The inherited economic rules, based on free markets, belong to the industrial past. In this age of platform economics, markets have ceased to work and regulation is still being discussed.

Free market competition can be quite useful, and is still a key mechanism to make our economy work, but in a dwindling set of areas. From t-shirts to tomatoes and cars, the producers depend on turning out useful things at reasonable prices. Quality and prices must match what competition may put on the markets. Letting the markets find their balance turned out to be a smart solution. This is Adam Smith, of course; the sum of individual interests would be the best path to expand the interests of society. The problem is that when we think of the economy, we still think of producers of goods and services, failing to notice that the structure of economic activities has deeply changed. We are in the hands of ‘gatekeepers,’ middle-men, intermediaries, in what has also been called a tollbooth economy. Goods and services must be financed and moved around, but moving around, in this new technological age, is in the hands of corporate giants of the immaterial economy, the platforms.

Shreeja Sen sums up this key challenge of the digital age: “Historically, competition law has been the umbrella tool for market regulation to identify any activity that may be considered anti-competitive or affect market efficiency, irrespective of sector, industry, or company. Has it been successful? Largely, yes, in the industrial era markets… the real challenge of digital markets is that firms controlling platform infrastructure become future overlords of entire economic sectors – retail commerce, farm-to-table supply chains or labor demand-supply matching – by monopolizing the intelligence derived from the data flowing on such infrastructures. How data-derived intelligence catapults the lead firm’s network advantage into an indomitable intelligence advantage is key to this transformation.”1


Source: Haskel and Westlake, Capitalism without Capital, p. 31

Haskel and Westlake called it Capitalism without Capital, exploring the new forms of organization which constitute a sector in itself, but in fact also dominates all sectors of the economy, since all traditional activities depend on it. Taking 20 years of technological transformation, 1995 to 2015, they present the growing share of intangible value-added share, as compared to traditional tangible activities: both in manufacturing and services, the intangible share is becoming dominant. We may call it L’immatériel as André Gorz does, or The Internet Galaxy in Manuel Castells’ studies, but the key issue is that the rules of the game change when we are in the platform economics age. There is growing awareness about the limitations of traditional competition to regulate the digital economy. The economy has changed, but the rules remained in the past century.

Platforms have a natural tendency to concentrate power, since we have, for productivity’s sake, to use what the majority uses. Google for searches, Facebook for messages, Amazon for online purchases, Microsoft for software, Visa for payments and so forth: we must use what others use, since this is all about digital flows. Economists call it ‘demand monopoly’. In the UN we used WordPerfect to write papers, but had to move to Microsoft Word: we have to write and read in the dominant software. If the companies raise their prices, we must comply. The universe of platform giants, GAFAM in the US and most of the world, or BAT in China, belong to the intangible universe of low costs (the electromagnetic waves belong to nature) and stupendous profits.

The UNCTAD 2021 report on the digital economy states that “a key challenge is how to govern and harness the surge in digital data for the global good” and that we must “recognize that current global institutions were built for a different world, that the new digital world is dominated by intangibles, and that new governance structures are needed.” (p.10)2 But the problem with governance structures is that the big platforms work in the global space, while regulations so far have been set up at national levels, with limited results. European governments are trying to set up regulations, based on the fact that “today the way in which gatekeepers conduct their businesses is either largely unregulated or based on sets of rules many of which pre-date the digital economy.” Accordingly, the Digital Market Act “aims to ensure that these platforms behave in a fair way online. Together with the Digital Services Act, the Digital Markets Act is one of the centerpieces of the European digital strategy.”3

The huge asset management corporations, for example, which must be seen as transnational platforms, dealing with intangible money on the global markets, have escaped practically any regulation, as we have seen with the Panama Papers, the Paradise Papers, the Pandora Papers, the Luxemburg Files and the Swiss Secrets files linked to Crédit Suisse.4 BlackRock manages assets worth US $10 trillion dollars, half the US GDP. In the US, there are a number of attempts at regulating the system, like the FCPA (Foreign Corrupt Practices Act), FATCA (Foreign Account Tax Compliance Act), FINCen (Financial Crimes Enforcement Network), CFPB (Consumer Financial Protection Bureau), but to little avail, as the state of Delaware open tax avoidance and evasion show. According to The Economist, “the share of American multinationals’ foreign profits booked in tax havens has risen from 30% two decades ago to about 60% today.”5 The fact that money is just a notation on computers, with only marginal government-printed money (3%), makes the flows easy and fast.

Chuck Collins, in his study on The Wealth Hoarders: how billionaires pay millions to hide trillions, shows how finance is out of control, and lists the international advocacy groups “working tirelessly to expose the injustices of the global hidden-wealth system. These include the Tax Justice Network, Global Witness, Oxfam, Global Financial Integrity, Transparency International, and the US-based Financial Accountability and Corporate Transparency (FACT) coalition. Many are motivated by the way this system impoverishes billions of people around the world.” The OECD created the Common Reporting Standards, with over a hundred countries pledging country-by-country reporting systems. “The United States, the number two worst financial secrecy jurisdiction, is not a signatory to this process.”6 Good will, but little results.

