The most ENSHITTIFICATION-PROOF way to get the Enshittification audiobook, ebook and hardcover is to pre-order them on my Kickstarter! Help me do AN END RUN around the AMAZON/AUDIBLE AUDIOBOOK MONOPOLY and DISENSHITTIFY your audiobook experience in the process.
Just as Martin Niemöller's "First They Came" has become our framework for understanding the rise of fascism in Nazi Germany, so, too is Wilhoit's Law the best way to understand America's decline into fascism:
https://en.wikipedia.org/wiki/First_They_Came
In case you're not familiar with Frank Wilhoit's amazing law, here it is:
Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.
The thing that makes Wilhoit's Law so apt to this moment – and to our understanding of the recent history that produced this moment – is how it connects the petty with the terrifying, the trivial with the radical, the micro with the macro. It's a way to join the dots between fascists' business dealings, their interpersonal relationships, and their political views. It describes a continuum that ranges from minor commercial grifts to martial law, and shows how tolerance for the former creates the conditions for the latter.
The gross ways in which Wilhoit's Law applies are easy to understand. The dollar value of corporate wage-theft far outstrips the total dollars lost to all other forms of property crime, and yet there is virtually no enforcement against bosses who steal their workers' paychecks, while petty property crimes can result in long prison sentences (depending on your skin color and/or bank balance):
Elon Musk values "free speech" and insists on his right to brand innocent people as "pedos," but he also wants the courts to destroy organizations that publish their opinions about his shitty business practices:
https://www.mediamatters.org/elon-musk
Fascists turn crybaby when they're imprisoned for attempting a murderous coup, but buy merch celebrating the construction of domestic concentration camps where people are locked up without trial:
https://officialalligatoralcatraz.com/shop
That stuff is all easy to see, but I want to draw a line between these gross violations of Wilhoit's Law and pettier practices that have been creating the conditions for the present day Wilhoit Dystopia.
Take terms of service. The Federalist Society – whose law library could save a lot of space by throwing away all its books and replacing them with a framed copy of Wilhoit's Law – has long held that merely glancing at a web-page or traversing the doorway of a shop is all it takes for you to enter into a "contract" by which you surrender all of your rights. Every major corporation – and many smaller ones – now routinely seek to bind both workers and customers to garbage-novellas of onerous, unreadable legal conditions.
If we accept that this is how contracts work, then this should be perfectly valid, right?
By reading these words, you agree, on behalf of your employer, to release me from all obligations and waivers arising from any and all NON-NEGOTIATED agreements, licenses, terms-of-service, shrinkwrap, clickwrap, browsewrap, confidentiality, non-disclosure, non-compete and acceptable use policies ("BOGUS AGREEMENTS") that I have entered into with your employer, its partners, licensors, agents and assigns, in perpetuity, without prejudice to my ongoing rights and privileges. You further represent that you have the authority to release me from any BOGUS AGREEMENTS on behalf of your employer. This indemnity will survive the termination of your relationship with your employer.
I mean, why not? What principle – other than "in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect" – makes terms of service valid, and this invalid?
Then there's binding arbitration. Corporations routinely bind their workers and customers to terms that force them to surrender their right to sue, no matter how badly they are injured through malice or gross negligence. This practice used to be illegal, until Antonin Scalia opened the hellmouth and unleashed binding arbitration on the world:
There's a pretty clever hack around binding arbitration: mass arbitration, whereby lots of wronged people coordinate to file claims, which can cost a dirty corporation more than a plain old class-action suit:
Of course, Wilhoit's Law provides corporations with a way around this: they can reserve the right not to arbitrate and to force you into a class action suit if that's advantageous to them:
Or take the nature of property rights themselves. Conservatives say they revere property rights above all else, claiming that every other human right stems from the vigorous enforcement of property relations. What is private property? For that, we turn to the key grifter thinkfluencer Sir William Blackstone, and his 1768 "Commentaries on the Laws of England":
That sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.
Corporations love the idea of their property rights, but they're not so keen on your property rights. Think of the practice of locking down digital devices – from phones to cars to tractors – so that they can't be repaired by third parties, use generic ink or parts, or load third-party apps except via an "app store":
A device you own, but can only use in ways that its manufacturer approves of, sure doesn't sound like "sole and despotic dominion" to me.
Some corporations (and their weird apologists) like to claim that, by buying their product, you've agreed not to use it except in ways that benefit their shareholders, even when that is to your own detriment:
Apple will say, "We've been selling iPhones for nearly 20 years now. It can't possibly come as a surprise to you that you're not allowed to install apps that we haven't approved. If that's important to you, you shouldn't have bought an iPhone."
But the obvious rejoinder to this is, "People have been given sole and despotic dominion over the things they purchased since time immemorial. If the thought of your customers using their property in ways that displease you causes you to become emotionally disregulated, perhaps you shouldn't have gotten into the manufacturing business."
But as indefensibly wilhoitian as Apple's behavior might be, Google has just achieved new depths of wilhoitian depravity, with a rule that says that starting soon, you will no longer be able to install apps of your choosing on your Android device unless Google first approves of them:
Like Apple, Google says that this is to prevent you from accidentally installing malicious software. Like Apple, Google does put a lot of effort into preventing its customers from being remotely attacked. And, like Apple, Google will not protect you from itself:
When it comes to vetoing your decisions about which programs your Android device can run, Google has an irreconcilable conflict of interest. Google, after all, is a thrice-convicted monopolist who have an interest in blocking you from installing programs that interfere with its profits, under the pretense of preventing you from coming to harm.
And – like Apple – Google has a track record of selling its users out to oppressive governments. Apple blocked all working privacy tools for its Chinese users at the behest of the Chinese government, while Google secretly planned to release a version of its search engine that would enforce Chinese censorship edicts and help the Chinese government spy on its people:
Google's CEO Sundar Pichai, personally gave one million dollars to Donald Trump for a seat on the dais at this year's inauguration (so did Apple CEO Tim Cook). Both men are in a position to help the self-described dictator make good on his promise to spy on and arrest Americans who disagree with his totalitarian edicts.
All of this makes Google's announcement extraordinarily reckless, but also very, very wilhoitian. After all, Google jealously guards its property rights from you, but insists that your property rights need to be subordinated to its corporate priorities: "in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."
We can see this at work in the way that Google treats open source software and free software. Google's software is "open source" – for us. We have the right to look at the code and do free work for Google to identify and fix bugs in the code. But only Google gets a say in how that code is deployed on its cloud servers. They have software freedom, while we merely have software transparency:
Big companies love to both assert their own property rights while denying you yours. Take the music industry: they are required to pay different royalties to musicians depending on whether they're "selling" music, or "licensing" music. Sales pay a fraction of the royalties of a licensing deal, so it's far better for musicians when their label licenses their music than when they sell it.
