The Age of Surveillance Capitalism

by Shoshana Zuboff

  Page grasped that human experience could be Google’s virgin wood, that it could be extracted at no extra cost online and at very low cost out in the real world, where “sensors are really cheap.” Once extracted, it is rendered as behavioral data, producing a surplus that forms the basis of a wholly new class of market exchange. Surveillance capitalism originates in this act of digital dispossession, brought to life by the impatience of over-accumulated investment and two entrepreneurs who wanted to join the system. This is the lever that moved Google’s world and shifted it toward profit.

  Today’s owners of surveillance capital have declared a fourth fictional commodity expropriated from the experiential realities of human beings whose bodies, thoughts, and feelings are as virgin and blameless as nature’s once-plentiful meadows and forests before they fell to the market dynamic. In this new logic, human experience is subjugated to surveillance capitalism’s market mechanisms and reborn as “behavior.” These behaviors are rendered into data, ready to take their place in a numberless queue that feeds the machines for fabrication into predictions and eventual exchange in the new behavioral futures markets.

  The commodification of behavior under surveillance capitalism pivots us toward a societal future in which market power is protected by moats of secrecy, indecipherability, and expertise. Even when knowledge derived from our behavior is fed back to us as a quid pro quo for participation, as in the case of so-called “personalization,” parallel secret operations pursue the conversion of surplus into sales that point far beyond our interests. We have no formal control because we are not essential to this market action.

  In this future we are exiles from our own behavior, denied access to or control over knowledge derived from its dispossession by others for others. Knowledge, authority, and power rest with surveillance capital, for which we are merely “human natural resources.” We are the native peoples now whose tacit claims to self-determination have vanished from the maps of our own experience.

  Digital dispossession is not an episode but a continuous coordination of action, material, and technique, not a wave but the tide itself. Google’s leaders understood from the start that their success would require continuous and pervasive fortifications designed to defend their “repetitive sin” from contest and constraint. They did not want to be bound by the disciplines typically imposed by the private market realm of corporate governance or the democratic realm of law. In order for them to assert and exploit their freedom, democracy would have to be kept at bay.

  “How did they get away with it?” It is an important question that we will return to throughout this book. One set of answers depends on understanding the conditions of existence that create and sustain demand for surveillance capitalism’s services. This theme was summarized in Chapter 2’s discussion of the “collision.” A second set of answers depends upon a clear grasp of surveillance capitalism’s basic mechanisms and laws of motion. This exploration has begun and will continue through Part II.

  A third set of answers requires an appreciation of the political and cultural circumstances and strategies that advanced surveillance capitalism’s claims and protected them from fatal challenge. It is this third domain that we pursue in the sections that follow. No single element is likely to have done the job, but together a convergence of political circumstances and proactive strategies helped enrich the habitat in which this mutation could root and flourish. These include (1) the relentless pursuit and defense of the founders’ “freedom” through corporate control and an insistence on the right to lawless space; (2) the shelter of specific historical circumstances, including the policies and juridical orientation of the neoliberal paradigm and the state’s urgent interest in the emerging capabilities of behavioral surplus analysis and prediction in the aftermath of the September 2001 terror attacks; and (3) the intentional construction of fortifications in the worlds of politics and culture, designed to protect the kingdom and deflect any close scrutiny of its practices.

  II. The Cry Freedom Strategy

  One way that Google’s founders institutionalized their freedom was through an unusual structure of corporate governance that gave them absolute control over their company. Page and Brin were the first to introduce a dual-class share structure to the tech sector with Google’s 2004 public offering. The two would control the super-class “B” voting stock, shares that each carried ten votes, as compared to the “A” class of shares, which each carried only one vote. This arrangement inoculated Page and Brin from market and investor pressures, as Page wrote in the “Founder’s Letter” issued with the IPO: “In the transition to public ownership, we have set up a corporate structure that will make it harder for outside parties to take over or influence Google.… The main effect of this structure is likely to leave our team, especially Sergey and me, with increasingly significant control over the company’s decisions and fate, as Google shares change hands.”8

  In the absence of standard checks and balances, the public was asked to simply “trust” the founders. Schmidt would voice this theme on their behalf whenever challenged on the subject. For example, at the Cato Institute in December 2014, Schmidt was asked about the possibility of abuse of power at Google. He simply assured the audience of the continuity of the firm’s dynastic line. Page had succeeded Schmidt as CEO in 2011, and the current leaders would handpick future leaders: “We’re fine with Larry… same circus, same clowns… it’s the same people… all of us who built Google have the same view, and I am sure our successors will have the same view.”9

  By that year, Page and Brin had a 56 percent majority vote, which they used to impose a new tri-class share structure, adding a “C” class of zero-voting-rights stock.10 As Bloomberg Businessweek observed, “The neutered ‘C’ shares ensure Page and Brin retain control far into the future.…”11 By 2017, Brin and Page controlled 83 percent of the super-voting-class “B” shares, which translated into 51 percent of the voting power.12

