An Initial Marxist Outline of Tech and Venture Capital

To be honest, it’s not super ideal that I am the one taking you through this, but there is almost no leftist analysis of venture capital at all, and even less, Marxist. So, I am not an academic, I am merely applying a text, the Communist Manifesto, to my extensive knowledge of the venture capital operating and economic systems. 

If you are a Marxist and have corrections and so on, you can POLITELY DM me on Twitter. This essay falls in the category of “work I shouldn’t have to do but find necessary because no one else is stepping up to say what is really going on”, and I also want to expand the frameworks we can bring to bear on this situation so that we can understand it and hopefully find ways to accomplish the overthrow of capitalism, of which tech plays a massive role. We are at an important juncture in the timeline of capitalism/ the revolutionary timeline, and you cannot understand what that juncture is without understand the central role tech is playing.

I believe that a Marxist analysis of venture capital, illuminates how tech animates the capitalist economy, is increasingly a uniquely powerful entity operating in capitalism, and must be specifically targeted as they are a massive formation in the advance and sustaining of capitalism. Most importantly, I want to argue that tech is an important target for revolutionary activity in the coming years; following the same tack, we will not be able to overthrow capitalism without defeating tech. They are too powerful and have too much to lose; they have shown a consist ability to fight for their sovereignty and self-determination and to defend it. I hope you come away with a better sense of venture capital and why we need to defeat it, and what role it is playing in the constant strife of capitalism.

Explanation of VC (Skip if Knowledgable) 

For people new to the topic, the explanation of what venture capital is, is very simple. Venture capitalists are the bosses of Silicon Valley. That is because the control the tech economy. They dole out the money, and startups build their empire for them. With all of the financial leverage over emerging technologies, they have the most influence and control over what the industry builds, what its vision is, how the money works and is distributed, and how it operates.

When venture capitalists fund startups, they gain the decisive share in the company — that is to say, venture capitalists are the primary force directing the startup’s operations: how they operate, what they build, when they build and launch things, even who they hire and marketing materials; as involved as they want to be. Venture capitalists are, in a word, in charge of the technology industry and run every single tech company to their desires. When they invest in a company it becomes, very literally, the VC’s company, and the VCs get rich as their company gets rich; in fact, VCs are the first to see returns when they come. The venture capitalists have their own vision of the technology industry and they drive different companies to fulfill the goals of their expanding empire. The venture capitalists push the startup towards success; because they control the money, they can stop competitors in their tracks, and they can use the entire ecosystem to lift up a company. In short, they are fixing the market and trying to create monopolies from inception; tech companies are designed to be the only one in a specific sector. So, the idea that competition is going on is quite a lie; there is no competition. It is just straight market fixing, cronyism, and monopoly building. They are the ones with all the power and and all the money. They are the crime bosses. Analyzing how they function in the tech industry is the basis of its economic dynamics. 

I want to open this inquiry with this quote from the Communist Manifesto, which I think speaks to the reality that tech “innovation” is nothing more than the underlying economic strategy of oppression, and the “innovation” tech produces, represents simply the ongoing cycle that Marx illuminates in the Communist Manifesto:

  "It [the bourgeoisie] has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades. The bourgeoisie cannot exist without constantly revolutionionising the instruments of production, and thereby the relations of production, and with them the whole relations of society."

This drive for constant revolution is the clear central animus within tech. The tech industry is in a state of constant search for revolutions in the way People do things and the way they live and work. In the industry, this pathological drive to constant revolution is known as “disruption”, “changing the world/eating the world” “bringing in a new paradigm” and “innovating the way we do x”, “revolutionizing how we interact with each other”, “changing how we stay in touch”. Blah blah blah fucking blah. Same story, every single time. An economic pattern. This… drive is the central feature of the industry: global change without any moral constraints, it is revolution and innovation for the sake of revolution and innovation, for the sake of the money, power, data it allows them to extract. Each revolution gives them a new way to extort money from a world forced to jump through hoops every time tech comes up with a new way to marginalize and automate workers. We must always buy new devices to keep up, use new apps, give more data; workplaces are forced to totally rebuild their technical infrastructure year after year as soon as tech makes the last thing it sold obsolete. Revolution of the instruments of production, is prized among the highest of aspirations in the industry. 

It is seen as an inherent good to come in and change everything — this is the replacement or “upgrading” that is constantly invented and pushed by the industry, that gives them the pretense to extract money and data (power, control). Tech is reliant on forcing society to constantly change in order to “keep up” or lose the ability to stay afloat; as Marx says, capitalism MUST do this in order to continually drive its own existence forward. As a result of that consistent, unceasing drive forward, the industry has “accomplished wonders” that surpass so much that has come before. And now we are living in the wreckages of assault after assault on their attempts to revolutionize the relations of society — the creation of the gig economy and the tech class, the personal computing revolution, the cloud computing revolution, the iPhone age, the social network, the crypto economy, the surveillance age, and coming now, artificial intelligence and robotics that will again change live totally for workers, and destabilize them. All of these have ultimately shifted all of society in profound ways, and we can’t seem to quite keep up with all of it either. 

As Marx expresses about the progress of life and society under capitalism: 

"all old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe.” 