When you or I click the "buy" button in an online music store, we are confronted with a "licensing agreement," that limits what we may do with our digital purchase. Things that you get automatically when you buy music in physical form – on a CD, say – are withheld through these agreements. You can't re-sell your digital purchases as used goods. You can't give them away. You can't lend them out. You can't divide them up in a divorce. You can't leave them to your kids in your will. It's not a sale, so the file isn't your property.
But when the label accounts for that licensing deal to a musician, the transaction is booked as a sale, which entitles the creative worker to a fraction of the royalties that they'd get from a license. Somehow, digital media exists in quantum superposition: it is a licensing deal when we click the buy button, but it is a sale when it shows up on a royalty statement. It's Schroedinger's download:
The plaintiffs insist that because Amazon showed them a button that said, "Buy this video" but then slapped it with licensing conditions that take away all kinds of rights (Amazon can even remotely delete your videos after you "buy" them) that they have been ripped off in a bait-and-switch.
Amazon's defense is amazing. They've done what any ill-prepared fifth grader would do when called on the carpet; they quoted Webster's:
Quoting Webster’s Dictionary, it said that the term means “rights to the use or services of payment” rather than perpetual ownership and that its disclosures properly warn people that they may lose access.
People are increasingly pissed off with this bullshit, whereby things that you "buy" are not yours, and your access to them can be terminated at any time. The Stop Killing Games campaign is pushing for the rights of gamers to own the games they buy forever, even if the company decides to shut down its servers:
https://www.stopkillinggames.com/
I've been pissed off about this bullshit since forever. It's one of the main reasons I convinced my publishers to let me sell my own ebooks and audiobooks, out of my own digital storefront. All of those books are sold, not licensed, and come without any terms or conditions:
https://craphound.com/shop/
The ability to change the terms after the sale is a major source of enshittification. I call it the "Darth Vader MBA," as in "I am altering the deal. Pray I do not alter it any further":
Look, I don't think that personal consumption choices can fix systemic problems. You're not going to fix enshittification – let alone tyranny – by shopping, even if you're very careful:
But that doesn't mean that there isn't a connection between the unfair bullshit that monopolies cram down our throat and the rise of fascism. It's not just that the worst enshittifiers also the biggest Trump donors, it's that Wilhoit's Law powers enshittification.
Wiloitism is shot through the Maga movement. The Flu Klux Klan wants to ban you from wearing a mask for health reasons, but they will defend to the death the right of ICE brownshirts to run around in gaiters and Oakleys as they kidnap our neighbors off the streets.
Conservative bedwetters will donate six figures to a Givesendgo set up by some crybaby with a viral Rumble video about getting 86'ed from a restaurant for wearing a Maga hat, but they literally want to imprison trans people for wearing clothes that don't conform to their assigned-at-birth genders.
They'll piss and moan about being "canceled" because of hecklers at the speeches they give for the campus chapter of the Hitler Youth, but they experience life-threatening priapism when students who object to the Israeli genocide of Palestinians are expelled, arrested and deported.
Then there's their abortion policies, which hold that personhood begins at conception, but ends at birth, and can only be re-established by forming an LLC.
It's "in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect" all the way down.
I'm not saying that bullshit terms of service, wage theft, binding arbitration gotchas, or victim complexes about your kids going no-contact because you won't shut the fuck up about "the illegals" at Thanksgiving are the same as the actual fascist dictatorship being born around us right now or the genocide taking place in Gaza.
But I am saying that they come from the same place. The ideology of "in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect" underpins the whole ugly mess.
After we defeat these fucking fascists, after the next installment of the Nuremburg trials, after these eichmenn and eichwomenn get their turns in the dock, we're going to have to figure out how to keep them firmly stuck to the scrapheap of history.
For this, I propose a form of broken windows policing; zero-tolerance for any activity or conduct that implies that there are "in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."
We should treat every attempt to pull any of these scams as an inch (or a yard, or a mile) down the road to fascist collapse.
We shouldn't suffer practitioners of this ideology to be in our company, to run our institutions, or to work alongside of us. We should recognize them for the monsters they are.
Click here to pre-order my next book, ENSHITTIFICATION: WHY EVERYTHING SUDDENLY GOT WORSE AND WHAT TO DO ABOUT IT
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:
Anya is live and ready to show you everything. Watch her strip, dance, and perform exclusive shows just for you. Interact in real-time and make your fantasies come true.
✓ Live Streaming✓ Interactive Chat✓ Private Shows✓ HD Quality✓ Free Actions
Free to watch • No registration required • HD streaming
One of the reasons I know how to use an industrial sewing machine and to build medieval, early modern, and 19th to early 20th century tents is that I like dressing up as various people in the past and camping like they did.
The other reason is that pretty much everything advertised to me these days is utter crap, and poorly made, so instead I buy the older models of backpac, shoe, tent, and some clothes, second hand, and repair and maintain them.
In 1986, a corporation that made women's lingerie bought every backpack brand you've ever trusted.
Apple faces criminal sanctions for defying App Store antitrust order
I'm on a 20+ city book tour for my new novel PICKS AND SHOVELS. Catch me at NEW ZEALAND'S UNITY BOOKS in AUCKLAND TODAY (May 2), and in WELLINGTON TOMORROW (May 3). More tour dates (Pittsburgh, PDX, London, Manchester) here.
Epic, makers of the wildly popular Fortnite video-game, have waged a one-company war against the "app tax" – the 15-30% rake that the mobile duopoly of Apple/Google take out of every penny we spend inside of apps.
Epic's own digital practices are hardly spotless: just this year, the company was caught cheating players – many of them children – with deceptive practices and had to refund over $72m:
But in this fight, Epic is on the side of the angels. The 30% that Apple/Google sucks out of the mobile economy is a brutal tax, and not just on app makers. Patreon performers recently raised a stink when the company announced that it would be clawing back 30% of the money pledged by their supporters – that 30% surcharge is passed straight through to Apple/Google:
From independent news outlets to crafters selling their work out of small storefronts, all the way up to massive entertainment services like Disney Plus and Fortnite, the mobile cartel takes 30% out of every dollar, a racket they maintain with onerous rules that ban apps from using their own payment processors, or even from encouraging users to click a link that brings them to a web-based payment screen.
30% is a gigantic markup on payment processing. It's ten times the going rate for payments in the USA, already one of the most expensive places in the world to transfer money from one party to another. In the EU, payment processing typically runs 1%…or less.
But crafters, Patreon podcasters and small-town newspapers are in no position to fight Google and Apple. Instead, we get Epic, a multi-billion-dollar company that's gone to the mattresses to fight these multi-trillion-dollar companies. Personally, I dote on billionaire-on-trillionaire violence.
Epic was wildly successful. It mopped up the floor with Google, securing an especially punitive award from a judge who was furious that Google had destroyed evidence:
Epic also won against Apple, though not as thoroughly as it had with Google, because Apple had the commonsense not to get up to the kind of shenanigans that make federal judges very, very mad. In the Google case, the court found that Google had acted as a monopolist and ordered it to open up the payment system in Google Play, a direct blow to the Android app tax.
