#microincentives

[mostlysignssomeportents]

The specific process by which Google enshittified its search

I'm touring my new, nationally bestselling novel The Bezzle! Catch me SATURDAY (Apr 27) in MARIN COUNTY, then Winnipeg (May 2), Calgary (May 3), Vancouver (May 4), and beyond!

All digital businesses have the technical capacity to enshittify: the ability to change the underlying functions of the business from moment to moment and user to user, allowing for the rapid transfer of value between business customers, end users and shareholders:

https://pluralistic.net/2023/02/19/twiddler/

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/04/24/naming-names/#prabhakar-raghavan

Which raises an important question: why do companies enshittify at a specific moment, after refraining from enshittifying before? After all, a company always has the potential to benefit by treating its business customers and end users worse, by giving them a worse deal. If you charge more for your product and pay your suppliers less, that leaves more money on the table for your investors.

Of course, it's not that simple. While cheating, price-gouging, and degrading your product can produce gains, these tactics also threaten losses. You might lose customers to a rival, or get punished by a regulator, or face mass resignations from your employees who really believe in your product.

Companies choose not to enshittify their products…until they choose to do so. One theory to explain this is that companies are engaged in a process of continuous assessment, gathering data about their competitive risks, their regulators' mettle, their employees' boldness. When these assessments indicate that the conditions are favorable to enshittification, the CEO walks over to the big "enshittification" lever on the wall and yanks it all the way to MAX.

Some companies have certainly done this – and paid the price. Think of Myspace or Yahoo: companies that made themselves worse by reducing quality and gouging on price (be it measured in dollars or attention – that is, ads) before sinking into obscure senescence. These companies made a bet that they could get richer while getting worse, and they were wrong, and they lost out.

But this model doesn't explain the Great Enshittening, in which all the tech companies are enshittifying at the same time. Maybe all these companies are subscribing to the same business newsletter (or, more likely, buying advice from the same management consultancy) (cough McKinsey cough) that is a kind of industry-wide starter pistol for enshittification.

I think it's something else. I think the main job of a CEO is to show up for work every morning and yank on the enshittification lever as hard as you can, in hopes that you can eke out some incremental gains in your company's cost-basis and/or income by shifting value away from your suppliers and customers to yourself.

We get good digital services when the enshittification lever doesn't budge – when it is constrained: by competition, by regulation, by interoperable mods and hacks that undo enshittification (like alternative clients and ad-blockers) and by workers who have bargaining power thanks to a tight labor market or a powerful union:

https://pluralistic.net/2023/11/09/lead-me-not-into-temptation/#chamberlain

When Google ordered its staff to build a secret Chinese search engine that would censor search results and rat out dissidents to the Chinese secret police, googlers revolted and refused, and the project died:

https://en.wikipedia.org/wiki/Dragonfly_(search_engine)

When Google tried to win a US government contract to build AI for drones used to target and murder civilians far from the battlefield, googlers revolted and refused, and the project died:

https://www.nytimes.com/2018/06/01/technology/google-pentagon-project-maven.html

What's happened since – what's behind all the tech companies enshittifying all at once – is that tech worker power has been smashed, especially at Google, where 12,000 workers were fired just months after a $80b stock buyback that would have paid their wages for the next 27 years. Likewise, competition has receded from tech bosses' worries, thanks to lax antitrust enforcement that saw most credible competitors merged into behemoths, or neutralized with predatory pricing schemes. Lax enforcement of other policies – privacy, labor and consumer protection – loosened up the enshittification lever even more. And the expansion of IP rights, which criminalize most kinds of reverse engineering and aftermarket modification, means that interoperability no longer applies friction to the enshittification lever.

Now that every tech boss has an enshittification lever that moves very freely, they can show up for work, yank the enshittification lever, and it goes all the way to MAX. When googlers protested the company's complicity in the genocide in Gaza, Google didn't kill the project – it mass-fired the workers:

https://medium.com/@notechforapartheid/statement-from-google-workers-with-the-no-tech-for-apartheid-campaign-on-googles-indiscriminate-28ba4c9b7ce8

Enshittification is a macroeconomic phenomenon, determined by the regulatory environment for competition, privacy, labor, consumer protection and IP. But enshittification is also a microeconomic phenomenon, the result of innumerable boardroom and product-planning fights within companies in which would-be enshittifiers try to do things that make the company's products and services shittier wrestle with rivals who want to keep things as they are, or make them better, whether out of principle or fear of the consequences.

Those microeconomic wrestling-matches are where we find enshittification's heroes and villains – the people who fight for the user or stand up for a fair deal, versus the people who want to cheat and wreck to make things better for the company and win bonuses and promotions for themselves:

https://locusmag.com/2023/11/commentary-by-cory-doctorow-dont-be-evil/

These microeconomic struggles are usually obscure, because companies are secretive institutions and our glimpses into their deliberations are normally limited to the odd leaked memo, whistleblower tell-all, or spectacular worker revolt. But when a company gets dragged into court, a new window opens into the company's internal operations. That's especially true when the plaintiff is the US government.

Which brings me back to Google, the poster-child for enshittification, a company that revolutionized the internet a quarter of a century ago with a search-engine that was so good that it felt like magic, which has decayed so badly and so rapidly that whole sections of the internet are disappearing from view for the 90% of users who rely on the search engine as their gateway to the internet.

Google is being sued by the DOJ's Antitrust Division, and that means we are getting a very deep look into the company, as its internal emails and memos come to light:

https://pluralistic.net/2023/10/03/not-feeling-lucky/#fundamental-laws-of-economics

Google is a tech company, and tech companies have literary cultures – they run on email and other forms of written communication, even for casual speech, which is more likely to take place in a chat program than at a water-cooler. This means that tech companies have giant databases full of confessions to every crime they've ever committed:

https://pluralistic.net/2023/09/03/big-tech-cant-stop-telling-on-itself/

Large pieces of Google's database-of-crimes are now on display – so much, in fact, that it's hard for anyone to parse through it all and understand what it means. But some people are trying, and coming up with gold. One of those successful prospectors is Ed Zitron, who has produced a staggering account of the precise moment at which Google search tipped over into enshittification, which names the executives at the very heart of the rot:

https://www.wheresyoured.at/the-men-who-killed-google/

Zitron tells the story of a boardroom struggle over search quality, in which Ben Gomes – a long-tenured googler who helped define the company during its best years – lost a fight with Prabhakar Raghavan, a computer scientist turned manager whose tactic for increasing the number of search queries (and thus the number of ads the company could show to searchers) was to decrease the quality of search. That way, searchers would have to spend more time on Google before they found what they were looking for.

Zitron contrasts the background of these two figures. Gomes, the hero, worked at Google for 19 years, solving fantastically hard technical scaling problems and eventually becoming the company's "search czar." Raghavan, the villain, "failed upwards" through his career, including a stint as Yahoo's head of search from 2005-12, a presiding over the collapse of Yahoo's search business. Under Raghavan's leadership, Yahoo's search market-share fell from 30.4% to 14%, and in the end, Yahoo jettisoned its search altogether and replaced it with Bing.

For Zitron, the memos show how Raghavan engineered the ouster of Gomes, with help from the company CEO, the ex-McKinseyite Sundar Pichai. It was a triumph for enshittification, a deliberate decision to make the product worse in order to make it more profitable, under the (correct) belief that the company's exclusivity deals to provide search everywhere from Iphones and Samsungs to Mozilla would mean that the business would face no consequences for doing so.

