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Sunday, December 14, 2025

Tech savvy users have most digital concerns




University College London

Digital concerns around privacy, online misinformation, and work-life boundaries are highest among highly educated, Western European millennials, finds a new study from researchers at UCL and the University of British Columbia. 

The research, published in Information, Communication & Society, also found individuals with higher levels of digital literacy are the most affected by these concerns.  

For the study, the researchers used from the European Social Survey (ESS) – a project that collects nationally representative data on public attitudes, beliefs and behaviour, from thousands of people across Europe every two years.  

They analysed responses from nearly 50,000 people in 30 countries* between 2020 and 2022. 

For the ESS, participants were asked how much they thought digital tech infringes on privacy, helps spread misinformation, and causes work-life interruptions. Combining responses to the questions into a single index, the researchers generated a digital concern scale, ranging from 0 to 1, where a higher score indicates greater concern.  

To establish their digital literacy and digital exposure, the respondents were asked how often they use the internet and to rate their familiarity with preference settings on a computer, advanced search on the internet, and using PDFs. At the country level, digital exposure was captured through the percentage of the population using the internet in each country.  

The researchers looked at the levels of concern across different countries, as well as how the concern varies across social groups.  They also looked at patterns by people’s digital literacy and their exposure to digital tech.  

Findings 

They found millennials (those aged 25–44 in 2022) reported greater concerns, compared to younger (15–24) and older adults (75+). They found no significant differences in the level of digital concerns between men and women, nor between income groups or between urban and rural residents.   

Across the board, people were more concerned about the potential harms of digital technologies than not. Bulgaria was the only country in the study that did not exceed the mid-point (0.5) on the digital concern scale (0–1). Of all the countries studied, digital concern was lowest in Bulgaria (with a score of 0.47) and highest in the Netherlands (0.74), followed by the UK (0.73).  

Compared with native-born citizens, migrants reported lower levels of digital concern, and those who were in work had a lower level of digital concerns than those out of work. People with middle/high school education and those with a university degree reported greater levels of worry compared to their peers with no education or only primary school education.  

The researchers found that those with greater tech know-how are more concerned about the negative impacts of digitalisation, but this association is only observed among people who use digital technology on most days or on a daily basis.  

The findings suggest that individuals may perceive the potential harms of digitalisation as something that is beyond their control. So, the more they know about and are exposed to the issues, the more powerless and concerned they may feel.  

Lead author Dr Yang Hu (UCL Social Research Institute) said: “Our findings call into question the assumption that greater exposure to the digital world reduces our concern about its potential harm.  

“Rather than becoming desensitised, greater use of digital technology seems to heighten our concerns about it, particularly among people who have a high level of digital literacy.  

“Anxieties about digitalisation have become a defining feature of today’s world. As our use and understanding of technology grows, concern about its potential harm can impact individuals’ mental health and quality of life, as well as wider societal well-being.   

“As businesses, governments, and societies embrace new technologies, tech has become ubiquitous and digital literacy is essential for most people. The rapid development of AI is undoubtedly accelerating this process, so digital concern is not an issue that can be ignored.”  

Co-author Dr Yue Qian (University of British Columbia, Canada) said: “Our results reveal dual paradoxes: those who are supposedly most vulnerable to digital harms – young people, older adults, and those with a low level of digital literacy – appear least concerned about the harms, while those with advanced digital skills report the most concern.   

“While mainstream efforts at improving digital literacy have focused on bolstering practical skills, authorities should not ignore people’s concerns about what rapid digitalisation means for the subjective well-being of individuals and societies.”  

 

Notes to Editors   

*29 European countries and Israel. 

For more information or to speak to the researchers involved, please contact Sophie Hunter, UCL Media Relations E: sophie.hunter@ucl.ac.uk, T: +44 7502505610 

The paper will be published in on Monday 15th December, 00:01 UK time and are under a strict embargo until this time.    

Hu, Y., Qian, Y., (2025). Who is concerned about digitalization? The role of digital literacy and exposure across 30 countries. Information, Communication & Society. DOI 10.1080/1369118X.2025.2592771  

   

 About UCL (University College London)  

UCL is a diverse global community of world-class academics, students, industry links, external partners, and alumni. Our powerful collective of individuals and institutions work together to explore new possibilities.  

Since 1826, we have championed independent thought by attracting and nurturing the world's best minds. Our community of more than 50,000 students from 150 countries and over 16,000 staff pursues academic excellence, breaks boundaries and makes a positive impact on real world problems.  