In the Apple case, the judge did not find that Google had acted as a monopolist, but did rule that the App Store's payment processing racket violated the law, and ordered Apple to end its own app tax:
That's where things get gnarly. Apple is addicted to corrupt sources of income – like the tens of billions it illegally receives every year in bribes from Google make it the default search:
And it really, really loves the app tax. When the EU ordered Apple to allow third-party app stores (as a way of killing the app tax), the company cooked up a malicious compliance plan that was comically corrupt:
So, the mere fact that a federal judge had ordered Apple to open up its app store to competing payment processors was not going convince Apple to actually do it. Instead, Apple cooked up a set of rules for third-party payment processing that would make it more costly to use someone else's payments, piling up a mountain of junk fees and using scare screens and other deceptive warnings to discourage users from making payments through a rival system:
That's the kind of thing that is apt to make a federal judge angry – and, as noted, angry federal judges can make life very hard for tech monopolists, a lesson Google learned when it destroyed key evidence in its Epic case. But Apple didn't just flout the court order – they lied about it to cover it up, and Judge Yvonne Gonzalez Rogers is furious. She held that Alex Roman, Apple's Vice-President of Finance, "outright lied under oath," and she has raised the possibility of criminal contempt penalties for Apple:
This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order. Time is of the essence. The Court will not tolerate further delays. As previously ordered, Apple will not impede competition. The Court enjoins Apple from implementing its new anticompetitive acts to avoid compliance with the Injunction. Effective immediately Apple will no longer impede developers’ ability to communicate with users nor will they levy or impose a new commission on off-app purchases
In other words, any junk fees, any impediments to opening up third party payments, will be switfly and harshly dealt with. As of right now developers can start to build third-party payments into their apps and Apple cannot block them. It's the end of the app tax, a source of about $100b/year for Apple:
The world is on fire and everything is terrible, but we are also living through the most consequential season in the history of the war on corporate tech power. Google has been convicted three times of being a monopolist and is almost certainly going to have to sell off Chrome, most of its ad-tech stack, and possibly Android. Meta just put up a pathetic showing in an equally serious antitrust case that could see it forced to sell off Instagram and Whatsapp:
Countries around the world have passed big, sweeping, muscular antitrust laws specifically aimed at smashing corporate tech power, like the EU's Digital Markets Act and Digital Services Act:
Most importantly, all of this is happening from the bottom up. There is no dark money campaign to fuck up the tech companies. The politicians and enforcers who are taking on Big Tech are being shoved from behind by billions of everyday people who are furious and refuse to take it any longer:
I am deeply grateful for the public servants who have championed this cause, but I also know that these people are the effect of our movement, not the cause. When Kier Starmer fires Britain's brilliant and effective top competition enforcer and replaces him with the former head of Amazon UK, that does nothing to tamp down the political outrage that Britons feel towards America's tech giants:
All over the world, countries that passed IP laws to protect US tech interests in exchange for tariff-free access to US markets are grappling with the end of free trade with America. This represents a generational opportunity to pass laws that enable local technologists to jailbreak US tech exports and liberate their people from the extractive practices of Big Tech forever:
https://archive.is/CiBIz
There is nothing harder to stop than an idea whose time has come to pass.
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:
Image:
Alex Popovkin, Bahia, Brazil from Brazil (modified)
https://commons.wikimedia.org/wiki/File:Annelid_worm,_Atlantic_forest,_northern_littoral_of_Bahia,_Brazil_%2816107326533%29.jpg
CC BY 2.0
https://creativecommons.org/licenses/by/2.0/deed.en
I'm on a 20+ city book tour for<p>placehold://://er </p> my new novel PICKS AND SHOVELS. Catch me in AUSTIN on MONDAY (Mar 10). I'm also appearing at SXSW and at many events around town, for Creative Commons and Fediverse House. More tour dates here.
It's true that capitalists by and large hate capitalism – given their druthers, entrepreneurs would like to attain a perch from which they get to set prices and wages and need not fear competitors. A market where everything is up for grabs is great – if you're the one doing the grabbing. Less so if you're the one whose profits, customers and workers are being grabbed at.
But while all capitalists hate all capitalism, a specific subset of capitalists really, really hate a specific kind of capitalism. The capitalists who hate capitalism the most are Big Tech bosses, and the capitalism they hate the most is techno-capitalism. Specifically, the techno-capitalism of the first decade of this century – the move fast/break things capitalism, the beg forgiveness, not permission capitalism, the blitzscaling capitalism.
The capitalism tech bosses hate most of all is disruptive capitalism, where a single technological intervention, often made by low-resourced individuals or small groups, can upend whole industries. That kind of disruption is only fun when you're the disruptor, but it's no fun for the disruptees.
Jeff Bezos's founding mantra for Amazon was "your margin is my opportunity." This is a classic disruption story: I'm willing to take a smaller profit than the established players in the industry. My lower prices will let me poach their customers, so I grow quickly and find more opportunities to cut margins but make it up in volume. Bezos described this as a flywheel that would spin faster and faster, rolling up more and more industries. It worked!
The point of that flywheel wasn't the low prices, of course. Amazon is a paperclip-maximizing artificial intelligence, and the paperclip it wants to maximize is profits, and the path to maximum profits is to charge infinity dollars for things that cost you zero dollars. Infinite prices and nonexistent wages are Amazon's twin pole-stars. Amazon warehouse workers don't have to be injured at three times the industry average, but maiming workers is cheaper than keeping them in good health. Once Amazon vanquished its competitors and captured the majority of US consumers, it raised prices, and used its market dominance to force everyone else to raise their prices, too. Call it "bezosflation":
We could disrupt Amazon in lots of ways. We could scrape all of Amazon's "ASIN" identifiers and make browser plugins that let local sellers advertise when they have stock of the things you're about to buy on Amazon:
https://pluralistic.net/2022/07/10/view-a-sku/
We could hack the apps that monitor Amazon drivers, from their maneuvers to their eyeballs, so drivers had more autonomy and their bosses couldn't punish them for prioritizing their health and economic wellbeing over Amazon's. An Amazon delivery app mod could even let drivers earn extra money by delivering for Amazon's rivals while they're on their routes:
We could sell Amazon customers virtual PVRs that let them record and keep the shows they like, which would make it easier to quit Prime, and would kill Amazon's sleazy trick of making all the Christmas movies into extra-cost upsells from November to January:
Rival audiobook stores could sell jailbreaking kits for Audible subscribers who want to move over to a competing audiobook platform, stripping Amazon's DRM off all their purchases and converting the files to play on a non-Amazon app:
Jeff Bezos's margin could be someone else's opportunity…in theory. But Amazon has cloaked itself – and its apps and offerings – in "digital rights management" wrappers, which cannot be removed or tampered with under pain of huge fines and imprisonment:
https://locusmag.com/2020/09/cory-doctorow-ip/
Amazon loves to disrupt, talking a big game about "free markets and personal liberties" – but let someone attempt to do unto Amazon as Amazon did unto its forebears, and the company will go running to Big Government for a legal bailout, asking the state to enforce its business model:
You'll find this cowardice up and down the tech stack, wherever you look. Apple launched the App Store and the iTunes Store with all kinds of rhetoric about how markets – paying for things, rather than getting them free through ads – would correct the "market distortions." Markets, we were told, would produce superior allocations, thanks to price and demand signals being conveyed through the exchange of money for goods and services.
