ADvAnCe PRAise fOR robert W. “A hard-to-put-down, media studies / current affairs $27.95 u.s. mcchesney meticulously researched must-read.” diGital disconnect d —Juliet B. scHor “A major new work by one of the nation’s lead- robert W. According to celebrAted mediA ing analysts of media. mcchesney shows scholar robert W. mcchesney, most igit how the economic context of the digital envi- m cchesney analyses of the internet oscillate d ronment is making the difference between an d between utopian bliss and dystopian open and democratic internet and one which is hell, completely failing to address the manipulated for private gain.” relationship between economic —Juliet B. scHor, author of True Wealth power and the digital world. in Digital and The Overworked American igit isconnect Disconnect, mcchesney offers a bold “mcchesney penetrates to the heart of the new argument that reveals just how A robert W. mcchesney is the Gutgsell issue: change the system/change the inter- undemocratic the internet has become. endowed Professor in the department of net. both/And—not either/or. indispensable mcchesney’s award-winning Rich communication at the university of illinois at reading as we lay groundwork for the coming Media, Poor Democracy skewered the great movement to reclaim America.” l urbana-champaign. He is the author of sev- assumption that a society drenched in —Gar alPeroVitz, eral books on the media, including the award- commercial information is a democratic author of What Then Must We Do? and professor of winning Rich Media, Poor Democracy and political economy, university of maryland one. in Digital Disconnect, the author Communication Revolution, and a co-editor d returns to this provocative thesis in (with Victor Pickard) of Will the Last Reporter “once again, mcchesney stands at the light of the advances of the digital age, Please Turn Out the Lights (all available from crossroads of media dysfunction and the arguing that the sharp decline in the denial of democracy, illuminating the com- isconnect the new Press). Al enforcement of antitrust violations, the plex issues involved and identifying a path increase in patents on digital technol- forward to try to repair the damage. here’s hoping the rest of us have the ogy and proprietary systems, and mas- good sense to listen this time.” sive indirect subsidies have made the —eric alterman, professor of english internet a place of numbing commer- and journalism, Brooklyn college, cialism. mcchesney points out that now city university of new York only a handful of monopolies dominate the political economy of the internet, PRAise fOR from Google, which garners an aston- ricH media, Poor democracY Ag t hoW ishing 97 percent share of the mobile urning the “if thomas paine were around, he would have search market, to microsoft, whose A written this book. if paul revere were here, operating system is used by over 90 he would have spread the word.” inst cApit percent of the world’s computers. this —Bill moYers capitalistic colonization of cyberspace “A rich and penetrating study advances has spurred the near-collapse of cred- considerably his pioneering work. d ible journalism and made the internet a emocr [A] very significant contribution.” A disturbingly antidemocratic force. —noam cHomskY lism is Digital Disconnect offers a ground- internet breaking analysis and critique of the internet, urging us to reclaim the democratizing potential of the digital THE NEW PRESS A revolution while we still can. www.thenewpress.com cy author photograph by Brent nicastro Jacket design by stewart cauley design, new York THE NEW PRESS Digital Disconnect_jacket.indd 1 12/17/12 2:25 PM DIGITAL DISCONNECT ALSO BY ROBERT W. MCCHESNEY Dollarocracy (with John Nichols) The Endless Crisis (with John Bellamy Foster) The Death and Life of American Journalism (with John Nichols) Our Media, Not Theirs (with John Nichols) Communication Revolution The Political Economy of Media Tragedy and Farce (with John Nichols) The Problem of the Media Rich Media, Poor Democracy The Global Media (with Edward S. Herman) Corporate Media and the Threat to Democracy Telecommunications, Mass Media, and Democracy EDITED VOLUMES Will the Last Reporter Please Turn Out the Lights (with Victor Pickard) The Future of Media (with Russell Newman and Ben Scott) Our Unfree Press (with Ben Scott) Capitalism and the Information Age (with Ellen Meiksins Wood and John Bellamy Foster) Ruthless Criticism (with William Solomon) DIGITAL DISCONNECT HOW CAPITALISM IS TURNING THE INTERNET AGAINST DEMOCRACY Robert W. McChesney © 2013 by Robert W. McChesney All rights reserved. No part of this book may be reproduced, in any form, without written permission from the publisher. Requests for permission to reproduce selections from this book should be mailed to: Permissions Department, The New Press, 38 Greene Street, New York, NY 10013. Published in the United States by The New Press, New York, 2013 Distributed by Perseus Distribution library of congress cataloging-in-publication data McChesney, Robert Waterman, 1952– Digital disconnect : how capitalism is turning the Internet against democracy / Robert W. McChesney. p. cm. Includes bibliographical references and index. ISBN 978-1-59558-867-8 (hardcover) ISBN 978-1-59558-891-3 (e-book) 1. Internet—Political aspects. 