Tuesday, May 16, 2023

Big Tech Has Made The Internet Terrible

jacobin  |  David Moscrop: Well, speaking of grifts, let’s talk about Twitter. The site was never a utopian online space, but it was previously at least better than it is now. What’s driving its collapse beyond Elon Musk purchasing it? Is there something better out there or something better to come?

Cory Doctorow: I think we should thank Elon Musk for what he’s doing because I think a lot of the decay of platforms and the abuses that enable that decay is undertaken slowly and with the finest of lines, so that it’s very hard to point at it and say that it’s happening. And Musk, a bit like Donald Trump, instead of moving slowly and with a very fine-tip pencil, he kind of grabs a crayon in his fist and he just scrawls. This can help to bring attention to issues on which it would otherwise be difficult to reach a consensus.

With Musk and with Trump, it’s much easier to identify the pathology at play and do something about it — and actually get people to understand what the struggle’s contours are and to join the struggle. I think in a very weird way, we should be thankful to Musk and Trump for this.

The pathology that I think that Musk is enacting in high speed is something I call “enshitification.” Enshitification is a specific form of monopoly decay that is endemic to digital platforms. And the platform is the canonical form of the digital firm. It’s like a pure rentier intermediary business where the firm has a set of users or buyers and it has a set of business customers or sellers, and it intermediates between them. And it does so in a low competition environment where antitrust law or competition laws are not vigorously enforced.

To the extent that it has access to things like capital, it can leverage its resources to buy potential competitors or use predatory pricing to remove potential competitors from the market. Think about Uber losing forty cents on the dollar for thirteen years to just eliminate yellow cabs and starve public transit investment by making it seem like there’s a viable alternative in rideshare vehicles. And we see predatory pricing and predatory acquisition in many, many, many domains.

Jeff Bezos is a grocer twice over. He runs a company called Amazon Fresh that’s an all-digital grocer and he runs a company called Whole Foods that’s an analog grocer. And if Amazon Fresh wants to gouge on the price of eggs, he just clicks a mouse and the price of eggs changes on the platform; he can even change the price for different customers or at different times of the day. If Whole Foods wants to change the price of eggs, they need teenagers on roller skates with pricing guns. And so, the ability to play the shell game really quickly is curtailed in the analog world.

The digital world does the same things that mediocre sociopath monopolists did in the Gilded Age, but they do it faster and with computers. And in some ways, this contributes to the kind of mythology surrounding the digital world’s Gilded Age equivalents. They can compose themselves as super geniuses because they’re just doing something fast and with computers that makes it look like an amazing magic trick, even though it’s just the same thing, but fast. And the way that this cycle unfolds is you use this twiddling to allocate surpluses — that is, to give goodies to end users so they come into the platform. This is things like loss-leaders and subsidized shipping.

In the case of Facebook or Twitter, it’s “you tell us who you want to hear from and we’ll tell you when they say something new.” That’s a valuable proposition; that’s a cool and interesting technology. And then you want to bring business customers onto the platform. And so, you’ve got to withdraw some surplus from the end users. So, you start spying on end users and using that to make algorithmic recommendations.


Just look at grocery stores in Canada. Loblaws is buying its competitors, engaged in predatory pricing, and abusing both its suppliers and customers to extract monopoly rents and leave everyone worse off. But there’s a thing that happens in the digital world that’s different. Digital platforms have a high-speed flexibility that is not really present in analog businesses.

John D. Rockefeller was doing all this stuff one hundred twenty years ago, but if Rockefeller was like, “I secretly own this train line and I use the fact that it’s the only way to get oil to market to exclude my rivals, and I’m worried that there’s a ferry line coming that will offer an alternate route that will be more efficient,” he can’t just click a mouse and build another train line that offers the service more cheaply until the ferry line goes out of business and then abandon the train line. The non-digital example is capital intensive, and it demands incredibly slow processes. With digital, you can do a thing that I call “twiddling,” which is just changing the business logic really quickly.


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