But Apple will not allow itself to be exposed to market forces. They won't even let independent repair shops compete with their centrally planned, monopoly service programs:
And they take the position that if you do manage to acquire a donor part from a dead phone or laptop, that it is a felony – under the same DRM laws that keep Amazon's racket intact – to install them in a busted device:
"Rip, mix, burn" is great when it's Apple doing the ripping, mixing and burning, but let anyone attempt to return the favor and the company turns crybaby, whining to Customs and Border Patrol and fed cops to protect itself from being done unto as it did.
Should we blame the paperclip-maximizing Slow AI corporations for attempting to escape disruptive capitalism's chaotic vortex? I don't think it matters: I don't deplore this whiny cowardice because it's hypocritical. I hate it because it's a ripoff that screws workers, customers and the environment.
But there is someone I do blame: the governments that pass the IP laws that allow Apple, Google, Amazon, Microsoft and other tech giants shut down anyone who wants to disrupt them. Those governments are supposed to work for us, and yet they passed laws – like Section 1201 of the Digital Millennium Copyright Act – that felonize reverse-engineering, modding and tinkering. These laws create an enshittogenic environment, which produces enshittification:
Bad enough that the US passed these laws and exposed Americans to the predatory conduct of tech enshittifiers. But then the US Trade Representative went slithering all over the world, insisting that every country the US trades with pass their own versions of the laws, turning their citizens into an all-you-can-steal buffet for US tech gougers:
This system of global "felony contempt of business-model" statutes came into being because any country that wanted to export to the USA without facing tariffs had to pass a law banning reverse-engineering of tech products in order to get a deal. That's why farmers all over the world can't fix their tractors without paying John Deere hundreds of dollars for each repair the farmer makes to their own tractor:
But with Trump imposing tariffs on US trading partners, there is now zero reason to keep those laws on the books around the world, and every reason to get rid of them. Every country could have the kind of disruptors who start a business with just a little capital, aimed directly at the highest margins of these stupidly profitable, S&P500-leading US tech giants, treating those margins as opportunities. They could jailbreak HP printers so they take any ink-cartridge; jailbreak iPhones so they can run any app store; jailbreak tractors so farmers can fix them without paying rent to Deere; jailbreak every make and model of every car so that any mechanic can diagnose and fix it, with compatible parts from any manufacturer. These aren't just nice things to do for the people in your country's borders: they are businesses, massive investment opportunities. The first country that perfects the universal car diagnosing tool will sell one to every mechanic in the world – along with subscriptions that keep up with new cars and new manufacturer software updates. That country could have the relationship to car repairs that Finland had to mobile phones for a decade, when Nokia disrupted the markets of every landline carrier in the world:
The US companies that could be disrupted thanks to the Trump tariffs are directly implicated in the rise of Trumpism. Take Tesla: the company's insane valuation is a bet by the markets that Tesla will be able to charge monthly fees for subscription features and one-off fees for software upgrades, which will be wiped out when your car changes hands, triggering a fresh set of payments from the next owner.
That business model is entirely dependent on making it a crime to reverse-engineer and mod a Tesla. A move-fast-and-break-things disruptor who offered mechanics a tool that let them charge $50 (or €50!) to unlock every Tesla feature, forever, could treat Musk's margins as their opportunity – and what an opportunity it would be!
That's how you hurt Musk – not by being performatively aghast at his Nazi salutes. You kick that guy right in the dongle:
The act of unilaterally intervening in a market, product or sector – that is, "moving fast and breaking things" – is not intrinsically amoral. There's plenty of stuff out there that needs breaking. The problem isn't disruption, per se. Don't weep for the collapse of long-distance telephone calls! The problem comes when the disruptor can declare an end to history, declare themselves to be eternal kings, and block anyone from disrupting them.
If Uber had been able to nuke the entire taxi medallion system – which was dominated by speculators who charged outrageous rents to drivers – and then been smashed by driver co-ops who modded gig-work apps to keep the fares for themselves, that would have been amazing:
The problem isn't disruption itself, but rather, the establishment of undisruptable, legally protected monopolies whose crybaby billionaire CEOs never have to face the same treatment they meted out to the incumbents who were on the scene when they were starting out.
We need some disruption! Their margins are your opportunity. It's high time we started moving fast and breaking US Big Tech!
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:
Anya is live and ready to show you everything. Watch her strip, dance, and perform exclusive shows just for you. Interact in real-time and make your fantasies come true.
✓ Live Streaming✓ Interactive Chat✓ Private Shows✓ HD Quality✓ Free Actions
Free to watch • No registration required • HD streaming
I'm on a 20+ city book tour for my new novel PICKS AND SHOVELS. Catch me in CHICAGO with PETER SAGAL on WEDNESDAY (Apr 2), and in BLOOMINGTON on FRIDAY (Apr 4). More tour dates here.
Trumpism is a mixture of grievance, surveillance, and pettiness: "I will never forgive your mockery, I have records of you doing it, and I will punish you and everyone who associates with you for it." Think of how he's going after the (cowardly) BigLaw firms:
Trump is the realization of decades of warning about ubiquitous private and public surveillance – that someday, all of this surveillance would be turned to the systematic dismantling of human rights and punishing of dissent.
23 years ago, I was staying in London with some friends, scouting for a flat to live in. After at day in town, I came back and we ordered a curry and had a nice chat. I mentioned how discomfited I'd been by all the CCTV cameras that had sprouted at the front of every private building, to say nothing of all the public cameras installed by local councils and the police. My friend dismissed this as a kind of American, hyper-individualistic privacy purism, explaining that these cameras were there for public safety – to catch flytippers, vandals, muggers, boy racers tearing unsafely through the streets. My fear about having my face captured by all these cameras was little more than superstitious dread. It's not like they were capturing my soul.
Now, I knew that my friend had recently marched in one of the massive demonstrations against Bush and Blair's illegal invasion plans for Iraq. "Look," I said, "you marched in the street to stand up and be counted. But even so, how would you have felt if – as a condition of protesting – you were forced to first record your identity in a government record-book?" My friend had signed petitions, he'd marched in the street, but even so, he had to admit that there would be some kind of chilling effect if your identity had to be captured as a condition of participating in public political events.
Trump has divided the country into two groups of people: "citizens" (who are sometimes only semi-citizens) and immigrants (who have no rights):
Trump has asserted that he can arrest and deport immigrants (and some semi-citizens) for saying things he doesn't like, or even liking social media posts he disapproves of. He's argued that he can condemn people to life in an offshore slave-labor camp if he doesn't like their tattoos. It is tyranny, built on ubiquitous surveillance, fueled by spite and grievance.