2. Capitalism. 3. Democracy. I. Title. HM851.M393 2013 302.23'1—dc23 2012035748 The New Press publishes books that promote and enrich public discussion and understanding of the issues vital to our democracy and to a more equitable world. These books are made possible by the enthusiasm of our readers; the support of a committed group of donors, large and small; the col- laboration of our many partners in the independent media and the not-for-profit sector; booksellers, who often hand-sell New Press books; librarians; and above all by our authors. www.thenewpress.com Composition by dix! This book was set in Electra Printed in the United States of America 2 4 6 8 10 9 7 5 3 1 C ONTENTS List of Illustrations ix Preface xi 1. What Is the Elephant in the Digital Room? 1 2. Does Capitalism Equal Democracy? 23 3. How Can the Political Economy of Communication Help Us Understand the Internet? 63 4. The Internet and Capitalism I: Where Dinosaurs Roam? 96 5. The Internet and Capitalism II: Empire of the Senseless? 130 6. Journalism Is Dead! Long Live Journalism? 172 7. Revolution in the Digital Revolution? 216 Notes 233 Index 285 LIST OF ILLUSTRATIONS Chart 1. Number of work stoppages involving 1,000 or more workers 31 Chart 2. Income share of the bottom 99.5 percent 33 Chart 3. Income share of the top 1 percent 34 Chart 4. Labor productivity and labor compensation 34 Chart 5. Number and percentage of concentrated U.S. manufacturing industries 38 Chart 6. Revenue of the top 200 U.S. corporations as a percent of total business revenue 40 Chart 7. Real U.S. GDP growth 48 Chart 8. Voter turnout by income in presidential elections 60 Chart 9. Voter turnout by income in interim elections 61 Table 1. Journalism funding and democracy 210 Chart 10. Investment in information processing equipment and software equipment as a percent of total nonresidential private fixed investment 222 ix P REFACE When I was young, in the late 1960s and early 1970s, I was attracted to the political left, like many of my generation. If I may generalize, this sizable cohort, though not an entire generation, was deeply concerned with eco- nomic and social inequality and corruption in American society. We were appalled by its brain-dead commercialism and rampant militarism. Many of us thought that existing capitalism really was a dying system that had no fu- ture: it needlessly permitted grotesque poverty and was antithetical to demo- cratic values and practices. We were also decidedly optimistic; we thought we had the winds of history behind us. With the arrogance of youth, we thought we had figured it all out and there would be no turning back. What does it say about our times that most contemporary observers now look at that period as the high point of American capitalism, when it was hitting on all cylinders? Many people today, and certainly most young peo- ple, would give anything to have an economy like American capitalism in 1972. Inequality was narrowing and barely existed by contemporary stan- dards, good-paying jobs were plentiful, the infrastructure was the envy of the world, and governance was downright benign compared to modern corrup- tion. There was a place for young people in the economy. There was hope, something that is awfully hard to muster nowadays. That paradox prompts this book, which attempts to connect the digital revolution—arguably the most extraordinary and important development of the past half century—to the overriding crises of our times. I began writing this book twenty years ago, in 1992. I was putting the finishing touches on my first book and was about to put it in the mail when I read a review of George Gilder’s Life After Television in the Financial Times. Gilder argued that the Internet was in the process of eliminating xi xii preface broadcasting as we knew it. The Internet would also eliminate all traditional concerns about media monopoly and commercialism and terminate the need for policy making. Just let the market do its thing and witness the great- est democratic communication revolution ever. Because my first book dealt with the policy battles that led to the entrenchment of commercial broad- casting in the United States, I felt compelled to add an endnote concerning Gilder’s argument. It was the first time I had seen the case for the Internet as a revolutionary medium put so concretely and provocatively.