Why are digital markets structured as they are? Early Internet visionaries predicted that the ’net would permit people around the world to exchange goods, services, and labour directly between each other in communal and peer-to-peer fashions, bypassing the need for states and large corporations as gatekeepers to markets. Today, that vision is in some ways fulfilled: the digital economy is intensely transnational, with 90 percent of transactions on some marketplace platforms crossing national boundaries. Yet this economy is hardly communal: instead, it is ruled by the giant tech firms that own the platforms. Why did the digital economy end up being organized in such a centralized manner? How are regulators, workers, shareholders, and other interest groups attempting to react to the situation? And what geopolitical implications does it have when so much power is concentrated in a handful of companies headquartered in the United States and China?
In this course we approach these questions through the lens of economic sociology and political economy. The aim is to understand how institutions and market structures are shaped on the one hand by economic forces and competition, and on the other hand by firms’ and other interest groups’ attempts to maximize their own welfare.
Students will learn some of the economic and political history of the Western (and to a lesser extent the Chinese) Internet economy. In particular, we will examine the rise of ecommerce, remote gig work, and cloud computing from early 1990s to the present, as well as some of the regulatory and geopolitical reactions. Students will learn fundamental theory from economics, economic sociology, and political science that can be used to understand why the digital economy came to be shaped as it is and how it interacts with national and international politics. This historical context and theoretical toolkit will equip the students to critically assess some of the proposed policy interventions, technical fixes, and future trajectories for the digital economy.
Students will learn:
1) selected economic history of the Western Internet economy from 1990s to the present;
2) selected theory from economics, economic sociology, and political science, that can be applied to understand this economic history; and
3) how to use these analytical tools to critically assess some of the proposed policy interventions and technical approaches to reshaping the future of the digital economy.