One of Trumpism's most important tenets is that private institutions should have the legal right to discriminate against minorities that he doesn't like. For example, he's trying to end the CFPB's enforcement action against Townstone, a mortgage broker that practiced rampant racial discrimination:
By contrast, Trump abhors the idea that private institutions should be allowed to discriminate against the people he likes, hence his holy war against "DEI":
This is the crux of Wilhoit's Law, an important and true definition of "conservativism":
Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protectes but does not bind, alongside out-groups whom the law binds but does not protect.
Wilhoit's definition is an important way of framing how conservatives view the role of the state. But there's another definition I like, one that's more about how we relate to one-another, which I heard from Steven Brust: "Ask, 'What's more important: human rights or property rights?' Anyone who answers 'property rights are human rights' is a conservative."
Thus the idea that a mortgage broker or an employer or a banker or a landlord should be able to discriminate against you because of the color of your skin, your sexual orientation, your gender, or your beliefs. If "property rights are human rights," then the human right not to rent to a same-sex couple is co-equal with the couple's human right to shelter.
The property rights/human rights distinction isn't just a way to cleave right from left – it's also a way to distinguish the left from liberals. Liberals will tell you that 'it's not censorship if it's done privately' – on the grounds that private property owners have the absolute right to decide which speech they will or won't permit. Charitably, we can say that some of these people are simply drawing a false equivalence between "violating the First Amendment" and "censorship":
But while private censorship is often less consequential than state censorship, that isn't always true, and even when it is, that doesn't mean that private censorship poses no danger to free expression.
Consider a thought experiment in which a restaurant chain called "No Politics At the Dinner Table Cafe" buys up every eatery in town, and then maintains its monopoly by sewing up exclusive deals with local food producers, and then expands into babershops, taxis and workplace cafeterias, enforcing a rule in all these spaces that bans discussions of politics:
Here we see how monopoly, combined with property rights, creates a system of censorship that is every bit as consequential as a government rule. And if all of those facilities were to add AI-backed cameras and mics that automatically monitored all our conversations for forbidden political speech, then surveillance would complete the package, yielding private censorship that is effectively indistinguishable from government censorship – with the main difference being that the First Amendment permits the former and prohibits the latter.
The fear that private wealth could lead to a system of private rule has been in America since its founding, when Thomas Jefferson tried (unsuccessfully) to put a ban on monopolies into the US Constitution. A century later, Senator John Sherman wrote the Sherman Act, the first antitrust bill, defending it on the Senate floor by saying:
If we would not submit to an emperor we should not submit to an autocrat of trade.
40 years ago, neoliberal economists ended America's century-long war on monopolies, declaring monopolies to be "efficient" and convincing Carter, then Reagan, then all their successors (except Biden) to encourage monopolies to form. The US government all but totally suspended enforcement of its antitrust laws, permitting anticompetitive mergers, predatory pricing, and illegal price discrimination. In so doing, they transformed America into a monopolist's playground, where versions of the No Politics At the Dinner Table Cafe have conquered every sector of our economy:
This is especially true of our speech forums – the vast online platforms that have become the primary means by which we engage in politics, civics, family life, and more. These platforms are able to decide who may speak, what they may say, and what we may hear:
These platforms are optimized for mass surveillance, and, when coupled with private sector facial recognition databases, it is now possible to realize the nightmare scenario I mooted in London 23 years ago. As you move through both the virtual and physical world, you can be identified, your political speech can be attributed to you, and it can be used as a basis for discrimination against you:
It's not just borders, though. Large, private enterprises own large swathes of our world. They have the unlimited property right to exclude people from their properties. And they can spy on us as much as they want, because it's not just antitrust law that withered over the past four decades, it's also privacy law. The last consumer privacy law Congress bestirred itself to pass was 1988's "Video Privacy Protection Act," which bans video-store clerks from disclosing your VHS rentals. The failure to act on privacy – like the failure to act on monopoly – has created a vacuum that has been filled up with private power. Today, it's normal for your every action – every utterance, every movement, every purchase – to be captured, stored, combined, analyzed, and, of course sold.
With vast property holdings, total property rights, and no privacy law, companies have become the autocrats of trade, able to regulate our speech and association in ways that can no longer be readily distinguished state conduct that is at least theoretically prohibited by the First Amendment.
Take Madison Square Garden, a corporate octopus that owns theaters, venues and sport stadiums and teams around the country. The company is notoriously vindictive, thanks to a spate of incidents in which the company used facial recognition cameras to bar anyone who worked at a law-firm that was suing the company from entering any of its premises:
This practice was upheld by the courts, on the grounds that the property rights of MSG trumped the human rights of random low-level personnel at giant law firms where one lawyer out of thousands happened to be suing the company:
Take your kid's Girl Scout troop on an outing to Radio City Music Hall? Sure, just quit your job and go work for another firm.
But that was just for starters. Now, MSG has started combing social media to identify random individuals who have criticized the company, and has added their faces to the database of people who can't enter their premises. For example, a New Yorker named Frank Miller has been banned for life from all MSG properties because, 20 years ago, he designed a t-shirt making fun of MSG CEO James Dolan:
This is private-sector Trumpism, and it's just getting started.
Take hotels: the entire hotel industry has collapsed into two gigachains: Marriott and Hilton. Both companies are notoriously bad employers and at constant war with their unions (and with nonunion employees hoping to unionize in the face of flagrant, illegal union-busting). If you post criticism online of both hotel chains for hiring scabs, say, and they add you to a facial recognition blocklist, will you be able to get a hotel room?
After more than a decade of Uber and Lyft's illegal predatory pricing, many cities have lost their private taxi fleets and massively disinvested in their public transit. If Uber and Lyft start compiling dossiers of online critics, could you lose the ability to get from anywhere to anywhere, in dozens of cities?
Private equity has rolled up pet groomers, funeral parlors, and dialysis centers. What happens if the PE barons running those massive conglomerates decide to exclude their critics from any business in their portfolio? How would it feel to be shut out of your mother's funeral because you shit-talked the CEO of Foundation Partners Group?
More to the point: once this stuff starts happening, who will dare to criticize corporate criminals online, where their speech can be captured and used against them, by private-sector Trumps armed with facial recognition and the absurd notion that property rights aren't just human rights – they're the ultimate human rights?
The old fears of Thomas Jefferson and John Sherman have come to pass. We live among autocrats of trade, and don't even pretend the Constitution controls what these private sector governments can do to us.
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:
ITHACA and NYC! I'm heading your way for a zillion events from Sept 11-18. Here's a list of open-to-all CORNELL activities including two major keynotes; a movie night with dinner and discussion; and a public event at CORNELL TECH in NYC. I'll also be at the BROOKLYN BOOK FESTIVAL on Sept 21.
Conspiratorialism is downstream of the trauma of institutional failures.
