Digital companies work the same way as their extractive forebears. When a big box store moves to a new neighborhood, it undercuts local businesses and eventually becomes the sole retailer and employer in the region. With its local monopoly, it can then raise prices while lowering wages, reduce labor to part-time status, and externalize the costs of healthcare and food stamps to the government.
The net effect of the business on the community is extractive. The town becomes poorer, not richer. The corporation takes money out of the economy—out of the land and labor—and delivers it to its shareholders.
A digital business does the same thing, only faster. It picks an inefficiently run industry, like taxis or book publishing, and optimizes the system by cutting out most of the people who used to participate. So a taxi service platform charges drivers and passengers for a ride while externalizing the cost of the car, the roads, and the traffic to others. The bookselling website doesn’t care if authors or publishers make a sustainable income; it uses its sole buyer or “monopsony” power to force both sides to accept less money for their labor. The initial monopoly can then expand to other industries, like retail, movies, or cloud services.
Such businesses end up destroying the marketplaces on which they initially depend.
Douglas Rushkoff blames capitalism.