We are consistently ranked among the top 10 universities in the world and are one of only a handful of institutions rated as having the strongest academic reputation and the broadest research impact.  

We have a progressive and integrated approach to our teaching and research – championing innovation, creativity and cross-disciplinary working. We teach our students how to think, not what to think, and see them as partners, collaborators and contributors.   

For almost 200 years, we are proud to have opened higher education to students from a wide range of backgrounds and to change the way we create and share knowledge.  

We were the first in England to welcome women to university education and that courageous attitude and disruptive spirit is still alive today. We are UCL.  

www.ucl.ac.uk | Read news at www.ucl.ac.uk/news/ | Follow UCL News on Bluesky and LinkedIn 

Does the ‘Military-Digital Complex’ Control Everything?

12.12.2025
TRIBUNE

Once regarded as a utopian project, digitalisation is now letting Big Tech and superpower governments regulate the world in ominous new ways. Is rejecting the devices and technologies they control the only effective way to fight back?



National Guard soldiers look at their phones as they sit in the cargo doors of the busses being used to transport them to and from the U.S. Capitol building on January 15, 2021 in Washington, DC. (Credit: Samuel Corum via Getty Images.)

Consider four events that vividly capture the spirit of our times. In late August 2025, in the port city of Tianjin in northern China, Xi Jinping, Narendra Modi, and Vladimir Putin — surrounded by the heads of state of twenty-three other non-Western nations (among them Iran, Pakistan, and the Central Asian republics) — sealed an economic and strategic alliance representing roughly 36 percent of global GDP, and 40 percent of the world’s population.

The following day, in Beijing, during the celebrations marking the 80th anniversary of Japan’s defeat in World War II, China displayed to the world its formidable military might. Alongside ballistic missiles capable of reaching the United States and annihilating its Pacific bases, the parade unveiled a new generation of digital weaponry — drones, autonomous vessels, robotic dogs, digital air defence systems, and hybrid warfare apparatuses — all crucial to prevailing on contemporary battlefields, in which China appears second to none.

Meanwhile, across the ocean at the White House, the Trumps dined with the chief executives of the great digital corporations — the Big Tech (Alphabet, Amazon, Apple, Meta, and Microsoft) — joined by representatives from firms like Cisco, Nvidia, Oracle, and Palantir, completing the US digital ecosystem. The purpose of the dinner: to solidify the alliance between the government and the digital oligopolists, mostly rooted in Silicon Valley, whose mission is to preserve America’s wavering technological supremacy — first and foremost in the field of Artificial Intelligence (AI).

For Big Tech, the invitation could not have been more welcome. Military expenditure has become an increasingly lucrative source of profit. The trillion dollars allocated by Trump for the new anti-missile shield — built on cutting-edge aerospace and digital technologies — marks only the latest step in a process that has seen the digital industry shift sharply away from communication, entertainment, and advertising, toward surveillance, social control, and military applications.

A symbolic counterpart to this militarisation of the digital arrives with the fourth event: on September 5, 2025, Trump renamed the Department of Defense the Department of War (DoW) — restoring the title it held in 1940, a year before the United States entered the Second World War.

Meanwhile, ongoing conflicts show no sign of abating, expanding their destructive reach. Other flashpoints ignite — between India and Pakistan, between Cambodia and Thailand — deepening geopolitical tensions and accelerating the fragmentation of the global economy. The grim toll of casualties carries with it a mounting risk of escalation, even of a nuclear kind.

The Military-Digital Complex and the New World (Dis)order


At the dawn of the internet, digitalisation was heralded as the key to unlocking the emancipatory virtues of the free market — spreading knowledge and economic opportunity, but above all ensuring peace and strengthening democracy. Today, it seems instead to be reviving old contradictions. Digitalisation has not only revolutionised how we communicate, produce, and consume; it has also fostered an unprecedented concentration of economic and technological power. Consider the market capitalisation, revenues, and profits of the US-based Big Tech firms in 2024 and 2025. In March 2025, their combined market capitalisation was three times the GDP of Germany and not far from that of the entire Euro Area ($16 trillion). In 2024, their share of profits over revenues was at 27 percent, a very high value for US companies. R&D expenditure was 13 percent of revenue.