It a picture of a company that isn't just too big to fail – it's (as FTC Chair Lina Khan put it on The Daily Show) too big to care:

https://www.youtube.com/watch?v=oaDTiWaYfcM

Zitron's done excellent sleuthing through the court exhibits here, and his writeup is incandescently brilliant. But there's one point I quibble with him on. Zitron writes that "It’s because the people running the tech industry are no longer those that built it."

I think that gets it backwards. I think that there were always enshittifiers in the C-suites of these companies. When Page and Brin brought in the war criminal Eric Schmidt to run the company, he surely started every day with a ritual, ferocious tug at that enshittification lever. The difference wasn't who was in the C-suite – the difference was how freely the lever moved.

On Saturday, I wrote:

The platforms used to treat us well and now treat us badly. That's not because they were setting a patient trap, luring us in with good treatment in the expectation of locking us in and turning on us. Tech bosses do not have the executive function to lie in wait for years and years.

https://pluralistic.net/2024/04/22/kargo-kult-kaptialism/#dont-buy-it

Someone on Hacker News called that "silly," adding that "tech bosses do in fact have the executive function to lie in wait for years and years. That's literally the business model of most startups":

https://news.ycombinator.com/item?id=40114339

That's not quite right, though. The business-model of the startup is to yank on the enshittification lever every day. Tech bosses don't lie in wait for the perfect moment to claw away all the value from their employees, users, business customers, and suppliers – they're always trying to get that value. It's only when they become too big to care that they succeed. That's the definition of being too big to care.

In antitrust circles, they sometimes say that "the process is the punishment." No matter what happens to the DOJ's case against Google, its internal workers have been made visible to the public. The secrecy surrounding the Google trial when it was underway meant that a lot of this stuff flew under the radar when it first appeared. But as Zitron's work shows, there is plenty of treasure to be found in that trove of documents that is now permanently in the public domain.

When future scholars study the enshittocene, they will look to accounts like Zitron's to mark the turning points from the old, good internet to the enshitternet. Let's hope those future scholars have a new, good internet on which to publish their findings.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/04/24/naming-names/#prabhakar-raghavan

[mostlysignssomeportents]

Let’s start with how hard it is to not use Google. Google spends fifty billion dollars per year on deals to be the default search engine for Apple, Samsung, Firefox and elsewhere. Google spends a whole-ass Twitter, every single year, just to make sure you never accidentally try another search engine.

Small wonder there are so few search alternatives — and small wonder that the most promising ones are suffocated for lack of market oxygen.

Google Search is as big as it could possibly be. The sub-ten-percent of the search market that Google doesn’t own isn’t ever going to voluntarily come into the Google fold. Those brave iconoclasts are intimately familiar with Google Search and have had to override one or more defaults in order to get shut of it. They aren’t customers-in-waiting who just need a little more persuading.

That means that Google Search can’t grow by adding new customers. It can only grow by squeezing its existing customers harder.

For Google Search to increase its profits, it must shift value from web publishers, advertisers and/or users to itself.

/The only way for Google Search to grow is to make itself worse./

- Microincentives and Enshittification: How the Curse of Bigness wrecked Google Search

[mostlysignssomeportents]

Podcasting "Microincentives and Enshittification"

Tomorrow (Oct 25) at 10hPT/18hUK, I'm livestreaming an event called "Seizing the Means of Computation" for the Edinburgh Futures Institute.

This week on my podcast, I read my recent Medium column, "Microincentives and Enshittification," about the way that monopoly drives mediocrity, with Google's declining quality as Exhibit A:

https://pluralistic.net/2023/07/28/microincentives-and-enshittification/

It's not your imagination: Google used to be better – in every way. Search used to be better, sure, but Google used to be better as a company. It treated its workers better (for example, not laying off 12,000 workers months after a stock buyback that would have paid their salaries for the next 27 years). It had its users' backs in policy fights – standing up for Net Neutrality and the right to use encryption to keep your private data private. Even when the company made ghastly mistakes, it repented of them and reversed them, like the time it pulled out of China after it learned that Chinese state hackers had broken into Gmail in order to discover which dissidents to round up and imprison.

None of this is to say that Google used to be perfect, or even, most of the time, good. Just that things got worse. To understand why, we have to think about how decisions get made in large organizations, or, more to the point, how arguments get resolved in these organizations.

We give Google a lot of shit for its "Don't Be Evil" motto, but it's worth thinking through what that meant for the organization's outcomes over the years. Through most of Google's history, the tech labor market was incredibly tight, and skilled engineers and other technical people had a lot of choice as to where they worked. "Don't Be Evil" motivated some – many – of those workers to take a job at Google, rather than one of its rivals.

Within Google, that meant that decisions that could colorably be accused of being "evil" would face some internal pushback. Imagine a product design meeting where one faction proposes something that is bad for users, but good for the company's bottom line. Think of another faction that says, "But if we do that, we'll be 'evil.'"

I think it's safe to assume that in any high-stakes version of this argument, the profit side will prevail over the don't be evil side. Money talks and bullshit walks. But what if there were also monetary costs to being evil? Like, what if Google has to worry about users or business customers defecting to a rival? Or what if there's a credible reason to worry that a regulator will fine Google, or Congress will slap around some executives at a televised hearing?

That lets the no-evil side field a more robust counterargument: "Doing that would be evil, and we'll lose money, or face a whopping fine, or suffer reputational harms." Even if these downsides are potentially smaller than the upsides, they still help the no-evil side win the argument. That's doubly true if the downsides could depress the company's share-price, because Googlers themselves are disproportionately likely to hold Google stock, since tech companies are able to get a discount on their wage-bills by paying employees in abundant stock they print for free, rather than the scarce dollars that only come through hard graft.

When the share-price is on the line, the counterargument goes, "That would be evil, we will lose money, and you will personally be much poorer as a result." Again, this isn't dispositive – it won't win every argument – but it is influential. A counterargument that braids together ideology, institutional imperatives, and personal material consequences is pretty robust.

Which is where monopoly comes in. When companies grow to dominate their industries, they are less subject to all forms of discipline. Monopolists don't have to worry about losing disgusted employees, because they exert so much gravity on the labor market that they find it easy to replace them.

They don't have to worry about losing customers, because they have eliminated credible alternatives. They don't have to worry about losing users, because rivals steer clear of their core business out of fear of being bigfooted through exclusive distribution deals, predatory pricing, etc. Investors have a name for the parts of the industry dominated by Big Tech: they call it "the kill zone" and they won't back companies seeking to enter it.

When companies dominate their industries, they find it easier to capture their regulators and outspend public prosecutors who hope to hold them to account. When they lose regulatory fights, they can fund endless appeals. If they lose those appeals, they can still afford the fines, especially if they can use an army of lawyers to make sure that the fine is less than the profit realized through the bad conduct. A fine is a price.

In other words, the more dominant a company is, the harder it is for the good people within the company to win arguments about unethical and harmful proposals, and the worse the company gets. The internal culture of the company changes, and its products and services decline, but meaningful alternatives remain scarce or nonexistent.

Back to Google. Google owns more than 90% of the search market. Google can't grow by adding more Search users. The 10% of non-Google searchers are extremely familiar with Google's actions. To switch to a rival search engine, they have had to take many affirmative, technically complex steps to override the defaults in their devices and tools. It's not like an ad extolling the virtues of Google Search will bring in new customers.