This is perhaps the most straightforward synthesis of the tech industry and its functions, that I have ever seen in my years working as a critic, activist, archivist and editor. Tech’s “disrupting” has destroyed a huge number of “old” industries in favor of its own, causing widespread destruction if not totally wiping out huge swathes of other industries. It’s easy to forget now, but once there were bookstores, cabs, libraries, video rental stores, and dial-up phones. Tech, along with mega-stores like Walmart, has destroyed small businesses in this country and all over the world. Amazon used to get called the Bookstore Killer. Netflix of course, was called the Blockbuster Killer. You have tech coming in and totally knocking business models out of town, replacing them with much more precarious models like gig work, non-unionized workplaces, the subscription model, and the new landlord age, which even further disrupts housing stability for workers. This has included replacing the unionized taxi industry with the gig economy of ride-sharing apps. It includes taking control of the housing market with AirBnB and gaining property and land through gentrification, causing a revolution in land lording that has only reinforced an already collapsed housing infrastructure. The police have been revolutionized, becoming data-enabled cops with drones, video streaming and crime prediction generated by AI trained on misogynist and racist datasets. Even the military is being disrupted by tech with a new age of autonomous warfare, AI pilots and drone swarms…  these visions and developments are coming FROM the tech industry, who are actively pushing these agendas on all of these different verticals; increasingly, they are the ones who imagine and control all industries they can touch with technology. Their fundamental model is to come up with new things it can force customers and consumers to buy, to force a dystopian nightmare on each vertical one by one. 

The field of computer programming itself is undergoing a major revolution as new programming AIs emerge from major companies and are currently in production improving productivity somewhere in the neighborhood of 10x-100x, according to reports (which I believe). And additionally while technology has already disrupted warehouse labor, we are entering a new era of robot integration into the manufacturing and supply chain. Tech’s value is in fact measured, almost universally, by how rapidly it can take over an area, aka how fast other industries are “destroyed or are daily being destroyed.” That is the only business metric that truly counts; that is the one the produces disproportionate wealth and power. 

In just a few decades, tech has created and forced the adoption of round after round of new products: personal computers, the internet, email, instant messaging, digital payments, video conferencing, virtual workspaces, remote work, cloud computing, big data, cryptocurrency, all of these have totally changed the way business is done. And everyone must keep up with the tech industry’s revolutions or risk not being able to stay afloat in the new rule; as Marx says, the adoption of technology becomes a “life or death” matter for entities to remain competitive, and tech is put into the position of being able to constantly show up and demand that everything is switched up to accommodate its new platform, its new business model, its new currency, and increasingly… its new nation as it more and more operates as one while having the open ambition to *checks notes* be recognized by NATO. 

Marx has also predicted the global expansion of the industry, stating “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere”; this is of course what we talk about when we talk in terms of technology or data colonialism, when we talk about tech imperialism. Tech reaches into every possible nook and cranny, with apps that collect data in every nook and cranny of the world; tech offices are springing up all over the globe and serious strongholds are being built out everywhere as more and more cities and countries become “bitcoin cities”. This requirement for the ever-expanding market, explains why tech has grown a global footprint as fast as possible and continues to insinuate itself in classrooms all over the world, into natural reserves in search of discovery, into cities and banks, inside the minds of children and even into space. 

There has been a disastrous shift in the economy during the pandemic, in which there was a massive upward wealth transfer —  tech was the primary beneficiary. And as this new domino effect of layoffs rippling out from the tech spreads, Marx describes how "The increasing improvement of machinery, ever more rapidly developing, makes [our] livelihood more and more precarious.” We see this happening in real time, as in anticipation of the AI revolution and the autonomous age, huge layoffs of 10%-15%+ are being announced across the tech industry, and are now spilling into the finance industry and we will see those cascade through the rest of the workforce as well. Even the software engineers who have been building these increasing revolutions, are among the very first to get the ax in their wake. The precariousness spreads — not even the artificially created tech class is safe.

In my interpretation, this type of disruption into the economic circumstances of the proletariat — the massive escalations promised by AI and robots — means we are beginning to see the stage of capitalism under which “the various interests and conditions of life within the ranks of the proletariat are more and more equalized, in proportion as machinery obliterates all distinctions of labour, and nearly everywhere reduces wages to the same low level.” I think the biggest indication that this is occurring is that even tech’s precious class of software engineers and other technology workers, are under serious pressure from layoffs and from the rapid deployment of coding AI; back in web 2.0, you would NEVER have seen a blue-chip company like Twitter treat its computer scientists with disdain, humiliating them publicly and stripping them of their jobs while denying severance pay and likely creating an effective blacklist of them within the industry. We know that women and members of other marginalized demographics, are currently being chased out of the industry using these new financial dynamics as an excuse. The fact that even SOFTWARE ENGINEERS are losing their jobs and certainly facing paycuts, all while there is an overall crunch down in salary, indicates we are arriving at a new point in Marx’s description of capitalism’s inevitable progression towards destruction via People’s revolution. 

