Episode 110: The Shiny-Object Psychology of American Capitalist “Innovation”

Citations Needed | May 20, 2020 | Transcript

Barack Obama holding his prized BlackBerry in 2014. (Larry Downing / Reuters)


Intro: This is Citations Needed with Nima Shirazi and Adam Johnson.

Nima Shirazi: Welcome to Citations Needed a podcast on the media, power, PR and the history of bullshit. I am Nima Shirazi.

Adam Johnson: I’m Adam Johnson.

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Nima: “Free markets drive innovation.” It’s a narrative imparted to us ad nauseam. The ultimate catalyst of creation and progress, we’re told by policymakers, business executives, think tanks, and the media outlets that bolster them, in which great strides in healthcare, electronics, media, and other areas are the domain of private enterprise motivated by competition and profit, and unencumbered by state intervention.

Adam: As the prospect of socialism — or at least the word “socialism” — regains currency in the West again, these claims have resurged. Capitalism’s supporters insist that a profit-first system is the reason the world is always improving, lifting people out of poverty while equipping them with iPhones, wi-fi, central air conditioning, flatscreen TVs. Socialism, they contend, hinders innovation because public ownership of the means of production removes the competition and profit that ostensibly incentivizes creativity and industry.

Nima: But why are we expected to believe that concentrating ownership of the means of production in the hands of just a few is the actual key to progress and prosperity for the many, let alone all? How is it that the most important metrics of “innovation” are expensive consumer goods available to only some, rather than socialized, need-based programs available to everyone? And above all else, who does this narrative that “innovation” is driven by Anglo-American style Randian capitalism really serve?

Adam: Today’s show we will delve into these questions, looking at how the world’s foremost champion of capitalism — the United States — packages propaganda about capitalism and innovation, the reasons capitalism not only fails to drive innovation, but also actively destroys it and the United States’ brutal actions to thwart socialist efforts toward a more equitably and sustainable version of “innovation” at home and aboard.

Nima: Later on the show, we’ll be joined by Vanessa A. Bee, lawyer, writer and Associate Editor at Current Affairs. Vanessa’s writing has been featured in, among other places, Harper’s, New York Magazine, The Appeal, and In These Times.

[Begin Clip]

Vanessa A. Bee: The trouble with our society is that we’re deeply unequal, we are not a meritocracy despite the narrative that we sort of tell ourselves, we are not a country that distributes resources fairly. So what we end up with is a system in which the zip code and economic class in which you’re born plays an outsized role in the education you get, the opportunities you’re able to pursue, the doors that open for you, the sort of basic freedom you get to pursue creative and innovative endeavors.

[End Clip]

Adam: The idea that capitalism is a driver of prosperity, and its logical corollary or antecedent innovation or technology is the water in which we swim and is the ideology with which one does not need to contend with in polite company, for example, the all time greatest quiet-out-loud moments in recent media criticism history, which we’ve mentioned on the show before, is when The New York Times opinion page editor, James Bennet, who s probably the single most influential person when it comes to sort of cementing and curating liberal opinion, splicing the boundaries of acceptable opinion, said the following in a closed door meeting in 2018, and again, we’ve read this on the show before, but we’re going to read it again because we think it is insightful, quote, “I think we are pro-capitalism. The New York Times is in favor of capitalism because it has been the greatest engine of, it’s been the greatest anti-poverty program and engine of progress that we’ve seen.” So this is a highly contestable ideological claim that is asserted as fact, as one would assert gravity or global warming or entropy, it is just this thing that is and it’s beyond debate.

Nima: And it was asserted as fact mind you during a meeting with New York Times staff that was grappling with why Bennet kept hiring shithead right-wingers to write for the opinion page. So basically his explanation is well because that ideology, the ideology that they have, this conservative, capitalist ideology, is what the paper stands for. Now the following year, in 2019, JPMorgan Chase CEO Jamie Dimon echoed James Bennet’s statement almost verbatim as if they were reading from the same script. So he wrote in his annual shareholders report this, quote:

There is no question that capitalism has been the most successful economic system the world has ever seen. It has helped lift billions of people out of poverty, and it has helped enhance the wealth, health and education of people around the world. Capitalism enables competition, innovation and choice.

End quote. Dimon’s letter goes on though and it says this, quote:

When governments control companies, economic assets (companies, lenders and so on) over time are used to further political interests — leading to inefficient companies and markets, enormous favoritism and corruption. As Margaret Thatcher said, ‘The problem with socialism is that eventually you run out of other people’s money.’ Socialism inevitably produces stagnation, corruption and often worse — such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives — which they frequently do to maintain power.

End quote.

Adam: Yes. Authoritarian unlike my bank, which is not. So, one disclaimer we want to make which is that we don’t want to fall into the trap for this episode of equating government spending with socialism. Those are not the same thing. What we want to do is problematize and pick apart and dissect to this notion that the sort of Anglo-American Randian capitalist vision is the primary driver of innovation, something that’s undermined by the way the American system of science, education and technology development actually exist within the United States. This is not to say that those systems, the public interest systems, are themselves not fraught with ideological baggage nor is it to say that they are socialist in any meaningful sense. The point is to show that public sector spending is not part of this model that Bennet and Dimon are talking about. It’s not part of the model that the American Enterprise Institute, Heritage Foundation and all these sort of grand and we’ll get into liberal think tanks as well — Center for American Progress, the Obama administration — it can kind of fit into a fudgy neoliberal framework, but we’re going to show that not only that capitalism is the driver of innovation is false in many empirical ways, we’re also going to show that alternative systems, namely socialist systems, offer a more robust, humane and sustainable alternative, although they may not necessarily have the latest shiniest iPads and iPhones.

Nima: So the notion that capitalism breeds innovation appears repeatedly throughout modern U.S. political discourse. While capitalism has had its champions for centuries of course, the line that it breeds innovation — it is the driver, it is why — is a much more modern phenomenon, appearing to have really taken off during the 20th century.