This concentration of techno-economic power breathes new life into the theses of thinkers like Hobson and Lenin, who revealed the imperialist nature of capitalism by linking war to the expansionist strategies of the great industrial monopolies of the early twentieth century. Old contradictions — inequality, instability, and the fractures within political and institutional systems that find in war their ‘natural’ outlet — now wear a new technological mask. The clash is between two military-digital complexes, the United States and China, locked in an increasingly violent struggle for control of markets, technologies, and critical raw materials. The digital sphere has become their privileged battleground: a vast panopticon where the profit-maximising strategies of digital oligopolies (which depend on constant surveillance and the extraction of data from those — ourselves included — who rely on their services) converge with the security, geopolitical, and military objectives of their respective states.

It is a perverse alliance. Private capital monopolises infrastructures (data centres, undersea cables), technologies (cloud and AI), and knowledge — codified in the patents they accumulate or embodied tacitly within organisations, and thus inaccessible to outsiders — now indispensable for conducting virtually any social or economic activity.

The state facilitates this process and seldom resists it (though tensions and contradictions abound), caught as it is in a relationship of mutual dependency. It cannot do without the technological and infrastructural capacities of Big Tech; without them, many of its objectives — both civilian and military — would be unattainable. Nor is it eager to curb the economic power of those who control the (social) platforms where public opinion and political consensus are shaped.

Through their respective Big Tech firms, the US and Chinese governments can maintain other nations within their spheres of digital subordination — possessing ‘eyes and ears’ that deliver a constant and invaluable stream of information.

Yet, dependence runs in the opposite direction as well. For Big Tech, cultivating a stable alliance with the state is not optional — it is a matter of survival. Their profits depend on their ability to monopolise network infrastructures and the data flowing through them. Hostile regulation or moves to bring these infrastructures under state control could severely limit, or even destroy, their capacity for accumulation. The same would be true of any serious increase in taxation.

And if the global economy slows — crippled by commercial, technological, and military wars, and by pervasive uncertainty — then the state, and particularly military spending, becomes an essential lifeline for preserving profit margins.

War, moreover, offers technological opportunity. It channels massive funding into military research in fields where Big Tech already holds dominance — automated command and control systems, artificial intelligence, and autonomous weapons. Active participation in conflicts also provides an unparalleled testing ground, where new applications can be refined under extreme conditions, free from oversight or ethical constraint.

Economy, Technology, and War

What is the relationship between economy, technology, and war? What can history and economic theory teach us about that recurring pendulum that drives technological evolution — at times toward the betterment of human life through advances in health or the environment, and at others toward the multiplication and refinement of instruments of death?

And what are the consequences of the militarisation of the dominant technological paradigm — the digital one, in our case? What explains the unprecedented power of Big Tech? Why, despite decades of evidence and political denunciation of the destructive effects of digital monopolies, has that power never been seriously challenged?

We will attempt to answer these questions by tracing the mechanisms that make contemporary society dependent on digital oligopolies.

The power of Big Tech has grown in parallel with the digitalisation of war. What, then, is the role of digital technologies in past and present conflicts? How has their partial redirection toward military goals altered the very nature of the great digital corporations? First, autonomous weapons and AI-based decision-support systems: the growing centrality of these tools carries enormous implications. It increases the leverage of Big Tech within the military-digital complex; it accelerates decision-making while narrowing the space for human intervention, heightening the risk of escalation; and it undermines the mechanisms of deterrence that, until now, have prevented nuclear confrontation.

Looking at the United States, the fusion of Big Tech and the military apparatus manifests itself not only in the vast number of contracts — most of them concerning critical infrastructures and technologies — that feed the profits of digital oligopolists, but also in the transformation of the government’s industrial and technological policy.

Private actors play an ever-growing role, and new institutions (for example, the Defence Innovation Unit, a DoD agency based in Silicon Valley to promote technology transfer from the civilian to the military domain) emerge to facilitate Big Tech’s participation in shaping research and innovation strategies. What the military establishment demands from them is speed: to accelerate the transfer of new applications from the civilian to the military domain. In exchange, Big Tech appropriates immense public resources and shields its monopolistic power.

A Chinese Military-Digital Complex?

While the United States appeared to dominate the global economy unchallenged — thanks in part to the meteoric rise of Big Tech — something equally momentous was taking place on the other side of the Pacific. China was achieving its own rapid economic and technological ascent by combining openness to international trade, strong public intervention, and long-term industrial planning. This strategy enabled Beijing to close the gap with Washington and to gain control over key production chains, including in the digital sector.

As the United States and Europe steadily eroded their own manufacturing capacity, China became the indispensable producer of most goods and components. It also became the only nation capable of building a digital ecosystem — anchored around its own Big Tech giants (Alibaba, Baidu, Huawei, and Tencent) — able to compete with its American counterpart. This ecosystem, while in some ways similar — given the systemic nature of China’s Big Tech firms and their central role in developing digital infrastructures and technologies — is also profoundly different, shaped by the Chinese Communist Party’s (CCP) ability to exert direct influence over the behaviour and strategies of major corporations.