Insitutional failures are downstream of regulatory capture.
Regulatory capture is downstream of monopolization.
Monopolization is downstream of the failure to enforce antitrust law.
Start with conspiratorialism and trauma. I am staunchly pro-vaccine. I have had so many covid jabs that I glow in the dark and can get impeccable 5g reception at the bottom of a coal-mine.
Nevertheless.
If you tell me that you are anti-vax because you:
a) believe that the pharma companies are rapacious murderers who'd kill you for a nickel; and
b) believe that their regulators are so captured that every FDA official should probably be wearing a gimpsuit;
I'd be hard pressed to argue with you.
After all, the Sackler family flagrantly lied about the safety of their opioids. They bribed doctors to over-prescribe their drugs. They paid pharmacists bonuses for not asking nosy questions about people filling endless, gigantic refills. They reaped billions. They hired FDA officials and paid them to lobby their ex-colleagues to turn a blind eye, even as the country's morgues filled with the corpses of their victims. They made more billions, and they abused the justice system and got to stay disgustingly, dynastically rich, even as more than one million Americans died in the overdose epidemic they started:
The hucksters and grifters peddling anti-vax conspiracies are pushing on an open door. The existence of real, high-stakes, mass-casualty conspiracies, right there in the open, make traumatized people easy marks for con artists selling horse-paste and taint-tanning.
(Obviously, this is also the Epstein story: the reason it was possible to convince vulnerable people that elite pedos were hiding kids in a DC pizza-parlor's nonexistent basement was that elite pedos were hiding kids on an entirely real island that Donald Trump and other rich and powerful people liked to visit and everyone knew about.)
So that's part one: conspiratorialism is downstream of institutional failures.
Institutional failures are downstream of regulatory capture:
Why do our institutions fail? Because they have been neutered, deliberately made weaker than the processes and companies they are meant to oversee. Starve the FAA of resources and eventually it's going to run out of money to inspect airplane factories. When that happened, Boeing got to hire its own inspectors. The FAA let Boeing mark its own homework, and then planes started falling out of the sky. Hundreds of people were murdered this way (so far – there's a reasonable chance that many more of us are boeing to die):
When Trump's old FCC chair Ajit Pai decided to kill Net Neutrality, he was able to cheat like hell. He accepted over one million identical anti-Net Neutrality comments from "@pornhub.com" email addresses. He accepted millions of obviously fraudulent, identical anti-Net Neutrality comments whose reply addresses corresponded to darknet identity-theft dumps. These included the email addresses of dead people and of sitting US Senators who supported Net Neutrality:
Americans have no federal privacy protections to speak of. The last time Congress updated consumer privacy law was with 1988's Video Privacy Protection Act, which bans video-store clerks from disclosing your VHS rentals. All other technological invasions of privacy are fair game. That's how it came to pass that when staffing agencies offer a nurse a shift, they are able to secure that nurse's credit report, discover how much credit-card debt the nurse is carrying, and offer a lower wage to nurses who are economically desperate:
Regulators are captured out there, right in the open. The revolving door between government service and industry lobby groups spins and spins. Give a Maga influencer a million bucks and he'll get the DoJ to call off its case blocking your $14 billion merger:
Whether you're buying a glass bottle, sending something by sea-freight, taking vitamin C, getting an IV drip, watching pro wrestling, lacing up your athletic shoes, shopping for a mattress, seeing a movie, using social media, listening to music, reading a book, getting fitted for eyeglasses, or choosing a browser, you are trapped in a market totally dominated by five or fewer corporations – often just one corporation.
Monopolies raise prices. They lower wages. They reduce quality. The reason Google – which has a 90% market share in Search – sucks so bad is that they decided to make their product worse so that you would have to repeatedly search to get the information you're seeking, which creates more opportunities to show you ads:
The reason your glasses are so expensive is that one company, a French-Italian consortium called Essilor-Luxotica, bought and merged all the retailers, manufacturers, optical labs and insurers and then raised the price of glasses by 1,000%:
Companies argue that their mergers create "efficiencies." That's tech's story, for sure. Google last created a successful consumer product in 1998, when it fielded a revolutionary new search engine. Since then, virtually every in-house product it's created has tanked, but the company has managed to grow to a world-girding kraken by buying other people's companies: ad-tech, videos, maps, docs, mobile, and more.
The true efficiency of mergers isn't in companies getting better at making things that make you happy. The real purpose of boiling down a big, vibrant industry into a handful of sclerotic, inbred giants is so that they can agree on a common lobbying position, and stick to it.
Hundreds of companies are a rabble, a mob. They compete. They poach each others' best customers and best workers. They hate each other. They can't agree on anything, especially what lie they should be telling their regulators. Forced into "wasteful competition" (-P. Thiel), they must lower prices and raise wages, which leaves them with less money to spend lobbying. They can't capture their regulators.
But: stage an orgy of incestuous mergers, shrink the industry to five companies whose C-suites have all known each other all their lives, who are executors of one another's estates and godparents to one another's children, and the collective action problem vanishes. Nominal competitors suddenly start singing with one voice, demanding a unified set of privileges and exemptions from their regulators:
Without monopolization, regulatory capture would be much harder to accomplish, and much easier to halt. Regulatory capture is downstream of monopolization.
And monopolization is downstream of the decision not to enforce antitrust laws.
The purpose of antitrust laws is, and always has been, to prevent monopolies. The first antitrust law was 1890's Sherman Act, and its author, Senator John Sherman, made the case for it thus:
If we will not endure a King as a political power we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.
For 80-some years, antitrust law did exactly that. But in the 1970s, the fringe theories of a conspiratorialist named Robert Bork came to prominence, at first hesitantly under Jimmy Carter, and then with undisguised ardor and glee under Reagan:
Robert Bork claimed that monopolies were "efficient." He said that monopolies in the wild were almost never the result of cheating – rather, if a company managed to get all of us to buy its products, that was evidence that its products were the best. Bork insisted that it would be perverse to enlist the government to punish companies for making the most pleasing and successful products.
Bork was many things: a virulent racist who defended racial discrimination against Black people and a criminal who served as Richard Nixon's hatchet-man, illegally firing "disloyal" DoJ lawyers after every other Reagan official refused.
But above all, Robert Bork was a conspiracy-peddler. He didn't just disagree with the idea of the government going after monopolies – he claimed that a close reading of the country's antimonopoly laws revealed that these laws were never intended to fight monopolies. This, despite the fact that the laws plainly and clearly stated that their purpose was to fight monopolies. This, despite the fact that the bills' authors climbed to their hind legs in Congress and the Senate and gave long speeches about how their laws would fight monopolies.
Bork's theories about the beneficence and efficiency of monopolies were profoundly stupid. But Bork's theories about the meaning of America's antitrust laws were profoundly nuts. Bork insisted that up was down, water was not wet, and black was white‡.
‡ Well, maybe not that last one.