Having saturated the search market, Google can only increase its Search revenues by shifting value from searchers or web publishers to itself – that is, the only path to Search growth is enshittification. They have to make things worse for end users or business customers in order to make things better for themselves:

https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys

This means that each executive in the Search division is forever seeking out ways to shift value to Google and away from searchers and/or publishers. When they propose a enshittificatory tactic, Google's market dominance makes it easy for them to win arguments with their teammates: "this may make you feel ashamed for making our product worse, but it will not make me poorer, it will not make the company poorer, and it won't chase off business customers or end users, therefore, we're gonna do it. Fuck your feelings."

After all, each microenshittification represents only a single Jenga block removed from the gigantic tower that is Google Search. No big deal. Some Google exec made the call to make it easier for merchants to buy space overtop searches for their rivals. That's not necessarily a bad thing: "Thinking of taking a vacation in Florida? Why not try Puerto Rico – it's a US-based Caribbean vacation without the transphobia and racism!"

But this kind of advertising also opens up lots of avenues for fraud. Scammers clone local restaurants' websites, jack up their prices by 15%, take your order, and transmit it to the real restaurant, pocketing the 15%. They get clicks by using some of that rake to buy an ad based on searches for the restaurant's name, so they show up overtop of it and rip off inattentive users:

https://pluralistic.net/2023/02/24/passive-income/#swiss-cheese-security

This is something Google could head off; they already verify local merchants by mailing them postcards with unique passwords that they key into a web-form. They could ban ads for websites that clone existing known merchants, but that would incur costs (engineer time) and reduce profits, both from scammers and from legit websites that trip a false positive.

The decision to sell this kind of ad, configured this way, is a direct shift of value from business customers (restaurants) and end-users (searchers) to Google. Not only that, but it's negative sum. The money Google gets from this tradeoff is less than the cost to both the restaurant (loss of goodwill from regulars who are affronted because of a sudden price rise) and searchers (who lose 15% on their dinner orders). This trade-off makes everyone except Google worse off, and it's only possible when Google is the only game in town.

It's also small potatoes. Last summer, scammers figured out how to switch out the toll-free numbers that Google displayed for every airline, redirecting people to boiler-rooms where con-artists collected their credit-card numbers and sensitive personal information (passports, etc):

https://www.nbcnews.com/tech/tech-news/phone-numbers-airlines-listed-google-directed-scammers-rcna94766

Here again, we see a series of small compromises that lead to a massive harm. Google decided to show users 800 numbers rather than links to the airlines' websites, but failed to fortify the process for assigning phone numbers to prevent this absolutely foreseeable type of fraud. It's not that Google wanted to enable fraud – it's that they created the conditions for the fraud to occur and failed to devote the resources necessary to defend against it.

Each of these compromises indicates a belief among Google decision-makers that the consequences for making their product worse will be outweighed by the value the company will generate by exposing us to harm. One reason for this belief is on display in the DOJ's antitrust case against Google:

https://www.justice.gov/opa/press-release/file/1328941/download

The case accuses Google of spending tens of billions of dollars to buy out the default search position on every platform where an internet user might conceivably perform a search. The company is lighting multiple Twitters worth of dollars on fire to keep you from ever trying another search engine.

Spraying all those dollars around doesn't just keep you from discovering a better search engine – it also prevents investors from funding that search engine in the first place. Why fund a startup in the kill-zone if no one will ever discover that it exists?

https://www.theverge.com/23802382/search-engine-google-neeva-android

Of course, Google doesn't have to grow Search to grow its revenue. Hypothetically, Google could pursue new lines of business and grow that way. This is a tried-and-true strategy for tech giants: Apple figured out how to outsource its manufacturing to the Pacific Rim; Amazon created a cloud service, Microsoft figured out how to transform itself into a cloud business.

Look hard at these success stories and you discover another reason that Google – and other large companies – struggle to grow by moving into adjacent lines of business. In each case – Apple, Microsoft, Amazon – the exec who led the charge into the new line of business became the company's next CEO.

In other words: if you are an exec at a large firm and one of your rivals successfully expands the business into a new line, they become the CEO – and you don't. That ripples out within the whole org-chart: every VP who becomes an SVP, every SVP who becomes an EVP, and every EVP who becomes a president occupies a scarce spot that it worth millions of dollars to the people who lost it.

The one thing that execs reliably collaborate on is knifing their ambitious rivals in the back. They may not agree on much, but they all agree that that guy shouldn't be in charge of this lucrative new line of business.

This "curse of bigness" is why major shifts in big companies are often attended by the return of the founder – think of Gates going back to Microsoft or Brin returning to Google to oversee their AI projects. They are the only execs that other execs can't knife in the back.

This is the real "innovator's dilemma." The internal politics of large companies make Machiavelli look like an optimist.

When your company attains a certain scale, any exec's most important rival isn't the company's competitor – it's other execs at the same company. Their success is your failure, and vice-versa.

This makes the business of removing Jenga blocks from products like Search even more fraught. These quality-degrading, profit-goosing tactics aren't coordinated among the business's princelings. When you're eating your seed-corn, you do so in private. This secrecy means that it's hard for different product-degradation strategists to realize that they are removing safeguards that someone else is relying on, or that they're adding stress to a safety measure that someone else just doubled the load on.

It's not just Google, either. All of tech is undergoing a Great Enshittening, and that's due to how intertwined all these tech companies. Think of how Google shifts value from app makers to itself, with a 30% rake on every dollar spent in an app. Google is half of the mobile duopoly, with the other half owned by Apple. But they're not competitors – they're co-managers of a cartel. The single largest deal that Google or Apple does every year is the bribe Google pays Apple to be the default search for iOS and Safari – $15-20b, every year.

If Apple and Google were mobile competitors, you'd expect them to differentiate their products, but instead, they've converged – both Apple and Google charge sky-high 30% payment processing fees to app makers.

Same goes for Google/Facebook, the adtech duopoly: not only do both companies charge advertisers and publishers sky-high commissions, clawing 51 cents out of every ad dollar, but they also illegally colluded to rig the market and pay themselves more, at advertisers' and publishers' expense:

https://en.wikipedia.org/wiki/Jedi_Blue

It's not just tech, either – every sector from athletic shoes to international sea-freight is concentrated into anti-competitive, value-annihilating cartels and monopolies:

https://www.openmarketsinstitute.org/learn/monopoly-by-the-numbers

As our friends on the right are forever reminding us: "incentives matter." When a company runs out of lands to conquer, the incentives all run one direction: downhill, into a pit of enshittification. Google got worse, not because the people in it are worse (or better) than they were before – but because the constraints that discipline the company and contain its worst impulses got weaker as the company got bigger.

Here's the podcast episode:

https://craphound.com/news/2023/10/23/microincentives-and-enshittification/

And here's a direct link to the MP3 (hosting courtesy of the Internet Archive; they'll host your stuff for free, forever):

https://archive.org/download/Cory_Doctorow_Podcast_452/Cory_Doctorow_Podcast_452_-_Microincentives_and_Enshittification.mp3

And here's my podcast's RSS feed:

http://feeds.feedburner.com/doctorow_podcast

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/07/28/microincentives-and-enshittification/

[mostlysignssomeportents]

Don’t Be Evil

Tonight (November 22), I'll be joined by Vass Bednar at the Toronto Metro Reference Library for a talk about my new novel, The Lost Cause, a preapocalyptic tale of hope in the climate emergency.

My latest Locus Magazine column is "Don't Be Evil," a consideration of the forces that led to the Great Enshittening, the dizzying, rapid transformation of formerly useful services went from indispensable to unusable to actively harmful:

https://locusmag.com/2023/11/commentary-by-cory-doctorow-dont-be-evil/

While some services have fallen harder and/or faster, they're all falling. When a whole cohort of services all turn sour in the same way, at the same time, it's obvious that something is happening systemically.