A Chinese-style military-digital complex, then? The tendencies are indeed symmetrical. As the confrontation with the United States intensifies, the bond between the CCP and firms like Alibaba and Tencent grows ever tighter. Military applications dominate China’s technological and research strategy as well, enabling it to impress its rival in crucial fields such as generative AI, quantum computing, and autonomous weaponry.

The Clash between Military-Digital Complexes

The clash between the two military-digital complexes is now open. Since the first Trump administration, the United States has implemented measures designed to hinder China’s digital rise: restrictions on the export of cutting-edge microchips (and the machinery needed to produce them), intended to slow Chinese progress; pressure on U.S. allies — including Europe — to limit the market access of Chinese tech firms; and outright confrontational acts, such as the arrest in Canada (at Washington’s request) of Huawei’s founder’s daughter. Huawei was not just any company, but the colossus that, having begun by producing elementary components for China’s telecom networks, rose in less than two decades to dominate the global networking industry — all while cultivating close ties with the security services and the People’s Liberation Army.

Trump’s return to the White House further sharpened the confrontation, though amid a general climate of uncertainty and unpredictability surrounding US strategy. The tit-for-tat that followed ‘Liberation Day’ — April 2, 2025, as Trump dubbed the day he imposed tariffs on all imports from countries with which the United States ran a trade deficit — gave a clear sense of the forces at play and of the centrality of the digital industry to the conflict. China was among the hardest hit by US tariffs (an initial 34 percent duty on Chinese imports, coupled with the abolition of exemptions that had allowed duty-free shipments under $800 — a vital mechanism for e-commerce platforms like Shein and Temu). Trump threatened to raise the tariffs even higher should Beijing retaliate.

China’s response went well beyond mere reprisal — and it had the power to shatter Washington’s coercive ambitions. With Announcement No. 18, the CCP imposed restrictions on the export of rare earths — chemical elements with unique properties that, while not scarce in the Earth’s crust, are difficult to extract and separate due to their low concentration — and on the permanent magnets that depend on them. China supplies about 90 percent of global magnet production and 60 percent of refining capacity.

These materials are indispensable for manufacturing a vast array of digital devices and are critical components in missile defence systems and next-generation fighter jets. Control over such strategic sectors — and the deep interdependence that binds the U.S. and Chinese economies more tightly than it appears — greatly strengthened China’s negotiating position. Trump, faced with this reality, backtracked: he softened his stance and initiated bilateral talks that minimised the penalties on Chinese imports. A brief exchange of blows, then — one that momentarily (new Chinese restrictions on the export of rare earth and magnets are in sight) eased tensions while highlighting the centrality of the digital industry, and its interconnected supply chains, in shaping the balance and evolution of the confrontation between the two blocs.

Europe: Between a Rock and a Hard Place


What about Europe? Caught in the crossfire between the two military-digital complexes, Europe plays the part of the fragile clay vessel among iron pots. It remains largely dependent on the United States for digital infrastructure and services. American Big Tech dominates European markets, absorbing vast amounts of data and deepening that dependence still further.

In trade negotiations, Trump makes his stance plain: any punitive measures against Big Tech will trigger retaliations against Europe. Technological dependence thus intertwines with military subordination — a condition the United States exploits coercively to keep Europe as distant from China as possible, while pushing for a European rearmament policy whose main effect is to funnel resources into, and thereby strengthen, the US military-digital complex.

Trapped within a self-defeating economic policy framework that leaves little room for industrial strategy — except when it serves the purchase of weapons — Europe contents itself with regulation. Carefully crafted measures such as the General Data Protection Regulation (GDPR), the Digital Markets Act (DMA), and the Digital Services Act (DSA) seek to contain the power of the major digital corporations: limiting their unrestricted access to personal data, fostering competition among digital service providers, and imposing sanctions in cases of abuse of dominance.

Yet, even with such an advanced legal framework, it is difficult to imagine these measures truly shifting the balance of power. Europe lacks the technological and productive autonomy to do so. Developing capabilities comparable to those of the United States and China would require years — perhaps decades — and a level of international cooperation (especially in raw materials, components, and knowledge exchange) that is implausible in today’s climate of growing geopolitical tension. The militarisation of the digital industry diverts resources and expertise away from uses that could improve the human condition and foster global cooperation. The fusion of digital monopolies with the imperial ambitions of states deepens inequality, hollows out democracy, and increases the risk of a global conflict.