  Many Silicon Valley founders followed Google’s lead. By 2015, 15 percent of IPOs were introduced with a dual-class structure, compared to 1 percent in 2005, and more than half of those were for technology companies.13 Most significantly, Facebook’s 2012 IPO featured a two-tiered stock structure that left founder Mark Zuckerberg in control of voting rights. The company then issued nonvoting class “C” shares in 2016, solidifying Zuckerberg’s personal control over every decision.14

  While financial scholars and investors debated the consequences of these share structures, absolute corporate control enabled the Google and Facebook founders to aggressively pursue acquisitions, establishing an arms race in two critical arenas.15 State-of-the-art manufacturing depended on machine intelligence, compelling Google and later Facebook to acquire companies and talent representing its disciplines: facial recognition, “deep learning,” augmented reality, and more.16 But machines are only as smart as the volume of their diet allows. Thus, Google and Facebook vied to become the ubiquitous net positioned to capture the swarming schools of behavioral surplus flowing from every computer-mediated direction. To this end the founders paid outsized premiums for the chance to corner behavioral surplus through acquisitions of an ever-expanding roster of key supply routes.

  In 2006, for example, just two years after its IPO, Google paid $1.65 billion for a one-and-a-half-year-old startup that had never made any money and was besieged by copyright-infringement lawsuits: YouTube. While the move was called “crazy” and the company was criticized for the outsized price tag, Schmidt went on the offensive, freely admitting that Google had paid a $1 billion premium for the video-sharing site, though saying little about why. By 2009, a canny Forrester Research media analyst had unpacked the mystery: “It actually becomes worth the additional value because Google can tie all of its advertising expertise and search traffic into YouTube… it ensures that these millions and millions of viewers are coming to a Google-owned site rather than someone’s else’s site.… As a loss leader goes, if it never makes its money back, it’s still g
oing to be worth it.”17

  Facebook’s Zuckerberg pursued the same strategies, paying “astronomical” prices for a “fast and furious” parade of typically unprofitable startups like virtual reality firm Oculus ($2 billion) and the messaging application WhatsApp ($19 billion), thus ensuring Facebook’s ownership of the gargantuan flows of human behavior that would pour through these pipes. Consistent with the extraction imperative, Zuckerberg told investors that he would not consider driving revenue until the service reaches “billions” of users.18 As one tech journalist put it, “There’s no real need for Zuckerberg to chat with the board… there’s no way for shareholders to check Zuckerberg’s antics.…”19

  It’s worth noting that an understanding of this logic of accumulation would have usefully contributed to the EU Commission’s deliberations on the WhatsApp acquisition, which was permitted based on assurances that data flows from the two businesses would remain separate. The commission would discover later that the extraction imperative and its necessary of economies of scale in supply operations compel the integration of surplus flows in the quest for better prediction products.20

  Google’s founders constructed a corporate form that gave them absolute control in the market sphere, and they also pursued freedom in the public sphere. A key element of Google’s freedom strategy was its ability to discern, construct, and stake its claim to unprecedented social territories that were not yet subject to law. Cyberspace is an important character in this drama, celebrated on the first page of Eric Schmidt and Jared Cohen’s book on the digital age: “The online world is not truly bound by terrestrial laws… it’s the world’s largest ungoverned space.”21 They celebrate their claim to operational spaces beyond the reach of political institutions: the twenty-first-century equivalent of the “dark continents” that drew nineteenth-century European speculators to their shores.

  Hannah Arendt’s examination of British capitalists’ export of over-accumulated capital to Asia and Africa in the mid-nineteenth century helps to develop this analogy: “Here, in backward regions without industries and political organizations, where violence was given more latitude than in any Western country, the so-called laws of capitalism were actually allowed to create realities.… The secret of the new happy fulfillment was precisely that economic laws no longer stood in the way of the greed of the owning classes.”22

  This kind of lawlessness has been a critical success factor in the short history of surveillance capitalism. Schmidt, Brin, and Page have ardently defended their right to freedom from law even as Google grew to become what is arguably the world’s most powerful corporation.23 Their efforts have been marked by a few consistent themes: that technology companies such as Google move faster than the state’s ability to understand or follow, that any attempts to intervene or constrain are therefore fated to be ill-conceived and stupid, that regulation is always a negative force that impedes innovation and progress, and that lawlessness is the necessary context for “technological innovation.”

  Schmidt, Page, and Brin have each been outspoken on these themes. In a 2010 interview with the Wall Street Journal, Schmidt insisted that Google needed no regulation because of strong incentives to “treat its users right.”24 In 2011 Schmidt cited former Intel CEO Andy Grove’s antidemocratic formula to a Washington Post reporter, commenting that Grove’s idea “works for me.” Google was determined to protect itself from the slow pace of democratic institutions:

  This is an Andy Grove formula.… “High tech runs three-times faster than normal businesses. And the government runs three-times slower than normal businesses. So we have a nine-times gap.… And so what you want to do is you want to make sure that the government does not get in the way and slow things down.”25

  Business Insider covered Schmidt’s remarks at the Mobile World Congress that same year, writing, “When asked about government regulation, Schmidt said that technology moves so fast that governments really shouldn’t try to regulate it because it will change too fast, and any problem will be solved by technology. ‘We’ll move much faster than any government.’”26