In 1911, capitalist economist Joseph Schumpeter’s Theory of Economic Development was published. The book posited that “innovation” was the driving force behind capitalism’s tumultuous boom-and-bust cycles, as it disrupted the old to introduce the new and improved. Those who would implement this innovation were termed “entrepreneurs.” Schumpeter is often credited with introducing the concept of “entrepreneurship,” and his valorization of “entrepreneurs” laid much of the groundwork for the propaganda that we discuss on today’s show.

Schumpeter also introduced the concept of “creative destruction” in his 1942 book Capitalism, Socialism, and Democracy. The term referred to a process in which new technologies, products, methods of production, and means of distribution render old ones obsolete, forcing existing companies to quickly adapt to a new environment or else fail. So, to Schumpeter, depressions and recessions were simply the cost of innovation and entrepreneurship. During the Great Depression, a time when questioning capitalism would have been a critical thing to do, Schumpeter is reported to have doubled down, saying, quote, “Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion.” So, unsurprisingly of course, Schumpeter became a favorite of figures like say economist Alan Greenspan, who was the chair of the Federal Reserve from 1987 to 2006.

Adam: A quick Ngram search shows a steady use of the word “innovation” and “innovate” up until the 1960s and ‘70s and then around, of course, the ‘80s and ‘90s it begins to explode in usage. More and more our economy or the kind of moral justification for western style, American capitalism increasingly became this idea that it’s innovative, that it creates new things that make people’s lives easier and better and happier through the magic of science and technology, noted value neutral concept of innovation, which we’ll get into later.

Nima: Now perhaps no figure that looms larger in the myth of American capitalist innovation than Thomas Edison. The only one that comes close is probably Benjamin Franklin, who invented the lightning rod and bifocals, and incidentally owned slaves for most of his life. But Thomas Edison was a master of PR. He was a workaholic who amassed a dazzling 1,093 patents in his lifetime. Among his inventions are, of course, the incandescent light bulb, the phonograph, the alkaline battery, the X-ray fluoroscope, and the carbon-button microphone. He also through his Menlo Park laboratory and later Bell Labs, created the model for the Research and Development Laboratory that is used too often by companies today.

Thomas Edison is credited with the famous aphorism “Genius is 1 percent inspiration, 99 percent perspiration,” lauding, of course the trope of the Protestant work ethic, but I think that leaves out something that’s been added to the mix in recent years — the notion that because of capitalism, innovation is probably more like 1 percent inspiration, 29 percent perspiration and 70 percent commodification. Shows like Shark Tank basically tell this story over and over again.

Now, incidentally, the first incarnation of the genius maxim credited to Edison was found in the May 6, 1901 edition of the Idaho Daily Statesman in a column called, “Doing One’s Best.” The piece, containing its own jaded view of humanity’s relationship to capital said this, quote, “Genius is another name for hard work, honest work. ‘Genius,’ says Edison ‘is 1 percent inspiration and 99 percent perspiration.’ People who take pains never to do any more than they get paid for, never get paid for anything more than they do.” End quote.

Adam: The Space Race of the 1960s obviously is held up as an example of the primacy of American capitalism over Soviet technology, but at best the Space Race was a tie. The Soviet Union had the first satellite in space, the first animal in space, the first man in space, the first woman in space, the first Asian in space, the first black guy in space, the first robot in space, the first space station.

Nima: Yeah, yeah, yeah, yeah, yeah, but did they colonize the moon?

Adam: But the United States put a man on the moon which admittedly is super fucking cool but from a science perspective may not make a lot of good sense. Now, of course, the U.S. space program itself was obviously not capitalist in any meaningful sense. It was a government-subsidized program. So the Atlantic Council, which is funded by the U.S. State Department, weapons contractors, military contractors, aligned sort of with NATO has stated that the Apollo Moon landing, quote, “symbolized the innovation of America’s capitalist society and, perhaps most importantly, it signaled the willingness and ability of the U.S. industrial base to generate the aerospace and defense capabilities needed to compete effectively with the Soviet Union.” Now, it’s true that parts of the space program had private contractors, but it was led, funded and directed by the U.S. government. So I’m not sure how that shows this innovation of American capitalism. It shows the, perhaps the innovation of the American people, but again, the idea of innovation — innovation for who? — is a central question we’ll be asking on this episode time and time again. So the fact that the Soviet program had women roughly 20 years or 15 years before the American program did, doesn’t really register the idea that it had black cosmonauts, doesn’t really register, it was innovative for a very specific set of people without really litigating who is better. So even the sort of great propaganda coup of landing the man on the moon somehow proves capitalism, not always really even really winning the Space Race, again, I think we’ll call it a tie for the sake of just tabling the discussion, but it’s definitely not clear the U.S. won and it’s certainly clear that if they did win, then it did so because — what? — Boeing was more innovative. I don’t, I mean, I don’t know.

Nima: I don’t know, ask Yuri Gagarin. In his book Keywords: The New Language of Capitalism, John Patrick Leary notes that the adjective “innovative” was hardly even known before the 1960s but has since become commonplace. In 1988, so right before the dissolution of the USSR, Ronald Reagan spoke at Moscow State University about the wonders of capitalist technology. He stood underneath a bust of Lenin, obviously the leader of the Russian Revolution, and in front of a mural filled with revolutionary iconography. And with that backdrop, Reagan said this:

[Begin Clip]

Ronald Reagan: Standing here before a mural of your revolution, I want to talk about a very different revolution that is taking place right now, quietly sweeping the globe, without bloodshed or conflict. Its effects are peaceful, but they will fundamentally alter our world, shatter old assumptions and reshape our lives. It’s easy to underestimate because it’s not accompanied by banners or fanfare. It’s been called the technological or information revolution…The explorers of the modern era are the entrepreneurs, men with vision, with the courage to take risks and faith enough to brave the unknown.