After all, these companies are still being led by the same people. The leaders who presided over a period in which these companies made good and useful services are also presiding over these services' decay. What factors are leading to a pandemic of rapid-onset enshittification?

Recall that enshittification is a three-stage process: first surpluses are allocated to users until they are locked in. Then they are withdrawn and given to business-customers until they are locked in. Then all the value is harvested for the company's shareholders, leaving just enough residual value in the service to keep both end-users and business-customers glued to the platform.

We can think of each step in that enshittification process as the outcome of an argument. At some product planning meeting, one person will propose doing something to materially worsen the service to the company's advantage, and at the expense of end-users or business-customers.

Think of Youtube's decay. Over the past year, Google has:

Dramatically increased the cost of ad-free Youtube subscriptions;

Dramatically increased the number of ads shown to non-subscribers;

Dramatically decreased the amount of money paid to Youtube creators;

Added aggressive anti-adblock;

Then, this week, Google started adding a five-second blanking interval for non-Chrome users who have adblockers installed:

https://www.404media.co/youtube-says-new-5-second-video-load-delay-is-supposed-to-punish-ad-blockers-not-firefox-users/

These all smack of Jenga blocks that different product managers are removing in pursuit of their "key performance indicators" (KPIs):

https://pluralistic.net/2023/07/28/microincentives-and-enshittification/

We can think of each of these steps as the outcome of an argument. Someone proposes a Youtube subscription price-hike, and other internal stakeholders object. These objections fall into two categories:

We shouldn't do this because it will make the product worse; and/or

We shouldn't do this because it will reduce the company's earnings.

Lots of googlers sincerely care about product quality. People like doing a good job, and they take pride in making good things. Many have sacrificed something that mattered in the service of making the product better. It's bad enough to miss your kid's school play so you can meet a work deadline – but imagine making that sacrifice and then having the excellent work you put in deliberately degraded.

I have been around Google's orbit since its early days, going to the odd company Christmas party in the early 2000s and giving talks at Google offices in cities all over the world. I've known hundreds of skilled googlers who passionately cared about making the best products they could.

For most of Google's history, those googlers won the argument. But they didn't do so merely by appealing to their colleagues' professional pride in a job well-done. For most of Google's history, the winning argument was a combination of "doing this bad thing would make me sad," and "doing this bad thing will make Google poorer."

Companies are disciplined by three forces:

Competition (the fear of losing business to a rival);

Regulation (the fear of legal penalties that would exceed the expected profits from a given course of action);

Self-help (the fear that customers or users will change their behavior, say, by installing an ad-blocker).

The ability of googlers to win enshittification arguments by appealing to the company's bottom line was a function of one or more of these three disciplining factors. The weakening of each of these factors is the reason that every tech company is sliding into enshittification at once.

For example, when Google contemplates raising the price of a Youtube subscription, the dissent might say, "Well, this will reduce viewership and might shift viewers to rivals like Tiktok" (competition). But the price-hiking side can counter, "No, because we have a giant archive, we control 90% of searches, we are embedded in the workflow of vloggers and other creators who automatically stream and archive to Youtube, and Youtube comes pre-installed on every Android device." Even if the company leaks a few viewers to Tiktok, it will still make more money in aggregate. Prices go up.

When Google contemplates increasing the number of ads shown to nonsubscribers, the dissent might say, "This will incentivize more users to install ad-blockers, and then we'll see no ad-revenue from them." The pro-ad side can counter, "No, because most Youtube viewing is in-app, and reverse-engineering the Youtube app to add an ad-blocker is a felony under Section 1201 of the Digital Millennium Copyright Act. As to non-app viewers: we control the majority of browser installations and have Chrome progressively less hospitable to ad-blocking."

When Google contemplates adding anti-adblock to its web viewers, the dissent might say, "Processing users' data in order to ad-block them will violate Europe's GDPR." The anti-adblock side can counter, "But we maintain the fiction that our EU corporate headquarters is in the corporate crime-haven of Ireland, where the privacy regulator systematically underenforces the GDPR. We can expect a very long tenure of anti-adblock before we are investigated, and we might win the investigation. Even if we are punished, the expected fine is less than the additional ad-revenue we stand to make."

When Google contemplates stealing performers' wages through opaque reshufflings of its revenue-sharing system, the dissent might say, "Our best performers have options, they can go to Twitch or Tiktok." To which the pro-wage-theft side can counter, "But they have no way of taking their viewers with them. There's no way for them to offer their viewers on Youtube a tool that alerts them whenever they post a new video to a rival platform. Their archives are on Youtube, and if they move them to another platform, there's no way redirect users searching for those videos to their new homes. What's more, any attempt to unilaterally extract their users' contact info, or redirect searchers or create a multiplatform client, violates some mix of our terms of service, our rights under DMCA 1201, etc."

It's not just Google. For every giant platform, the threats of competition, regulation and self-help have been in steady decline for years, as acquisitions, underenforcement of privacy/labor/consumer law, and an increase in IP protection for incumbents have all mounted:

https://locusmag.com/2020/09/cory-doctorow-ip/

When internal factions at tech companies argue about whether to make their services worse, there's a heavy weight tilting the scales towards enshittification. The lack of competition, an increase in switching costs for users and business-customers, and broad powers to prevent users from modifying the service for themselves all mean that even when a product gets worse, profits can still go up.

This is the culprit: monopoly, and its handmaiden, regulatory capture. That's why today's antimonopoly movement – and the cases against all the tech giants – are so important. The old, good internet was built by flawed tech companies whose internal ranks included the same amoral enshittifiers who are gobbling up the platforms' seed corn today. The thing that stood in their way before wasn't merely the moral character of colleagues who shrank away from these cynical maneuvers: it was the economic penalties that befell those who enshittified too rashly.

Incentives matter. Money talks and bullshit walks. Enshittification isn't due to the moral failings of individuals in tech companies. It's possible to have a good internet run by flawed people. But to get that new, good internet, we have to support technologists of good will and character by terrorizing their venal and cynical colleagues by hitting them where they live: in their paychecks.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/11/22/who-wins-the-argument/#corporations-are-people-my-friend

[mostlysignssomeportents]

The curse of bigness is by no means limited to Google. The other tech giants have each attained gigantic market shares in their respective territories. Even where there is a duopoly — say, the Google/Apple mobile duopoly, or the Google/Meta ad duopoly — growth is more likely to come through enshittification than competition.

Google and Meta don’t want to compete on their respective share of the ad-market, because each one is strong enough to seriously challenge the other. Instead, they illegally colluded to rig the ad market in order to steal from advertisers and publishers, who are soft targets.

Likewise Google/Apple’s mobile duopoly is more cozy than competitive. Google pays Apple $15–20 billion, every single year, to be the default search in Safari and iOS. If Google and Apple were competing over mobile, you’d expect that one of them would drop the sky-high 30 percent rake they charge on in-app payments, but that would mess up their mutual good thing. Instead, these “competitors” charge exactly the same price for a service with minimal operating costs.

But it’s not just tech that faces the curse of bigness: your bank, your insurer, your beer company, the companies that make your eyeglasses and your athletic shoes — they’ve all run out of lands to conquer, but instead of weeping, they’re taking it out on you, with worse products that cost more.

- Microincentives and Enshittification: How the Curse of Bigness wrecked Google Search

[mostlysignssomeportents]

Search and spam have always been at war. In the Altavista days, “search engine optimization” consisted of ending every page with seven paragraphs of white-on-white keywords (“keyword stuffing”).

