How Did American Capitalism Mutate Into American Corporatism? Æ Brownstone Institute

Every major company that once stayed far away from Washington now owns a similar giant palace in or around D.C., and they collect tens of billions in government revenue. Government has now become a major customer, if not the main customer, of the services provided by the large social media and tech companies. They are advertisers but also massive purchasers of the main product too. 

Amazon, Microsoft, and Google are the biggest winners of government contracts, according to a report from Tussel. Amazon hosts the data of the National Security Agency with a $10 billion contract, and gets hundreds of millions from other governments. We do not know how much Google has received from the US government, but it is surely a substantial share of the $694 billion the federal government hands out in contracts. 

Microsoft also has a large share of government contracts. In 2023, the US Department of Defense awarded the Joint Warfighter Cloud Capability contract to Microsoft, Amazon, Google, and Oracle. The contract is worth up to $9 billion and provides the Department of Defense with cloud services. It s just the beginning. The Pentagon is looking for a successor plan that will be bigger. 

Actually, we don t even know the full extent of this but it is gargantuan. Yes, these companies provide the regular consumer services but a main and even decisive customer is government itself. As a result, the old laughing stock line about backwards tech at government agencies is no more. Today government is a main purchaser of tech services and is a top driver of the AI boom too. 

via brownstone.org

Jeffrey A. Tucker.