<story><title>Cory Doctorow: Platform Capitalism and the Curse of “Enshittification” [audio]</title><url>https://podtail.com/podcast/future-tense-full-program-podcast/cory-doctorow-platform-capitalism-and-the-curse-of/</url></story><parent_chain><item><author>beepbooptheory</author><text>Just don&amp;#x27;t understand how one could be convinced these days of the fundamental conceit that even a properly profitable company is necessarily going to provide good things for people downstream, or for society in general. What is the argument for that in general again?&lt;p&gt;Because to me, if your not Twitter, your Wal Mart or Raytheon or BoA. If your not shittifying a platform you are pushing out small businesses from every town, price gouging government contracts for missiles, fooling elderly people with complicated financial instruments.&lt;p&gt;I just can&amp;#x27;t really put together any argument at all, if am being honest, to justify the idea that companies with a self interest in profit will reliably help people or the world. It just does not at all feel rational, its like everyone in the world is dreaming.</text></item><item><author>sharperguy</author><text>I think the issue could be rooted in recent monetary policy rather than an inhrenent feature of the market itself.&lt;p&gt;Artificially low interest rate environments lead to a lot of money in the hands of investors, which due to inflation slowly loses purchasing power over time. However, with large reserves, they can easily afford to prop up a business model which persistantly spends more money on bringing &amp;quot;free&amp;quot; features to user while charging very little. Those businesses obviously outcompete any business which do not recieve such investment.&lt;p&gt;However, as time goes on, those investments must eventually earn a return. Switching from a model which loses money every year to one which must profit every year is invariably going to affect the quality of the product. Especially in an environment where directly charging customers for your service would be a death sentence.&lt;p&gt;In the absense of such cheap credit, however, a truly competitive environment could potentially emerge, where businesses must be sustanably profitable from the ground up. Esentially this would mean the last 15 or so years has been wasted time in pursuit of this goal, as false monetary signals were steering us in completely the wrong direction.&lt;p&gt;Some of todays tech companies may survive the transition, but I believe that most will eventually be replaced by completely new ones. Unless we go back to a policy of lowering interest rates to near (or even below) 0%.</text></item><item><author>_eypq</author><text>I&amp;#x27;ve been thinking about how enshittification, venture capital, shareholders and the life cycle of a company are in some ways related. Any company that has external investors is bound to go through this cycle of 
- building a great product
- taking in external funding money
- growing and then either being acquired or going public (or more commonly shutting down)
- then all the head scratching decision making starts&lt;p&gt;It&amp;#x27;s head scratching to users and outside observers, but the incentives are such that there is pressure to grow on a quarterly basis, get those charts looking good and individuals in the management chain are doing what they can to optimize their career growth leading to short term decision making at the cost of users and customers.&lt;p&gt;The big picture thinking and long term decision making are incredibly hard. Very few companies are able to do this over the long term. Micosoft and apple are doing great currently and it will be interesting to see how stripe and openai navigate this process.&lt;p&gt;My current opinion is that only small founder owned companies or foss organizations can avoid this trap over the long term and it involves not trying to squeeze out every last bit of value. Both of these require a certain level of financial security + there&amp;#x27;s the opportunity cost vs just going the vc route.&lt;p&gt;VC funding is incredibly valuable and it opens up a lot of possibilities that small orgs can never hope for. I guess what I&amp;#x27;m saying is: expect enshittification and enjoy the ride while it lasts and then jump ship when trouble starts. Jumping ship becomes incredibly hard with network effects, so that&amp;#x27;s the challenge we are seeing with social media companies now. Also once companies become too big to fail, it&amp;#x27;s a drag on society.&lt;p&gt;Personally I would still go the VC route since I don&amp;#x27;t have a few million lying around and tell myself this is just the cycle of life (for corporates) to avoid existential questions and going down the rabbit hole of questioning everything around me. Sorry about the disconnected thoughts.</text></item></parent_chain><comment><author>andrekandre</author><text>&lt;p&gt;&lt;pre&gt;&lt;code&gt;  &amp;gt; Just don&amp;#x27;t understand how one could be convinced these days of the fundamental conceit that even a properly profitable company is necessarily going to provide good things for people downstream, or for society in general. 
&lt;/code&gt;&lt;/pre&gt;
if one has worked in a number of business it should become fairly obvious that good products and good revenue are orthogonal phenomena (sometimes they align of course)&lt;p&gt;&lt;pre&gt;&lt;code&gt;  &amp;gt; What is the argument for that in general again?
&lt;/code&gt;&lt;/pre&gt;
i think the general conceit is that bad or good product, someone is paying and they are getting &lt;i&gt;some kind of value&lt;/i&gt; so who is anyone to say its good or bad for society?&lt;p&gt;&lt;pre&gt;&lt;code&gt;  &amp;gt; the idea that companies with a self interest in profit will reliably help people or the world
&lt;/code&gt;&lt;/pre&gt;
wasn&amp;#x27;t this idea put forth strongly by milton freidman and the chicago school - &amp;quot;greed is good&amp;quot; [1] - because more economic activity rises all...? i have to admit intuitively it sounds good even if its probably b.s [2]&lt;p&gt;&lt;pre&gt;&lt;code&gt;  &amp;gt; It just does not at all feel rational, its like everyone in the world is dreaming.