Today, the SEO industry uses much more sophisticated techniques, locking horns with Google. Of course: Google’s the first — and often the last — place we go to for answers, so snagging top billing in a Google search results page is, approximately speaking, equivalent to being “true.”

Google is losing. Search for your local restaurant — a verified Google merchant, no less! — and the top result will be a scammer that cloned their website, jacked up their prices by 15 percent, who’ll take your order, cream off that sweet 15, and then pretend to be you and place the order with the restaurant.

Getting rooked for 15 percent on your takeout meal is one thing, but that’s strictly smalltime: the big money is in switching out the phone numbers Google gives for every major US airline, substituting numbers for boiler-rooms where scammers will take your credit card and rip you off for all you’re worth.

How did Google get this enshittified? And more to the point, why do we keep using it?

- Microincentives and Enshittification: How the Curse of Bigness wrecked Google Search

[mostlysignssomeportents]

The exec who decided to save money by reducing the stringency of phone number checking for business accounts didn’t announce this in a company-wide memo.

When you’re eating your seed-corn, it’s imperative that you do so behind closed doors, and tell no one what you’ve done. Like any sleight-of-hand artist, you want the audience to see the /outcome/ of the trick (the cost savings), not how it’s done (exposing every searcher in the world to fraud risk to save a buck).

- Microincentives and Enshittification: How the Curse of Bigness wrecked Google Search

[mostlysignssomeportents]

Zuck’s gravity-defying metaverse money-pit

Tomorrow (Oct 31) at 10hPT, the Internet Archive is livestreaming my presentation on my recent book, The Internet Con.

Think of everything that makes you miserable as being caught between two opposing, irresistible, irrefutable truths:

"Anything that can't go on forever eventually stops" (Stein's Law)

"Markets can remain irrational longer than you can remain solvent" (Keynes)

Both of these are true, even though they seemingly contradict one another, and no one embodies that contradiction more perfectly than Mark Zuckerberg.

Take the metaverse.

Zuck's "pivot" to a virtual world he ripped off from a quarter-century old cyberpunk novel (reminder: cyberpunk is a warning, not a suggestion) was born of desperation.

Zuck fancies himself an avatar of the Emperor Augustus (that's why he has that haircut) (no, really). The emperors of antiquity are infamous for getting all weepy when they run out of lands to conquer.

But the lachrymosity of emperors has little causal relationship to the anxieties of tech monopolists! Alexander weeps because he just loves a good conquest and when he finishes conquering the world, he's terminally bored. That's not Zuck's problem at all. When Zuck attains monopoly status, his company develops an autoimmune disorder, as his vicious princelings run out of enemies to destroy and begin to knife one another.

Any monopoly faces these destructive microincentives, but tech is exceptional here because tech has the realtime flexibility and speed that brick-and-mortar businesses can never match:

https://pluralistic.net/2023/02/19/twiddler/

Sociopaths with tech monopolies are worse for the same reason that road-rage would be worse in a flying car: adding new capacity to indiscriminate self-destructive urges turns ordinary car crashes into low-level airburst warfare:

https://pluralistic.net/2023/07/28/microincentives-and-enshittification/

The flexibility of digital gives tech platforms so much latitude to break things in tiny increments. A tech platform is like a Jenga tower composed of infinitely divisible blocks. The Jenga players are the product managers and executives who have run out of the ability to grow by attracting new business thanks to their monopoly dominance. Now they compete with one another to increase the yield from their respective divisions by visiting pain upon the business customers and end users their platform connects. By tiny increments, they increase the product's cost, lower its reliability, and strip it of its utility and then charge rent to restore its functionality:

https://pluralistic.net/2023/10/24/cursed-bigness/#incentives-matter

This is the terminal stage of enshittification, the unstoppable autocannibalism of platforms as they seek to harvest all the value created by business customers and end users, leaving the absolute minimum of residual value needed to keep both stuck to the platform. This is a brittle equilibrium, because the difference between "I hate this service but I just can't stop using it," and "Get me the fuck out of here" is razor-thin.

All it takes is one tiny push – a whistleblower, a livestreamed mass-shooting, a Cambridge Analytica – and people bolt for the doors. This triggers the final stage: the "pivot," which is a tech euphemism for "panic."

For Zuck, the pivot got real after a disappointing earnings call triggered a mass sell-off of Facebook stock, history's worst one-day value incineration, which lopped a quarter of a trillion dollars off the company's market cap:

https://www.bloomberg.com/news/articles/2022-12-19/dramatic-stock-moves-of-2022-led-by-meta-dive-nordic-flash-crash

This was when the metaverse became the company's top priority.

Now, in my theory of enshittification, the step that follows the pivot is death: "Finally, they abuse those business customers to claw back all the value for themselves. Then, they die":

https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys

Many people have asked me about the conspicuous non-death of Facebook! That's where I have to fall back on Stein's Law: "Anything that can't go on forever eventually stops." Facebook can't continue to annihilate value, alienate its workers, harm the public, hemorrhage money in support of a mediocrity's cherished folly forever. Can it?

Admittedly, it sure seems like it can. Facebook's metaverse pivot has thus far cost the company $46,500,000,000. That is: $46.5 billion. That's even more money than Uber torched, seeking to maintain the illusion that they will be able to create monopolies on both transport and the labor market for driving and recoup the billions the Saudi royal family let them use for the con:

https://pluralistic.net/2022/02/11/bezzlers-gonna-bezzle/#gryft

Don't worry: the Saudi royals are fine! They cashed out at the IPO, collecting a tidy profit at the expense of retail investors who assumed that a pile of shit as big as Uber must have a pony under it, somewhere:

https://pluralistic.net/2023/05/19/fake-it-till-you-make-it/#millennial-lifestyle-subsidy

Uber has doubled the cost of rides and halved drivers' wages, using illegal gimmicks like "algorithmic wage discrimination" to squeeze a little more juice out of the nearly exhausted husks of its workforce:

https://pluralistic.net/2023/04/12/algorithmic-wage-discrimination/#fishers-of-men

But Stein's Law hasn't been repealed. Drivers can't drive for sub-subsistence wages. Do that long enough and they'll literally starve: that's what "subsistence" means. We lost a decade of transit investment thanks to the Uber con, at the same time as traditional taxi drivers were forced out of the industry. Uber can't be profitable and still pay a living wage, and the fantasy of self-driving cars as a means of zeroing out the wage-bill altogether remains stubbornly, lethally unworkable:

https://pluralistic.net/2022/10/09/herbies-revenge/#100-billion-here-100-billion-there-pretty-soon-youre-talking-real-money

Which means we're at the point where you can get off a commuter train at a main station and find yourself stranded: no taxis at the taxi-queue, no busses due for an hour, and no Uber cars available unless you're willing to pay $95 for a ten-minute ride in a luxury SUV (why yes, this did happen to me recently, thanks for asking).

As more and more of us are exposed to these micro-crises, the political will to do something will increase. This can't go on forever. "Don't use commuter rail" isn't a viable option. "Walk three miles each way to the commuter rail station" isn't viable either. Neither is "Pay $95 for an Uber to get to the station." Something's gotta give…eventually.

"Eventually" is the key word here. Remember the corollary of Stein's Law: Keynes's maxim that "markets can remain irrational longer than you can remain solvent." Sure, anything that can't go on forever eventually stops, but that is no guarantee of a soft landing. You can't smoke two packs a day forever – but in the absence of smoking cessation, the eventual terminus of that habit is stage-four lung cancer. Keep hammering butts into your face and your last smoke will come out a crematorium chimney.

