Payments and the Platforms: Monetization of the Social
With Libra Facebook attempts to financialize the social by monetizing communication, including the communication of nearly 2 billion so-called unbanked. It is not nearly the only Tech Giant rich in information and data that aims to get its foot in the digital money industry. There’s Apple Pay, which allows Apple users to pay with their iPhone or Apple Watch, there’s Google Pay (formerly known as G Pay) a digital wallet and online payment system for Android and Google users, and Amazon is opening a checking system that may apply for financial license. What lessons have we learned from the platformization of the web? Is this the Battle Royal for the unbanked? Will the dream of a participatory, free, P2P, transactional community that dismantles the age-old architecture of financial power end up in a centralized, global, one-currency payment system headed by white, male, wishy-washy bankers-cum-techfeudalists? What can we expect from the competition between these new financial competitors?
Lana Swarts argues that if national currency represents liberal democracy, and Bitcoin represents some combination of techno-libertarianism and anarcho-capitalism, then Libra represents Silicon Valley feudalism. Andrea Fumagalli historicizes the liberalization of the issuance of money all the way up to today’s attempts to financialize sentiments, and Valeria Ferrari discusses what remains of the dream of peer-to-peer, decentralized platforms in light of Libra. Rachel O’Dwyer talks about a little discussed line from Libra’s white paper in which Facebook states its interest in developing an open identity standard.
Speakers: Lana Swartz, Andrea Fumagalli, Valeria Ferrari, Rachel O’Dwyer
Moderator: Nathaniel Tkacz
Libra: A portable digital identity
Buried towards the end of the Libra whitepaper is a throw away comment about the development of an open identity standard. Financial services require KYC (know your customer), meaning that the payments app needs to be able to verify and prove a user’s identity. This suggests that Facebook is not only developing a global currency to publicly mandated currencies, but also using cryptographic techniques similar to those used by bitcoin to develop what they are calling a ‘portable digital identity’. Is Facebook’s interest in acting as the arbiter of global digital identity where our focus should lie? What does it mean to allow a platform to act as the arbiter of our financial identity? And to what extent in platform payments systems, do identity and payment become one?
Rachel O’Dwyer is a lecturer in digital cultures in the National College of Art & Design, Dublin. She writes about digital value, platforms and payments systems, most recently for The London Review of Books, The Journal of Cultural Economy, Longreads, MoneyLab and MIT Press
Silicon Valley Feudalism: From Mass Money Money to Social Money Media and Back Again
State currency– a universal, public, print media– is a mass media form, and like other legacy communication systems, it is poised for disruption. Bitcoin and other alternative currencies are prying the state’s grip on money loose in our imaginations, offering a vision, aligned with visions for the early Internet, of a participatory, free, transactional community that displaces traditional structures of power. But the shift from the mass money media of state currency will likely be replaced by social money media that looks more like today’s social media: monopolistic, surveilled, closed platforms that collude with traditional structures of power even as they work erode the benefits those structures afford. Facebook’s Libra is envisioned as a universal, global currency: a one-world money. Where private transactional communities are niche and segmented, Libra paves over the differences between national currencies and payment systems, to bring all users of money, banked and unbanked, under its auspices. Social media becomes mass media. Where cryptocurrency advocates imagined a world without third party intermediaries and megalithic control systems, Libra embraces them. While state currencies can be subject to the governance, Libra is designed to be managed by corporations at the levels of both monetary policy and infrastructure. If national currency represents liberal democracy, and Bitcoin represents some combination of techno-libertarianism and anarcho-capitalism, then Libra represents Silicon Valley feudalism.
Lana Swartz is assistant professor of media studies at the University of Virginia and co-editor of Paid: Tales of Dongles, Check, and Other Money Stuff (MIT, 2016) and author of New Money: Currency, Community, and the Future of Payment (Yale, Spring 2020).
Facebook Libra: towards a financialization of the economy of interiority?
Money is caught in a process of dematerialization. Its becoming sign-money (as Marx had predicted), is a consequence of the disappearance of any material relationship with a physical unit of measurement. There is also a historical date that fixes this moment: 15 August 1971, when then US President Nixon decreed the inconvertibility of the dollar in gold, causing the fixed ratio of $35 per ounce of gold to lapse.
Since then, Pandora’s modern money box has been uncovered. We have entered the new historical phase of the liberalization of the issuance of money. This is characterized by two main stages. The first one deals with the end of state monetary sovereignty and the transition of monetary governance from central banks to speculative conventions set in motion by the financial oligarchy. But the focus of this presentation is on the second stage, which starts in the new millennium and is characterized by ‘putting life directly to value’ without the necessity to pass through labor activity. This is a new source of valorization that makes use of social media and big data. Cryptocurrencies represent an increasingly wide opportunity for these industries to financialize what we can call ‘the economy of interiority’, that is, the commodification of sentiments. (Co-author: Cristina Morini)
Andrea Fumagalli is professor of economics in the Department of Economics and Management at University of Pavia. He teaches also Theory of Firm at University of Bologna. He is member of Effimera Network, founder member of the Basic Income Network Italy. His research activity deals with the structural changes of accumulation process, labor precarity, monetary theory of production and basic income. Among his recent publications, see The crisis of the Global Economy. Financial markets, social struggles and new political scenarios (with S.Mezzadra), and forthcoming: Cognitive Capitalism, Welfare, Labour (with A. Giuliani, S, Lucarelli, C. Vercellone).
Libra: the building block(chain)s of Facebook’s empire
As digitally native financial networks, cryptocurrencies’ main provocation lies in the possibility of generating value and spaces for economic interaction outside of mainstream financial venues and institutional channels. To prevent censorship from outsiders, the governance of blockchain-based systems is submitted to the rules encoded in the technology, with code assuming a normative value and coercive capacity within the environment in which it operates. Exploiting the affordances of blockchain-based crypto-assets, Facebook’s cryptocurrency project Libra represents yet another step in the tech-giant’s construction of its own technology-based jurisdiction. Already holding a dominant position in social media, messaging, advertising and e-commerce, with Libra, Facebook seeks to create a payment system that would further lock users within its own ecosystem and distance the latter from external legal environments. The inception of Libra urges us once again to understand the dimensions and scale of Facebook’s growing influence on information and value flows, as to find possible ways to counterbalance it. Are states still in a position to tackle Facebook’s dominance? Do they have enough weight in the negotiation processes around Libra? Are legal obligations the right tools to fight this battle, or should we rather rely on peer-to-peer, decentralized platforms as only viable alternatives?
Valeria Ferrari is conducting her research within the Blockchain & Society Policy Research Lab, hosted by the Institute for Information Law, at the University of Amsterdam. Her work is aimed at studying how code and digital infrastructures can be deployed as architectures for social control, and what is their relation to national legal protections and enforcement mechanisms. Before joining the Lab, her research focused on the role of the internet in the smuggling of migrants and asylum seekers, and on the protection of fundamental rights in digital forensic investigations. Alongside her academic work, Valeria has been involved with the Amsterdam crypto-community as event organizer and consultant.