But Bork – like so many conspiracy peddlers – was pushing on an open door. America's wealthy, would-be aristocrats loved the idea of securing monopolies and becoming "autocrats of trade." They funded Bork's theories, endowed economics chairs, sponsored conferences, and, above all, funded all-expenses-paid luxury junkets for judges to teach them about Bork's ideas. 40% of the US Federal judiciary attended one of these "Manne Seminars" and afterwards, their rulings changed to embrace Bork's pro-monopoly posture:
Conspiratorialism is downstream of traumatic institutional failures; and
Institutional failures are downstream of regulatory capture; and
Regulatory capture is downstream of monopolization; and
Monopolization is downstream of the decision not to enforce antitrust laws; and
The decision not to enforce antitrust laws was the result of a conspiracy.
The campaigns to fight "disinformation" are concerned with effects, not causes. The reason people are vulnerable to conspiratorial accounts of current affairs is that they have direct, undeniable experience of many actual conspiracies that inflicted deep harm and lasting trauma. If we want to armor the people we love against conspiratorial cults, it's not enough to argue over the implausibility of their belief that elite cabals are abusing the rest of us for fun and profit – we have to actually address the real elite cabals that really do abuse us for fun and profit.
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:
I'm on a 20+ city book tour for my new novel PICKS AND SHOVELS. Catch me in PITTSBURGH on May 15 at WHITE WHALE BOOKS, and in PDX on Jun 20 at BARNES AND NOBLE. More tour dates here.
For all that orthodox economists hate tariffs in all their forms, the question, "do tariffs work?" is a complex one, which can't be answered unless you specify which tariffs, in what context:
The orthodox case against tariffs goes like this: tariffs raise the price of goods before they reach the market. Sellers will raise the price of goods to recover those costs from buyers, so it's you, the person buying a car, a phone, or a board-game, who will bear that additional cost:
As is ever the case with economics, this critique builds in certain assumptions. And as is especially the case with neoliberal economics, this critique builds in certain assumptions that are never tested for veracity – indeed, neoliberal economists pride themselves on their reliance on incorrect assumptions:
The main assumption built into the orthodox case against tariffs is that sellers can't afford to eat the costs of tariffs. In the thought-experiment land of neoliberalism, market competition erodes sellers' profits so that everything being sold is only slightly marked up above the cost of making it, getting it to the store and selling it to you. Companies are said to be making a "competitive" rate of profit, which is tautologically defined as "whatever profit they're making." If Nike pays $20 to make a pair of shoes in Vietnam that it sells in America for $140, that $120 profit is "competitive" – if it wasn't, it would be lower, and it isn't, so it is.
Trump's own explanation for how the tariffs will work is no better. Trump has made a variety of incoherent claims about who will pay the tariffs. On the campaign trail, he insisted that the tariffs would somehow be paid by America's trading partners, either by their governments or by overseas companies. This is literally untrue: when you order something from overseas, the customs broker sends the bill to you, not the company that sold you the goods.
But the smarter elements in the Trump orbit have a slightly more reality-based theory: they claim that importers, faced with tariff costs, will push back on sellers and insist that they discount their products to offset the tariff bill. That's how the costs end up being paid by foreign sellers – and if their governments step in to help pay the bill, that's how foreign governments will pay the bill.
This explanation has the benefit of actually being an explanation, in that it is a series of cause-and-effect relationships that end up with the costs being borne by someone other than stateside buyers. However, this explanation is also founded on (at least) two demonstrably untrue assumptions: first, that buyers have the power to force sellers to lower their prices; and second, that this power comes from the availability of substitute goods that are made (or could be made) in the USA.
It's possible for there to be a market economy in which buyers can force sellers to eat tariff costs. For that to happen, the sellers have to be in real competition with one another. Competition requires competitors: companies that consider themselves rivals, directly attacking one another's margins. But that's not how American big business operates: 40 years of lax antitrust enforcement has produced an American economy in which nearly every sector is dominated by a monopoly, a duopoly, or a cartel:
Take Nike: Nike controls 86% of the US athletic shoe market. Nearly all the remaining market share is owned by its main rivals, Adidas and Reebok – companies that merged in 2005. It's clear that Adidas/Reebok would like to get some of Nike's market share, but in 20+ years of duopoly rule over the sector, neither Nike nor Adidas/Reebok have tried a serious discounting strategy to win that market. Instead, the duopoly has found it easy to tacitly collude to rig margins of more than 600%. What's more, the collusion may have been explicit, not tacit – when a sector is dominated by two giant firms, the upper ranks of both companies are dominated by people who've worked at both companies. These people aren't rivals, they're peers. They're executors of one another's estates, godparents to one another's children, members of the same charitable boards and pickup sports leagues. They're lifelong pals. If you think they never explicitly conspire to rig markets – over drinks at someone's wedding or funeral, say – then I envy you your touching faith in humanity.
A market controlled by a handful of firms doesn't have to solve the thorny "collective action problem" of deciding on a regulatory priority and then holding that line as the cartel captures its regulators:
That means that these companies end up with pricing power, because they can maintain solidarity while they raise prices. If everyone hikes prices together, consumers can't exert market discipline by buying from someone less greedy. And the same solidarity that confers pricing power to a cartel also insulates it from regulatory discipline, because all the companies will tell the same lie to regulators about why prices went up.
This was on display for all to see during the covid inflation shocks. Companies like Pepsi boasted to shareholders that "consumers are willing to pay more for our brands," as they hiked prices way above any inflationary rises, meaning that they didn't just force buyers to cover their higher costs, they actually raised prices more than was needed to cover those costs:
Needless to say, Coke didn't respond by slashing its prices in order to capture Pepsi's customers. They did the opposite: they also raised prices over and above the inflationary costs. Coke and Pepsi might be rivals on paper, but when it comes to questions like, "Should sugar-water have higher margins?" they are the best of friends.
The same is true of the fossil fuel industry, another highly concentrated sector with sky-high margins that raised prices over inflation during the covid supply-chain shocks, and boasted about it on investor calls, without facing any regulatory scrutiny:
Neoliberal economists have an answer to this kind of thing: "it's fine." In the self-referential world of economism, whatever happens was meant to happen, because markets are efficient, so whatever happens in the market is efficient, and can only be made worse by state intervention. This theory of efficient markets is full of beautiful, self-equilibriating processes that can be precisely modeled using equations, but only because the field discards all the nonquantifiable elements of society, assuming that because you can't do math on these qualitative factors, they must not matter:
Of all the qualitative factors that clearly matter that are treated as if they don't matter, the most obvious, glaring omission is power. Power is hard to measure, but if you try to model a transaction without factoring power in, you end up in very dark places, for example, in systems where people should be allowed to "voluntarily" sell themselves into slavery.