[End Clip]

Adam: So with the fall of the Soviet Union, you now have the kind of mean, the big ideological battle of the 20th century has been won, capitalism is superior. I guess winning somehow makes you morally right? I’m not sure how that works. It’s a bit of a tautology, but that’s neither here nor there. And then from then on, you have this sort of constant rhetoric about innovation from Bill Clinton, Bill Clinton loved the word innovation. George W. Bush loved the word innovation. Obviously Obama did. Pretty much every President talks non stop about innovation. Barack Obama expanded the government bodies dedicated to the vague term of innovation, he had the Office of Social Innovation and Civic Participation and the position of Chief Technology Officer position within the Executive Office of the President. And of course, he hired Cass Sunstein as Chief Information Officer who’s the king of nudging people towards innovation. He also set up in 2016, the Defense Innovation Board, which is sort of a who’s who of tech titans and TED Talk human brands like Neil deGrasse Tyson, Eric Schmidt, then the head of the parent company of Google, he had the executive vice president of Microsoft, the head of research for Carnegie Mellon, and they basically got together and wrote reports about how the Defense Department could be more innovative. Reid Hoffman incidentally, a big liberal donor and the co-founder of LinkedIn and Greylock Partners, incidentally, also helped fund the effort to create fake bots during Roy Moore’s senate campaign, but that’s a different conversation — I guess that was a form of innovation.

Nima: Very innovative.

Adam: And 1 percent sycophant and Aspen Institute CEO, Walter Isaacson, whose contribution to the intellectual canon is to write hagiography of important white men. And in 2016, Obama authored one of these kind of Steven Pinker-like articles, he was a guest editor for Wired magazine, wrote an article called, quote, “Now Is the Greatest Time to Be Alive.” Unquote. This was the November 2016 issue, things precipitously went downhill since then so —

Nima: (Laughing.) It used to be. Everything, everything has gone downhill.

Adam: Right. He spoke routinely in this sort of innovation language. He wrote, quote:

[One] reason why I’m so optimistic about the future: the constant churn of scientific progress. Think about the changes we’ve seen just during my presidency. When I came into office, I broke new ground by pecking away at a Black­Berry. Today I read my briefings on an iPad and explore national parks through a virtual-­reality headset. Who knows what kind of changes are in store for our next president and the ones who follow?

Now, left unmentioned is under Barack Obama’s tenure inequality rapidly expanded. One study from the University of California, Berkeley published in 2013 found 95 percent of income gains from 2009 to 2012 went to the top 1 percent of the earners. So again, innovation for who is the question we will continue to ask in this, except for cheap consumer products, the benefits of innovations, mostly go to the 1 percent, they go to the very rich and the 1 percent of the 1 percent and on the theme about this about this optimism porn that you consistently hear from the innovation crowd is something we talked a lot about with Jason Hickel in Episode 58, which is the neoliberalism optimism industry, where there’s this really weird sleight of hand that all these capitalist cheerleaders do where they credit to Western-style American capitalism, with poverty reduction that is almost all from China, which of course is not really, you know, we can sort of debate its socialist properties all you want, but it is not the sort of IMF capitalist model.

Nima: It doesn’t fit neatly into the American capitalism model lifted millions out of poverty, actually, the Chinese communist model lifted millions of poverty.

Adam: So the American Enterprise Institute wrote an article in 2016, they write this article every week, it’s a very popular article they write, American Enterprise Institute is a corporate funded right-wing think tank we’ve discussed a lot, says, quote, “Don’t tell Bernie Sanders, but capitalism has made human life fantastically better. Here’s how” and then the article links to a graph that shows, quote, a “global average GDP per person” and it shows it exploding in this sort of typical hockey stick graph after the fall of the Soviet Union but as we noted earlier, the vast majority of global gains in poverty reduction come from China, the average, the amount of people who lived on less than $1 a day in China in 1993 was 750 million and now it’s just a few million as of 2016. So you can’t get credit for that. You can’t give capitalism credit for that unless you consider China’s model a sort of reflection of the kind of capitalism you want, which the American Enterprise Institute, or at least over the last few months, has published an article a week bashing China. So, like, that can’t be the case and so like, you constantly see this ‘world progress, everything’s getting better,’ Steven Pinker line —

Nima: But the metrics only work if you include China, which goes against the capitalist argument.

Adam: And like if you don’t, right? Because there’s always this sense of, everything’s getting great without a sense of, no matter how delicious and great the pie is. If all the pie is going to the global one percent, then it doesn’t really do you any good and I think that this is why innovation is seen as this good thing, but it’s not. It’s a morally neutral thing.

Nima: It’s neither inherently good or bad.

Adam: What’s the biggest own that a capitalist can level at you in social media.? It’s —

Nima: ‘Are you tweeting socialist propaganda from your iPhone?’

Adam: And I cannot believe that when Barack Obama listed off the things that marked the advancement of technology, he mentioned the iPhone, the iPad, versus the Blackberry. I mean, this is sort of the thing we always go to.

Nima: Better consumer goods, personal technology, things to make your life easier, that is the greatest gain of capitalist innovation.

Adam: It’s an extremely myopic way of viewing innovation. So Casey Newton, who is the, quote, “senior Silicon Valley” editor at The Verge, which is a Vox property, who also incidentally has one of the most obnoxious Twitter bios ever, his Twitter bio reads, this is really petty, I don’t care, reads, quote, “Tech, democracy, and pandemic.”

Nima: (Laughs.) He’s up to date.

Adam: So he tweeted on May 13th, he linked to a demo of the new Unreal engine for the Playstation 5, which admittedly looks great, he unironically tweeted, quote, “If you’re a nerd and feel hungry for a story about human progress today, I recommend watching this stunning demo of the next Unreal engine running on a PlayStation 5.” So that’s human progress. And it’s like, look, I like a good video game as much as the next red-blooded American, but I’m not sure that really qualifies as human progress. So it’s difficult to sort of gauge the meta-question of what Americans perceive as innovation, which is sort of key to this broad moral post-Cold War narrative that Western-style American capitalism is good because it gives you shiny shit.

Nima: Now, a Gallup poll from 2002 may actually shed some light on this very question. The International Technology Education Association, or ITEA, a lobbying trade group for tech giants, wanted to get a sense of how the public perceived “technology” and commissioned a poll, one question of which was this, “When you hear the word “technology,” what first comes to mind?” And that’s an open-ended question that was asked so anyone could answer anything and the results lay bare what we are talking about. 67 percent of respondents said computers.

Adam: Right. So it’s like it’s sort of a proxy for shiny objects, which, again, shiny objects are fine and computers obviously are an important part of our economy, but they don’t really touch on anything else that can be considered innovation.