Zuckerberg hasn't merely blown a whole-ass Twitter on the metaverse with nothing to show for it – he's gotten richer while doing it! In the past year, his net worth increased by 130%, to $59 billion, thanks to an increase in Facebook's share-price, driven by investors who stubbornly remain irrational, keeping the Boy Emperor solvent long past any reasonable assessment of his performance.

What are these investors betting on? One possibility is that the rise and rise of Facebook's share-price represents a bet on technofeudalism. Since the Communist Manifesto, Marxists have been predicting the end of capitalism. That end seems to have come, but what followed capitalism wasn't socialism, it was the return of feudalism, an economic system where elites derive their wealth from rents, not profits:

https://pluralistic.net/2023/09/28/cloudalists/#cloud-capital

Profit is the income you get from investing in capital – machinery, systems, plant – and then harvesting the surplus value created by workers who mobilize this capital. Capitalism produces massive returns for its winners – in the Manifesto's first chapter, Marx and Engels just geek out about how productive and dynamic this system is.

But capitalism is also a Red Queen's Race, where the winners have to run faster and faster to stay in the same place. Capitalism drives competition, as other would-be winners pile into the sector, replicating the systems that the current winners are using and then improving on them. This is why the prophets of capitalist end-times like the FBI informant Peter Thiel say that "competition is for losers."

Capitalism's "profits" stand in contrast to the feudalist's "rents." Rents are income you get from owning something that other people need to produce things. The capitalist owns the coffee-shop, but the feudalist owns the building. When a rival capitalist opens a superior coffee-shop and drives the old shop out of business, the capitalist loses, but the rentier wins. Now they can rent out an empty storefront in the neighborhood everyone's coming to because of that hot new cafe.

Feudal and manorial lords also made their fortunes by extracting surplus value from workers, but these rentiers don't care about owning the means of production. The peasant in the field pays for their own agricultural equipment and livestock – control over the means of production is necessary for worker liberation, but it's not sufficient. The worker's co-op that owns its factory can still find the value it produces bled off by the landlord who owns the land the factory sits on.

The jury's still out on whether American workers really see themselves as "temporarily embarrassed millionaires," but America's capitalists have a palpable, undeniable loathing for capitalism. The dream of an American "entrepreneur" is *PassiveIncome: money you get from owning something capitalists and/or workers use to create value. Digital technology creates exciting new possibilities for rent-extraction: a taxi-operator had to buy and maintain a car that someone else drove. Uber can offload this hassle onto its drivers and rent out access to the chokepoint it created between drivers and riders, charging all the traffic can bear. This is feudalism in the cloud – or as Yannis Varoufakis calls it, cloudalism.

In Varoufakis's Technofeudalism, he describes Amazon as a feudal venture. From a distance, Amazon seems like a bustling marketplace of manic capitalism, with sellers avidly competing to offer more variety and lower costs in a million independently operated storefronts. But closer inspection reveals that Amazon is a planned economy, not a market.

Every one of those storefronts pays rent to the same landlord – Amazon – which determines which goods can be offered for sale. Amazon sets pricing for those goods, and extracts 45-51% of every dollar those sellers make. Amazon even controls which goods are shelved at eye-height when you enter the store, and which ones are banished to a dusty storeroom in a distant sub-basement you'll never find:

https://pluralistic.net/2023/06/14/flywheel-shyster-and-flywheel/#unfulfilled-by-amazon

Zuck's metaverse is pure-play technofeudalism, Amazon taken to the logical extreme. It's easy to get distracted by the part of Zuck's vision that will convert us all into legless, sexless, heavily surveilled low-resolution cartoon characters. But the real action isn't this digitization of our fleshy wants and needs. Zuck didn't spend $46.5B to torment us.

The cruelty isn't the point of the metaverse.

The point of the metaverse is to rent us out to capitalists.

Zuck doesn't know why we would use the metaverse, but he believes that if he can convince capitalists that we all want to live there, that they'll invest the capital to figure out how to serve us there, and then he can extract rent from those capitalists and start earning "passive income." It's an Uber for Cyberpunk Dystopias play.

Zuck's done this before. Remember the "pivot to video?" Zuckerberg wanted to compete with Youtube, but he didn't want to invest in paying for video production. Videos are really expensive to produce and the median video gets zero views. So Zuck used his captive audience to trick publishers into financing his move into video. He fraudulently told publishers that videos were blowing up on Facebook, outperforming boring old text by vast margins.

Publishers borrowed billions and raised billions more in the capital markets, financing the total conversion of newsrooms from text to video and precipitating a mass extinction event for print journalists. Zuck kept the con alive by giving away (fewer) billions to some of those publishers, falsely claiming that their videos were generating fortunes in advertising revenue. These lucky, credulous publishers became judas goats for their industry, luring others into the con, the same way that the "lucky" guy a carny lets win a giant teddy-bear at the start of the day lures others into putting down $5 to see if they can sink three balls in a rigged peach-basket.

But when we stubbornly refused to watch videos on Facebook, Zuck stopped spreading around these convincer payouts, and precipitated a second mass-extinction event in news media, as the new generation of video journalists joined their predecessors in Facebook-driven unemployment. Given this history, it's surreal to see publishers continue to insist that Facebook is stealing their content, when it is so clearly stealing their money:

https://www.eff.org/deeplinks/2023/04/saving-news-big-tech

Metaverse is the new Pivot to Video. Zuckerberg is building a new world, which he will own, and he wants rent it to capitalists, who will compete with one another in just the way that Amazon's sellers compete. No matter who wins that competition, Zuckerberg will win. The prize for winning will be a rent increase, as Zuckerberg leverages the fact that your "successful" business relies on Facebook's metaverse to drain off all the value your workers have produced:

https://pluralistic.net/2022/12/18/metaverse-means-pivot-to-video/

This can't last forever, but how long until Zuck's reality distortion field runs out of battery? That's the $46.5B question.

The market can certainly remain irrational for a hell of a long time. But the market isn't the only force that regulates corporate outcomes. Regulators also regulate. Europe's GDPR is now seven years old, and it plainly outlaws Facebook's surveillance.

For nearly a decade, Facebook has pretended that this wasn't true, and they got away with it. Mostly, that's thanks to the fact that Ireland is a corporate crime-haven with a worse-than-useless Data Protection Commission:

https://pluralistic.net/2023/05/15/finnegans-snooze/#dirty-old-town

But anything that can't go on forever will eventually stop. Facebook has finally been dragged into EU federal jurisdiction, where it will face exterminatory fines if it continues to spy on Europeans:

https://pluralistic.net/2022/12/07/luck-of-the-irish/#schrems-revenge

In response, Facebook has rolled out a subscription version of its main service and its anticompetitive acquisition, Instagram:

https://about.fb.com/news/2023/10/facebook-and-instagram-to-offer-subscription-for-no-ads-in-europe/

For €10/month, Facebook will give you an ad-free experience across its service offerings (it's €13/month if you pay through an app, as Facebook recoups the 30% #AdTax rents that the feudal Google/Apple mobile duopoly extracts).

But this doesn't come close to satisfying Facebook's legal obligations under the GDPR. The GDPR doesn't ban ads, it bans spying. Facebook spies on every single internet user, all the time. The apps we use are built with "free" Facebook toolkits that extract rent from the capitalists who make them by harvesting our data as we use their apps. The web-pages we visit have embedded Facebook libraries that do the same thing for web publishers. Facebook buys our data from brokers. Facebook has so many ways of spying on us that there's almost certainly no way for Facebook to stop spying on you, without radically transforming it operation.

