1) The document examines how social media platforms like Facebook operate within a transnational capitalist system dominated by venture capital firms and their investors. 2) It draws on Gramsci's concept of hegemony to argue that social media users unknowingly consent to having their data and relationships commodified for profit. 3) While social media presents itself as free and non-commercial, it relies on advertising revenue and collects vast amounts of user data that is valuable for market research and targeting ads. This represents the "commodification of friendship" for economic gain.

1. Socialmedia and
Transnational Capitalism
Dr David Kreps, ISOS, Salford, UK

2. Introduction
Gramsci, Gill, and the Hegemony of the
Transnational Historic Bloc
Transnational Capital and Socialmedia
Conclusion.

3. Introduction
Social Networking Sites (SNS) and other social media
the most publicly discussed innovations of the internet
Balance remains precarious between technological
features which support social networking and those
which facilitate online advertising.

4. Introduction: Examining VC
Venture Capital: Often treated as an anonymous and
unremarkable part of the process
Cultural concepts originally developed by
Antonio Gramsci - Hegemony
Gill - transnational historical bloc

5. Introduction: Virtual
countries
Bulletin Board Systems of 80s and 90s
amateur enterprises
Today’s SNS and MUVEs have
populations the size of countries - or
blocs
Hundreds of professionals involved
Big business
Attractiveness to investors
Walled gardens - Apps
Tensions between social and
commercial - Facebook > 500 million

6. Gramsci, Gill, and the
Hegemony of the
Transnational Historic
Bloc
Commodicification, consumerism, and the power of
rich elites
Antonio Gramsci: “recognised that social
power is not a simple matter of
domination on the one hand and
subordination or resistance on the other.”

7. Hegemony
Culture and politics :
Marx: underlying economic necessities
Gramsci: web of relations with the economy in
which there is a continual shift of emphasis and
influence
“Rather than imposing their will ‘dominant’ groups
within democratic societies generally govern with a
good degree of consent from the people they rule,
and the maintenance of that consent is dependent
upon an incessant repositioning of the relationship
between rulers and ruled.” Gramsci

8. Consent of the ruled
Insidiously, a dominant bloc, in
order to maintain its dominance,
must be able to “reach into the
minds and lives of its
subordinates, exercising its
power as what appears to be a
free expression of their own
interests and desires.”

9. Hegemony: The Punk
exampleLate 1970s: safety pins in the ear
and torn fabrics loosely arranged as
clothing - statement of rebellion, of
rejection of fashion (Hebdige 1979)
Early 1980s this ‘look’ had become
a fashion in itself
What was revolutionary had been
absorbed, packaged, and sold back
to the revolutionaries
Everything is allowed, if it
contributes to the market - the
pluralistic nature of the modern
consumerist society

10. Gill & the New World Order
Stephen Gill, Professor of Political
Science at York University, Canada,
writing in 2003
New World Order created after 1945 -
the world after 1991 he describes as
but the 3rd phase
The dominance of the market, of
transnational capital, the G7 (and
more recently G8 and G20) and the
central role of US power in supporting
and spearheading this dominance.

11. Roosevelt’s 30’s New Deal
Significant shift in US political &
domestic policy
Increased government control over
the economy and money supply
Intervention to control prices and
agricultural production
World War II tightened the
relationship between government
and economy
‘mobilisation’ of industrial units &
workforce to produce of arms.

12. Military Industrial Complex
Post World War II - Marshall Plan
- NATO - emerging EEC -
an international historical bloc
built on a pax Americana
American New Deal state - the
model for the whole Western world
Albeit modified by wartime
mobilisation & the
‘military-industrial complex’
this had spawned.

13. Cold War
Mobilisation not ‘stood down’ in 1945 - evolved into
‘military-industrial complex’
combination of a nation’s armed forces, its suppliers of
weapons systems, supplies and services, and its civil
government
European and transatlantic treaties, special relationships
and political settlements under American leadership
International military-industrial-complex, underpinning
an American led economic model ⎯ an international
historical bloc.

14. Supremacy
Hegemony of US capitalism became
supremacy after 1st Gulf War, collapse &
absorption of Soviet bloc
3rd phase New World Order
More integrated global political economy
Organised labour increasingly
marginalised
Capitalist elites investing in many
different nations
Elites include those in “key positions in
transnational companies, banks,
universities, think tanks, media
companies, governments and
international organisations such as the
IMF, World Bank and OECD” 1 supermarket - 6 oil companies
3 car manufacturers
World’s 10 biggest companies

15. Transnational historical bloc
1st and 2nd phase international historical bloc
becomes
US-“centred & led transnational historical bloc” at
whose “apex are elements in the leading states in the
G7 and capital linked to advanced sectors in
international investment, production and finance”
whose activities “seek to make transnational capital a
class ‘for itself’”

16. 4th Phase New World
Order
Arguably the crash of 2008 heralded a new phase
China, India and Brazil challenging US-led
transnational historical bloc
G20, not G7
‘Decline’ of US
UK in decline since
1880s
Multipolar world?
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