Nima: Far and away, you know, the vast majority said computers, over 70 percent mentioning computers or electronics, only one percent of respondents said science, said when you think of technology, what do you think, like the thing that would create the driver of innovation, the reason this all works, science got 1 percent, which really shows this obsession with the shiny object and what it means for the term innovation. Now, that term on its own has an actual meaning. It’s the act of developing and introducing something new or improving upon something. But when used in capitalist discourse, the word is deliberately made so much more abstract and disembodied from the labor that makes it possible to innovate. “Innovation,” therefore, is attributed to the owners of capital, the “entrepreneurs,” in Schumpeter’s word, the hardworking patent owners for Edison, right? This obscures who’s actually doing the research, who is using the science, who is building and testing the products. And these are of course who? The workers.

Adam: The suggestion that capitalism breeds innovation conveniently omits the fact that under capitalism, most working people, particularly working people living in poverty, are prohibited from “innovating” because they’re confined to jobs that don’t embrace their creativity or allow them to voice their ideas to their employer. An illustrative example of this that comes from the UK in the 1970s. Union delegates at Lucas Aerospace proposed that the company, a military aircraft manufacturer, shift to generating products that would benefit the public rather than perpetuate war. Some of the products they planned to produce were dialysis machines, a cart that would improve mobility for children with a spinal condition and solar cells. Executives rejected their ideas and dismissed the union delegates. Capitalism, after all, favors what’s profitable; the military had far more money and lobbying power than any advocacy organization for children with physical disabilities could. So you have a perverse incentive structure where innovation necessarily gravitates towards that which is profitable and you may be shocked to learn that that which is profitable for certain corporations or bombing villages is not necessarily what’s good for humanity. And another scam that we see running time and time again, is the idea that innovation itself, and a lot of the innovation coming out of Silicon Valley in the last 10 to 15 years, is really about suppressing labor. They’re not actually creating any new products or any real new technologies. They don’t have any objective innovation merit to it. So let’s take, for example, Uber and Lyft, who’ve had basically zero innovation, they have a convenient app, people like to be able to have a more elegant way of calling a taxi, not really a major innovation, technology wise it’s not anything particularly original, but they exist basically to circumvent labor law and taxi and limousine regulations. Airbnb is the same. Airbnb has no real innovations, it simply exists to circumvent regulations on hotels. Their entire business model is predicated on subverting and circumventing and rewriting in many ways, the regulation of the taxi and limousine industry or the hotel industries.

Nima: Now, according to Ceilidh Gao, a staff attorney at the National Employment Law Project, quote, “In 2016, Uber and Lyft deployed 370 lobbyists around the country — more than Amazon, Microsoft and Walmart combined. In the first half of 2017, Uber [spent] $1.8 million to affect New York state-level legislation.” Now that legislation was on labor and livery laws. Uber and Lyft spent a combined $2.46 million in lobbying in California for 2019, more than major lobbying player Pacific Gas & Electric which spent just a little over $2 million. So, this money was largely spent on preventing legislation that would make Uber and Lyft drivers employees of the companies Uber and Lyft. Between 2013 and 2015, Uber spent nearly a million dollars on lobbyists in California alone. That’s more money than Apple and Facebook spent on lobbying in the state combined. Uber also spent $300,000 on lobbying in Massachusetts to protect and expand the gig economy system and repeal regulations on taxi driving. So when we’re talking about technological innovation and the entrepreneurial pursuits of success of companies like Uber and Lyft are definitely going to be included in that when you hear the word ‘innovation’ lauded by politicians and the press of course, but what does this technological innovation really do? It is paying, literally paying, in lobbying money to pull back industry regulation and destroy labor power.

Adam: Yeah, the big hack, the big market insight they had, was not a creation of anything that makes things better it’s to get rid of labor laws and regulations of who can drive a taxi who can own a hotel. That’s not really innovation in any meaningful sense. It’s just finding a creative vehicle to push back against labor law, and to create precarious workers for whom you don’t have to pay high wages, sustainable wages, or health insurance or one that’s, God forbid, unionized.

Nima: Right. And so something kind of only counts as being innovative in our popular discourse when it involves a huge amount of money poured into it, right? But why isn’t it considered innovative that certain indigenous communities have long figured out how to be actual responsible stewards of the land and to protect biodiversity for generations, for centuries, but even more specifically and critically, now, in our age of extreme climate change and ecological disaster?

Adam: Discussions of innovation, of course, the big elephant in the room is that they never talk about how innovation contributes to climate change or requires the exploitation of raw minerals from the Global South. The massive reduction in the cost of consumer goods over the past two decades is a product of advances in technology, yes, but it’s also a product of a race to the bottom labor outsourcing created by global trade agreements like the World Trade Organization and the previous year trade pacts like NAFTA, which have reduced wages globally and reduced wages the United States and Mexico. And there is massive political implications on the focus of consumer goods as the marker of innovation, as the mark of progress, products that are essential to human flourishing and civil engagement — housing, healthcare, child healthcare, and food — have gotten far more expensive in absolute terms since 1997, whereas shiny objects that have little or no societal value that are just sort of good for passing the time or distracting people — flatscreen TVs, software and toys and home furnishings — have gotten radically cheaper. There’s a study by, you guessed it, the American Enterprise Institute, by the way, they were saying this is a positive, that shows a graph that literally branches off. You see, hospital services, college textbooks and college tuitions increase by over 250 percent. Childcare has increased by 100 percent since 1997. These are real terms, these are absolute terms, this is not just because of inflation. Wages have gone up just slightly and housing has increased as has food and beverages. Now things that have remained roughly the same: cars and clothing, cell phone services have been reduced by roughly 50 percent and flatscreen TVs and software have gone down by about 100 percent. So the things that we mark as innovation, television, electronics, iPhones, that polls show and our former president cites as evidence of innovation are basically just shit you can watch shit on, you know, and I like to do that as much as anyone else, but is that really a mark of civilization?

