Many times, when we write the weekly reports we need to criticize discourses and approximate very complex strategies. We always try to make sure that the reader never loses sight, even for a moment, of the fact that, however tangled it may be, the ideology justifying these strategies is always simple and brutal. In the end, directly or indirectly, it is always the same: expanding markets and achieving profitable uses in which to place capital that cannot be found in the domestic market. But sometimes, as has been the case with the ban on TikTok and WeChat in the USA, it is the very course of events that ends up driving the protagonists to take off their masks.
May 13th. Colombia is the first of a series of countries that cynically discovers, after the American fine, the possible danger to children of the app. If the US can call to order and fine the large funds of fictitious capital so that they do not become too attached to China, then why shouldn’t other countries?
June 24th. A campaign on TikTok, Instagram and Facebook calls for reservation of seats at the Trump campaign kick-off meeting. The Republican organizers relied on reservation numbers and hung the No tickets notice prematurely… until they placed Trump there… in front of a half-empty room. The organizers of the prank became the media focus. And the media, already in an electoral campaign, magnified the role of TikTok… and with them the speculators, always attentive to the expectations and public image of capital placements.
July 2. The border conflict between India and China has already resulted in deaths. The Indian government sees an opportunity to initiate industrial renationalization and reduce imports from its neighbor. From war threats, it moved on to encourage the organization of bonfires of Chinese products. Soon the first measures arrive, all in the same direction: in the first place, all Indian companies are forbidden to participate in a project of the new Chinese silk road, that is to say, to become bound to Chinese capital. And immediately after that, Chinese apps were also banned from Indian cell phones, with a special emphasis on TikTok because of its popularity among young people.
July 7th. The U.S. Secretary of State threatens for the first time to ban TikTok as part of the U.S. retaliation against Hong Kong’s security law. The US press commented at the time that the second phase of deglobalization of the Internet, the process of partitioning the network into national markets and technologies, was underway. Second phase because it had been going on for a long time. At first it was a Chinese strategy of social control, the great Chinese cyber-wall, which prevented the arrival of subversive contents. Then it was used by Russia to force the big technology companies to invest in the country by opening data centers on Russian ground. The excuse was that only if the servers and headquarters of the companies were in the country, the applicable laws were the Russian ones and the justice system could effectively watch over the national users. But the trade war gave a new dimension to the trend. There was already talk of Splinternet: an Internet divided into blocs around the two great imperialist powers in conflict.
July 8th. Australia, which is in its own trade war with China, finds itself suddenly concerned about the privacy of teenagers’ data in TikTok. USA says it is investigating … that which it had already fined a few months ago.
July 28th. The excuses are forgotten and the USA presses Japan and other allies to ban Chinese applications with large user numbers. In general.
August 3rd. Microsoft takes advantage of the threats to try to buy down the Chinese app in the USA, Canada, Australia and New Zealand. There is an approach to buy also the Indian branch, but it failed. Microsoft announces that it would meet with Trump the next day. Tiktok announces that it is considering closing its London headquarters.
August 4th. Microsoft executives meet with Trump. The U.S. president tells them that he wants a substantial pieceof the sale of TikTok for the state because “we’re the ones making it possible” And it gives them until September 15th to close a deal with the Chinese owner.
August 8. The United States issues a presidential order prohibiting U.S. companies from doing business with ByteDance, the company that owns TikTok and WeChat, within 45 days. Facebook launches its alternative to TikTok.
Under the apps lies the war of capitals
ByteDance, the company now banned, was the creator of Douyin in 2016. In 2017 it bought its American competitor, Musica.ly. The merger of the two almost identical apps became TikTok. That Musica.ly did not raise any alarms among the authorities about data privacy yet TikTok did is more than suspicious. The fact that WeChat has a thousand AI filters alerting Chinese repression about any possible discontent and its propagators is an open secret. Although it also doesn’t seem credible that all this arose from a concern for the safety of Chinese residents in the US who communicate with their families through this app… and who will now have no way of doing so. In fact, this has not even been mentioned in the Trump and Pompeo arguments. Actually, it’s not even worth discussing. When the threats stopped being specifically against TikTok and became about Chinese apps with large user bases it became clear that the excuses had been pushed into the background.
Nor is this a mere symbolic attack, a technological cherry on the cake in the escalation between the US and China. American trade offensives are never completely symbolic. Not only do they intend to hurt their rivals, they have specific objectives, they seek to benefit, one by one, national capital.
The clue is given by Trump’s boasting to Microsoft executives that the state is the one giving them the opportunity to buy Bytedance users and apps at knockdown prices, and by Facebook’s pulling out its own TikTok on the same day the president’s executive order is issued.
The issue is not TikTok itself. Its technology is easily replicable by any company with enough capital, as Facebook has already done. The problem for American capital is ByteDance, the owner. ByteDance is the one attracting capital and the one that has been outlawed. It should not be forgotten that only between Apple, Facebook, Google and Amazon add up to a quarter of the capitalization value of the S&P 50, the US equivalent of the Ibex 35, the index of the 50 largest listed companies in the US. In other words, the big four of the Internet in the US represent a very important part of the US national capital and are very important to maintain its capacity to attract capital.
In capitalism, companies are nothing more than applications of capital, alternative uses that compete with each other for receiving and making profitable previously accumulated profits. In decadent capitalism, applications capable of allocating large amounts of new capital are especially valuable. There aren’t many because the markets are chronically insufficient to absorb the entirety of what companies produce. So a huge mass of capital, the so-called fictitious capital, finds no productive location and is dedicated simply to betting on the future results or prices of other applications while waiting for the appearance of productive companies justifying the massive use of capital with more or less solid promises of profits.
For the national capital of the United States, suffering competition from large Chinese steel companies or manufacturers of low-cost solar panels is an attack on the profitability and future of some of its best capital applications. But against them it can impose tariff barriers. A ByteDance – or a Huawei – is far more dangerous. It doesn’t just compete for customers, it competes directly for capital. In fact, some of the largest American venture capital funds are already there. And with an estimated value of $100 billion last May and a growing user base in the US itself, Bytedance was poised to become a real competitor to the big American social networks. A competitor not for users – who tend to use several without major problems – but for investments. The company had planned to go public in Hong Kong this year. Therefore, the concern does not stop at closing the growth possibilities in users of a specific app in its catalogue, but at aborting any attempt to attract new capital. And if possible, force it to sell for a residual value and increase the market attractiveness of its American rivals.
The forces that have led to this openly predatory move are the same ones that are pushing for trade warfare… and end up imposing armed wars. This is by no means a phenomenon exclusive to the United States, even to rich countries. imperialism is a phase, a historical stage of capitalism as a whole. The difference between China and the US, or between either of them and any small Central American or African country, is one of resources and strength to assert the needs of their respective national capitals. But the needs that move them are the same for all of them: more markets to sell products, and greater possible profitable applications to place their own surplus capital and capture that of others.
The only extraordinary thing in this operation has been the tremendous effrontery, the disinterest in building an ideological alibi on the part of the US government. This is a sign of the general increase in violence of the imperialist conflict. All this has not happened because Trump -or Modi- are crazy nor because China is a totalitarian state and its technologies are not reliable. There is no longer anyone who would deny that Biden, if he wins, will maintain a similar policy. And one must be very blind not to see that it is not precisely the defense of democracy and human rights that moves and guides the foreign policy of Germany, France, Italy, Portugal, Spain or any other state. Capital is in a deep and widespread crisis. Capital responds with increasing aggressiveness at all levels to its same needs in every country. And its forms are increasingly obscene, coarser, more desperate, closer to war.