ONE of the major changes visible in the organisation and control of the capital in the recent period has been the emergence of platform-based global giants such as Google, Facebook, Amazon, Alibaba and Uber emerging as market makers, enjoying immense control over the market without producing any goods per se. In different phases of capitalism, we not only come across different forms of regulating capital but also of changing the structure of firms that defined ownership and control of companies. During the phase of stakeholder capitalism, for instance, in the era of General Motors and Ford, the capital was relying on steady vertical growth focusing on concerns and contestations of stakeholders of companies: owners, managers and workers.

The scenario gradually changed with the advent of shareholder capitalism when long-term investment and growth, as the preferred goal of companies, was substituted by the maximisation of immediate gains for shareholders. The power of decision-making became largely concentrated in the hands of CEOs of companies and the major concern became maximising returns of shareholders. It is also the phase when the competition has been largely dependent on networks of firms, externalising and reducing costs in order to compete in markets of similar products. This network spreads across the globe involving subcontractors and suppliers reaping the benefits of low-cost resources and labour, mostly concentrated in developing countries. The vertical structures with internalised production systems were being replaced by networks creating layers of contracts down the line. In the process of globalisation global capital got access to the reserve army of labour of developing countries, but so far has not been explored due to restricted movement of capital across nation-States. It also immensely helped MNCs in escaping regulatory oversight allowing huge transfer of surplus from developing countries to the metropolitan centre through various means including intra-firm transfers. This also drastically reduced state capacities in regulating movements of capital and in most cases nation States instead of protecting domestic producers turned out to be guarantors of profits for the MNCs. More importantly, becoming part of such a global value chain became the cherished goal of many policymakers in view of fostering industrialisation in developing countries.

NEW DIMENSION OF CONTROL

The scenario seems to have changed further. Financialised regime not only created a network of firms as the dominant form of capital control but gradually moved towards the dominance of platform-based companies. These platform giants dominate not by producing for the market but produce the market itself. They emerged to be market makers of the new regime of capital. Google as a search engine helps one to reach a site, Facebook connects people with other people and shares information about them with advertisers, and Amazon connects buyers to sellers. In these platforms the producer meets the consumers, workers meet employers, buyers meet sellers, creators meet viewers and so on and the platforms only bring together two sides of the exchange. The core strength of these companies is not the products or services being transacted but the huge quantum of data they acquire through these transactions and the aggregation of data as well as the algorithmic analytics built-in, allows them to gain immense market power by influencing future choices.

The profit in this case emanates not from a competition based on prices but by finding producers and sellers dispersed across the globe, the economies of scope that generates margin through arbitrage. Besides facilitating transactions, these critical intermediaries regulate and critically control the structural parameters that define an exchange. In other words, they dictate if not impose the terms of trade in the market. More importantly, the magnitude of control exercised by these giant platforms is much beyond the usual measures of capital control such as market capitalisation or market share and does not necessarily require direct ownership. Capitalism seems to offer a model of control without having direct ownership of producer companies but by exercising control over the transactions through granular data derived from innumerable transactions. It is the key information about the choices and preferences of individuals or business entities that enable these companies in conditioning and adjust demand as well as supply accordingly, which is the key strength of these platform giants. In that way, they impose a governance structure and exercise control over a large number of buyers and sellers spread across the globe. Most important is the fact that this control is largely invisible unlike in the case of vertically integrated large firms or in the case of vertically or horizontally integrated network-based companies. In the case of platforms, dominance and huge concentration are largely invisible. Nonetheless, Apple, Amazon, Facebook, Google, Microsoft and Tencent and Alibaba are the seven out of the ten most valuable companies in the world in terms of net worth.

CONCENTRATION OF POWER

Increased concentration of economic power has reached a different height altogether. In terms of access to conventional resources such as coal, electricity, logistics or simply finance, differences between the large and small were there earlier as well. But this gap has increased exponentially when it comes to access to data and the propertied big data generated in the process. It is easily conceivable how the bargaining power of a consumer or a small producer drastically reduces and almost becomes non-existent vis-à-vis these giant players. At the same time, it becomes equally difficult for globally dispersed economic agents be it buyers or sellers in coming together and putting up a credible dissent or complaint. The high concentration of power also creates huge entry barriers for new entrants and for small producers nothing is left but to join the market that has been crafted by these giants. It is not only about price, but rather the huge power of data mining actually enables them much finer-grained control over the market through customization and speedy adjustment in transactions. Besides the huge scale and scope, they regulate the transactions through algorithms that are beyond the reach of any side of the players in the market.

This concentration of market power evolves over time and initially may not bring an immediate return. In the case of the financialised structure of network-based companies, the governance of firms was dominated by the objective of maximising shareholders’ returns. Hence the efficiency of managers was measured in terms of their responsiveness to this objective which is maximising gains in the short term. For platform-based companies, things have changed. In this case, investment is for the long haul. And therefore investors have to be patient so that they can wait with big pockets, and destroy all competitors with the goal of eventually winning it all. In traditional sectors with the rise of monopoly and consequent concentration across the globe, we may come across at least fourteen global auto giants or five or six oil companies, and quite a few steel companies but in digital platforms, each segment has been grabbed by one or two. The supply of the ‘patient capital’ which allows platform-based companies to wait for the final destination has been possible because of the huge supply of finance across the globe. It is the architecture of finance that sets the rules of the game, the dominant governance structure both economic and non-economic which countries, governments or individuals are expected to internalise.

 Therefore, any regulation that comes into conflict with the interest of finance is seen as a move against the ‘ideal governance’ of profit aiming to disrupt the journey towards the final destination of winning it all. Platforms could offer lower prices of goods and services to consumers and implicitly reduces the monitoring cost of labour by collecting feedback from them. In a way, the consumer at times feels benefitted and empowered by the platform company and tends to side with the company and against workers whenever some contestation occurs. Such intentions of absolute control by big capital involve enormous power that is detrimental to both the economy and society in the long run. However, this also in a way redraws the battleground that encompasses the whole society and does not remain confined to specific segments or sectors. It objectively shares the experience of powerlessness vis-à-vis platform giants, cutting across various exploited and oppressed entities such as workers, farmers, petty producers or consumers, creating opportunities for building larger solidarity towards fighting capital’s power.