Loss of control over finance is a key issue, since it drastically reduces the capacity of governments to channel resources to where they are needed, whether environment, health, science or infrastructure. It also limits consumer access to adequate credit (see the 2008 crisis), as well as productive investment capacity.

Jacques de Larosière, former finance minister of France and IMF managing director, laments that only 3% of GDP worth of financial assets goes to productive investment.7 We still think about banks using our deposits to fund useful credit and stimulate the economy, but this universe, though still present in small local banks or public institutions, has changed: with virtual money, high frequency trading, banks creating money as credit, expansion of shadow-banking, 60-plus tax havens and a whole industry of financial speculation, and the US emitting dollars free of charge, we created a financial unregulated chaos. Calling it “markets” is a sham, it’s a free-for-all racketeering.

The intangible economy managed through platforms goes way beyond the financial world. We are all in the communication business nowadays, whether we like it or not. And communication goes through the hands of a small group of giants like Google (Alphabet), Facebook (Meta), Amazon and a few others. Everything we do is registered online, the medicine we buy, the books we read, the films we like, the places we go – all of them leave footprints for the giant platforms to create a behavioral data industry, based on user profile information (UPI). According to Shoshana Zuboff, in her The Age of Surveillance Capitalism, “the corporation’s scientists are not recruited to solve world hunger or eliminate carbon-based fuels. Instead, their genius is meant to storm the gates of human experience, transforming it into data and translating it into a new market-colossus that creates wealth by predicting, influencing and controlling human behavior.”

This is not business-as-usual. “A wholly new electronic text now extends far beyond the confines of the factory or office. Thanks to our computers, credit cards, and phones, and the cameras and sensors that proliferate in public and private spaces. Just about everything we now do is mediated by computers that record and codify the details of our daily lives at a scale that would have been unimaginable only a few years ago. We have reached the point at which there is little that is omitted from the continuous accretion of this new electronic text.”8 (182) Thus, personal information, individualized by algorithms, allows for a powerful influence and marketing industry. Hazel Henderson refers to “control spread via attention economies, mass media and influence industries based on psychological methods of behavior modification.”9

In economic terms, this is a different system. Searching for a book on Amazon or any information on Google-Search, we are producing the basis for this global database, and it will be used free of charge, and only cosmetic privacy regulation, to produce huge profits, putting these platforms at the trillion-dollar range of value. For us, using the platforms seems free, but the more sophisticated the database becomes on each of us, the higher the price paid by real economy producers to channel the messages. These huge costs for producers are beyond any control, since the messages have to go to those few platforms. The costs are in turn included in the selling prices, which we pay. In other terms, we produce the raw material free of charge, and pay for the marketing costs through our consumer behavior and the higher prices we pay.

Marketing has become a behavior-influencing industry, generating huge profits we pay for. The message you get on your phone, interrupting whatever you are doing, is paid by you, and it comes to you because they are registering your every move. It’s a full circle, a win-win process for the platforms.

Thus, communication and personal information have become an industry, and the platforms rose to first places as the most profitable corporations. But they are controlled neither by market competition – they are too few, and eventual burgeoning competitors are simply bought – nor by regulation. The timid attempts to regulate have been met by world-scale protests in the name of freedom, and generous financing of politicians. It is a full-scale industry, with roots in our cellphones and our credit cards. Actually, we are the product. The above mentioned EU’s proposed Digital Markets Act (DMA) “intends to address competition concerns in the digital economy, with a clear mandate to regulate unfair trade practices imposed by large platforms.” The intention is clear. But the fact is that the only thing we do have is ‘self-regulation,’ whatever that means for who owns power.

On my 70th birthday, I received a curious message from a cemetery in the State of Goiás, a short film showing the beautiful site, trees, a lake beyond, calling me to this wonderful place with an extended hand and a gracious feminine smile, inviting me: “vem!” How nice of them to have remembered my birthday, and my age. The message is part of the price, of course. What was it I was doing when this message came?


1 Shreeja Sen - Time for upgrade: why competition law is not enough for the platform economy – Alainet, February 25, 2022.
2 UNCTAD – Digital Economy report 2021.
3 The Digital Market Act.
4 For the content of the files and the volume of financial resources, consult ICIJ reports on their website.
5 What would a new system for taxing multinationals look like, Economist, May 15, 2021.
6 Chuck Collins – The Wealth Hoarders – Polity Press, Medford, USA, 2021. pp 61 and 157.
7 Larosière figures at webinar meeting on the 50th Anniversary of Bretton Woods, March 1, 2022. For figures on the German economy, also referring to 3% productive investment, see: Michael Peters and Magdalena Senn – Shrink Finance, or Prosperity: why too much finance harms the European Economy and Society.
8 Shoshana Zuboff – The Age of Surveillance Capitalism: the fight for a human future at the new frontier of power – PublicAffairs, New York, 2019.
9 Hazel Henderson – Steering our powers of persuasion toward our human future – 2019.