Digital financialization and surveillance capitalism in the Global South: The new technologies of empire

Abstract

This essay describes a hybrid form of contemporary colonization that involves the fusion of digital and financial realms to explore new frontiers in profit generation, governance, and control. While early research has explored this dual mode of financialization and surveillance capitalism, it primarily employs Western frameworks assuming a universalism that does not account for the coerced lived experiences of the digitally colonized across the Global South. Organization, with its commitment to providing critical epistemic space to non-Western subjectivities, should lead this quest by shining a light on the colonization of everyday spaces in the Global South, with the new technologies of empire.

Introduction

A recent New York Times (NYT) article enthusiastically describes millions of Indians being brought into the fold of formal finance through a digital payments system that is moving the country closer to the Reserve Bank of India’s goal of going completely digital. “The little QR code is ubiquitous across India’s vastness”; the authors explain how small shops, street vendors and even beggars have QR codes that can be used to make digital payments through mobile apps (Mashal and Kumar, 2023).

What the NYT article describes is yet another configuration of the digital financialization of everyday spaces and social relations across the Global South. As Harvey (2010) reminds us, financial innovation is critical to the survival of capitalism and to achieve compound growth, for capital cannot do without ceaseless reinvention. More significantly, the Indian example illustrates the interconnectedness between the growing financialization and digitalization of individual lives. Financialization was originally defined as the increasing presence of financial motives, financial markets, financial actors, and financial institutions in domestic and international economies (Epstein, 2005). A more micro view followed, with Aitken (2013) describing financialization as the conversion of major features of social life into financial asset streams (Zulfiqar, 2017). The move from analog to digital financialization includes a new dimension, that is the “often-coerced fusion of the digital and financial realms to create a new hybrid realm that opens new possibilities for profit generation and governance through the surveillance of individuals” (Jain and Gabor, 2020: 814).

In moving from analog to digital financialization, the state assumes a new role, which is to support the creation of national digital infrastructures to promote data driven finance. In India, under a digital identification project the government has issued around one billion Aadhars which are unique 12-digit sequences linked to citizen biometric and demographic information. Aadhars make it very cheap and quick for banks and other service providers to carry out identification checks on poor customers, many of whom do not have other forms of identification. Aadhars are now also required to access government services. Through the World Bank, other countries in the Global South are liaising with the Indian government to develop similar systems (Jain and Gabor, 2019). The Brazilian Pix is one such “success” story, where consumer data is centralized at the central bank.

My contention is that interventions like the Aadhar and the Pix represent hybrid colonization through a global system of finance and digital surveillance. This is clear from, on the one hand, the World Bank’s facilitation in the proliferation of digital finance technologies across the Global South, and on the other, global institutions such as the United Nations’ support of surveillance infrastructure in the same spaces. I spotlight this in the hope of stimulating critical management scholars’ interest in studying this newer form of imperialism. In this 30th anniversary issue, I acknowledge Organization’s role in uncovering the hegemonies of financialization (Lightfoot and Lilley, 2017; Willmott, 2010) and digital surveillance (Pignot, 2023; Weiskopf, 2020, 2023). I now call attention to how these tools are employed together to digitally colonize the Global South in the name of “inclusion” and “development.” This becomes especially urgent as a new era of AI threatens to digitally upend our social, economic, and political structures at escape velocity.

Digital financialization and its colonial roots

Digital financialization is a new form of financialization whose initial focus are populations that are neither included in digital spaces nor in financial ones and whose empowerment is claimed in terms of “digital financial inclusion.” As tech companies enter the domain of finance, once the preserve of banks, financial institutions in turn try to emulate tech companies to keep their market share from eroding, blurring the lines between tech and finance (Jain and Gabor, 2019).

