Only ’90s kids will remember Netscape, the original browser of the Internet before the era of Internet Explorer, Mozilla Firefox, and Google Chrome. But what we didn’t realize was the impact Netscape had on capitalism, and the way it symbolized and perhaps even initiated a recomposition of political economy. I have a hypothetical periodization of capitalism that I’ve been trying to work out, involving a distinction between industrial capitalism, finance capitalism, and technocapitalism, based on what industries are dominating the economy and directing the flow of capital, and studying the Netscape era yields some very useful information.
Netscape was the first real “unicorn”, a tech start-up that becomes valued in the billions of dollars by big investors. It was the brainchild of Jim Clark, an eccentric entrepreneur in the likes of Steve Jobs, whose impact on Silicon Valley has been documented in Michael Lewis’ The New New Thing (1999). Clark had already made a small fortune during the 1980s from his first start-up, Silicon Graphics, which had revolutionized graphic cards and 3-D rendering and paved the way for graphic user interfaces and the personal computer. But as the company grew, it was essentially taken over by Wall St. investors, who pushed out Clark and took control of the the profits.
Bankers taking control of up-and-coming companies wasn’t exactly a novel thing; it was how things were in the 1980s. But with Netscape, Clark was determined to not lose control and money to the bankers again. The new company, and its core product — an Internet browser — suddenly made the Internet more accessible to the average person by many orders of magnitude, and thus also meant a massive, massive market opportunity.
Its not clear exactly what kind of bargaining power Clark had against Wall St. Part of it was probably just a case of information asymmetry, and the bankers having severe FOMO. But in any case, he and his team played hard and fast against selling out the company too early, or for too few shares or seats on the board, and the result was that Netscape was the first tech firm that had engineers and programmers at the top, controlling the lion’s share of capital and the flow of profit. Wall St. made money too, of course, but they were simply following along in the wake. When the company launched its IPO in 1995, it turned the engineers and programmers into millionaires, and the co-founders into billionaires, and forever changed the game for Silicon Valley. Even though the company would be very quickly run off the road by Microsoft and Internet Explorer, the nature of its rise created a new standard for the ambitions and strategies of its entrepreneurs, and flipped the balance of power between tech capital and finance capital.
However, the Netscape era was only the beginning of a larger recomposition and re-balancing of global capitalism. The rise of technocapitalism rode on the Dot-com bubble, which burst in 2000 and eviscerated the industry. The survivors would kneel once again before finance capital — until the latter had its own reckoning in the 2008 financial crisis, after the housing bubble burst. Once the smoke cleared, tech would once again be in the vanguard of capitalism, based on the foundations built by companies like Netscape years earlier.