It goes without saying that a theory of economics without a theory of power relationships is a great deal for powerful people. In Careless People, the whistleblower Sarah Wynn-Williams's excellent new tell-all memoir about Facebook, Wynn-Williams recounts how shocked and offended Sheryl Sandberg became when she was told that other countries wouldn't allow her to go and buy a kidney for her son, should he ever need one (her kid wasn't sick – she just wanted to know that if he ever did get sick…):
This is economics without a theory of power: if I offer to buy your son's kidney, and you accept my offer, then we have achieved a voluntary exchange of value that is – tautologically – assumed to be fair. Indeed, this transaction isn't merely a way for kidneys to change hands – it's a way to "discover" the "market price" of a kidney. We're not just buyers and sellers, we're brave explorers of the vast, uncharted space of market prices.
Economics without power relies on tautology: if you assume the market is efficient, then whatever you get is what you were supposed to get. If Nike can charge a 600% markup on a $20 pair of shoes, then that is the "natural" price. Everyone in the chain – the workers who made the shoes, the subcontractors who employed the worker, the freighters who shipped the shoes, the logistics company that brought the shoe to the store, the clerk who rang up the purchase – is making what the market says they should be making. The price you pay? That's the price you should pay.
Perhaps you've heard people say that the most important thing is to "grow the pie," and that it's foolish to argue about how big any given "slice of the pie" is:
But this doesn't stand up to even cursory examination. If your slice of the pie is way too small to live on, and the pie grows, and your slice doesn't grow with it – or if it does, but not by enough to keep you solvent, then the size of your slice of the pie is the only thing that matters.
Economists call this the "distributional outcome" question, and orthodox economists insist that only fools and ideologues talk about distributional outcomes. They consider distributional outcomes to be a trap that sucks in well-meaning people who back "market-distorting interventions" that end up making everyone else poorer.
But you know who really cares about distributional outcomes? The finance sector. Think of the 2015 American Airlines pilot strike, which ended with a raise for pilots. When the company announced this on an investor call, Citibank analyst Kevin Crissey declared: "This is frustrating. Labor is being paid first again. Shareholders get leftovers":
Investors have a lot of power. After all, capital is concentrated into just a few hands, with trillions being wielded by institutional investors – index funds, hedge funds, etc – and they get to elect the board, who have the power to hire and fire corporate executives. A corporate board is like a trade union for wealth, a small committee that wields solidaristic power to threaten companies with dire consequences if their interests aren't given priority over the interests of workers and buyers.
No wonder that corporations are so ardently opposed to other forms of solidaristic power, like trade unions – who might shift value from investors to workers – and regulators – who might shift value from investors to buyers. Without these sources of countervailing power, unified capital will not only pass on any additional costs to workers and shoppers, they'll raise prices over and above any inflationary hikes. This does indeed "grow the pie" – while beggaring both shoppers and workers.
In other words, Nike could eat the tariff costs on its goods, but it won't because it doesn't have to, because it's part of a duopoly that both tacitly and explictly colludes to screw its customers and workers. Indeed, the cartelized big businesses that run the US economy just spent the pandemic years doing greedflation – using the excuse of the pandemic and their monopolistic pricing power to raise the prices of everything, from your rent to a dozen eggs:
If you've got the right kind of especially smooth market-pilled brain, you insist that this is impossible. These giant margins are so tempting that they will inevitably coax "new market entrants" into opening competing businesses. That does happen – sometimes. But not when the dominant companies can figure out how to build Warren Buffett's cherished "moats and walls" around their businesses. For example, if you're Amazon and 90% of middle class US households prepay for their shipping through Prime, you can charge sellers whatever the traffic will bear, because they have to go through your chokepoint in order to reach their best customers. That's how Amazon ended up taking 45-51% out of every dollar platform sellers earn:
In Trumpland, the point of tariffs is to create friction on imports so that investors back businesses that do their production onshore. There's plenty of reasons to want things to be made in America. Manufacturing key resources in the US creates resiliency against geopolitical events (like wars), environmental disasters (like shipping-disrupting superstorms), and epidemiological events (like pandemics). Moreover, the low cost of overseas manufacturing often comes at the expense of human rights and environmental protection: making things in the US is no guarantee that they'll be made by fairly compensated workers in safe workplaces that don't pollute their environments, but it's a lot easier to enforce those priorities when production is within US borders.
But US investors spent the past 40 years gleefully demolishing the capacity of America to make things. As Apple CEO Tim Cook said:
[V]ocational expertise is very deep here [in China]. And I give the educational system a lot of credit for continuing to push on that even as others were de-emphasizing vocational.
The US doesn't have enough qualified tool-and-die makers and other skilled tradespeople to produce the machines that will make the goods that Americans want to buy. New tradespeople can be trained, but acquiring these skilled trades is a process of many years. For the US to reshore its manufacturing, it needs substantial, sustained public investment in capacity-building: loans and grants to train workers and investment in basic research and other non-market goods needed to recover the US manufacturing base.
America should do all that, but if it wants to try, it needs a robust, predictable, orderly system of government to build upon. It needs the kind of reliable and orderly processes that make people feel safe about changing trades and going back to school. It needs imports of goods from overseas that can be used to restart the US manufacturing capacity that can replace those imports.
But in a market like this one, dominated by monopolies who needn't fear the Trump-gutted FTC, DOJ and CFPB; where cartels have captured their regulators; where Doge-style chaos spreads existential terror about the future, tariffs will only raise prices, without any significant re-shoring or capacity building. The Trump tariffs are a gift to giants like Nike, who have the logistics sophistication to exploit loopholes, demand preferential rates from shippers and brokers, and to pass on costs to their customers. Any domestic company that seeks to compete with Nike will not have these advantages. For Nike – and other dominant companies – the Trump tariffs are just another moat, another obstacle which they can hurdle, but which stops smaller competitors dead in their tracks:
Trump's tariffs, weak antitrust and weak consumer regulation are a recipe for shifting billions from the American public to the investors in the largest companies. It's still going to result in a huge economic collapse, but the most profitable companies of today will be best poised to stay on top of the pile after the crash. One hopeful outcome of this is that a bunch of the One Percenters are extremely fucked off about the plan:
The New Civil Liberties Alliance is a nonprofit impact litigation shop funded by Leonard Leo, the mastermind of the Federalist Society and its takeover of the Supreme Court. They're the ones who got Chevron Deference overturned last year, and now they're suing the Trump administration over the tariffs:
As Corey Robin writes, tariffs have a long history of breaking up conservative coalitions, "the leading edge of political conflict in the 19th century." Robin writes that the conservative movement has spent years shifting tariff power from Congress to the president, never anticipating that someday, a president might preside over a Mad King tariff strategy. Now, Robin says:
The tariff is going to be the major issue that leads the judicial right to confront the empowered executive that they’ve turbo-charged in so many other ways.
Last year, Rick Perlstein pointed out that the true significance of Project 2025 lay in its contradictions, the irreconcilable, mutually exclusive policy prescriptions found in its pages:
Perlstein said that these contradictions were a map of the fracture lines in the Trump coalition. Trump's tariffs clearly represent a major fault-line, and we need to seize this opportunity when it presents itself.
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:
