In his classic 1945 article, The Use of Knowledge In Society, Friedrich Hayek writes that:

It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.

The claim that it is “more than a metaphor” to describe the price system in this way is pretty unambiguous. For Hayek, the market is a telecom network. This argument supplements the claims made by Ludwig von Mises, dating back to 1920, that the price system performs a kind of distributed, real-time computation, that no planner or economist could match (at least, not given the scale and complexity of modern capitalism).

In the post-War period, Chicago School economists developed this neoliberal logic to treat markets as not only efficient telecom networks or computers, but machines of democracy. As Gary Becker wrote in 1958, “There is relatively little to choose between an ideal free enterprise system and an ideal political democracy; both are efficient and responsive to preferences of the “electorate”. The assumption that democracy privileges “efficiency” and “responsiveness” to preferences reveals a cybernetic vision of politics, in which the problems of society are all ultimately reducible to the collecting and processing of information. It is an assumption that weaves its way through the political history of neoliberalism, and which now occupies an important place in the imaginaries of Silicon Valley.

As Tarleton Gillespie has detailed, the concept of ‘platforms’ has done important work in the early 21st century in enabling Silicon Valley firms to articulate their mission and the various (often ambiguous) benefits that they deliver. The term ‘platform’ simultaneously implies a raised space, a computational system, a policy agenda and a shared infrastructure, via which people will achieve their goals. In the Silicon Valley context, this term clearly refers to the giant tech platforms: Uber, YouTube, AirBnB and so on. However, at the risk of anachronism, we might say that the early neoliberals were effectively treating markets as platforms, that is, as computational-infrastructural-political resources, via which the various goals of their ‘users’ could be pursued. As Philip Mirowski has stressed, the neoliberals held a constructivist view of markets, refusing to see them as ‘natural’ or organic, but as technologies and instruments that needed to be designed, built and rolled out like other infrastructures.

By seeing the early neoliberal intellectuals as advocates of computational ‘platforms’, upon which politics, society and economy might run, we get to see important continuities between the project of 20th century Austro-American neoliberalism and the libertarian fantasies of contemporary Silicon Valley ‘founders’, such as Peter Thiel. At the same time, this helps makes sense of the seemingly paradoxical stance that American neoliberals and libertarians have typically taken towards competition, monopoly and anti-trust, famously expressed in Thiel’s stark phrase “competition is for losers”.

As I and others (such as Robert Van Horn) have documented, the Chicago School of economics performed a major pivot between the 1950s and the 1970s in its view of monopoly, shifting from an anti-trust ‘maximalist’ position (which believed the anti-trust authorities should attack monopoly at every turn, so as to enhance competition) to an anti-trust ‘minimalist’ position (which believed that anti-trust authorities needed firm economic evidence that a monopoly was more harmful than regulatory intervention, before they should intervene).

On the face of it, this can appear like an oddly anti-market position to take, seeing as it allows markets to become dominated by giant firms, exploited for exceptional profits and closed off. But if we consider that, for the neoliberals, markets were effectively ‘platforms’ all along, it is not clear that the state necessarily has any a priori role in their design, construction or roll-out, any more than – from a libertarian perspective – the state has any role in establishing the algorithms that govern Uber.

First of all, markets can be privately-provided services, that users pay to access. This is perhaps best exemplified by the market-platform of eBay. However, stock markets, such as the London Stock Exchange and Nasdaq, are also privately-owned, profit-making platforms. As sociologists such as Harrison White have long argued, markets compete against other markets. The phenomenon of the finely-tuned, digitised, privately-owned market is arguably a far more significant realisation of the neoliberal vision – as articulated by Mises, Hayek, Becker et al – than anything achieved via law and public regulation. Hayek’s claim, which I quote at the outset, that a market is literally a telecommunications network also implies the reverse: a slick telecommunications network can also be a market. There are good reasons, from a neoliberal perspective, why such market-networks should be owned and controlled by private monopolies.

It is widely recognised that a feature of platform business models is that of ‘network effects’, which in turn generates monopolistic tendencies. The value of a social media platform or financial market rises as it accrues more and more users, thereby embedding its dominant position vis a vis rivals. Breaking them up through anti-trust would de-value their network effects. The result are the types of monopolistic platform – Google, Facebook, Uber – that now dominate the internet and exert control over various aspects of social, economic and urban life. The rise of such businesses, achieving unprecedented levels of surveillance and calculation of everyday life, has in some corners reignited the socialist hope for rational economic planning, should they be brought into public or ‘social’ ownership.

What’s curious is that this socialist vision of planning by some centralised authority is not so very far from the ideology of libertarian ‘founders’ such as Thiel – it’s just that, for the latter, the authority is resolutely private in its governance and goals. As detailed in Max Chafkin’s The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power (which I reviewed here), Thiel and the ‘PayPal mafia’ with which he fraternised were always set on power and domination, rather than just money. In the early days of PayPal, a “World Domination Index” was created, a little software app which played the sound of a bell ringing, every time a new user created an account. Of course, in a sector governed partly by ‘network effects’, rapid growth counts for a great deal (because once users are locked into some other service provider, it’s too late). But the lust for a kind of sovereign power, to be able to look down on the world as if from a seat of government, seems to be an important feature of Thiel’s worldview, and seemingly of the other ‘founders’ in his milieu. The choice of the name ‘Uber’ speaks of a political vision of what a firm should aspire to, as much as a material or financial one.

Varieties of freedom

What this implies is that there are different ontologies or orders of freedom built into the ideology of neoliberalism and of Silicon Valley. This is what Mirowski has referred to as the “double truth” of neoliberalism. Firstly, there is the freedom conventionally associated with market activity: the freedom to choose, invest, consume, work and sell. This is freedom that, for neoliberals, is guaranteed so long as markets remain the basic template of society – which is why that template deserves to be insulated from whatever political or democratic temptations might disrupt it. It is a narrow vision of liberty, that involves basic responses to informational cues, whether they be those of the price system or some other information technology network, such as a rating system. Individuals governed in such a system behave in predictable, pattern-forming ways.

Secondly, there is the higher-order freedom of ‘founders’, which is far greater than the ordinary freedom to make choices, but really the freedom to construct whole social worlds. It is a freedom that, necessarily, is only available to a very rarefied minority. This was a freedom that was especially valued by Austrian conservatives, such as von Mises and Joseph Schumpeter. But in the form taken by Thiel and others, it is far closer to a political capacity than an ordinary economic one; far closer to ‘positive liberty’ than ‘negative liberty’. It is the freedom to create the very conditions of ordinary people’s freedom, something that we can witness all around us today, every time we find our choices being channelled via the search bar of Amazon or the menu interface of Uber Eats.

How can a worldview in which “competition is for losers” be deemed compatible with the so-called ‘market fundamentalism’ of neoliberalism? The answer, it seems to me, lies in recognising what kind of market neoliberals desired and why: not the market as celebrated by liberals such as Adam Smith, which emerged ‘naturally’ from social relations, facilitating a division of labour and steady improvements in productivity, but a technology capable of formatting the freedom of the masses. The challenge for ‘founders’, pursued feverishly since the collapse of the dotcom bubble in 2000, has been to design, build and own these technologies.

Will Davies is Director of the Political Economy Research Centre.

This is the first contribution of our new 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]