17. Transnational Capital and
Socialmedia
It is the authors’ opinion that socialmedia display
precisely this constellation of behaviours between a
dominant bloc of venture capitalists and the tens of
millions of us who willingly surrender our personal
data and the conduct of our friendships and
relationships to their marketplace.
Peter Thiel Mark Zuckerberg

18. Facebook global reach
Interestingly - in the new multipolar 4th phase - the
very countries that are outgrowing the US are those
where Facebook lacks penetration: China, India and
Brazil
http://dukky.com/2010/11/facebook-a-country-unto-itself/

19. Web Business models
Advertising - but not the only model
Pay per click (Adwords)
Pay per download (iTunes / Mac AppStore)
Subscription to service (Spotify)
Multi-tier internet [wired and wireless]
‘Apps’ paid access to a web service
However - advertising the most successful model

20. Web 2 Success story
Google
Created by Larry Page and Sergey Brin as PhD students at
Stanford
“to organize the world's information and make it universally
accessible and useful” “Don’t be evil”
Saw Search - the most important thing on the web
Created algorithm that credits a site that is linked to by other sites
with a ranking that will enable it to come top of the search results
Market capitalisation Nov 2010 about $190bn
An ad-supported business

21. Web 2 success story
Amazon
Jeff Bezos founded it in 1994
Largest online retailer in US, 3rd largest in UK
Market Capitalisation Nov 2010 - $75bn
- 2nd after Google.
The biggest online retailer - much acclaimed for its
internal advertising: ‘people who bought X also
bought Y’

22. Web 2 success story
The elite
Max Levchin, Peter Thiel, Luke Nosek, and Ken
Howery
Formed Paypal in March 2000 - charges a fee for
online financial transactions
Sold October 2002 for $1.5bn to eBay (Nov 2010
valued at $40bn, fourth after Facebook)

23. Web 2 success story
Peter Thiel
Used his money from Paypal sale to eBay to create a
hedge fund (very successful) and become main Venture
Capitalist behind Facebook
Owns 5.2% which he bought in Summer 04 for $0.5bn -
now worth $2.6bn.
Facebook, as Zuckerberg famously reminded us, is an
ad-supported business
Facebook
Facebook
valued at
$50bn Jan
2011 - 3rd after
Amazon

24. Web 2 success story
Peter Thiel
Now on steering committee of the Bilderberg Group

25. Social Networking & Money
Marketing professionals understand that
“the reason that people are attracted to
social networks in the first place is that
reliance on user-generated content is
seen as relatively free of traditional
corporate content and advertising”
(Goad & Mooney 2008).
Moreover “if users perceive that a social
network is becoming ‘polluted’ they will
leave ⎯ and the evidence suggests that this
can happen extremely quickly”

26. Commoditising friendship
Facebook utilizes transnational networks
architecturally structured to transcend geography
emphasising locality and the institutional, political or
economic context of users’ physical localities
Rhetoric of communities-of-interest
within communities-of-place
These are markets
“We are seeing the commodification of human
relationships, the extraction of capitalistic value from
friendships” (Hodgkinson 2008).

27. Market Research
Investors / advertisers can capture all
Facebook users in a place (Harvard),
or of a type (movie goers)
Facebook repositioning themselves as
‘social facilitators’ rather than market
researchers
This is a hegemonic relationship
with their users
When Facebook over-assumes on the relationship, as with
Beacon, users become aware and withdraw their consent
When the illusion of divorce is maintained, Gramsci’s
‘unwitting collusion’ is perpetuated.

28. Privacy
Front-end social privacy described in friendly, jargon-free
language on the About pages
Back end privacy described in techy language of cookies,
IP logging and other opaque terminology
Users may feel they are creating something new, vibrant,
theirs, not ‘polluted’ by existing structures and institutions
and social hierarchies
Punk may have felt the same way before they saw their
styles and tropes for sale on the high street.

29. Commodification of friendship
Social networks critical to hegemonic dominance of the
commercial interests over the social
The ‘commodification of friendship’ can occur between two
friends, or two hundred
In economic terms, the strength of the tie or the ‘genuine-
ness’ of the friend makes no difference
It is the information exchanged
between these ties, & across these
networks with little concern for
privacy policies

30. Conclusion
Utopian rhetoric pictures SNS as a social space, mediated by
transnational communication tools, that is democratic, anti-
hierarchical, open, without capitalist agendas
This ignores hidden aspects of SNS as corporate entities with
obligations to venture capital investors & shareholders
Rather than separate from offline capitalist institutions and histories,
the internet, including SNS, is in fact a continuation of these
practices and ideologies
Having made the move from hobby activity to corporate entity, SNS
have been appropriated to become part of a hegemonic
transnational capitalist strategy for globalised and unregulated
market dominance.
In classic Gramscian style, we - a 1/12th of humanity - have willingly
and gladly colluded in the creation of this new marketplace, now
worth $50bn

31. Contact
Dr David Kreps
Director, Centre for
Information Systems,
Organisations and Society
http://www.isos.salford.ac.uk
http://snipr.com/davidkreps
d.g.kreps@salford.ac.uk