Digital finance used the discourse of financial inclusion for the citizens of the Global South, as an entry point around the time microfinance was being painted as an answer to the access to finance imperative (Jain and Gabor, 2019). Access to finance became the mantra of global development at the turn of the century, when it was argued that “poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence” (Ferguson, 2007: iv). A similar contention appeared in the World Bank’s Microfinance Handbook (Ledgerwood, 2013) where access to finance was described as a right of the poor in the Global South as much as it was taken for granted by those in the Global North. Soon the G20 Principles for Innovative Financial Inclusion were pushing to bring the four billion or so “unbanked” global citizens into the fold of formal financial networks (Zulfiqar, 2017). The World Bank simultaneously launched its National Financial Inclusion Strategies (NFIS) to formulate and implement financial inclusion roadmaps across the South (The World Bank, 2015).

Digital finance quickly became incorporated in these grand plans, as an The Economist (2020) article enthused, “For those seeking to help the worst-off in poor countries, the mobile phone has been a magic wand” (as quoted in Bernards, 2022a). Here I situate digital finance within the broader context of “poverty finance” which Rankin (2013) defines as a global development strategy that coopts the Global South as an important site of financialization. This acts as a spatial fix for capital’s declining rate of profit by expanding into new or overlooked geographies to create fresh opportunities for accumulation (Harvey, 2006). At the household level, the financialization of daily life explains how these new forms of debt are increasingly used to finance social reproduction, as wages continue to fall and the state’s capacity to provide social welfare declines with the structural adjustments demanded of Southern countries by multilateral institutions, such as the International Monetary Fund (IMF) (Zulfiqar, 2022).

The spatial fix is made possible by colonial legacies (Bernards, 2022b). The colonial state in the 20th century presided over a continuous and simultaneous process of destruction, preservation, and transformation of indigenous precapitalist modes of production in order to coercively subsume them under the dynamic of metropolitan capitalism. The processes of extraction, from newly articulated capitalist or quasi-capitalist relations of production, led to new class formations and uneven development (Berman and Lonsdale, 1980). This in turn left a significant majority of the colonized population impoverished and in debt. Peasants and workers were indebted not to formal financial institutions but to the capitalist farms, mines and merchants that employed debt as a mechanism to discipline and commodify labor (Bernards, 2022a).

The colonial financial structure that developed in the colonies was not for the purpose of the latter’s economic development. Colonial banks were clustered in urban centers to serve the extraction activities of merchant capital and lending was restricted to large scale public works and larger colonial enterprises. Credit was not meant for the wider colonial economy nor were these banks interested in long-term investments as most of their assets were held in metropolitan centers (Bernards, 2022a).

These financial infrastructures continue to serve as the “imperial remains” (Kimari and Ernstson, 2020: 827) of colonization to determine unevenness across the South, nestled as they were within racialized regimes of land ownership and labor exploitation (Bernards, 2022b). Control of land in the colonial and postcolonial periods was and remains crucially related to access to credit, which remain in the hands of the colonial and postcolonial elite. Alongside this was the urban bias in the lending operations of commercial banks which mainly offered loans in the major cities.

Since independence postcolonial elites have preserved the structures of the colonial economy, particularly with respect to land and property, both of which serve as primary sources of collateral (Bernards, 2022b). The working classes meanwhile are provided with what Aitken (2007: 4) calls “popular finance” which are “schemes and projects developed by a diverse range of organizations and actors keen to incorporate poor and working classes into private financial spaces and to develop the forms of ‘agency’ and self-government among individuals within those populations required to manage their own form of ‘everyday capital.’” The organizations and actors include a coalition of multilateral institutions, international financial institutions, academics—mainly economists who work closely on grant funded projects with multilateral organizations such as the World Bank—as well as domestic political elites (Jain and Gabor, 2019).

Surveillance capitalism and the Global South

Populations coerced into the hybrid realm of digital finance not only become financial subjects but also subjects of surveillance. In the case of the Aadhar program, the Indian state makes surveillance a condition of citizens’ digital, mobile, financial access as well as access to public services (Jain and Gabor, 2020).

At the scale of the global, this becomes digital colonialism where instead of conquering land, big tech corporations use digital technology to expand across the South (Kwet, 2019). With their search engines, web browsers, smartphones, tablets and other hardware, operating systems, cloud infrastructure and services, social networking platforms, video streaming and online advertising, big tech corporations from the North, particularly the US, have been able to create technological dependencies that lead to endless resource extraction and the undermining of local industries (Kwet, 2019). Custodians of big data across the South are expert bodies located in the North (Mann, 2018). For instance, the Africa UN Data for Development Platform serves as a “one-stop-shop repository that captures high-quality data and evidence for the 2030 Agenda and SDGs from all the African countries” (United Nations Development Programme UNDP [UNDP], 2021). The Data for Development Platform sits at the nexus of digital, financial, and commercial infrastructures.