&lt;/code&gt;&lt;/pre&gt;
well, at least some economists anyways....&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.youtube.com&amp;#x2F;watch?v=RWsx1X8PV_A&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.youtube.com&amp;#x2F;watch?v=RWsx1X8PV_A&lt;/a&gt;&lt;p&gt;[2] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.nytimes.com&amp;#x2F;2020&amp;#x2F;09&amp;#x2F;13&amp;#x2F;business&amp;#x2F;dealbook&amp;#x2F;milton-friedman-essay-anniversary.html&quot; rel=&quot;nofollow noreferrer&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.nytimes.com&amp;#x2F;2020&amp;#x2F;09&amp;#x2F;13&amp;#x2F;business&amp;#x2F;dealbook&amp;#x2F;milton-...&lt;/a&gt;</text></comment>
<story><title>Cory Doctorow: Platform Capitalism and the Curse of “Enshittification” [audio]</title><url>https://podtail.com/podcast/future-tense-full-program-podcast/cory-doctorow-platform-capitalism-and-the-curse-of/</url></story><parent_chain><item><author>beepbooptheory</author><text>Just don&amp;#x27;t understand how one could be convinced these days of the fundamental conceit that even a properly profitable company is necessarily going to provide good things for people downstream, or for society in general. What is the argument for that in general again?&lt;p&gt;Because to me, if your not Twitter, your Wal Mart or Raytheon or BoA. If your not shittifying a platform you are pushing out small businesses from every town, price gouging government contracts for missiles, fooling elderly people with complicated financial instruments.&lt;p&gt;I just can&amp;#x27;t really put together any argument at all, if am being honest, to justify the idea that companies with a self interest in profit will reliably help people or the world. It just does not at all feel rational, its like everyone in the world is dreaming.</text></item><item><author>sharperguy</author><text>I think the issue could be rooted in recent monetary policy rather than an inhrenent feature of the market itself.&lt;p&gt;Artificially low interest rate environments lead to a lot of money in the hands of investors, which due to inflation slowly loses purchasing power over time. However, with large reserves, they can easily afford to prop up a business model which persistantly spends more money on bringing &amp;quot;free&amp;quot; features to user while charging very little. Those businesses obviously outcompete any business which do not recieve such investment.&lt;p&gt;However, as time goes on, those investments must eventually earn a return. Switching from a model which loses money every year to one which must profit every year is invariably going to affect the quality of the product. Especially in an environment where directly charging customers for your service would be a death sentence.&lt;p&gt;In the absense of such cheap credit, however, a truly competitive environment could potentially emerge, where businesses must be sustanably profitable from the ground up. Esentially this would mean the last 15 or so years has been wasted time in pursuit of this goal, as false monetary signals were steering us in completely the wrong direction.&lt;p&gt;Some of todays tech companies may survive the transition, but I believe that most will eventually be replaced by completely new ones. Unless we go back to a policy of lowering interest rates to near (or even below) 0%.</text></item><item><author>_eypq</author><text>I&amp;#x27;ve been thinking about how enshittification, venture capital, shareholders and the life cycle of a company are in some ways related. Any company that has external investors is bound to go through this cycle of 
- building a great product
- taking in external funding money
- growing and then either being acquired or going public (or more commonly shutting down)
- then all the head scratching decision making starts&lt;p&gt;It&amp;#x27;s head scratching to users and outside observers, but the incentives are such that there is pressure to grow on a quarterly basis, get those charts looking good and individuals in the management chain are doing what they can to optimize their career growth leading to short term decision making at the cost of users and customers.&lt;p&gt;The big picture thinking and long term decision making are incredibly hard. Very few companies are able to do this over the long term. Micosoft and apple are doing great currently and it will be interesting to see how stripe and openai navigate this process.&lt;p&gt;My current opinion is that only small founder owned companies or foss organizations can avoid this trap over the long term and it involves not trying to squeeze out every last bit of value. Both of these require a certain level of financial security + there&amp;#x27;s the opportunity cost vs just going the vc route.&lt;p&gt;VC funding is incredibly valuable and it opens up a lot of possibilities that small orgs can never hope for. I guess what I&amp;#x27;m saying is: expect enshittification and enjoy the ride while it lasts and then jump ship when trouble starts. Jumping ship becomes incredibly hard with network effects, so that&amp;#x27;s the challenge we are seeing with social media companies now. Also once companies become too big to fail, it&amp;#x27;s a drag on society.&lt;p&gt;Personally I would still go the VC route since I don&amp;#x27;t have a few million lying around and tell myself this is just the cycle of life (for corporates) to avoid existential questions and going down the rabbit hole of questioning everything around me. Sorry about the disconnected thoughts.</text></item></parent_chain><comment><author>ssklash</author><text>A guy named Karl came to the exact same conclusions, in 1867.</text></comment>