EDucate! - Development

So our first question is, how significant do you see the skirmishes between the Department of Justice and Microsoft? Do you see it as an important turn of events?

There’s some significance. We There’s some significance. We shouldn’t exaggerate it. If there are three major corporations controlling what is essentially public property and a public creation, namely the Internet, telecommunications, and so on, that’s not a whole lot better than one corporation controlling, but it’s maybe a minor difference. The question is to what extent parasites like Microsoft should be parasites off the public system, or should be granted any rights at all.

Give us a little bit of historical context. How does what’s happening with Microsoft’s growing power, and its role in society fit into the history of Corporate power, the evolution of corporations?

Here’s a brief history, a thumbnail sketch.

There were corporations as far back as the 18th century, and beyond. In the United States, corporations were public bodies. Basically, they were associations. A bunch of people could get together and say we want to build a bridge over this river, and could get a state charter which allowed them to do that, precisely that and nothing more. The corporation had no rights of individual persons. The model for the corporation back at the time of the framing of the Constitution was a municipality. Through the 19th century, that began to change.

It’s important to remember that the constitutional system was not designed in the first place to defend the rights of people. Rather, the rights of people had to be balanced, as Madison put it, against what he called ‘the rights of property’. Well of course, property has no rights: my pen has no rights. Maybe I have a right to it, but the pen has no rights. So, this is just a code phrase for the rights of people with property. The constitutional system was founded on the principle that the rights of people with property have to be privileged; they have rights because they’re people, but they also have special rights because they have property. As Madison put it in the constitutional debates, the goal of government must be “to protect the minority of the opulent against the majority”. That’s the way the system was set up.

In the United States, around the turn of the century, through radical judicial activism, the courts changed crucially the concept of the corporation. They simply redefined them so as to grant not only privileges to property owners, but also to what legal historians call ‘collectivist legal entities’. Corporations, in other words, were granted early in this century the rights of persons, in fact, immortal persons, and persons of immense power. And they were freed from the need to restrict themselves to the grants of state charters.

That’s a very big change. It’s essentially establishing major private tyrannies, which are furthermore unaccountable, because they’re protected by First Amendment rights, freedom from search and seizure and so on, so you can't figure out what they're doing.

After the Second World War, it was well understood in the business world that they were going to have to have state coordination, subsidy, and a kind of socialization of costs and risks. The only question was how to do that. The method that was hit upon pretty quickly was the ‘Pentagon system’ (including the DOE, AEC, NASA). These publicly-subsidized systems have been the core of the dynamic sectors of the American economy ever since (much the same is true of biotechnology, pharmaceuticals, etc., relying on different public sources). And that certainly leads right to Microsoft.

So how does Microsoft achieve its enormous profits? Well, Bill Gates is pretty frank about it. He says they do it by ‘embracing and extending’ the ideas of others. They’re based on computers, for example. Computers were created at public expense and public initiative. In the 1950s when they were being developed, it was about 100% public expense. The same is true of the Internet. The ideas, the initiatives, the software, the hardware – these were created for about 30 years at public initiative and expense, and it's just now being handed over to guys like Bill Gates.

What are the social and cultural impacts of allowing, not only a monopoly, but even if it’s just a few large corporations, dominating something as basic as human speech, communication with each other?

It’s a form of tyranny. But, that’s the whole point of corporatization – to try to remove the public from making decisions over their own fate, to limit the public arena, to control opinion, to make sure that the fundamental decisions that determine how the world is going to be run – which includes production, commerce, distribution, thought, social policy, foreign policy, everything – are not in the hands of the public, but rather in the hands of highly concentrated private power. In effect, tyranny unaccountable to the public. And there are various modalities for doing this. One is to have the communication system, the so-called information system, in the hands of a network of, fewer or more doesn’t matter that much, private tyrannies.

Let’s take the media. These are corporate media, overwhelmingly. Even the so-called public media are not very different. They are just huge corporations that sell audiences to advertisers in other businesses. And they're supposed to constitute the communications system. It’s not complicated to figure out what’s going to come out of this. That includes also the entertainment industries, so-called, the various modalities for diverting people from the public arena, and so on.

And there are new things happening all the time. Like there’s a dramatic example, that’s the Multilateral Agreement on Investment (MAI). The negotiations have been going on in secret for about three years. It’s essentially a huge corporate power play, trying to give ‘investors’ – that doesn’t mean the guy working on the shop floor, it means the board of directors of GE, of Merrill Lynch, and so on – to give investors extraordinary rights. That’s being done in secret because the people involved, which is the whole business community incidentally, know that the public is going to hate it. So therefore the media are keeping it secret. And it’s an astonishing feat to keep quiet about what everyone knows to be a major set of decisions, which are going to lock countries into certain arrangements. It’ll prevent public policy. Now you can argue that it’s a good thing, a bad thing, you can argue what you like, but there’s no doubt about how the public is going to react, and there’s no doubt about the fact that the media, which have been well aware of this from the beginning have succeeded in virtually not mentioning it.

How would a company like Microsoft benefit from the MAI?

They could move capital freely. They could invest it where they like. There would be no restrictions on anything they do. A country, or a town, like say, Cambridge, Massachusetts, where I live, where I work, could not impose conditions on consumer protection, environmental control, investment and set-asides for minorities or women, you name it, that would be ruled out.

