nettime: What does Capital want? 1/2 - McKenzie Wark

[Pit Schultz <pit@contrib.de>]

WHAT DOES CAPITAL WANT?: 
CORPORATE DESIRE AND THE INFOBAHN FANTASY

McKenzie Wark
mwark@laurel.ocs.mq.edu.au

Dateline: London 19th January 1997: 'Prodigal son returns to 
Apple corps' reads the headline in the Guardian Weekly. Its a 
no more than usually unimaginative header for a story that's 
been told and retold all over the world. Steve Jobs has returned 
to Apple with the purchase of his Next complany for a reported 
US$400 million. The pictures show Jobs on stage with Apple 
chairman Gil Amelio. 

As the trade papers reported with somewhat more 
thoroughness than the newswires, Apple's San Francisco trade 
fair stage show, where the Jobs deal was announced, was long 
on spectacle and short on technical detail. The strategy for the 
development of the operating system boiled down to a slide 
showing a blue and a yellow box, with an arrow from one to 
the other. Somewhat more effort seemed to go into stage 
managing the video clips from the science fiction film 
Independence Day and a walk-on guest appearance by actor 
Jeff Goldblum.

So what's going on here? Business as usual. The selling of 
desire. Apple is going all out to retain the love of its loyal 
customers, developers, stock holders and institutional investors, 
reinvigorating the faith in the greap leap from the blue to the 
yellow box. 

Business and technology -- its supposed to be hard stuff, 
impervious to the tools of pointyheaded intellectuals, to our 
'critique'. But look what's really at stake here, as Apple tries to 
sell itself a future. Nothing but smoke and mirrors, words and 
images, and above all desire -- Apple's desire to be desired, and 
thus know itself and be itself and grow in our love. Didn't Hegel 
have something to say about that?

And so, we come to the question where art meets money: what 
does capital want? I want to try to answer it, not by speaking 
of this immediate future, the one into which all our desires 
project themselves without certainty. I want to wind back the 
clock a bit, and look at the desires of a slightly earlier moment 
in net history -- the great infobahn bubble of the early '90s. 
For the net has a history, and I think there's as much to learn 
about the net from its history, as from science fiction.


PROJECTING THE FANTASY

Dateline: Washington 14th October 1993: The Bell Atlantic 
telephone company announced a US$23 billion deal to buy 
America's largest cable TV operator, Tele-Communications Inc 
and its cable programming company Liberty Media. The 
merger would create the 6th largest corporation in the country. 
By combining TCI's 25% of the cable TV market with Bell 
Atlantic's telephone services, the merger would produce a 
company with a wire to the home of 42% of American 
households. This is the biggest merger proposed so far aimed at 
positioning companies for the development of the 'information 
superhighway'. This is a concept attributed to American Vice 
President Al Gore, that describes the ambition to build a 
communications network carrying voice, video and computer 
data, to homes as well as businesses. The merger plan will 
attract close scrutiny from the Federal Communications 
Commission and the Justice Department, concerned about 
monopoly pricing practices and corporate collusion 
respectively. 

The value of this deal would be variously reported, from $23bn 
(Korporaal, 1993) to $33bn (Mandese, 1994), but with a rhetoric 
invariably the same: Bell Atlantic and TCI shall build between 
them an 'information superhighway'. Following a Washington 
policy wonk fashion, I will henceforth abbreviate this strange 
object of desire to 'infobahn' for short. What is in a name? 
Quite a lot, as we shall see. 

The scale of the proposed merger, "one of the largest 
acquisitions in American history", put the infobahn firmly on 
the information mediascape of business news. Ray Smith, 
chairman and CEO of Bell Atlantic Corp was the man of the 
moment. The business mediascape is often populated by heroic 
action figures: "He leapfrogged cable industry visionaries like 
Ted Turner and John Malone in the process and turned a low-
intensity battle to create telecommunications services into an 
all-out war that borders on brinkmanship." (Deagon, 1994a) 
But there are perhaps more interesting stories to tell than the 
ones that the business and professional press makes up as it 
goes along. And I should know -- I've made up my own stories 
about the infobahn for The Australian, rather cynical and 
critical ones. (Wark, 1994a; 1994b) This present essay is an 
extension, even more cynical and critical, of those perverse 
versions of the fantasy. It does what I cannot do in the press: 
examine the role of that press itself in creating the substance, if 
it can be called that, of these corporate desires.