As the capitalistic wheel continues to turn, Marx discusses how capitalism brings about a state in which “the proletarian is without property… they have nothing of their own to secure and to fortify”. This has become more and more the case: tech has forced people out of homes and turned them into Airbnbs, displaced entire populations of cities, tech is buying up hundreds of thousands of apartments to rent out, tech has bought real estate up from under residence’s feet and turned them into rental properties or simply replaced them with a richer owner. As we enter a new technology-driven phase of “pay in 4 installments” financial schemes, people are harassed and pushed down by capitalism, into only being able to purchase things that they no longer outright own, but rather owe the tech industry and the fintech companies the money for. The same is true for the transportation system, where cars are now leased out to ride share drivers. Tech’s business model is to take your shit and then RENT it back to you; everything eventually comes underneath their own ownership and the ownership and stability of the people is terrifically undermined.  

This displacement of the proletariat and its estrangement, is what sets us up for a change, at long last, a change; when the tech superstructure has gone so far that people are unable to have their own things, we are nearing a revolutionary window. Because it is in that moment that “it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him." 

In essence, tech is simply not capable of actually providing for the people it is continuously pressuring into the bottom; and we have indeed seen that the tech industry CANNOT take care of us; and that their wealth has had an inverse relationship with our own, that their wealth is made possible exclusively by the oppression of the People, by exploiting them, taking advantage of them, robbing and stealing from them. 

This, however sad, is how we do arrive at the beginning of revolution: “Political power, properly so called, is merely the organized power of one class for oppressing another. If the proletariat during its contest with the bourgeoisie is compelled, by the force of circumstances, to organize itself as a class, if, by means of a revolution , it makes itself the ruling class, and, as such, sweeps away by force the old conditions of production, then it will, along with these conditions, have swept away the conditions for the existence of class antagonisms and of classes generally, and will thereby have abolished its own supremacy as a class.”

Although I am far from a Marx scholar, these principles are simple enough that are easy enough to apply to this situation; that is because Marxism is an economic science, and it describes the inescapable consequences that flow from the capitalist system. That is why the results of venture capital are predictable. 

Certainly, tech is fundamentally no different from any other formation of capitalism; at its very foundation is simply capitalism. Yet I believe it is at the bleeding edge of the capitalist cycle, that it is the formation of which we can most see where we actually are on the revolutionary timeline, that it is the central engine of capitalist progress at this state; this is in large part due to the overall decline and stagnation of America, in large part due to tech itself forcing these constant revolutions that other parts of the system simply cannot afford and is left with half-working expensive technology that barely holds on until tech needs a new round of funding and so comes to them with a new system or simply replaces it. Other sectors are left with the inability to provide a living wage or a competitive one, constantly being put out of business by new “innovations” — this is one way tech has ravaged once-vital cities like Oakland and San Francisco, and so on. 

I think that a Marxist analysis of venture capital allows us to explain its behavior as stemming from the underlying capitalist system, and that it also shows where we are in the revolutionary timeline. When Marx speaks of how “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie,” I think we should mark venture capitalists among the executives of the modern state, first revolutionizing then managing then revolutionizing again, shown again and again to be the most powerful and decisive force in this never-ending change that ultimately and dominantly affects “the whole relations of society”. Tech competes with very few, and perhaps none, single entities that has produced this level of change in our very daily lives, irrevocably. From a workers point of view, “the increasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious”. So I believe tech specifically, has us at the point where we are seeing that crunch down on the workers where wages are being decreased to the same low levels, and that this moment marks a critical one in this, again, scientific journey we are on. 

[Do you think you are smarter than Marx, Marc Andreessen? You are not. What is your rebuttal to this scientific argument? How can you deny an obvious scientific argument that spells doom for your empire, and capital punishment by democratic jury? How can you possibly justify thinking that unequally distributing money, so some live in sickly wealth, and others live sick with no wealth? Your industry has done nothing for the People, there are no material gains you can point to; you have led this country straight into fucking poverty and misery and oppression. In this is a matter you cannot lie about: this is about underlying financial systems. There are two fundamental economic systems: sharing wealth, and not sharing wealth. And the latter leads to the downfall of such system and the rise of the former. Do you feel nothing for others? If you cannot feel, how can you survey humanity’s greatness at an intellectual level and not be humbled, but rather conclude that you surpass it, that your personal ideas of neo-fascist capitalism should reign over the implementation of a much fairer economic system that you could help effect? Put me on your shoulder and walk with me to the possibility that you are wrong and that you are not doing a good thing. You owe it to “openness” to try. ]

So, you know, my main point here is that we are entering an economic phase in this country, driven by tech’s constant “revolution” of production, where things are very precarious and groups of people who have previously been comfortably middle class, now have no guarantee of livelihood, or a livelihood that allows a comfortable quality of living. That should start to produce new agitations, new resistance, the “formation of the proletariat into a class, overthrow of of the bourgeois supremacy, conquest of political power by the proletariat.” That is to say, we are entering a critical moment and tech is propelling it; thus, we must strategically and tactically, begin to fight directly against “the bourgeois conditions of production”… in this case that will require directly fighting tech itself, and fighting tech itself must be central to our ongoing, inevitable march to revolution. But as Lenin says “Sometimes - history needs a push”.