How can political economists understand the collective mobilization of capital around the metaverse?

It is by now impossible to have not heard about Facebook’s identity crisis. Its 2021 rebranding as Meta and plans to eventually build the ‘Metaverse’ signal deeper concerns the company has so far been unable to resolve. With mounting regulatory pressure amid years of scandals, a declining user base, and ongoing privacy reforms by Apple that are predicted to cost Meta $10 billion in ad sales, the timing of announcing the Metaverse is, in all likelihood, no accident.

Derived from Neil Stephenson’s Snow Crash, the Metaverse is said to represent the next generation of the internet: a seamless network of networks facilitated by new kinds of interactivity such as 3D virtual reality environments, avatars, and new kinds of digital content enabled by blockchain and NFTs. The Metaverse has now been embraced by tech giants such as Microsoft and NVIDIA. South Korea’s Ministry of Science and ICT created a ‘Metaverse Alliance’ to encourage public-private partnerships in Metaverse development. There are already examples of Metaverses you can use today, such as Decentraland, Roblox, and the Sandbox. Most recently, Fortnite developer Epic Games, boosted by an influx of cash from Sony and Lego, has announced plans to build their own avatar filled Metaverse targeting the children’s gaming market. Beyond tech companies, retailers, clothing manufacturers, and even investment banks have all now begun to explore how their brand will colonize the Metaverse. Investment bank Morgan Stanley has predicted the Metaverse will become an $8 trillion opportunity in China alone. Citi has valued it at $13 trillion globally.

Within only a few months we have seen countless examples of companies beginning to territorialize the Metaverse. This, despite it being arguably more of a collective fantasy than anything else at this point. How is this possible? How do we explain this flurry of investment? Historically, virtual and augmented reality devices such as Google Glass have not exactly followed the path towards mass adoption as their designers had otherwise hoped for, and it remains to be seen whether existing 3D headsets will become mainstream peripherals. For that matter, there is a broader social history of how emerging digital technologies are laden with myths and anticipatory futures that work to mobilize capital and shape public understanding. Will the Metaverse then simply rehash these long-term trends, or is there something else to be said about it? Should we take the Metaverse seriously?

Academics are already beginning to debate the implications of the Metaverse. There have now been some excellent critical analyses on Meta’s ambitious plans, such as David Beer’s skepticism that the Metaverse will ever actually happen. Conversely, historian David Olusoga has been exploring potentials of virtual and augmented media to develop unique forms of storytelling about under-represented communities as part of the StoryTrails project. All of these are important discussions that merit further unpacking. As with any technological diffusion, there will likely be a complex and contested story to tell about the Metaverse’s sociotechnical change and cultural significance that will impact its social shaping.

We need to then think about how to write the material histories of the Metaverse, and the social implications they portend for larger issues of digital inclusion. This is particularly so in the case of Meta that has been grappling with larger structural issues that are challenging its revenue streams and public credibility.

These point to the need to situate the Metaverse in terms of how Silicon Valley (and the larger corporate cosmology of global brands and finance capital) understand changing data and property relations that structure how financial investment plays out in digital culture. We need to therefore ask key questions about the underlying political and economic contexts that are shaping Metaverse investment, and what sorts of new financial instruments and logics rationalize the Metaverse as the next-generation of internet infrastructure.

Living the Decentralized Life

Growing interest in the Metaverse is in part shaped by a perceived inability of current network infrastructures to accommodate new kinds of technological developments, markets, and politics. Networked technologies are in many ways symbolic of larger political ideologies for how to design and program sovereign power through software. These are often masked by normative claims of how we should be building technology. In Mark Zuckerberg’s own words: “technology that’s built around people, and how we actually experience the world and how we interact with each other. That’s what the Metaverse is all about.” Underlying Zuckerberg’s claim is that current technologies are not fit for purpose and must be rebuilt. That, for various ideological, political, economic, and technological reasons, existing internet architecture is seen as incompatible with a broader set of visions for how we should be living the decentralized life through blockchain, NFTs, DAOs, cryptocurrencies, and so on.

Meta’s insistence on building technology “around people” should be viewed with suspicion because of Facebook’s history of investing in what they call “people-based marketing”. People-based marketing originated from a Facebook acquisition of a digital marketing company, Atlas Solutions, and was used to build a marketing platform for ‘identity resolution’ that could help track Facebook users across devices and internet properties. Countless other companies and data brokers now try to unify data points across the web to develop comprehensive profiles of users. Building technology around people then, does not simply equate with making technology somehow more user-friendly or an interface that will be conducive to more ‘authentic’ sociality, but instead it is about creating a highly concentrated marketing infrastructure to make users identifiable and quantifiable as they move across the Metaverse. It remains to be seen then, to what extent Meta’s vision of the Metaverse will actually embrace open, decentralized architectures. Meta’s history of developing cross-device, identity resolution services that enable tracking across the open web suggests instead that their version of the Metaverse will likely try to consolidate surveillance for serving ads and tracking their performance.

It is also worth thinking about what kinds of financial instruments and relationships are helping breathe life into the Metaverse. Scholarly analysis into the implications of finance on digital platforms has shown that developers are constantly seeking new ways to extract value, be it monetary or data, by investing in things like free-to-play games, and revenue generation from asset sales such as avatar skins. Existing Metaverse platforms such as Decentraland already feature their own digital marketplaces where users can buy property and assets. Entire cities are now being built and, in some cases, colonized by corporations and private interests. Meta is also reported to be developing new financial tools by offering virtual currency for the Metaverse (“Zuck Bucks”), social and reputational tokens for rewarding users, and even traditional lending services. Although they have already tried—and failed—to develop a global cryptocurrency, Diem (formerly Libra), this new plan is to identify the course of least regulatory resistance, and also build the infrastructure to allow Meta to extract as much revenue from every transaction as possible, charging commission rates even as high as 47.5% on the sale of digital assets such as NFTs. This, despite Meta being critical of other companies doing the same thing, such as characterizing Apple’s 15-30% app store commission as monopolistic.

Moving forward, it will be important to examine how the Metaverse configures mechanisms of data extraction and financial reproduction to reflect on the political and cultural implications this will have on structuring emerging Metaversic space. Examining how Metaverse architectures are being built, by whom, and for what purpose will likely become a key focus in the political economy of Metaverses as finance and ideology become imbricated in the design of new virtual worlds.

The Metaverse advocated by Meta is better understood at best as a new kind of collective fantasy for turning people’s ‘real world experiences’ into an asset economy and property market. It is, at worst, a digital replica of post-neoliberal offshore sovereign state; an autonomous, virtual ‘data haven’ designed for ubiquitous surveillance and the extraction of ‘rents’ through commissions. Meta’s vision is exactly the kind of world that reflects the tech billionaire fantasy of monarchy rule over a sovereign territory with total control over the financial instruments, currencies, data, and users that sustains it.


Harrison Smith is Lecturer in Digital Media and Society at the University of Sheffield. His article “Software, Sovereignty and Exit”, written with Roger Burrows, came out in Theory, Culture and Society in 2021. It examined the impact of neoreactionary (NRx) thinking – that of Curtis Yarvin, Nick Land, Peter Thiel and Patri Friedman in particular – on contemporary political debates manifest in ‘architectures of exit’.

This is the second contribution of PERC’s series on the Silicon Valley ideology. Each week for the next two months, experts from the fields of political economy, political science, cultural studies and law will share their research perspectives on the recent trends that have animated the Silicon Valley bubble. If you wish to get involved or would like to pitch an idea for a contribution, get in touch with our editor Carla Ibled (c.ibled[at]