So now again, the fact that TVs and phones have gotten cheaper is somewhat a product of just the nature of plastics and electronics in terms of the technological advancements that have been made, but it’s also a deliberate policy choice as well, which is, say outsourcing of labor and the focus on consumer products as a primary feature of economic growth. And this is where you get into sort of — what does it mean to have innovation? — in a country with 27 million people without health insurance, 600,000 homeless people on any given night, a total of two and a half million homeless children throughout the year, 150,000 people are going to die of coronavirus, 2.2 million people are incarcerated, about 15 million children in the United States, 21 percent of all children live in families below the federal poverty line. So where’s the innovation for that? What good is the cheaper TV or the cheaper phone or the cheaper air conditioner if you have such inequality and so many people suffering? I don’t know what that means. I don’t know what it means when Barack Obama gets into office in 2009, leaves in 2016, and he goes from having a Blackberry to an iPad. So fucking what? I mean, these things are nice, but they’re not a marker of progress. They’re a marker of having cool gadgets and that conflation and that conflation not only from the former president, but just how the media talks about innovation, I think is a dangerous one.

Nima: To talk more about this, we’re going to be joined by Vanessa A. Bee, lawyer, writer and associate editor at Current Affairs. Her writing has been featured in, among other places, Harper’s, New York Magazine, The Appeal, and In These Times. Vanessa will join us in just a moment. Stay with us.


Nima: We are joined now by Vanessa A. Bee. Vanessa, it is so great to have you on today’s show. Thanks for joining us on Citations Needed.

Vanessa A. Bee: Thank you for having me.

Adam: So I want to start off quickly by sort of talking about, we mentioned this at the top of the show, that socialism, such that it is, and I know it’s a highly contestable word, is not interchangeable with things the government spends money on, but I do think it’s useful to say, when you talk about the United States, or even any kind of Western country, like when the government spends money on something, and invests in the basic research and the basic foundation of something, it may not be socialism per se, but it’s definitely not what we’re told is capitalism or capitalist innovation. So I want to sort of clarify that ideological distinction that it’s not as if we’re doing the thing where we say socialism is when the government spends money, but you write in In These Times, you say, quote, “Instead of directing attention to what will protect the largest number of people from the greatest harm, capitalism steers innovation toward the largest profit in the shortest amount of time.” Which seems fundamental to what we talked about at the top of the show and I want you to talk about what you view as the primary dangers of this approach are and who specifically is left out of this incentive structure of quote-unquote “market innovation?”

Vanessa A. Bee

Vanessa A. Bee: Well, because of the primacy that capitalism places on profit, capitalism ends up being surprisingly bad at accounting for risk, other than in the short horizons. And in the medical space, to the extent that public research is tangled with and dependent on private investment, one danger you run into is that the private system that feeds funding into research and development and preparation is just not going to prioritize rare events. And by this, I mean events that are rare because of the type of disease that we’re talking about, a disease that maybe doesn’t occur very often in the general population, or rare in terms of the scale of the event, so meaning the likelihood of a very infectious and pretty deadly pandemic, spreading worldwide very quickly. And the reason is that some of the largest funding players, when you’re talking about vaccines, for instance, have shareholders to satisfy and shareholders are going to want to see returns in their lifetimes, and preferably in the next quarter, right? So sometimes these large firms have research arms of their own, and they’ll do the work themselves, other times you’ll see them partner with public institutions in these so-called public-private projects, and sometimes they’ll partner with smaller players that may be too small to have shareholders, but just by supplying the funding, they get a say in how the money is spent.

So you sort of end up in the same place where these public-sector institutions or smaller partners are also limited by what the large firms prioritize. And you might even enter this cycle where the smaller partners or public institution researchers that are applying for grants end up seeing what has been funded in the past and will shape their proposals, will shape their interests to increase their chances of getting a yes from the larger funding partners, which takes us back to ultimately, you know, what will yield the greatest profit. And in a different world, maybe this isn’t such a big deal because, you know, maybe you have massive investment in innovative treatment on the public side, but that’s just not the story in the United States, generally, at the federal level, at the state level, the United States has been just cutting, cutting, cutting, cutting university research budgets, encouraging austerity, even at places like the Center of Disease Control and Prevention, which leaves the public sector in a tough spot.

And sometimes a mix of private and public investment will actually get us to a place where we see interesting innovation and I didn’t go deep into this in the piece, but my mind goes to Hepatitis C, which for a long time just didn’t have great treatment options, but now there’s like this really fast acting hyper effective medication that can basically eradicate something as painful and infectious as Hepatitis C, but the market cares about returns first. So what we end up seeing are these exclusive rights that allow the manufacturers to prevent competitors from creating and developing cheaper generic treatments, and practically speaking, what you end up with, to get to your question of where does that leave the rest of us or rather, who does that leave behind, practically speaking when you end up having hotspots around the country where Hep C is concentrated, those hotspots provide an opportunity to get to the disease, right? And to improve public health outcomes for everyone else and prisons are a great example of that. There’s a lot of Hep C in prisons. And so here you have this very effective treatment, you could just target American prisons, and it would make a huge difference, but instead, what you end up finding in the United States is that wardens are doing the math of whether to help eradicate Hep C, and potentially punch a crater-sized hole in their budgets, or to not do that. And so of course, a lot of prisons are just opting to let Hep C spread, to let people die, needlessly and so, you know, at bottom, like who does that leave out? I think the answer is us. It’s the people who are at the mercy of those making those investment and pricing decisions.

Nima: Yeah, you know, one example that you gave in your piece is about the Ebola outbreak in 2014 through 2016, and you write that it’s like a particularly pertinent example of what can go wrong when private companies become responsible for vaccine development. Vanessa, can you tell us a little bit more about this, dig into that, how the private sector actually winds up slowing down the timeline of finding and then releasing a vaccine, which I think, you know, kind of important to be talking about right now, too?

Vanessa A. Bee: Yes, so this piece of my essay was very much sourced from a case study of the Ebola vaccine, which was published in the Journal of Law and the Biosciences. So from 1997 to 2015, almost three quarters of the one billion-ish dollars that have been allocated to Ebola research came from the public sector and from philanthropy. A very significant portion of that basic research, and by basic research, I mean, research that might not go anywhere, research for the sake of research, so a lot of that research came out of a Canadian public lab, which is called, or used to be called, the National Microbiology Laboratory in Winnipeg.

