Towards an Atlantic police state? (5) How US deficits helped the information revolution that gave us mass surveillance

The successful launch by the Soviet Union of the Sputnik, the first space satellite, in late 1957 was the trigger for stepping up the United States research effort that would lead to the IT revolution. Within a month after the Soviet success a new secretary of defence proposed the creation of a single research agency and in January 1958 Congress was asked to fund the Advanced Research Projects Agency (ARPA).

After NASA, created later in 1958, took space research under its wings, ARPA switched to studying anti-ballistic missile defence and what later became GPS, the geo-location system. In the 1960s it also pioneered digital communication technology (ARPANET) on which the Internet is based. Renamed DARPA (D for Defence) in 1972, the agency also funded the establishment of academic computer science departments in the United States that would drive forward the IT revolution and enable, eventually, mass surveillance. ‘Silicon Valley’ in this sense was the outcome of the collaboration of the American state and industry in the context of the Cold War.

That the United States was able to take the lead in the IT field had everything to do with the restructuring of the capitalist world economy in that period. The decision to abandon the gold cover of the US dollar in 1971 was an emergency measure meant to avoid a US default on its international obligations, basically caused by the war in Vietnam. At the time most members of the Nixon economic team were still committed to rectifying the trade and budget deficits that led to taking this step, but a few others already thought along the lines of making US deficits a foreign investment proposition. After the agreement to switch to a floating exchange rate regime in 1973, the paper dollar effectively became the global reserve currency. The United States became the top destination for the world’s surpluses once initial dollar inflation was brusquely terminated in 1979. In the words of Yanis Varoufakis, this turned the United States into the ‘Global Minotaur’, the Cretan monster fed with human sacrifice, this time goods and capital.
This gave the beginning IT revolution its American epicentre, financed by borrowing, including from abroad and without budget constraints. The US massively imported capital through the sale of Treasury bonds or otherwise. This allowed it to deficit-finance, in large part via its defence establishment, the IT revolution. For whereas the political culture in the United States with its celebration of the free market and competition rules out state support for industry, the Federal government, via the Pentagon and the defence budget, did in fact finance the modernization of the industrial apparatus in the name of national security. 

There was never a civilian IT revolution that later was captured for defence and intelligence: the IT revolution was part of the US military and intelligence posture from the very start. This created the coalition between the military-industrial complex, the IT corporations and university research institutes, and Wall Street. It inflected research and science generally towards military and intelligence purposes with their secrecy requirements, thus threatening democracy itself.

The Internet was very much a product of this complex of forces but today it is evident that the Internet as a global network potentially undermines US and NATO influence. It allows people to select their own information, by-passing the role of editorial teams committed to endorsing the ‘official line’. Hence the need to control all that passes through the Internet. This control and the consolidation of the US first-mover advantage were taken up jointly with the Five Eyes, and their favourite outsider, Israel. To understand how mass surveillance merged with a condition of permanent war and a permanent state of emergency (the ‘War on Terror’) we must investigate the rise of a Neo-Conservative new Right as the socio-cultural and (geo-)political counterpart to (economic) neoliberalism.

Kees van der Pijl

For a complete text with full references see Surveillance Capitalism and Crisis

Artwork by Michiel Kassies

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