The infobahn emerges as a fantasy to fill a certain void, a 
certain faltering of the "animal spirits" of capitals' desire. 
Without an object of desire, capital cannot invest itself in the 
world it finds around itself. As Michael Eisner, CEO of Walt 
Disney says about this infobahn thing: "I don't get it, so we are 
not investing in it." (Deagon, 1994b) Without investing in that 
world, it cannot remake itself. It becomes, as they say, 'mature' 
-- a short step away from death. The information age has been 
ageing for quite a long time now. 

As Bob James, Group General Manager of Strategic 
Development at Telecom explained it to the Sydney Morning 
Herald computer pages editor Gareth Powell, telecoms the 
world over will contract if they think that their business is just 
POTS (plain old telephone services), because: "It starts to 
become a commodity when you can buy it from a wide range 
of suppliers." So telecoms have to think about new services and 
new infrastructure to run new services. According to James, "On 
average, television is used for three hours a day, the telephone 
for 30 minutes. Television needs two megabits a second 
compared to the telephone which needs only 64 kilobits." 
(Powell, 1994a) So while telecoms would love to offer services 
that soak up some of that TV watching time, this involves 
considerably more bandwidth, and that sort of bandwidth is 
still not so cheap to deliver. Or as Ray Smith, Bell Atlantic CEO 
puts it about the TCI deal: "Basically, both cable and telephone 
businesses are mature businesses with mature technologies, 
customers and product lines. We have reached the limits of our 
original franchise but believe we have tremendous opportunity 
to find new ones if we can reinvent ourselves around a new 
marketplace with a whole new set of requirements." (Deagon, 
1994a) A sort of transcendental logic lurks here, either mature 
companies resurrect themselves to answer a new desire -- or 
they die.

Of course the Bell Atlantic deal was not meant to be, and its 
unravelling nearly putting paid to the information 
superhighway fantasy as the yarn spun to a standstill. "The 
breakup of the Bell Atlantic / Tele-Communications Inc deal is 
still sending shock waves throughout the business world..." 
writes the Advertising Age, and yet the story quotes the result of 
online discussions that publication sponsored through its 
involvement in the commercial online system Prodigy, neatly 
showing off its own interest in electronic media at the same 
time as it dampens expectations. 


CAPITAL, SEDUCTION & DEATH

The Bell Atlantic/TCI deal wasn't exactly unprecedented -- 1993 
saw a spurt of investment in cable and wireless networks. MCI 
loudly and proudly publicised plans for a $20bn consortium to 
build an information superhighway. It also earmarked $2bn for 
a plan to offer local service, and compete with the regional 
phone companies. (Flaherty, 1994) Quite a few corporate 
speculations and projections had used the infobahn rhetoric 
before. What made the Bell Atlantic announcement different 
was the sheer size of it. The amount of money hooked to the 
rhetoric had an ontological property -- it announced that the 
infobahn was now a far more probable future reality than it 
had previously appeared, even when backed by the authority 
of the vice president. 

It is a unique feature of the culture of capital that corporate 
identities are in the long run premised on the desireability of 
the future being *different* from the past. Companies are 
validated by their ability to incorporate into themselves and 
themselves into an image of a different future. A future others 
accept as a projection of a desireable and posessable future 
terrain. The company that successfully 'husbands' this image to 
grow and proliferate has to simultaneously possess it for itself 
and arouse the desire of others for it. What does the 
corporation want? It wants the future to desire it. It desires the 
desire of the other. And it wants its rivals, its dependents, its 
patrons to desire its desire. This is the basic structure of fantasy, 
(Zizek, 1989, pp87-129) but as it exists in the historical romance 
that has become 'late capitalism'. (Jameson, 1991, 1-55)

Irony is the wetnurse of history. Marx said that capital is a 
culture where "...all that is solid melts into air, all that is sacred 
is profaned....".  (Marx, 1978, p70) It became a culture that 
thrives on revolutionising itself, and revolutionising us, its 
agents, rather than the other way around. The desires invested 
in futures that have now passed deflate into corporate 
stagnation, impotence, death -- or worst, merger as the junior, 
'passive' partner in a hostile 'takeover'. The other side to this 
historical form of 'radical negativity' (Zizek, 1989, p5) is the 
corporation's positive projection of the fantasy of its own 
desire, posited in terms of a future. As Zizek says, "desire is not 
something given in advance, but something that has to be 
constructed -- it is precisely the role of fantasy to give the 
coordinates of the subject's desire, to specify its object, to locate 
the position of the subject in it." (Zizek, 1991, p6) Even when the 
subject in question is the legally incorporated collective subject 
of the company, its object of desire a flow of revenue and its 
location mapped on a spreadsheet projection into the future, 
marked off in accounting quarters.

