Big Tech Won’t Remake the Global Order


2021-11-08 /

Will Big Tech transform geopolitics and perhaps one day supplant the nation-state? In a recent article in Foreign Affairs, titled “The Technopolar Moment: How Digital Powers Will Reshape the Global Order,” Eurasia Group President Ian Bremmer argues we can’t rule that possibility out. In a provocative analysis of the rapidly evolving digital space, Bremmer writes that the major technology firms—Facebook, Apple, Google, Amazon, and foreign counterparts such as Alibaba, Huawei, and Tencent—have become powerful, autonomous actors that are “increasingly shaping geopolitics.”
In particular, he suggests that these firms have created a “new dimension in geopolitics—digital space—over which they exercise primary influence.” With increasing power over “how people spend their time, what professional and social opportunities they pursue, and, ultimately, what they think,” these firms are already “exercising a form of sovereignty,” he writes. The future geopolitical environment will take one of three forms: “one in which the state reigns supreme, rewarding the national champions; one in which corporations wrest control from the state over digital space … or one in which the state fades away.” These are starkly different alternative futures, but which one is most likely?
Taken as a whole, the article is vintage Bremmer: far-reaching, mind-stretching, bridging commerce, politics, and technology, and well worth reading.But I’m not persuaded that Big Tech is as powerful or as autonomous as he thinks, and I certainly don’t think these firms will supplant or replace the nation-state at any point in the foreseeable future. Of his three alternatives, the smart money should be on states.

Physical space is essential. Digital space is optional.

To see why, let’s start with the fundamental differences between physical space and digital space. Physical space is familiar and tangible: It is air, water, food, arable land, the built environment in which we dwell and work. Physical space is essential to human life; our species cannot eat, breathe, procreate, clothe and house itself, or do much of anything else without it. You can’t surf the internet or play a virtual reality game without a place to sit and plug in your device. Our inescapable dependence on the physical environment is why humans fight over territory, control of sea routes, and other physical resources, and it is why states created borders and devised institutions such as sovereignty to regulate political authority over the inhabitable land areas in which we dwell. To make an obvious point, the indispensability of physical space is why climate change looms so large today.
By contrast, nothing in digital space is essential to human life. Its various elements are useful, ubiquitous, seductive, convenient, and, in many cases, life-enhancing—but not strictly necessary. How do we know? Because humanity managed to survive and multiply to nearly 8 billion people and counting, most of them now enjoying levels of material well-being that would boggle the minds of their ancestors. Guess what? They did this without laptops, smartphones, Facebook, or any of the other elements of digital space.
Moreover, as Bremmer admits, “technology firms cannot decouple themselves from physical space”; they invariably touch ground in somebody’s sovereign territory. Servers must be located somewhere and connect to existing power grids. The employees who write algorithms or answer help lines or fill orders in warehouses must live and work and eat and sleep in specific locations that are subject to political authority. Amazon may live in the cloud, but it also depends on fleets of trucks to deliver merchandise to actual human beings. Even techno-utopians have to build their survivalist bunkers within the borders of a real country and in accordance with its zoning laws.
My point is that it is easy to imagine human life without the digital space; all we have to do is think back to what life was like a few decades ago. But trying to imagine human life absent the physical environment in which humans evolved transports us into the realm of science fiction. If Elon Musk’s fantasies of a Mars colony ever come to fruition, it will be a remote and tiny outlet dependent on a steady stream of supplies from Earth and in all probability inhabited by robots, not people.
None of this is to deny the importance of the digital realm. The world economy would suffer significantly if the digital space collapsed tomorrow and we had to go back to snail mail, analog devices, and other pre-digital ways of doing business, but civilization would not collapse, and our species would probably adapt quickly. Some aspects of contemporary life—such as the level of civility in our political discourse—might even improve. If we destroy the biosphere or other essential features of our physical space, by contrast, we’re toast.

Equally important, today’s digital space is not going to collapse no matter what governments decide to do; no serious person wants to smash the servers and return us to an analog world. The real question is how much and in what ways it will be regulated. Imposing limits on Google and Apple and Facebook won’t drive them out of business, although it might make them slightly less profitable and slow the headlong pace of innovation somewhat. Regulating the use of artificial intelligence or other digital tools may reduce some of the benefits of unfettered technological autonomy, but it won’t halt all progress. When there are trade-offs between security and political authority and technological innovation—and clearly there are—governments (and societies) are likely to accept somewhat less of the latter to preserve the former.

Why states will win

For all their shortcomings, states remain the dominant political form in the world today. The number of independent states has grown steadily since 1945 because different ethnic or national groups continue to crave the security and autonomy that only self-government can provide. (If you don’t understand why groups want their own state, just ask Kurds or Palestinians what life is like without one.) Some states do not protect their own populations very well, but most states do a fair job of providing basic security most of the time. And when emergencies arise—9/11, the 2008 financial crisis, a catastrophic weather event—people don’t call Tim Cook or Sergey Brin to fix the problem; they turn to the government.
Even today, corporations, banks, NGOs, and Big Tech are all ultimately backstopped by rules enacted and enforced by governments. If corporations enjoy certain privileges (such as limited liability, legal personhood, or the protection of Section 230 of the U.S. Communications Decency Act), it is because governments have given these to them. When Huawei suddenly couldn’t get the chips it needed, it was because a government decided to block these sales. States also control the ultimate weapon: the legitimate use of force. It is states that decides when and whom to fight, and when they do, citizens in nearly every country willingly march into harm’s way.
No Big Tech firm commands similar power or loyalty. Alphabet’s leaders would be arrested if they tried to use force to protect their market share, and Facebook’s many users aren’t going to take up arms to defend Mark Zuckerberg from government regulation. In short, Big Tech does not possess anything remotely like the sovereignty possessed by states, by which I mean the authority and ability to do whatever is necessary to defend themselves. In the self-help world of international politics, states are often willing to blithely break the law and do horrendous things in the name of national security. No Big Tech firm has anything like that capacity.

Is Big Tech really different?

It is possible that today’s Big Tech is a wholly new phenomenon and that ossified, corrupt, and ignorant governments will be unable or unwilling to bring it to heel. But history suggests a degree of skepticism is in order. Back in the 1970s, scholars such as Raymond Vernon, Richard J. Barnet, and Ronald E. Muller believed that multinational corporations were imposing significant constraints on the nation-state (the title of Vernon’s best-known book is Sovereignty at Bay), a thesis that slighted the central role that U.S. power (and the liberal order it encouraged) played in enabling their activities. Even now, states are cracking down on the tax havens and accounting tricks that Big Tech (and other global firms) has exploited to bolster its profits.
Look back a little further. In the early 20th century, the United States Steel Corp. was as dominant and ubiquitous as some Big Tech firms are today, accounting for two-thirds of U.S. steel production in 1901. If you wanted to build a rail line, make an automobile, erect a skyscraper, or manufacture a plow back then, it was hard to avoid doing business with it. Despite years of lobbying to avoid government regulation and obtain a host of government subsidies, today the company’s share of domestic steel consumption is a mere 8 percent. Might a similar fate await some of the colossi that now loom large in the digital arena?
Or consider the precursor to today’s digital media giants: broadcast television. In 1950, hardly any Americans had TV sets; by 1960, they were in more than 80 percent of U.S. households. Yet apart from the rather insignificant public TV stations, the content you could watch on your sets came from just three “big tech” companies: NBC, CBS, and ABC. If you got your news from the boob tube, you had your choice of just three decidedly mainstream sources, which in turn gave them enormous influence over what Americans knew and thought. Is today’s Big Tech really different?
Writing in the Financial Times, Brooke Masters offers another cautionary tale. In the 19th century, she writes, for-profit railway companies in the United States “wielded monopoly power in the areas they served: new railway stations could create viable towns, and closures could destroy them. Variations in freight rates determined whether businesses were profitable.” She notes further that these powerful companies “fought off state regulation in the 1870s,” but Congress eventually got its act together, created the Interstate Commerce Commission, and brought the railway companies to heel.
Bremmer believes that regulating Big Tech will be more difficult and technically challenging, and I agree, but the writing seems to be on the wall here, too. China has already cracked down hard on its tech sector, and Russia’s Vladimir Putin is moving in this direction as well. The United States won’t go as far as these authoritarian states have, but a desire to bring these firms back down to earth is apparent across the political spectrum. Just last week, the Biden administration blacklisted the Israeli spyware firm NSO Group, the close relationship between the two countries notwithstanding. The bottom line: The unfettered environment in which these firms have grown is disappearing, as states around the world assert their authority over a wide range of activities in the digital space.
But remember: Regulating the digital space does not mean killing it off entirely, rendering big firms unprofitable, or ending all innovation within this arena. Properly designed, greater regulation could increase innovation by breaking up restrictive monopolies while at the same time protecting society as a whole from Big Tech’s negative effects, whose magnitude we are only now beginning to recognize.
Digital technology affects our lives in myriad ways, and it will continue to do so in the years ahead. But so did electrification, the internal combustion engine, air travel, immunization, the harnessing of the atom, and the unlocking of the human genome. None of these scientific or technological revolutions transformed the geopolitical map, rendered borders irrelevant, or turned billions of people from citizens of a particular country to citizens of the world.