A New Faustian Pact and the Role of Social Conflicts


We are witnessing a new Faustian pact — one that is driving the planet toward a perilous precipice. The arms race serves to consolidate the monopolistic profits of Big Tech (and of other corporations, particularly the traditional arms manufacturers, eager to claim their share of the swelling tide of military spending). To preserve those profits, the great digital corporations support belligerent strategies and do not hesitate to participate directly in military and intelligence operations.

The state, in turn, cannot do without its financial, infrastructural, and technological capacities. For that reason, it refrains from challenging their monopolies and tolerates the deepening dependence on tools controlled by Big Tech.

How can we counter this Faustian pact? How can we ensure that digital technologies are used for purposes other than social control and the destruction of people and things, as is happening in Ukraine and Palestine? A glimmer of hope emerges from the gradual convergence of fights against war and the militarisation of society with struggles aimed at improving living and working conditions against the concentration of capitalist power. There are engineers at Alphabet and Amazon who oppose the development of military applications. There are activists attempting to occupy Microsoft data centres where data and algorithms used by the Israeli army are stored. Chris Smalls, head of the Amazon Labour Union, participated in the Freedom Flotilla mission to Gaza, aiming to break the military blockade and deliver humanitarian aid to the exhausted population. These episodes are far from disrupting the workings of the military–digital complex. However, they do at least testify to a growing awareness of the close link between the concentration of economic power, the struggle between oligopolists to acquire raw materials, technologies and markets, and the increasing militarisation of society.

At an individual level, tackling the military–digital complex requires us to adopt a critical approach to the technologies and devices we use. Rejecting the total surveillance imposed by Big Tech by critically engaging with (or rejecting, where appropriate) tools such as social media, which often contribute directly to the spread of social pathologies and the commodification of public spaces, is essential to safeguarding social justice and democratic viability. It is also a way to prevent the race towards new and more devastating conflicts from becoming inevitable.

This essay is part of Alameda Institute’s After Order project, examining the transformations of sovereignty during our catastrophic times.

Contributors

Dario Guarascio is an associate professor of economic policy at the Sapienza University of Rome.

State, Capital and State Capitalism

As Trump mobilises the state for his purposes, Karl Elliott explains that, counter to official narratives, there is always interplay between state and capital in the way capitalism works.

December 10, 2025

Trump 2.0: The (increasingly interventionist) Story So Far

On 22 August 2025, the Trump administration announced it was taking a 10% equity stake in Intel, making the government the largest shareholder in the US’s flagship semiconductor firm. This came just fifteen days after the president posted on his Truth Social platform: “The CEO of Intel is highly CONFLICTED and must resign, immediately”. Cue the company’s stock price falling by 3.8%. 

In between, Trump cut one of his famous deals with two of Intel’s rivals, Nvidia and AMD. In return for his mercy of staying an embargo on their AI exports to China, Trump extracted a tribute of 15% of all revenues arising from these sales to be paid to the U.S. Treasury. Pope Innocent III must surely be smiling up at him right now: tithes are back in vogue. 

In June, the government secured a “golden share” in US Steel (veto power over major corporate decisions, de facto a controlling interest) in exchange for blessing Nippon Steel’s $14.9 billion acquisition of the company. July saw the Department of Defence splash $400 million to become the largest investor in MP Materials – a California based rare earth miner that harvests minerals essential for military-grade weapons.

Add to this: Trump’s firing of the Bureau of Labor Statistics commissioner at the start of August (within hours of a jobs report release he claimed was “rigged” to make him “look bad”), his attempted firing of Federal Reserve Governor Lisa Cook at the end of August and his repeatedly expressed desire to fire the Fed Chair for not cutting interest rates fast enough. Not to mention the general chaos wrought by the president’s unmoored wielding of executive authority – tariffs, emergency powers, the trade war saga – all geared at steering corporate decisions, reshaping industries and influencing sector behaviour (covered in detail in Brian O’Boyle’s instructive article earlier this year). Put it all together, and what have you got? 

No State Please. We’re Capitalists.

State Capitalism, apparently – at least according to the Cato Institute, the D.C. based doyenne of American libertarianism. The think-tank bemoans “unprecedented government ownership of private enterprise”, quipping “state capitalism will not make America great again – it will make it unrecognizable.” The National Review laments the “lurch toward state-directed capitalism”, characterising Trump’s shakedown of the chipmakers as “the definition of extortion”. The response from the free-market commentariat has been similarly indignant: “The U.S. Marches Toward State Capitalism With American Characteristics” reads a Wall Street Journal headline, in an ironic wink to Deng Xiaoping. The article goes on to make the case that Trump is “imitating the Chinese Communist Party by extending political control ever deeper into the economy”, describing his administration’s policies as a “hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises”.