To comply with the GDPR, Facebook must halt surveillance advertising altogether. There's no way to square "spying on users" with "you can't surveil without explicit consent, and you can't punish people for refusing."

And of course, "not spying" isn't the same as "not advertising." "Contextual advertising" – where ads are placed based on the thing you're looking at, not who you are and what you do – is hundreds of years old. Context ads underperform surveillance ads by a slim margin – about 5% – but they're vastly more profitable for publishers. That's because surveillance ads are feudal, controlled by rentiers like Facebook, who own vast troves of the surveillance data needed to run these ads. Traditional ad intermediaries (agencies, brokers) took 10-15% out of the total advertising market. Ad-tech companies – the Google/Facebook duopoly – take 51% out of every ad dollar spent.

Eliminate surveillance ads and you torch their feudal estates. Facebook will always know more about someone reading a news article than the publisher – but the publisher will always know more about the article than Facebook does:

https://www.eff.org/deeplinks/2023/05/save-news-we-must-ban-surveillance-advertising

There are rents under capitalism, just as there are profits under feudalism. The defining characteristic of a system is what happens when rents and profits come into conflict. If profits win – for example, if productive companies beat patent trolls, or if news publishers escape Facebook's rent-extraction – then the system is capitalist. If rents win – if investors continue to bet large on the metaverse as its losses pass $50 billion and head for the $100 billion mark – then the system is feudal.

Anything that can't go on forever will eventually stop. The question isn't whether the platforms will eventually become so enshittified that they die – the question is whether they will go down in an all-consuming fireball, or whether they'll go down in a controlled demolition that lets us evacuate the people they've trapped inside them first:

https://pluralistic.net/2023/07/09/let-the-platforms-burn/

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/10/30/markets-remaining-irrational/#steins-law

Image: Diego Delso (modified) https://commons.wikimedia.org/wiki/File:Puente_de_las_cataratas_Victoria,_Zambia-Zimbabue,_2018-07-27,_DD_10.jpg

CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0/

[mostlysignssomeportents]

Subprime gadgets

I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me THIS SUNDAY in ANAHEIM at WONDERCON: YA Fantasy, Room 207, 10 a.m.; Signing, 11 a.m.; Teaching Writing, 2 p.m., Room 213CD.

The promise of feudal security: "Surrender control over your digital life so that we, the wise, giant corporation, can ensure that you aren't tricked into catastrophic blunders that expose you to harm":

https://locusmag.com/2021/01/cory-doctorow-neofeudalism-and-the-digital-manor/

The tech giant is a feudal warlord whose platform is a fortress; move into the fortress and the warlord will defend you against the bandits roaming the lawless land beyond its walls.

That's the promise, here's the failure: What happens when the warlord decides to attack you? If a tech giant decides to do something that harms you, the fortress becomes a prison and the thick walls keep you in.

Apple does this all the time: "click this box and we will use our control over our platform to stop Facebook from spying on you" (Ios as fortress). "No matter what box you click, we will spy on you and because we control which apps you can install, we can stop you from blocking our spying" (Ios as prison):

https://pluralistic.net/2022/11/14/luxury-surveillance/#liar-liar

But it's not just Apple – any corporation that arrogates to itself the right to override your own choices about your technology will eventually yield to temptation, using that veto to help itself at your expense:

https://pluralistic.net/2023/07/28/microincentives-and-enshittification/

Once the corporation puts the gun on the mantelpiece in Act One, they're begging their KPI-obsessed managers to take it down and shoot you in the head with it in anticipation of of their annual Act Three performance review:

https://pluralistic.net/2023/12/08/playstationed/#tyler-james-hill

One particularly pernicious form of control is "trusted computing" and its handmaiden, "remote attestation." Broadly, this is when a device is designed to gather information about how it is configured and to send verifiable testaments about that configuration to third parties, even if you want to lie to those people:

https://www.eff.org/deeplinks/2023/08/your-computer-should-say-what-you-tell-it-say-1

New HP printers are designed to continuously monitor how you use them – and data-mine the documents you print for marketing data. You have to hand over a credit-card in order to use them, and HP reserves the right to fine you if your printer is unreachable, which would frustrate their ability to spy on you and charge you rent:

https://arstechnica.com/gadgets/2024/02/hp-wants-you-to-pay-up-to-36-month-to-rent-a-printer-that-it-monitors/

Under normal circumstances, this technological attack would prompt a defense, like an aftermarket mod that prevents your printer's computer from monitoring you. This is "adversarial interoperability," a once-common technological move:

https://www.eff.org/deeplinks/2019/10/adversarial-interoperability

An adversarial interoperator seeking to protect HP printer users from HP could gin up fake telemetry to send to HP, so they wouldn't be able to tell that you'd seized the means of computation, triggering fines charged to your credit card.

Enter remote attestation: if HP can create a sealed "trusted platform module" or a (less reliable) "secure enclave" that gathers and cryptographically signs information about which software your printer is running, HP can detect when you have modified it. They can force your printer to rat you out – to spill your secrets to your enemy.

Remote attestation is already a reliable feature of mobile platforms, allowing agencies and corporations whose services you use to make sure that you're perfectly defenseless – not blocking ads or tracking, or doing anything else that shifts power from them to you – before they agree to communicate with your device.

What's more, these "trusted computing" systems aren't just technological impediments to your digital wellbeing – they also carry the force of law. Under Section 1201 of the Digital Millennium Copyright Act, these snitch-chips are "an effective means of access control" which means that anyone who helps you bypass them faces a $500,000 fine and a five-year prison sentence for a first offense.

Feudal security builds fortresses out of trusted computing and remote attestation and promises to use them to defend you from marauders. Remote attestation lets them determine whether your device has been compromised by someone seeking to harm you – it gives them a reliable testament about your device's configuration even if your device has been poisoned by bandits:

https://pluralistic.net/2020/12/05/trusting-trust/#thompsons-devil

The fact that you can't override your computer's remote attestations means that you can't be tricked into doing so. That's a part of your computer that belongs to the manufacturer, not you, and it only takes orders from its owner. So long as the benevolent dictator remains benevolent, this is a protective against your own lapses, follies and missteps. But if the corporate warlord turns bandit, this makes you powerless to stop them from devouring you whole.

With that out of the way, let's talk about debt.

Debt is a normal feature of any economy, but today's debt plays a different role from the normal debt that characterized life before wages stagnated and inequality skyrocketed. 40 years ago, neoliberalism – with its assaults on unions and regulations – kicked off a multigenerational process of taking wealth away from working people to make the rich richer.

Have you ever watched a genius pickpocket like Apollo Robbins work? When Robins lifts your wristwatch, he curls his fingers around your wrist, expertly adding pressure to simulate the effect of a watchband, even as he takes away your watch. Then, he gradually releases his grip, so slowly that you don't even notice:

https://www.reddit.com/r/nextfuckinglevel/comments/ppqjya/apollo_robbins_a_master_pickpocket_effortlessly/

For the wealthy to successfully impoverish the rest of us, they had to provide something that made us feel like we were still doing OK, even as they stole our wages, our savings, and our futures. So, even as they shipped our jobs overseas in search of weak environmental laws and weaker labor protection, they shared some of the savings with us, letting us buy more with less. But if your wages keep stagnating, it doesn't matter how cheap a big-screen TV gets, because you're tapped out.

