Pluralistic: 12 Jul 2021

Today's links

A mousetrap superimposed over the Matrix 'waterfall' effect.

Podcasting "Tech Monopolies and the Insufficient Necessity of Interoperability" (permalink)

This week on my podcast, I read my latest Locus Magazine column, "Tech Monopolies and the Insufficient Necessity of Interoperability." It presents a theory of change to get us to a world of aggressive, trans-industry, global trustbusting.

Most industries are monopolized. Whether we're talking about athletic shoes or pharmacy benefit managers, the path to monopolization is the same: companies buy up small competitors, merge with major ones, and use their investors' cash to subsidize anticompetitive attacks.

The reason they're able to get away with it is that for 40 years, the world's been in the grip of a dangerous economic delusion: that the only basis for fighting monopolies is "consumer welfare." That is, monopolies should only be considered harmful if they make prices go up.

The "consumer welfare" standard originated with the far-right economics cult of the University of Chicago and was launched by Ronald Reagan, and has been supported by every president since (until Biden, whose EO from last week explicitly rejects it).

Reagan had incipient dementia (and was thick as pigshit even in his prime), but consumer welfare's boosters understood its consequences: by focusing solely on what monopolies did to us as "consumers," we'd remove from consideration how monopoles acted on us as citizens.

"Consumer welfare" was a recipe for concentrating corporate power so that it could overwhelm regulators, lawmakers and judges, creating a kind of pluocratic planned economy where how we live and work is decided in unaccountable board-rooms, not public legislatures.

Lawmakers were complicit in this power-grab while it benefited them – while the campaign contributions offset the voter alienation that followed from every corporate sellout – but today, it seems, a critical mass of lawmakers have had enough.

The 26-hour markup session for House Democrats' six landmark antitrust bills saw every kind of lawmaker speak out against tech monopolies – from far-right clowns like Matt Gaetz to "squad" member Pramila Jayapal, and every kind of "moderate" in between.

Lawmakers are, for once, ahead of the electorate. Lots of voters are furious about some kind of monopoly – tech, health insurance, cable, beer, finance, meat packing – but precious few who understand that the problem isn't with one industry, it's with monopoly itself.

To create the momentum we'll need for global, cross-industry trustbusting, we have to create and build momentum for the movement. I think we should start with tech.

Even though few people have fixing tech at the top of their agenda, nobody likes the tech industry.

What's more, though tech companies monopolized the same way that, say pro wrestling did (spending their way to the top, buying out or crushing all rivals), tech has particular, specific characteristics that make it easier to pry apart again.

You've probably heard that tech is monopolized because of "network effects." That's econ jargon for a product or service that gets more valuable as more people use it. You join Facebook because your friends are there. Once you're on FB, others join because you're there.

But while network effects explain why tech gets big, they're not why tech stays big. For that, you need to look at the neglected economics concept of "switching costs" – the things you give up when you stop using a product or service.

Facebook and other Big Tech companies do everything they can to raise switching costs. When you quit FB, you lose access to the friends, communities and customers who stay behind. There's no technical reason this has to happen.

You can switch cell carriers without losing the ability to call your friends, after all. The high cost of leaving FB was deliberately created by the company, which has used expensive lawsuits and technological countermeasures to block every attempt to interoperate with it.

But if we used the law to guarantee interop, to force FB to connect to other, non-monopolistic services (say, ones run by co-ops, nonprofits or startups) then FB's billions of users wouldn't be a reason to join FB, they'd be a reason to leave it.

If we passed the ACCESS Act – which imposes a duty on Facebook to interoperate with rivals that promise not to mine or commercialize data – then leaving FB would give you all the benefits of FB (community and friends), with none of the privacy costs.

And if we safeguarded Competitive Compatibility – the right to interoperate without permission, we'd future-proof the ACCESS Act, by securing the right to mod FB to protect security, add accessibility, and add other forms of interop.

Fixing industry – including and especially tech – requires action from the public sector. We can't make monopolies better by acting as "consumers" – we have to act as citizens.

You won't fix Surveillance Capitalism by buying Apple products.

For all the noise that tech companies make about their rivalries – Google vs Facebook, Apple vs Google – at bottom, they differences are as meaningless as the flavors of "marshmellows" in a box of Lucky Charms.