So that laboratory filed for a patent in Canada, in Europe, in the United States, they had a very good reason to do that, by 2004, there was a vaccine that was 100 percent effective in animals. So they filed their patent and then decided that for the part of the vaccine development process that requires preclinical trials and clinical trials that involve testing the vaccine on human beings. They were going to partner with the private sector. So in 2008, they started entering in talks with a small startup in Iowa, and the startup is called BioProtection Systems, or BPS, and they start talking, they sort of start hashing out a potential patent license agreement. Finally, in 2010, up to two years, they reach a deal in which the startup would have sole license to the vaccine but there’s a carveout that would allow the Canadian lab to use the vaccine for noncommercial research, for educational purposes and in the event of a humanitarian crisis, as well, and then in exchange BPS, so the startup, agrees to commercialize the vaccine and to provide written progress reports.

I note this last part because from 2010 to 2014, the startup provided zero written reports of their commercialization progress, they dragged their feet on conducting preclinical trials, they were super slow in even setting up a meeting with the Food and Drug Administration, so the American FDA, and they basically failed to complete any experimental objectives in their contract. Fast forward to the spring and summer of 2014, there’s a pretty bad Ebola outbreak in West Africa, and still no confirmed vaccine, despite the fact again that there was a vaccine that was 100 percent effective in animals 10 years earlier.

Nima: And it’s just sitting there under patent but not mass-produced?

Vanessa A. Bee: It’s just sitting there.

Nima: Yeah.

Vanessa A. Bee: And the Canadian lab has 800 vials that I think they mostly produce themselves, I don’t think the startup actually helped very much with those vials. They take those 800 files and just provide them to the World Health Organization directly. In November, I feel like this is all very fascinating, and I’ll try to go fast —

Nima: No, take your time.

Adam: You’re fine.

Vanessa A. Bee: But I just think it’s a weird story. So in November, the startup sub-licenses with a Big Pharma corporation called Merck and they basically transfer all their responsibilities to Merck. Merck ends up taking credit for the WHO-led efforts, even though all they did was hand over work that was shouldered entirely by the Canadian public sector from the financing to the technical expertise. From 2016 to 2017, Merck gets around $45 million, mostly from the American federal government, but there’s $5 million there from some charity and their one jobs is to create a stockpile of Ebola vaccines with the condition that at least part of the stockpile should be affordable for, you know, considering that Ebola outbreaks tend to hit below the equator, and they sort of do that but they don’t really meet their target. They’re producing doses by 2018, but the supply is not keeping up with the actual demand and the way the writers of this journal case study sort of reach a conclusion is by, really, I mean, so they fault the Canadian government for all of this, you know, for even sort of outsourcing labor that they clearly had the capacity of doing themselves, they fault it for undertaking massive austerity measures right around 2010, which, you know, close to the financial crisis, so who knows what was going on there, but all those funding cuts resulted in the Canadian lab losing researchers that had spent years and years getting the program this far, getting the vaccine this far and then the person who inherited the Ebola vaccine development program suffered from having not enough institutional support, and they end with this quote that I want to paraphrase here that I thought was really great. They say that the ‘Canadian labs decisions were clouded by the conventional logic of commercialization and just as that logic inspires licensing patent rights out to the private sector, it renders precarious funding and labor in public-sector science, while simultaneously obscuring the actual contributions of publicly funded research to therapeutic interventions, like the Ebola vaccine. This is how commercialization practice works to entrench the status quo.’ (Laughs.) And I thought, TL;DR, this is exactly it.

Adam: No, that pretty much sums it up. I want to zoom out a little bit and talk about the kind of meta-narrative around this, after all, this is a media-criticism podcast. And so I think the sort of general perception that people have is and I think, when I stress general, this is obviously a generalization, is that the technology that we interface with most is consumer technology at its sort of end point, its flashiest, its most shiny-object-est, right? So we see, ‘Oh, wow, the flatscreen TV has gotten really cheap.’ ‘Oh, the CGI of the Avengers 17 looks great.’ ‘My iPhone looks good.’ So the way people interface with the latest technology, right? ‘The newest Xbox looks great,’ is usually consumer products. And it’s the tip of the iceberg, of course, to use a very original metaphor and everything under the water that’s sort of put into that is obviously not seen, because people who build shiny objects, they sell you the shiny object as a function of their corporate brand. And so I guess I’m sort of curious from your perception to what extent you think, because this is the first thing people say when people, like if you criticize capitalism, 18 people with globe avis or sort of self-identified new liberals coming to you saying, ‘Well, you did it on your iPhone,’ or what about you know, ‘What about the iPhone,’ the iPhone is the greatest accomplishment, I guess, in the history of capital. But people’s perception is driven by consumer technology, a sort of superficial understanding of what it is to be on the vanguard of technology. I want you talk about that, versus say, for example, I don’t know the sort of dreary process of preventive disease or finding cures for the transfer of AIDS from mother to children, things that are not particularly sexy, how that or, you know, Elon Musk doing trips to the moon or Mars with his car, the sort of frivolous PR exercises, to what extent you think that those kind of glossed up interpretations of technology or sort of manifestations of technology obscure the real kind of science and effort that goes into creating science or even new products for that matter?

Image of a Tesla Roadster apparently orbiting Earth. (SpaceX)

Vanessa A. Bee: Yeah, I mean, I think the iPhone is a particularly interesting example to pick here because you look at the last three generations of iPhones, and you lost your earphone jack, and you got a better camera.

Adam: Right.

Vanessa A. Bee: You know, and that’s supposed to be the example of how well capitalism is working.

Nima: Innovative.

