Rebelión (Spain): the concentration and centralization of capital in times of a pandemic

We are talking about the process of capital accumulation in the presentation of Karl Marx, that is about two trends: concentration and centralization. The first term, the concentration of capital means the accumulation of capital by increasing the share of reinvestment of surplus value.

The second term, the centralization of capital is to increase the size of capital in terms of associations or mergers of existing capital. Both processes due to increased competition and increased productivity.

The first idea that I would like to develop, due to the fact that the group of technology companies contributed to the deployment of what we call the fourth industrial revolution, and these companies are at the vanguard of economic growth of the United States. The countries ‘ cooperation with the group companies, hereinafter referred to as the technological “leaders” implies the dependency in terms of cost and technology to countries all over the world, especially Latin America. In the world of coronavirus each leader used the technological capabilities in their industry or sector, to determine the vectors of development of the third industrial revolution, namely light, flexible and adaptive manufacturing at the macro level, as well as the preferences of consumers “real-time” or even their forecasts. Thanks to the “breakthrough innovation” brought profit.

In times of coronavirus that initial advantage, which is reflected in the records of gross revenues, declined quarter after quarter. This reduction is provoked by the technology, and based on their business model. Here she faces. Like Google, Facebook — technology company, however, almost 100% of revenue from advertising. Apple is experiencing serious technical stagnation, the business model is based on the Apple ecosystem, iOS and the Iphone, but because of the dependence on China’s efficient supply chain, the company was under threat. Netflix requires subscription to use the cloud and streaming broadcasts in real time.

Every leader is faced with strong competitors in their fields of activity, which are forced to buy competitors or to merge existing companies, for example, Apple and Facebook, Facebook and Instagram or Facebook and WhatsApp. In the same way Apple competes with Huawei and Samsung, and also with the Android ecosystem from Google, and Netflix with Disney +, Amazon Prime, Apple TV and other platforms. They all share a trait that distinguishes it from other industrial giants, namely the ability to make a technological breakthrough and step into a new era of “disruptive innovation”, which is primarily focused on artificial intelligence and machine learning for big data users. One of the leaders of the process of accumulation of new capital is Amazon. This is the company that most clearly follows this process reinvests the profits in order to remain a leader, and resorts to “breakthrough innovation” based on the entrepreneurial behaviour of their creative mastermind projects of Jeff Bezos (Jeff Bezos).

For example, Amazon Prime Video has helped accelerate the use of robotics, plans to use drones and in General the development of artificial intelligence for Autonomous logistics. The cloud or the so-called Amazon Web Services (AWS) to identify technological models of new enterprises is also a component that changed the rules and is influenced by the other flexible models, for example, one of the three basic models of Uber’s marketplace. The use of artificial intelligence as a replacement for human labour was considered a problem and was delayed only because of the improvement of necessary technologies. However, in connection with the coronavirus Amazon has considered such application an unavoidable necessity, as the company focuses on achieving efficiency and sustainability.

In the process of capital accumulation Amazon amid coronavirus labor force became the weak link because of the possibility of failures due to mass infection of people, or strikes of workers. This situation showed Amazon that the logistics of the company will remain vulnerable as long as it continues to depend on people who work in the warehouse or doing deliveries.

Let’s get back to the leaders. Remote control circuits and intangible assets in the world of coronavirus, a common result of actions of the companies FAANG was the growing concentration of capital on an unprecedented scale. In 2000, the top 5 Fortune 500 was part of the industry associated with the traditional mass production or trade. However, taking into account the principles of the supporters of Fordism, for example, General Motors Corporation, Wal-Mart Stores, Inc., Exxon Mobil Corporation, Ford Motor Company or General Electric Company, all these industries are closely associated with the industrial revolution in the petrochemical and automotive industries. Currently in the top 5 include the company inevitably associated with this type of consumption, but they are closely related to information electronics, serving in the role of a coordinating mechanism. The big five (Facebook, Amazon, Apple, Microsoft and Google) is 25% of the global market capitalization of 500 leading companies in the world.

In addition, as we have already considered the market capitalization of these companies defines at least 20 — 24% recovery of the US stock market, an indicator which is S&P 500. The sustainability of these companies during the events of “black Swan”, and what was the cov that really allowed the stock market organizational capitalized in the midst of a pandemic, that is, to develop an organizational approach to conducting the normal business cycle as equivalent aspect of recovery actions by Central banks, especially the Federal reserve system of the United States.

In the beginning of the article suggested that was scheduled many of these trends, however, the coronavirus has accelerated the pace of development leaders and forced a generation of baby boomers to move to a new techno-economic paradigm. This new paradigm will lead a small group of companies that are primarily associated with monitoring and data processing people, and are also accompanied by hegemonic ideas on a global level. Representing data it is difficult to deny, and large-scale control within such a concept of doing business is dire. Enough to see how governments around the world voluntarily join the process of accumulation of global capital.

For example, in many countries a group of Alphabet, showing the enthusiasm and foresight, I had free access to the educational activities in El Salvador through Google Classroom. Is this something bad? No, on the contrary. During a pandemic, for the continuity of the learning process this approach has been vital. Nevertheless, you need to exercise caution. This approach aspect of a slow and relentless process, which, if desired, with clinical accuracy enables the entire chart teaching. To provide data in real-time artificial intelligence algorithms in the near future will allow neat to perform some boring and routine tasks of teachers, for example, to describe or define the actions of the students. However, a systematic accumulation of data may eventually replace themselves in the curriculum. Such is the nature of concentration and centralization of operating in real time during a pandemic: “… who wants to see will see…”

Jose E. Montoya, an economist and Professor at the School of Economics of University of Salvador