Venture Colonialism: The VC Economic Package for Colonizing Countries in the Global South
We’ve been actively tracking the movements of venture capital to enter countries in the global south and set up predatory deals with local governments to invade the area for access to natural resources, land, cheap labor, and freedom from regulation of any kind, and recognition of sovereignty. To the latter point, something we have seen in a Peter-Thiel backed “startup city” that rests outside the jurisdiction of Nigeria despite being located in it.
Yes, big red flag there.
Perhaps most pressingly at the moment is El Salvador, with construction underway for a VC-backed “bitcoin city” and Bitcoin mining operation, as the country is cited for mass human rights abuses and El Salvador is in an open dictatorship. This deal involves using a volcano in El Salvador for wind and solar energy to hook up towards Bitcoin mining; they hope to have the largest mine in the world. The details of the volcano deal recently came out and venture capitalists literally have more ownership in the project than El Salvador; El Salvador’s government will only get 23% of the revenues.
You can check out this article for information on more of the specific VC settlements, including in Honduras, Kenya, Vietnam, and Dublin, Ireland, which seems like an outlier until you consider its history of being violently and devastatingly colonized by England.
In this post I want to talk more about what venture capitalists have on offer to governments in the global south: a full tool-kit for developing an oppressive state, a turn-key installation of a technofascist infrastructure, and a brand-new settlement: the venture capital city.
These are the elements of their “build a state”. Technology tends to replicate design patterns so this will be the same way they operate in all of these areas. Having essentially a pre-made package ready for “sale” to governments in the global south, will speed “adoption” (invasion) of these areas, makes it easier to scale as they implement the model across multiple cities and countries. We get our understanding here from how they are operated in the Bay Area; there they developed a model for take-over that is now being scaled across vulnerable areas of the world.
Obviously one of the major things VCs bring is capital and investment. If they are going to be setting up in your country, they bring a ton of money just in the things needed to support their population at its financial level. One of the major ways this happens is through the housing market; VC will easily outbid local and government to gain prime property and begin construction on it. Land is exceedingly cheap to them in some of these areas like El Salvador; this will enable a scale and speed of development that has no precedent in their US activity. They will bring in a number of startups and a number of highly-paid workers who will quickly continue colonizing the country.
The venture capital class needs housing and office space foremost. All very expensive and high-end, this means extremely lucrative contracting. They also need nice restaurants and bars, and hotels for visiting executives and teams; they often travel around to see each other. Airport development for private planes, too. So that is bringing a lot of money to the government and to the elite of that area; meanwhile, tech is amassing extremely low-paid labor from the country to build the city and provide the services, creating an extreme wealth gap in the region. We saw this in the Bay area where giants like Facebook had to be literally begged to grant $15/hr wage for key roles in maintaining their corporate campus, people in culinary, janitorial services, security and transportation who were not paid a living wage particularly as tech gentrification grew. We’ve also seen it in the pattern of predatory and abusive outsourcing where they are paying $1-2 / hr to workers in Africa — something they have just been busted doing yet again with OpenAI.
The venture capital technology portfolio is significantly more expansive than it was at the start of the web 2.0 bubble and even has expanded a lot during and in the wake of the pandemic. We have startups for just about everything you could need to start or re-do a city. The development of city infrastructure and residential infrastructure and the arrival of tech workers and tech elite, means business opportunities to venture capital startups ranging from concierge medicine to fitness companies, factory automation, food, clothing, etc… i.e. they have a broad range of growing startups looking for global footprints that they can bring in immediately as well.
Under these types of conditions, the socioeconomic picture of a region, the employment patterns, displacement, police violence, etc., change very quickly especially because tech thrives on a concentration of energy (capital) that accumulates. The change in the Bay Area and Oakland that took decades to achieve, will happen under these circumstances of power and wealth on a much accelerated timeframe. Basically, they know what they are doing now and have comprehensive development plans that will also be replicable across sites of settlement and can unfold simultaneously, so we get economics of scale kicking into effect as well.
Another thing that venture capital brings is policing and military technology. They have an entire fleet of weapons startups at this time that have been up and active in conflict zones already. In particular, borders come up as a massive part of the weapons package, with full-suite products from venture capital already implemented at the US/Mexico border.
The suite of products that VC can offer directly from their portfolio adds up to entire policing forces and militarization. Major parts of their weapons portfolio focus on autonomous drones and drone swarms for combat and surveillance. Recently, a “Smart Gun” came on the market from a PayPal Mafia operation, so we are talking about just literally access to guns before you even get to anything else. VCs and tech generally have provided a wide range of hardware support to police and military. In San Francisco, a tech CEO gave the Bay-area police a weaponized jet ski. The Bay Area cops, of course, being notoriously violent and corrupt, including sex trafficking minors and long history of violently putting down social movements such as the Black Panthers and continuing to Ferguson. Microsoft turned an SUV into a “mobile command center” purpose-built for use by policing agencies. Et cetra et centra.
We have a large variety of surveillance tools from hacking tools to body cams and surveillance drones. We have even experimented with a killer dog robot for police and could probably definitely get you some of those. We have Palantir, essentially our own personal CIA, that can come in a set up custom evil shit for whatever you need. We also have social media networks that we can manipulate for regimes — providing consumer data, censorship, and bot nets come to mind. Basically, whatever is a given government’s darkest version of itself as a police state, tech will come with its finest wares to manifest.
This is important because a lot of the areas that tech will be coming into are conflict regions or regions in significant civil conflict. VCs will thus be able to provide essentially a state of the art autonomous military and policing system, turn-key, upon reaching an agreement with a given government for tax and regulation free zones. Correct, this puts them in the position of running the CIA playbook on countries that, you guessed it, have had significant communist movement and significant histories of communist struggle. This is coming in the wake of a new military strategy being forwarded by venture capitalists that involves re-arming allies in an arms race / possible proxy conflict against China. So these settlements will absolutely be sites of arms dealing by the venture capital state.
In El Salvador we have been watching a situation unfold in which the VC settlement is going up during the ascension of a dictatorship and large-scale civil rights violations and human rights abuse. A great deal of this has to do with VCs creating the environments THEY feel safe in via violence and surveillance. This in itself requires the oppression of local people and the build-out of a militarized surveillance and policing system, which we saw in the Bay Area again. And in El Salvador we are watching the rise of a new police state with their new “mega prison”, which began construction last year as venture capital secured favorable taxation and regulation deals — including no tax on crypto and AI — and secured seats in the government as well.
Amnesty International has declared a state of human rights abuse by the dictatorial government in El Salvador. Now that VCs are firmly installed there and that they have the local residents firmly under the boot, now that they have secured natural resources like the volcano they are going to build a Bitcoin mine on (with more of the revenue and ownership going to venture capital than to the people of El Salvador)… now that they have crypto multimillionaire tourists coming in, startups signing up, and venture capital flowing into the state. Now we will see the venture capital state rise. But not just in El Salvador.
This will rise out of a dozen distributed points on the globe all at once.
The new fascist colonial empire.