Clearly, the American Right are up in arms that Trump has entered his interventionist era, but are they right? Is his administration guilty as charged of following the CCP’s state capitalist playbook? While that question may seem straightforward, answering it substantively implies we already know the answer to several other, related, questions. Questions such as: What is state capitalism? How’s it different from good old-fashioned private capitalism? When have we seen other instances of it? Can capitalism exist without the state? Why is it seemingly all the rage again now? Why should we as socialists care about any of these distinctions? Comparing Trump’s alleged state capitalism with vanilla varieties of capitalism, such as we have here in Ireland, may help us arrive at answers.

What’s It All About, State Capitalism?

The Wall Street Journal’s “hybrid” framework of state capitalism conceives of economic systems on a spectrum with ‘pure’ free-market capitalism on one end, ‘pure’ socialism on the other, with state capitalism somewhere in between. This view takes capitalism (vs socialism) at its core to be private (collective) ownership of the means of production, exploitation (coordination) of labour, production for profit (for social need), competitive accumulation (distribution according to social or economic priorities) and a virtually non-existent (central planning) role for the state in economic life. 

The need for the state in capitalism, in this version, is thus negligible: enforce contracts, secure property rights, maintain order and basic infrastructure, and otherwise stay the hell out of the way. It’s basically there to be the referee. But in reality, the interplay between state and capital is much deeper. With state capitalism, the state pulls on the jersey and comes onto the pitch as a deep lying playmaker. Sure, all that good, fun stuff that dyed-in-the-wool capitalists love remains: the exploitation of workers, the extraction of surplus value, the accumulation of capital, etc. But the state also intervenes in economic affairs as investor, as owner, as director. In addition, there are shiny bonus features: a powerful domestic state bureaucracy operating in line with the ruling class, and heightened imperialist rivalry with other foreign state capitals. Ostensibly, it may appear plausible that the distinguishing feature of state capitalism is a more active, muscular state – counterposed against a hands-off, minimal state under its earlier and different capitalist versions. Think of the middle of last century so called Soviet Russia, US War Production Board during WWII, postwar East Asian development states. But there are good reasons to be sceptical of the claim that the state, under classical capitalism, is distinct from the capitalist system itself. 

For starters, this portrayal of the state as passive, supervising “night-watchman” under capitalism is a mirage. The state is not just some neutral, free-floating structure above society. It never has been. For proof that the “hands-off” capitalist state notion is a myth we don’t need to skip ahead to Stalin or Japan and South Korea in their industrial heyday. We need look no further than the cradle of modern capitalism itself – Amsterdam 1602 and the founding of the Dutch East India Company (VOC). The story of its formation isn’t just about the birth of commercial corporations and their instruments of capital and conquest (shares, dividends, permanent incorporation, multinational operations). It’s the cautionary tale of how capitalism was, from the start, a state project. Whether it’s the granting of the firm’s charter by the States-General of the Netherlands (to seventeen of the most prominent merchants and regents forming the board), the fact the firm was vested with sweeping sovereign powers (rights to wage war, mint coins, negotiate treaties), or the Dutch state’s use of the VOC as the armed wing of its mercantilist, colonial strategy for securing spice routes and underwriting imperialist expansions – the conclusion is inescapable. The entanglement of state power and corporate profit is essential to capitalist development. As the tech bros say: It’s a feature, not a bug.

Bonnie and Clyde. Captain and Tenille. State and Capital.

We shouldn’t satisfy ourselves with simply pointing to historical examples of this Bruderkuss between state and capital. The bigger question is: why this structural independence, with each feeding off the other, which neither appear capable of easily escaping? Over the decades, there have been several influential attempts to answer this question and to lay out the logic underpinning the co-dependency. Some common themes emerge. 

First and foremost, under capitalism, they rely on each other to survive. To keep the show on the road, the state depends on capital for resources: specifically, tax revenues; more generally, capital accumulation. Act against capitals’ interests and they might just defect, taking their productive assets with them. Thus the approximately half trillion dollars in annual corporate tax receipts acts as a limiting constraint on Trump’s strong-arm tactics against US firms. 

