed to producing new data. This is because market pressures favor applied research in the interest of greenlighting products, not higher-risk investments in foundational science that are likely to pay off at a later date. In the interest of budget conservation, research may be dropped. Patents increase the value of innovations, and in turn stimulate continued R&D in the interest of “inventing around” (i.e. around existing innovations). As a result, there is a disproportionate focus on development rather than research as the most profitable approach for a corporation.
If both the public and traditional private sectors are experiencing funding squeezes, the technocapitalist investment sector should be a great source of support for the technological and scientific communities. However, the technocapitalist “disruptor” efforts are subject to the same issues choking industry funding: they favor low-risk research with high payoffs. Research that requires a fifteen-year timeline to produce tangible effects is passed over in favor of disruptive options. These initiatives can have limited shelf lives due to regulatory issues or poor adoption rates.
Optics remain an issue for the technocapitalist sector. Private organizations with enough disposable income to fund grants are backed by the exceedingly wealthy, and as a result these organizations will almost always function in the interest of self-preservation. Those who have accrued excess capital typically make efforts to maintain it. The Gates Foundation, the most robust organization in this field, has a history of furnishing other major corporations with unneeded charitable donations in the interest of obtaining favorable alliances with regard to public policy. Some of the most highly-documented technocapitalist projects have little to no use value. Elon Musk’s Boring Company’s reworked subway system beneath Los Angeles turned out to be a tunnel for Tesla vehicles; Jeff Bezos’ Earth Fund spent between $300 and $400 million of its $10 billion total to name an NHL stadium after itself; Singularity University (Raymond Kurzweil and Peter Diamandis’s unaccredited innovations hub) exists mostly as an advocacy group. Both Richard Branson and Jeff Bezos recently spent fortunes launching themselves into space for a few minutes.
The balance of public relations and institutional respectability is delicate. It could be argued that technocapitalist projects have inherent value if only because they increase public interest in the sciences. At the center of this argument is an ethical issue: does the effect of private institutions reducing trust in data mean their contributions to their fields are morally suspect, or should they persist because they draw new interest to those fields in a way that may be more effective than traditional institutions?
Left unchecked, the commercialization of the sciences may reduce the overall quality of work available to the public. Academic researchers who receive private funding are more likely to select projects that have a high potential for commercial use, despite an increased association with publication delays and confidentiality restrictions. Since a larger proportion of this work will remain proprietary, this framework essentially withholds information from academic peers, cheapening the epistemic value of scientific research by raising its exchange value.
A potential option, then, is that perhaps technocapitalism shouldn’t remain unchecked. The U.S. Congress has held hearings on limiting tech companies in various ways. Increasingly, public funding apparatuses are taking note of the efficacy of the technocapitalist funding model and are incorporating their structures. The EU’s Horizon Europe program is split into high-value ‘missions’ to prompt research in a manner that bears similarities to the Gates Foundation’s Grand Challenges framework. The U.S. government has its own startup competition. The incorporation of private funding into public distribution methods, for example through the formation of public-private enterprises, could create environments for innovation that are less susceptible to corporate priorities. It is worth keeping in mind that this has notable downsides, with one of its sole benefits being a bureaucratic structure that is familiar to venture capitalists and civil servants alike. A mixed funding model may ultimately be subject to the same biases and ambiguities as private funding. This conflict is already evident in the function of certain government agencies. The FDA is a prime example: a portion of the FDA’s review budget is furnished by the pharmaceuticals industry, and FDA scientists have self-reported that the agency’s regulatory processes appear vulnerable to industry pressures despite increased transparency efforts. This points to inter-agency mistrust about which standards should be enforced, and which definitions of integrity are considered most valid. Yet unless the dwindling availability of research funding resolves over the next few decades, there appears to be little room for options other than pooling public and private resources. Further clarity on the ownership of research outputs would be necessary for this system to be at all functional.
In the end, the goal for society should be to preserve the use value of science and technology instead of turning them into tradable commodities. The unfortunate reality is that most capital has strings attached. A funding-dependent epistemic sphere free of market forces may be untenable without fundamental changes to our current economic system. Under our current models of public and private power, this goal may be an impossibility. The best we can do—as technologists, financiers, policymakers, and above all citizens—is to find ways to pursue innovation in an experimental and flexible manner, with a conscious focus on improving society as a whole. Without a spirit of collaboration, we may be limited by ideologies like technocapitalism, which promises inevitable progress and epistemic certainty while concentrating economic power, debasing public discourse, and failing to live up to its grand ideals.