Knight First Amendment Institute Data and Democracy Essay Series (2022)
Throughout the 20th century, market capitalism was defended on parallel grounds. First, it promotes freedom by enabling individuals to exploit their own property and labor-power; second, it facilitates an efficient allocation and use of resources. Recently, however, both defenses have begun to unravel—as capitalism has moved into its “platform” phase. Today, the pursuit of allocative efficiency, bolstered by pervasive data surveillance, often undermines individual freedom rather than promoting it. And more fundamentally, the very idea that markets are necessary to achieve allocative efficiency has come under strain. Even supposing, for argument’s sake, that the claim was true in the early 20th century when von Mises and Hayek pioneered it, advances in computing have rekindled the old “socialist calculation” debate. And this time around, markets—as information technology—are unlikely to have the upper hand.
All of this, we argue, raises an important set of governance questions regarding the political economy of the future. We focus on two: How much should our economic system prioritize freedom, and to what extent should it rely on markets? The arc of platform capitalism bends, increasingly, toward a system that neither prioritizes freedom nor relies on markets. And the dominant critical response, exemplified by Shoshana Zuboff’s work, has been to call for a restoration of market capitalism. Longer term, however, we believe it would be more productive to think about how “postmarket” economic arrangements might promote freedom—or better yet, autonomy—even more effectively than markets, and to determine the practical steps necessary to realize that possibility.