If the state is prudent, it avoids concentration risk and diversifies across a broad base of industries and geographies. If instead the state is run by Fianna Fáil and Fine Gael, it relies on three US firms for 38% of all corporation tax take, leaving us in hock to these private tyrannies for the foreseeable. Apple, ECJ, €13 billion – need I say more? Likewise, individual capitals’ success depends heavily on their ability to influence state policy. Firms in a particular country are all too aware that their success rests, in large part, on their ability to influence the state to manoeuvre any number of variables in their favour (labour costs, borrowing rates, foreign-exchange rates, public sector contracts, protectionist trade barriers). Despite the seeming Damoclean sword (of companies hinting they might up sticks) hanging over the state’s head, in reality firms usually have strong economic and legal reasons for being there in the first place. Tearing up finely tuned supply chains and restructuring operations elsewhere tends to be a guaranteed way to torch profits. Far better to ingratiate oneself with the great and the good of the state, and gently nudge them toward the ‘right’ decisions. 

It’s A Big Club. And You Ain’t In It.

Leading us to a second main reason for suspecting state and capital can’t be kept discrete: people and relationships. Any capitalist worth their salt has a contact book brimming with movers and shakers of the state. Any up-and-coming apparatchik hungry for high office needs to be seen as au courant with the captains of industry. This dynamic has intensified under Trump, where the ‘revolving door’ has spun so fast, it’s practically a carousel: Scott Bessent and Howard Lutnick in from Wall Street hedge fund and brokerage firms as current Secretaries of Treasury and Commerce, respectively. And in the other direction: Rick Perry rejoining the board of Energy Transfer LP (a leading mid-stream oil and gas company) in January 2020, having previously resigned from the same board in 2017 to become Trump’s Secretary of (you guessed it) Energy.

Such flagrant jobbery might even make our ruling class here blush. Here in Ireland, we’d like to think of ourselves as a little more demure in our patronage – rationalising decades of policy outcomes favouring corporations over the public interest as the result of a broadly ‘pro-enterprise’ ideological orientation of senior civil servants and the personal connections and tight interlocking networks they form with private sector leaders in the course of crafting policy. Or to translate all that bureaucratic waffle: lobbying (legalized, codified corruption) and old boys clubs (nod-and-a-wink, sanctioned cronyism) guaranteeing business-as-usual carries on. 

It might not be a perfectly geometric circle on Google Maps connecting Clongowes, Smurfit, IFSC, Ibec and Leinster House – but it’s undeniably a golden one. Although, now with the two most recently retired Taoisigh exiting stage left to join the boards of a private equity company and an American PR firm, respectively – not to mention the Minister for Finance resigning last month to take up a $600k-a-year tax-free job at the World Bank, months after serendipitously increasing the government’s annual contribution to the organisation by 33.5% – the revolving door is starting to creak ever louder on this side of the Atlantic. But it’s not just connections solidified by education, socialising, in-marrying and nepotism that unite businesspeople and state bureaucrats: it’s their shared status as members of the ruling class. Even if state bureaucrats don’t personally hold shares in their IBKR portfolios, they’re still forced to operate as agents of a capital accumulating class. The continued existence of their stratum depends directly on continued capitalist exploitation. Without it they can’t fund their own privileges and functions. Like it or not, under capitalism, they can’t be autonomous. The senior civil servant’s interests are inherently aligned with those of the corporate exec that they golf with – and both are against the interests of the working class.

Crisis (State) Capitalism

Nowhere is the proof of this alignment of interests among the ruling class more evident than in that essential feature of modern capitalism: the dig-out (or for American-English speakers: bail-out). Is there anything more nailed on, in times of crisis, than the state riding in on its white horse to save the day? The 2008 Great Financial Crisis brutally exposed this. IBRC, NAMA, TARP, TBTF … you name the crisis, the state reflexively intercedes to deliver life-saving resuscitation to capital (along with a jargony four-letter acronym to obscure the true nature of the heist).

Libertarian ideologues might talk a good game about the perils of state interference in free markets. But their Cassandra warnings fall silent whenever the threat of systemic financial collapse drives them back into the forgiving arms of their mother states. In breaking news: capitals will in fact turn to the state (to whom they’re paying protection money) to defend their competitive and economic interests. And in the current epoch of Too Big To Fail corporations (where the fall of any one of the technofeudalist mega-corporations would trigger a domino effect bringing them all down), states have no option but to intervene. The alternative – millions of their citizens losing their livelihoods, imminent collapse of the prevailing order and the loss of revenue and power that threatens to accompany widespread economic collapse – is simply too dire to contemplate. These interventions are rare, temporary exceptions, we’re told. But these are the exceptions that prove the rule that a minimalist role of the state in capital is undesirable for both. Likewise, capital needs to be backstopped by something else that only the state can provide: what Chris Harman referred to as “local monopolies of armed forces” that can prevent their geoeconomic rivals from “using direct, Mafia style violence” against them. Only the full might of the state’s arsenal can keep the foreign wolf from the corporate henhouse. 