Vanessa A. Bee: Innovative. And I almost wonder, okay, well, one of two things could be going on, you know, I’m not certainly, I’m not a techie, maybe phone technology has plateaued, maybe this is sort of as good as it gets, maybe Apple has shareholders to satisfy, it’s going to keep cranking out iPhones because they are money makers, I mean, the last generation surpass $1,000 per iPhone, so that’s working out great for them, but they don’t actually want to really take risks, because risks means that if it doesn’t work out, then your profits are going to be impacted and if your profits are impacted, then you have to answer to the shareholders. And so I think that the iPhone, I don’t know, the iPhone might actually be an example of how little innovation there is and like, what that looks like when you can’t take risks because again, you have to be so careful to never go into the red. I also think those flashy examples are just so much less interesting and that’s why I didn’t focus on them very much in this piece. I think they’re just so much less interesting than the, what I view as the sort of heroic work, of developing treatments for rare diseases and vaccines for illnesses that kill thousands of people every year because so much of that work, it’s actually really risky to undertake basic research. Maybe you study neurotransmitters, and you end up figuring out how to sort of treat depression, but maybe nothing comes of it. Or maybe you think nothing comes of it until someone remembers that you wrote a paper, you know, in 1968 and now it’s 2018 and there’s a completely different condition that we think your paper could be helpful for, that’s actual risk, you know, to undertake all these years of work.

Adam: And it’s a very romantic notion of what science and even pure math is, right? It’s sort of, you do it for its own sake, because not everything has to have a consumer endpoint because if we did approach every single scientific or mathematical or biological question as an issue of products, we would never create anything because there’d be no pure research and, and I guess this speaks to the issue of like, outward facing consumer technology because when people say innovation, top of the show, we go over media examples of innovation, it really is always very sort of superficial consumer technology, Silicon Valley.

Nima: It’s the cool stuff that you’re able to buy.

Adam: Yeah. And even that is sort of just a bunch of coked-out VC guys pissing away money on vanity projects, or it’s a gamble for some new thingamajig that helps people sell ads or whatever it is, you know, and there may be some technological perks here and there, although I think they’re mostly incidental but when you see the word innovation, you don’t see it in the context of boring, dreary academia and we’re pandering a little bit here because a lot of our listenership is in academia. I’m okay to pander to that.

Nima: But not boring.

Vanessa A. Bee: Oh, never.

Adam: Let’s be honest, but you know what I mean? It’s sort of not sexy. It’s the hard shit in the background. You know what I mean? Sort of like when you have a hot-take podcast that rips off research other people do? No, I’m just kidding.

Nima: It’s innovative, Adam.

Adam: (Laughs.) You see the sort of outward facing of it.

Nima: Yeah, I think that, you know, one of the things that I’m struck by is how you lay out kind of the recipe in a way for innovation, right, Vanessa? You talk about there are some, you know, key ingredients, right? Ample resources like education and having the right equipment, being able to have the time and space and creativity to actually think about things to create new ways of thinking about things and the free flow of information, the sharing of past research, making that widely available and accessible for people down the line to then build on it. Can you maybe talk about how capitalism, and I think counterintuitively based on what we see in the media, how capitalism actually works to obstruct these conditions and how possibly more of a socialistic approach could create better conditions for this type of innovation?

Vanessa A. Bee: Yeah, so going through each ingredient, starting with ample resources, the trouble is with our society is that we’re deeply unequal, we are not a meritocracy, despite the narrative that we sort of tell ourselves. We are not a country that distributes resources fairly. So what we end up with is a system in which the zip code and economic class in which you’re born plays an outsized role in the education you get, the opportunities you’re able to pursue, the doors that open for you, the sort of basic freedom you get to pursue creative and innovative endeavors, how much room you get to fail before you succeed and there are always outliers and pull-yourself-up-by-the-bootstraps types that, you know, sort of are able to curb that, but the reality, I think, is that it just falls back on luck, good and bad in terms of who gets to be an innovator in the sciences and the arts and, you know, sort of other creative areas where we usually see innovation. And so, of course, I think that capitalism has a lot to do with it. I think the system picks winners and losers and is comfortable with that. It depends on having losers. And, you know, I use this term free and creative minds as being essential to fostering innovation. I ended up not expanding a ton of that in my essay, but I meant free in a very literal way. I just didn’t have room to go there.

And I don’t have to tell Adam this because I know that you also do a lot of work with The Appeal, but to go back to prisons for a minute, you know, the U.S. has one of the largest prison populations in the world, almost 2.3 million people nationwide, according to the Prison Policy Initiative, and the U.S. has this entire population of unemployed or underemployed people that it just holds in cages. A number of them are aging, granted, but certainly a significant chunk of those 2.3 million people are of working age, would be out in the world potentially innovating in unexpected ways and instead, their minds are being completely wasted on bottling Coca-Cola products for slave wages or whatever.

And in a different but related essay that I wrote for Current Affairs in 2019, I noted that, well, I got this from people who have actually taken economics and are probably better versed in all this than I am, but I think capitalism benefits from having a pool of workers just out of the labor force, right? Like, I think the closer we get to full employment, the more power workers have to demand more from their employers. But at the same time, you know, we’re clearly shooting ourselves in the foot here, there are tons of people who could, you know, like the person who invents the next I don’t know, I don’t want to see the next iPhone because I don’t want to pander to people who can’t think of any other examples, but the truth is that we could have an Einstein stuck in Parchman prison in Mississippi and that’s really our loss. It’s just an incredible waste of brainpower and as far as free flow of information capitalism is just such an impediment to that. I was thinking of the patent system, which I’ve mentioned before with Hep C, but there are also all these restrictions on labor that American capitalism permits and time zones for the sake of protecting profits.

So I’m thinking here of contract provisions that are called while there are different kinds, but non-compete agreements, for instance, prevent workers from, once they leave their employer, going to work for a competitor and sometimes that can be for several years. So what you end up seeing with at least a tenth of the workers who are under these contracts, under these restrictions, is that people will just leave their fields, like they will leave fields in which engineers who are very good at innovating in the space that they were working on, will just leave and do something else because people have to work and have to feed themselves. And I mean, if that’s not a form of impeding innovation, I don’t know what is. I think that socialism would promote different values. So I’m very much in a camp that socialism is a set of principles and at the heart of those principles, it’s, you know, democratic ownership of the means of production, payment price, but by this, you know, I think we mean our workplaces and also the products that emerge out of public investment. And that vision for me, necessarily imagines fairer redistribution of national resources, which would get at that first ingredient and pull resources. We want children to have access to quality education and support at home, regardless of their parents’ class, of whether their parents have disabilities, we want people to have more free time to explore and experiment, and we want people to not need to be somebody, to not need to have the last name Kushner to have access to funding to do interesting things.