The enormous growth in desktop media, presentation graphics 
and the like is the symptom of an investment in this positive 
ontology, where capital reinvents itself as a more general, 
collective fantasy. A fantasy meant to counter the spectre of 
Marx and Schumpeter's (1981) bleak vision of capital as radical 
negativity and endless death. Capital has created a new theatre 
of operations for itself, in which it fantasises its future and 
organises its desires. (Ross, 1991, 169-183) This is postmodern 
capital, thrusting itself into the future, in bad faith and indeed 
false consciousness, rather than being burned up by an 
inability to outrun its own past.


SCORING

Investment confidence is not just about the 'hard' numbers, it is 
about the ability to imagine a sphere of (relatively) 
unrestrained action. One of the functions of the business media 
is a sort of locker room boy's talk that tries to talk up this very 
possibility of making it, unencumbered, to the profit zone of 
'blue sky.' "Two things that have just happened in the US 
indicate that the world is on the threshold of a new 
communications era." (Gray, 1994) Commentator Robert Gray 
calls the play from the March 1994 corporate press releases: 
Viacom has beat Barry Diller's QVC to Paramount, buying it for 
$10 million; that software firm Oracle has allied itself with Bell 
Atlantic and a collection of smaller firms, including Apple and 
the Washington Post. The point of the first score is that Viacom 
now joins News Corp and Time Warner in the league of "mega-
media groups." The second announces an all-star line-up for 
what we are meant to believe is the big league playing field for 
the future conflicts of capital investment -- interactive 
television.

By April 1994 the pundits are less sure of themselves. A less 
attractive future becomes a more common prognosis. Three 
events punctured the bull run on the future of the infobahn 
that Ray Smith raised to the level of a media feeding frenzy. 
Besides the collapse of his $20-odd billion Bell Atlantic / TCI 
merger, there was the collapse of $4.9bn Southwestern Bell/Cox 
Enterprises deal and a federal judge's rejection of $12.6bn AT&T 
/ McCaw Cellular deal. "Corporate executives and media 
moguls are gnashing their teeth over the regulatory climate in 
Washington after the scuttling of a second deal" editorialises a 
Reuters reporter after the Southwestern Cox nil-all playoff. 
(Kelley, 1994) What she means is that these deals have no value 
unless the telecoms can fly free of federal regulation, and there 
are not enough encouraging signs that they will have a free 
hand to keep the merger mania afloat. Southwestern Bell called 
off plans for a $4.9bn cable TV partnership with Cox 
Enterprises, and blamed it on the tighter rules on cable rates 
imposed by the Federal Communication Commission (FCC). "I 
don't care what the FCC says, I think this is all attributable to 
the FCC's second cable rate rollback. It has sent a signal to the 
marketplace that the FCC and the Clinton Administration are 
going to be regulating this industry with a heavy hand," the 
Advertising Age quotes one Ms Jessica Reif, an analyst with 
Openheimer and Co. (Mandese, 1994) The FCC made it clear to 
cable operators, with two mandatory cuts to basic cable fees, 
that it would not tolerate monopoly pricing practices. This put 
pressure on the asking price the cable companies demanded of 
the telecoms in the merger deal negotiations. 

The state-managed referent that ultimately sets the value of 
these firms is the regulated monopoly price that cable firms 
can charge for 'basic cable' services. While rhetorically, 
'deregulated' and 'free' markets are usually taken to be 
synonymous, they are not. The cable and telecom companies 
want to be freed from regulation, but they do not want 
competition -- they want to be free to extract monopoly rent 
prices. The possibility that they might cement alliances 
organised around a new fantasy promising benefits for all, and 
in the process weaken the regulatory net was an attractive play 
in the corporate sport of seduction. It just did't quite come off.


ANTAGONISM AND FANTASY

Part of the problem with monopoly strategies in 
communications is that while it may appear to be desirable for 
an individual company to achieve something approaching 
monopoly power, this may be contrary to the interests of 
capital as a whole. The rhetoric of 'deregulation' may well 
mean the attempt by a monopoly to free itself from state 
imposed limits to its power. The rhetoric of 'competition' more 
likely reflects the desire of other companies to substitute 
another mechanism of control should the pressure to relax