A new round of restructuring in the global economy based on digitalisation and militarisation could recreate the same structural conditions that triggered the Great Depression of 2008 suggests study
Amid rising debt levels and a slowing global economy, warnings are mounting that the global financial system is heading for another disaster.
In a new paper, William I. Robinson of the University of California adds to these warning bells by highlighting how the rapid rise of digitalisation and new technologies could potentially hurt the global economy.
In the face of a sluggish production sector and debt-driven consumption reaching breaking-point, Robinson argues that investors have turned to two intertwined outlets to invest surplus funds. One is the digital and data-driven economy. A handful of US-based tech companies that generate, extract and process data have absorbed enormous amounts of cash from
financiers desperate for new investment opportunities, argues Robinson. He cites the examples of Apple, Microsoft and Alphabet holding hundreds of billions of dollars in reserves and the highest market capitalizations in 2017.
The enormous cash reserves and profits accumulated in the tech sector do not represent the production of new value so much as the surplus profits of the ‘digital capitalists’, writes Robinson. And the gap between the productive economy and ‘fictitious capital’ grows ever wider as financial speculation spirals out of control, he warns.
The second channel for the investment of surplus funds is in the police state. The bogus wars on drugs and terrorism, the construction of border walls, the expansion of prison-industrial complexes, deportation regimes, police, the military, and other security apparatuses, have become major sources of state-organised profit-making, writes Robinson.
Taken together, he suggests that this has led to the creation of a global police state which is controlling and repressing societies. Finally, he warns that digitalisation and militarisation are also likely to aggravate the underlying structural conditions behind the Great Depression of 2008 and trigger a similarly dire crisis.
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