  Both Brin and Page are even more candid in their contempt for law and regulation. CEO Page surprised a convocation of developers in 2013 by responding to questions from the audience, commenting on the “negativity” that hampered the firm’s freedom to “build really great things” and create “interoperable” technologies with other companies: “Old institutions like the law and so on aren’t keeping up with the rate of change that we’ve caused through technology.… The laws when we went public were 50 years old. A law can’t be right if it’s 50 years old, like it’s before the internet.” When asked his thoughts on how to limit “negativity” and increase “positivity,” Page reflected, “Maybe we should set aside a small part of the world… as technologists we should have some safe places where we can try out some new things and figure out what is the effect on society, what’s the effect on people, without having to deploy kind of into the normal world.”27

  It is important to understand that surveillance capitalists are impelled to pursue lawlessness by the logic of their own creation. Google and Facebook vigorously lobby to kill online privacy protection, limit regulations, weaken or block privacy-enhancing legislation, and thwart every attempt to circumscribe their practices because such laws are existential threats to the frictionless flow of behavioral surplus.28

  Extraction quarry must be both unprotected and available at zero cost if this logic of accumulation is to succeed. These requirements are also an Achilles heel. Code is law for Google now, but the risk of new laws in its established and anticipated territories remains a persistent danger to surveillance capitalism. If new laws were to outlaw extraction operations, the surveillance model would implode. This market form must either gird itself for perpetual conflict with the democratic process or find new ways to infiltrate, seduce, and bend democracy to its ends if it is to fulfill its own inner logic. The survival and success of surveillance capitalism depend upon engineering collective agreement through all available means while simultaneously ignoring, evading, contesting, reshaping, or otherwise vanquishing laws that threaten free behavioral surplus.

  These claims to lawless space are remarkably similar to those of the robber barons of an earlier century. Like the men at Google, the late-nineteenth-century titans claimed undefended territory for their own interests, declared the righteousness of their self-authorizing prerogatives, and defended their new capitalism from democracy at any cost. At least in the US case, we have been here before.

  Economic historians describe the dedication to lawlessness among the Gilded Age “robber barons” for whom Herbert Spencer’s social Darwinism played the same role that Hayek, Jensen, and even Ayn Rand play for today’s digital barons. In the same way that surveillance capitalists excuse their corporations’ unprecedented concentrations of information and wealth as the unavoidable result of “network effects” and “winner-take-all” markets, the Gilded Age industrialists cited Spencer’s specious, pseudoscientific “survival of the fittest” as proof of a divine plan intended to put society’s wealth in the hands of its most aggressively competitive individuals.29

  The Gilded Age millionaires, like today’s surveillance capitalists, stood on the frontier of a vast discontinuity in the means of production with nothing but blank territory in which to invent a new industrial capitalism free from constraints on the use of labor, the nature of working conditions, the extent of environmental destruction, the sourcing of raw materials, or even the quality of their own products. And like their twenty-first-century counterparts, they did not hesitate to exploit the very law that they despised, flying the banner of “private property” and “freedom of contract,” much as surveillance capitalists march under the flag of freedom of speech as the justification for unobstructed technological “progress,” a topic to which we shall return.

  Imbued with the conviction that “the state had neither right nor reason to interfere in the workings of the economy,�
� the Gilded Age millionaires joined forces to defend the “rights of capital” and limit the role of elected representatives in setting policy or developing legislation.30 There was no need for law, they argued, when one had the “law of evolution,” the “laws of capital,” and the “laws of industrial society.” John Rockefeller insisted that his outsized oil fortune was the result of “the natural law of trade development.” Jay Gould, when questioned by Congress on the need for federal regulation of railroad rates, replied that rates were already regulated by “the laws of supply and demand, production and consumption.”31 The millionaires mobilized in 1896 to defeat the populist Democrat William Jennings Bryan, who had vowed to tether economic policy to the political realm, including regulating the railroads and protecting the people from “robbery and oppression.”32

  The bottom line for Gilded Age business elites was that the most effective way to protect the original sin of that economic era was, as David Nasaw put it, “to circumscribe democracy.” They did this by lavishly funding their own political candidates as well as through the careful honing and aggressive dissemination of an ideological attack on the very notion of democracy’s right to interfere in the economic realm.33 Their industries were to be “self-regulating”: free to follow their own evolutionary laws. “Democracy,” they preached, “had its limits, beyond which voters and their elected representatives dared not trespass lest economic calamity befall the nation.”34 In our discussion of “fortifications” we’ll see that Google revived all of these strategies and more. But first we explore the unique circumstances that sheltered the young company and protected its discovery of human experience as a limitless resource ripe for the taking.

  III. Shelter: The Neoliberal Legacy

  Google’s leaders were also favored by historical circumstance. Both Google and the wider surveillance capitalist project were the beneficiaries of two developments that contributed to a uniquely sheltering habitat for the surveillance mutation. The first is the neoliberal capture of the governmental machinery for oversight and regulation of the US economy, the framework of which we discussed in Chapter 2.35