So in tandem with cheap goods from overseas sweatshops, we got easy credit: access to debt. As wages fell, debt rose up to fill the gap. For a while, it's felt OK. Your wages might be falling off, the cost of health care and university might be skyrocketing, but everything was getting cheaper, it was so easy to borrow, and your principal asset – your family home – was going up in value, too.

This period was a "bezzle," John Kenneth Galbraith's name for "The magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." It's the moment after Apollo Robbins has your watch but before you notice it's gone. In that moment, both you and Robbins feel like you have a watch – the world's supply of watch-derived happiness actually goes up for a moment.

There's a natural limit to debt-fueled consumption: as Michael Hudson says, "debts that can't be paid, won't be paid." Once the debtor owes more than they can pay back – or even service – creditors become less willing to advance credit to them. Worse, they start to demand the right to liquidate the debtor's assets. That can trigger some pretty intense political instability, especially when the only substantial asset most debtors own is the roof over their heads:

https://pluralistic.net/2022/11/06/the-end-of-the-road-to-serfdom/

"Debts that can't be paid, won't be paid," but that doesn't stop creditors from trying to get blood from our stones. As more of us became bankrupt, the bankruptcy system was gutted, turned into a punitive measure designed to terrorize people into continuing to pay down their debts long past the point where they can reasonably do so:

https://pluralistic.net/2022/10/09/bankruptcy-protects-fake-people-brutalizes-real-ones/

Enter "subprime" – loans advanced to people who stand no meaningful chance of every paying them back. We all remember the subprime housing bubble, in which complex and deceptive mortgages were extended to borrowers on the promise that they could either flip or remortgage their house before the subprime mortgages detonated when their "teaser rates" expired and the price of staying in your home doubled or tripled.

Subprime housing loans were extended on the belief that people would meekly render themselves homeless once the music stopped, forfeiting all the money they'd plowed into their homes because the contract said they had to. For a brief minute there, it looked like there would be a rebellion against mass foreclosure, but then Obama and Timothy Geithner decreed that millions of Americans would have to lose their homes to "foam the runways" for the banks:

https://wallstreetonparade.com/2012/08/how-treasury-secretary-geithner-foamed-the-runways-with-childrens-shattered-lives/

That's one way to run a subprime shop: offer predatory loans to people who can't afford them and then confiscate their assets when they – inevitably – fail to pay their debts off.

But there's another form of subprime, familiar to loan sharks through the ages: lend money at punitive interest rates, such that the borrower can never repay the debt, and then terrorize the borrower into making payments for as long as possible. Do this right and the borrower will pay you several times the value of the loan, and still owe you a bundle. If the borrower ever earns anything, you'll have a claim on it. Think of Americans who borrowed $79,000 to go to university, paid back $190,000 and still owe $236,000:

https://pluralistic.net/2020/12/04/kawaski-trawick/#strike-debt

This kind of loan-sharking is profitable, but labor-intensive. It requires that the debtor make payments they fundamentally can't afford. The usurer needs to get their straw right down into the very bottom of the borrower's milkshake and suck up every drop. You need to convince the debtor to sell their wedding ring, then dip into their kid's college fund, then steal their father's coin collection, and, then break into cars to steal the stereos. It takes a lot of person-to-person work to keep your sucker sufficiently motivated to do all that.

This is where digital meets subprime. There's $1T worth of subprime car-loans in America. These are pure predation: the lender sells a beater to a mark, offering a low down-payment loan with a low initial interest rate. The borrower makes payments at that rate for a couple of months, but then the rate blows up to more than they can afford.

Trusted computing makes this marginal racket into a serious industry. First, there's the ability of the car to narc you out to the repo man by reporting on its location. Tesla does one better: if you get behind in your payments, your Tesla immobilizes itself and phones home, waits for the repo man to come to the parking lot, then it backs itself out of the spot while honking its horn and flashing its lights:

https://tiremeetsroad.com/2021/03/18/tesla-allegedly-remotely-unlocks-model-3-owners-car-uses-smart-summon-to-help-repo-agent/

That immobilization trick shows how a canny subprime car-lender can combine the two kinds of subprime: they can secure the loan against an asset (the car), but also coerce borrowers into prioritizing repayment over other necessities of life. After your car immobilizes itself, you just might decide to call the dealership and put down your credit card, even if that means not being able to afford groceries or child support or rent.

One thing we can say about digital tools: they're flexible. Any sadistic motivational technique a lender can dream up, a computerized device can execute. The subprime car market relies on a spectrum of coercive tactics: cars that immobilize themselves, sure, but how about cars that turn on their speakers to max and blare a continuous recording telling you that you're a deadbeat and demanding payment?

https://archive.nytimes.com/dealbook.nytimes.com/2014/09/24/miss-a-payment-good-luck-moving-that-car/

The more a subprime lender can rely on a gadget to torment you on their behalf, the more loans they can issue. Here, at last, is a form of automation-driven mass unemployment: normally, an economy that has been fully captured by wealthy oligarchs needs squadrons of cruel arm-breakers to convince the plebs to prioritize debt service over survival. The infinitely flexible, tireless digital arm-breakers enabled by trusted computing have deprived all of those skilled torturers of their rightful employment:

https://pluralistic.net/2021/04/02/innovation-unlocks-markets/#digital-arm-breakers

The world leader in trusted computing isn't cars, though – it's phones. Long before anyone figured out how to make a car take orders from its manufacturer over the objections of its driver, Apple and Google were inventing "curating computing" whose app stores determined which software you could run and how you could run it.

Back in 2021, Indian subprime lenders hit on the strategy of securing their loans by loading borrowers' phones up with digital arm-breaking software:

https://restofworld.org/2021/loans-that-hijack-your-phone-are-coming-to-india/

The software would gather statistics on your app usage. When you missed a payment, the phone would block you from accessing your most frequently used app. If that didn't motivate you to pay, you'd lose your second-most favorite app, then your third, fourth, etc.

This kind of digital arm-breaking is only possible if your phone is designed to prioritize remote instructions – from the manufacturer and its app makers – over your own. It also only works if the digital arm-breaking company can confirm that you haven't jailbroken your phone, which might allow you to send fake data back saying that your apps have been disabled, while you continue to use those apps. In other words, this kind of digital sadism only works if you've got trusted computing and remote attestation.

Enter "Device Lock Controller," an app that comes pre-installed on some Google Pixel phones. To quote from the app's description: "Device Lock Controller enables device management for credit providers. Your provider can remotely restrict access to your device if you don't make payments":

https://lemmy.world/post/13359866

Google's pitch to Android users is that their "walled garden" is a fortress that keeps people who want to do bad things to you from reaching you. But they're pre-installing software that turns the fortress into a prison that you can't escape if they decide to let someone come after you.

There's a certain kind of economist who looks at these forms of automated, fine-grained punishments and sees nothing but a tool for producing an "efficient market" in debt. For them, the ability to automate arm-breaking results in loans being offered to good, hardworking people who would otherwise be deprived of credit, because lenders will judge that these borrowers can be "incentivized" into continuing payments even to the point of total destitution.

This is classic efficient market hypothesis brain worms, the kind of cognitive dead-end that you arrive at when you conceive of people in purely economic terms, without considering the power relationships between them. It's a dead end you navigate to if you only think about things as they are today – vast numbers of indebted people who command fewer assets and lower wages than at any time since WWII – and treat this as a "natural" state: "how can these poors expect to be offered more debt unless they agree to have their all-important pocket computers booby-trapped?"

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/03/29/boobytrap/#device-lock-controller

Image: Oatsy (modified) https://www.flickr.com/photos/oatsy40/21647688003

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