Now exactly how far this would go depends on the disposition to enforce it. These things are not determined by words. There’s nothing in the Constitution, or the amendments to the Constitution, which allows private tyrannies to have the right to personhood. It’s just power, not the wording. What the MAI would mean in practice depends on what the power relations are, like whether people object to it so strenuously they won’t allow it to happen, maybe by riots, or whatever. So those are the terms that they're going to try to impose.

A crucial element of this is what they call the ratchet effect; that is existing legislation is to be allowed, but it has to be removed over time. It has to be rolled back, and no new legislation can be introduced conflicting with the rights of Microsoft to do anything they like in the international arena, or domestically. Well over time that’s supposed to have a ratchet effect, to turn the world over more and more in the hands of the major private tyrannies, like Microsoft, with their alliances and interactions.

Economist Brian Arthur argues that with the rapidly changing nature of technology, no one will remain in a monopoly position for long, so that monopoly power in the technology industries is different than what we’ve historically seen, and is nothing to worry about.

But there never was monopoly power; or there very rarely was monopoly power. Take highly concentrated power systems, like the energy industries. But they’re not strictly speaking monopolies. Shell and Exxon are competitors. This is a highly managed system of market administration, with enormous state power entering in the interests of a small collection of private tyrannies.

It’s very rare to find a real monopoly. AT&T was a monopoly for a time, that’s why it could create things like the transistor, for example. It was a monopoly, so therefore they could charge high rates. But that’s certainly unusual.

Do you think the whole monopoly issue is something to be concerned about?

These are oligopolies; they are small groups of highly concentrated power systems which are integrated with one another. If one of them were to get total control of some system, other powers probably wouldn’t allow it. In fact, that’s what you’re seeing.

How has the transfer from the public to the private sphere changed the Internet?

As long as the Internet was under control of the Pentagon, it was free. People could use it freely [for] information sharing. That remained true when it stayed within the state sector of the National Science Foundation.

As late as about 1994, people like say, Bill Gates, had no interest in the Internet. He wouldn’t even go to conferences about it, because he didn’t see a way to make a profit from it. Now it's being handed over to private corporations, and they tell you pretty much what they want to do. They want to take large parts of the Internet and cut it out of the public domain altogether, turn it into intranets, which are fenced off with firewalls, and used simply for internal corporate operations.

They want to control access, and that’s a large part of Microsoft’s efforts: control access in such a way that people who access the Internet will be guided to things that they want, like home marketing service, or diversion, or something or other. If you really know exactly what you want to find, and have enough information and energy, you may be able to find what you want. But they want to make that as difficult as possible. And that’s perfectly natural. If you were on the board of directors of Microsoft, sure, that’s what you’d try to do.

Well, you know, these things don't have to happen. The public institution created a public entity which can be kept under public control. But that's going to mean a lot of hard work at every level.

What would it look like if it were under public control?

It would look like it did before, except much more accessible because more people would have access to it. And with no constraints. People could just use it freely. That has been done, as long as it was in the public domain. It wasn’t perfect, but it had more or less the right kind of structure. That's what Microsoft and others want to destroy.

We are curious about this potential for many-to-many communications, and the fact that software, as a way of doing things carries cultural values, and impacts language and perception. And what kind of impacts there are around having technology being developed by corporations such as Microsoft.?

I don’t think there’s really any answer to that. It depends who’s participating, who’s active, who’s influencing the direction of things, and so on. If it’s being influenced and controlled by the Disney Corporation and others it will reflect their interests. If there is largely public initiative, then it will reflect public interests.

So it gets back to the question of taking it back.

That’s the question. Ultimately it’s a question of whether democracy is going to be allowed to exist, and to what extent. And it’s entirely natural that the business world, along with the state, which they largely dominate, would want to limit democracy. It threatens them. It always has been threatening. That’s why we have a huge public relations industry dedicated to, as they put it, controlling the public mind.

What kinds of things can people do to try to expand and reclaim democracy and the public space from corporations?

Well, the first thing they have to do is find out what’s happening to them. So if you have none of that information, you can’t do much. For example, it’s impossible to oppose, say, the Multilateral Agreement on Investment, if you don’t know it exists. That’s the point of the secrecy. You can’t oppose the specific form of globalization that’s taking place, unless you understand it. You’d have to not only read the headlines which say market economy’s triumphed, but you also have to read Alan Greenspan, the head of the Federal Reserve, when he’s talking internally; when he says, look the health of the economy depends on a wonderful achievement that we’ve brought about, namely ‘worker insecurity’. That’s his term. Worker insecurity – that is not knowing if you’re going to have a job tomorrow. It is a great boon for the health of the economy because it keeps wages down. It's great: it keeps profits up and wages down.

Well, unless people know those things, they can’t do much about them. So the first thing that has to be done is to create for ourselves, for the population, systems of interchange, interaction, and so on. Like Corporate Watch, Public Citizen, other popular groupings, which provide to the public the kinds of information and understanding that they won't otherwise have. After that they have to struggle against it, in lots of ways which are open to them. And it should aim, in my opinion, not just at narrow questions, like preventing monopoly, but also at deeper questions, like why do private tyrannies have rights altogether?

What do you think about the potential of all the alternative media that's burgeoning on the Internet, given the current trends?

That’s a matter for action, not for speculation. It’s like asking 40 years ago what’s the likelihood that we’d have a minimal health care system. These things happen if people struggle for them. The business world, Microsoft, they’re highly class conscious. They’re basically vulgar Marxists, who see themselves engaged in a bitter class struggle. Of course they’re always going to be at it. The question is whether they have that field to themselves. And the deeper question is whether they should be allowed to participate; I don’t think they should.