In The Age of Surveillance Capitalism, Zuboff (2019) contends that a new logic of accumulation is transforming human experience into behavioral data that is extracted, measured, assessed, and exploited (Weiskopf, 2020). This is made possible through surveillance infrastructures that render subjects legible and machine readable (Jain and Gabor, 2020). The real prize is user data obtained from the expansion of the data gaze with its algorithmic profiling and classification (Jain and Gabor, 2020; Weiskopf, 2023). Google and Meta have built multi-billion dollar corporations by subjecting users to ever increasing levels of surveillance (Jain and Gabor, 2020) and discipline through behavioral engineering that includes digital nudges, conditioning and reinforcement of desired behaviors (Weiskopf, 2020). Digital identification infrastructures such as the Aadhar make the process instantaneous and extremely accurate, making them popular with international finance, commerce, and development institutions, as well as intelligence agencies such as the US’ National Security Agency (NSA).

The Covid-19 pandemic brought the technologies of surveillance into sharp focus as individuals across the globe were tracked, traced, and quarantined without their consent (Anisin, 2022). Borders were shut while refugees and migrants were disproportionately targeted, further heightening their economic and social vulnerabilities. Across the European Union, the pandemic was used as an excuse to conduct technological experiments that were discriminatory, privacy-breaching, and endangered the lives of refugees (Molnar, 2022).

In short, there are three key interconnected features that make digital colonization possible. First, the global monopoly of big tech corporations over digital technology. Second, employing this monopoly in conjunction with global institutions such as the UN to plant surveillance infrastructures across the Global South to meeting big tech’s own needs. Surveillance is facilitated by imposing privatized forms of governance such as through the SDGs. Finally, big tech’s partnerships with global surveillance programs, such as that of the NSA, allows the latter to collect, use, and store user information from emails, phone calls, text messages, banking and social networking data. Together, these features impose the North’s new forms of economic and sociopolitical imperialism on the South (Kwet, 2019), while also enabling the governments of the South to spy on their own citizens.

Organization and the technologies of empire

Writing more than 10 years ago, Mir and Mir (2013) noted that while even critical traditions in organizational theory (OT) continue to be led by Eurocentric assumptions, Organization since its inception in 1994 has given space to narratives that decenter OT’s Eurocentrism. The commitment continues to be unwavering. In 2021, Organization produced a special issue on decolonizing management and organizational knowledge (MOK) (Jammulamadaka et al., 2021), which included articles from a diversity of empirical and epistemic settings from across the South to pushback against the dominance of Western neoliberal perspectives in MOK. With such a legacy, I expect Organization to continue to take the lead in shining a light on newer forms of neoliberal imperialism.

As a critical journal, over the years Organization has produced scholarship highlighting the financialization of everyday spaces, materials, and social relations (Lightfoot and Lilley, 2017; Willmott, 2010). More recently, it has published on contemporary modes of surveillance capitalism (Pignot, 2023; Weiskopf, 2020, 2023). Insightful as they are, these articles have not analyzed the phenomena in question from the vantage point of the South. It is my hope that scholarship exploring the new technologies of empire will find a home in Organization as it enters its fourth decade. This is especially urgent as a new and unprecedented era of artificial intelligence (AI) begins to unfold at lightning speed, taking every aspect of digitalization to new heights of potential danger for humanity. A recent example is Elon Musk’s brain implant startup Neuralink which just received the US Food and Drug Administration’s approval. What once seemed like pure science fiction is becoming a reality too fast for regulators to understand its far reaching impacts. While alarm bells are being rung across the Global North against the dangers of AI (Coy, 2023; Gregory and Hern, 2023), there is little to no conversation yet about its monopolizing and centralizing tendencies, and how those in the Global South are likely to become its worst sufferers.