Adam: I think your point about the sort of lost human capital is a fascinating one and one that kind of haunts me where, you know, for 99.9 percent of human history, really only white men of a certain class were permitted to innovate at all and that’s even to some extent, still true when you look at just institutional biases and sort of a softer version of it. And then you think of all the people that lived and died, it’s a little trite, but it’s true. All the people who lived and died, all the women who lived and died, all the non white people who lived and died, who never had an opportunity to contribute, it would seem that if your endpoint is innovation, or, you know, scientific breakthrough, reduce, you know, eliminating 95 percent of the world’s minds from the equation would not be the first thing you would do. But of course, that was not truly the goal of capitalism. The goal of capitalism was to perpetuate a power structure. So I think that’s such a poignant thing to think about, especially when you think about, you know, the numbers behind who gets, you know, what startups get financed, it’s people who have money already, who gets the, you know, gets to go to the right schools to get the right funding later on.

Nima: Meanwhile Pell Grants are gutted and so preventing people who are incarcerated from getting, you know, a certain kind of education and having those minds be able to have that freedom to do the work that they obviously can do. The brilliance that is caged in this society, largely on purpose, is, I think, a lot of what we’re talking about.

Adam: Before you go, what are you working on that you want to talk about? What are you up to? What can we look forward to? Let’s do some, let’s do some promotion here.

Vanessa A. Bee: Some promotion. Okay. I have an essay coming out very soon in The New Republic, in which I make a hard case for workers, worker owned cooperatives. Other people have made the case, but I think you should still read my essay when it comes out.

Adam: Very much looking forward to it.

Nima: Absolutely. We will all read that essay. All our listeners now have homework and they have to read that essay, but I’m sure they will definitely benefit from it, as we all have from this conversation. Vanessa A. Bee, lawyer, writer, associate editor at Current Affairs. Vanessa’s work has been featured in Harper’s, New York Magazine, The Appeal, In These Times, soon in The New Republic, you can follow her on Twitter @Vanessa_ABee. Vanessa, thank you so much for joining us today on Citations Needed.

Vanessa A. Bee: Thank you so much.


Adam: It’s interesting that she focused, she focuses in the article on vaccines and therapy and pharma specifically because it is this sort of ultimate case study and I know that the race to find a vaccine for coronavirus is the PR coup of the 21st century, nothing will even come close, whatever country, whatever entity, whatever corporation comes up with a workable vaccine, everybody wants to be that person. Now if it turns out it’s going to be Cuba or China, there’s going to be a fucking meltdown at the Atlantic Council crowd. But of course I don’t care.

Nima: Well, that’s the thing, right? That it’s always about stealing innovation, that now China —

Adam: It’s a vaccine who gives a shit if they steal it?

Excerpt from the New York Times story “Profits and Pride at Stake, the Race for a Vaccine Intensifies,” May 2, 2020.

Nima: Are going to ‘steal’ the technological, medical advances and therefore come out with the vaccine first. So that’s being warned against. We’ve seen that New York Times story, like, 14 times so far.

Adam: Yeah. Well, they’re peppering it so in the event that China comes up with a vaccine, they can also do the story where they say, ‘Well, they stole it from us.’

Nima: Exactly.

Adam: Trust us. We had it, but China, you know, they’re like the Klingons, they just steal technology, they don’t actually invent anything, because you know, they’re incapable of that. There’s going to be a whole public relations war. I mean, there’s been a dozen articles I’ve counted about the PR war about coronavirus, whether or not it’s good for China or good for the United States. I mean, I’m trying to imagine someone looking at a death count of 100,000 to 150,000 people from coronavirus in this country and thinking the thing that matters to you is what is the PR win for China? Who gives a fucking shit?

Nima: And which companies or nations profit from a potential vaccine?

Adam: Yeah, who cares? I’m very worried about a potential when and if there is a vaccine, the potential for, which I think is a very real potential, for an apartheid where, which countries get it, predominantly white countries get it, and everyone else has to get in the back of the line. I mean, that’s a real concern, it’s a little separate from that, but I do think how we administer this vaccine, if it is discovered in United States, is going to be a very potent political question and one that I think is going to, you know, if it is the U.S. that does it, it is going to have to be about ‘rah, rah America’ with all this increased nationalism, bipartisan, xenophobia, bipartisan nationalism is very scary. So, you know, the idea that we would, I don’t know, maybe cooperate or do what some countries have done in Europe, which is an open-source investigation, so you say, why does this have to be proprietary? That remains to be seen, and this is the modern Space Race, which is to say, whoever wins this is going to have a huge propaganda coup in their hands, assuming it’s not a virtual tie.

Nima: Which is why the idea of who is innovating, who is most innovative has to be the province of the capitalist, right? And so there can be claimed victory —

Adam: If it’s Cuba, I’m going to laugh my ass off.

Nima: (Laughs.)

Adam: Cause that’s going to piss off, that’s going to piss off a lot of people.

Nima: Oh, yeah, no, Marco Rubio would explode.

Adam: Marco Rubio is going to have a 500-tweet meltdown.

Nima: Well —

Adam: Cuba could, you know, Cuba’s in the hunt. They’re in the game.

Nima: So the good news of Marco Rubio potentially exploding is where I think we should leave this one, and so thank you, everyone, for joining us today for this episode of Citations Needed. Of course, you can follow the show on Twitter @CitationsPod, Facebook Citations Needed, become a supporter of our work through Patreon.com/CitationsNeededPodcast with Nima Shirazi and Adam Johnson. If you are able to do that at this time, it is so appreciated and as always, an extra special shout out goes to our critic-level supporters through Patreon. I’m Nima Shirazi.

Adam: I’m Adam Johnson.

Nima: Citations needed is produced by Florence Barrau-Adams. Associate producer is Julianne Tveten. Production assistant is Trendel Lightburn. Newsletter is by Marco Cartolano. Transcriptions are by Morgan McAslan. The music is by Grandaddy. Thanks everyone again for listening. We’ll catch you next time.


This episode of Citations Needed was released on Wednesday, May 20, 2020.

Transcription by Morgan McAslan.