It’s these insights about the fragility of the capitalist system – unbridled corporate leviathans, superpower rivalries, geopolitical tensions – that are key to understanding the resurgence of state capitalism. China has long been its poster child over the past three-quarters of a century. And you don’t need to have been listening to many Trump speeches to realize it’s his bête noire. China has transformed utterly, from Mao’s largely subsistence-based agrarian economy modelled on the Soviet Union, to a nation that can boast the following accolades: world’s largest exporter, largest energy consumer, second largest economy (one-fifth of global GDP). All achieved through systematic, long-term orchestration of state capitalist power over capital accumulation and exploitation (terms not in the Chinese official version) under the tightening grip of the CCP – and increasingly blurring the boundaries between public and private.

When your whole shtick is that you’re going to Make America Great Again, these challenges to your political, economic and military interests are a direct affront. No mafia boss just sits back and allows a rival family to take over. And if you can’t beat them, join them. But analysis of Trump’s seemingly erratic attempts to reset the global economic order back in America’s favour should go beyond a shallow inference of an impetus to emulate China’s success. The deeper question is: what features intrinsic to capitalism are forcing this global tendency towards competitive state capitalism?

Neoliberal decay

First, the accelerating decay of neoliberalism. The spectre of economic stagnation haunts the markets. Exponential growth on a finite planet, with finite resources and markets to expand into, is destined to end in increasingly antagonistic, nationalist competition. From an average of roughly 10% per annum for three decades from 1980 on, China’s yearly growth rate is down to below 5% today. The US meanwhile has limped along at 2-3% growth this century. The law of diminishing returns to scale. Both nations have staggering national debt burdens, continually exacerbated with stimulus packages and quantitative easing (money-printing) to eke out these dwindling GDP rates. There are structural limits to mature capitalist economies as markets get saturated and overall rates of profit decline.

All of this necessarily results in intensified competition over trade, investment and technological superiority between geopolitical rivals. What emerges is a kind of Game Theory in an increasingly multipolar world, with states monitoring each others’ policy moves and making strategic changes to their own in response. Which is why you can’t open the newspaper these days without encountering tariffs, embargoes, export bans, border controls and other such artifacts of state interventionism. History has repeatedly shown us that the rise of aggressive economic nationalism often precedes the erosion of any meaningful boundary between corporate interests and national security. 

A case in point: Taiwan. Despite being an island of just 36,200 square kilometres, it has become a crucial pawn in this inter-imperialist struggle. Not only is it caught in the cross-fire of the militaristic sabre-rattling of both Washington and Beijing, but as home to the world’s largest producer of semiconductors (TSMC), it has also taken on an outsized strategic importance as the superpowers vie for access to the precious silicon increasingly regarded as an existential necessity in the rapidly escalating AI arms race. Geoeconomic rivalry is once again the new norm.

State capitalism?

So, to return to the initial question: is the Trump administration guilty of State Capitalism? Fixating narrowly on this probably misses the wood for the trees. It’s in attempting to answer the series of related questions posed earlier in the article that we can deepen our understanding of the state’s role in capital. State capitalism might best be viewed as a mutating feature of the capitalist mode of production, rather than a distinct mode of its own. All the classical elements – the private property, the exploitation, the accumulation – are still there. But this variation involves a brawnier, more overt state with explicit imperialist aims, no longer content with remaining hidden in the engine room. This mutation may express itself differently across time and place. Trump’s “Daddy State” economics may appear more volatile, transactional and opportunistic than the carefully orchestrated, tightly planned, systemic (Chinese) or coercive, bureaucratic (Soviet) variants that have gone before. But what links them all is a ruling class sitting at the top of society and a powerful overlap of interests and personnel between those who preside over capital and state office alike. While history may well look back on Trump in his second term as an accelerant of state capitalist dynamics in the midst of neoliberal decline and inter-imperial multipolarity, it’s important to recognize that the history of capitalism is the history of the state constituting capital. To paraphrase Sinatra – under capitalism – state and capital go together like a horse and carriage. Our job as socialists is to bring about the conditions where you can have one without the other – or a state that pulls for workers not capitalists.