Report on the historical relationship between democracies and the economy

15 December 2023 By

The INCA partner UNIBO has conducted an ambitious and in-depth historical analysis of the historical relationship between democracies and the economy. This analysis aims to establish a grounded historical and theoretical perspective to delve into the political power held by the digital platforms investigated in INCA (namely GAFAM – Google/Alphabet, Amazon, Facebook/Meta, Apple, and Microsoft). The prominent role played by such platforms within society is possible because they possess a panoply of powers primarily based on the technologies they master (firstly, the extraction, accumulation, and use of data as raw material and, secondly, their algorithmic capacity to implement instant decisions) and on their characterization as infrastructures.

This analysis shows how political power was constantly owned by big firms. In line with this observation, the report demonstrates the assumption that economy and politics (or, differently said, Capital and the State) have never been distinctly separated but rather deeply intertwined. To test this hypothesis, they have chosen four case studies from the so-called First Industrial Revolution onwards that touch on four continents.

1) The report starts with the historical case of the British East India Company. The EIC directly governed territories as vast as present-day India, exerting a form of direct political power also thanks to the “infrastructurization” of the territory and the “infrastructural” role played by its ships: EIC represents one the clearest historical cases where Capital engages in politics.

2) The second case study analyses the construction of the Suez Canal, a project that had a transnational rationality in nature and scope: an infrastructure that reshapes politics, industrial relations, cultures and imaginaries. In a nutshell, in the construction of the Suez Canal, the private initiative of the joint-stock company promoting the project guided the political action of the French and Egyptian states.

3) The third case looks at the US in the first half of the XX century when state regulation and partial planning foreshadowed a new role of the State with respect to Capital. The New Deal monumental infrastructural projects, such as the hydroelectric dams constructed by the Tennessee Valley Authority, were eminent instances of capitalist infrastructures in the age of industrial mass production, where the power of government merges with corporate rationality to regulate the pace of capitalist development.

4) Eventually, the fourth case looks at the genealogy of the so-called “platform capitalism” that took shape in the new millennium. Today, social life and social reproduction are more and more mediated by platforms as infrastructure. As a matter of fact, platforms are not mere matchmakers, rather they shape the ways users – including States – may relate to each other. Within platforms, politics and Capital are integrated, and the Amazon case that close our report shows this blatantly.

Each case study defines a specific approach to Industrial Revolutions, beginning with a historical overview, analysing the specific dynamics of the market/state relationship within that case study, describing its infrastructural characteristics, and providing an assessment of the political role of Capital in the case under scrutiny. Across the different cases, the report turns “infrastructural power” into a conceptual razor that enables a new perspective on the vexed questions of the relation between State and Capital, as well as between capitalism and democracy. Going beyond the established partition of “spheres”, according to which politics pertains to the State and economy to Capital, the INCA researchers underscore the need to focus attention on the direct political implications of what we call “Operations of Capital”.