Apple and Google are effectively a combine – for years, Google's Eric Schmidt sat on Apple's board. Apple's biggest single customer is Google. And Apple and Google had no problem illegally colluding to suppress wages with "no poach" agreements.

Same goes for Google-Facebook's rivalry. For two companies that are supposed to be as different as night and day, there are a fuckton of personnel who have moved from one to the other – all the way up to Sheryl Sandberg, the one-time Google VP who's now Facebook's COO.

In his dissent to Citizens United, Justice Stevens wrote that corporate free speech was bullshit because "corporations have no consciences, no beliefs, no feelings, no thoughts, no desires."

Companies want us to believe they have "values," but these are just marketing crap.

That's why monopoly is so easy. Back when the DoJ killed AT&T and T-Mobile's merger, John Legere took charge of T-Mobile's and declared himself the "un-CEO," growing out his hair and donning a t-shirt and emphasizing that he was nothing like his rivals.

But Legere was an ex-AT&T exec. T-Mobile's differences from the other carriers – its claim to be an "un-carrier" were as superficial as those Lucky Charm marshmellow flavors.

That's why Legere was able to merge T-Mobile with Sprint, pocket $135m and retire.

If corporations really had character and personality, if corporate rivalries really meant anything, then we wouldn't have waves and waves of mergers.

I mean, either Disney and Fox were completely at odds with one another and Rupert Murdoch and Bob Iger were Romeo and Juliet, whose desperate, burning love for one another united their two great houses, or…

…It was all bullshit.

To the extent that corporations have "character" and "value," these boil down to one thing:

Class solidarity among monopolists.

Which is why boycotts or other purchase decisions are not going to solve the monopoly problem. You're not a consumer, an ambulatory wallet who votes by buying or not buying. You're a citizen, who can and must demand action from your state on your behalf.

Corporate capture isn't inevitable. It's the result of monopoly – of massive profits and concentrated decision-making power following from boiling an industry down to a few companies.

We can have a responsive government, but only while it is more powerful than companies.

We need to bust every trust, but we have to start somewhere. Tech is uniquely suited to being that starting point, both because of the role interop can play in shattering tech's power, and because tech is the infrastructure for a mass movement to change every industry.

You can read the article here:

Here's the podcast episode:

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

And here's the RSS feed for my podcast:

(Image: Royalty Free, CC BY, modified)

The columnated facade of the Serpentine Sackler Gallery; behind the columns, the front of the gallery has been replaced with a mosaic of $100 bills and Oxycontin pills.

The Sacklers will get to keep billions (permalink)

The Sacklers engaged in an intergenerational, half-century program of drug-pushing; starting by creating the market for benzos and culminating in creating the opioid epidemic. They made a vast fortune off the misery they created and today they're richer than the Rockefellers.

The family drug company, Purdue Pharma, created the addictive, destructive opioid Oxycontin, then systematically lied to the public about its safety, while bribing doctors and pharma distributors to overprescribe it, leading to over 850,000 US opioid deaths.

The family used philanthropy to ensure its name was associated with galleries and museums rather than mass murder and had their lawyers threaten their critics (like me) and when that stopped working, they stashed billions offshore.

The Sacklers' deliberate campaign of mass killing made them billions, but it cost the rest of us far more, both in human lives and in the cash-money costs for local governments and states coping with the opioid epidemic. Many of their victims sued for compensation.

The Sacklers aren't mere world-class drug-dealers and reputation launderers, they've mastered the dark art of capturing judges. They owe their long, profitable career as pushers to their ability to get a court to suppress Richard Sackler's testimony.

As the compensation claims poured in, the Sacklers used their judicial connivance to push all their personal liability into Purdue Pharma's corporate liability, and then declared the company bankrupt:

This would nonconsensually settle all claims – personal and governmental – against the Sacklers. It's a bold move, one that few judges in America would agree to. Lucky for the Sacklers, they know how to abuse the system to go judge-shopping:

The name of the game is Judge Robert Drain, America's most billionaire-friendly bankruptcy judge, who has a long history of letting wealthy criminals declare bankruptcy, discharge their obligations, and walk away with billions.

Getting their case in front of Drain in the Southern District of New York involved some obvious chicanery, like putting a bogus Westchester County address in the machine-readable metadata in their court filings – a White Plains, NY office that the company never used.

The Sacklers' gambit worked. Their case is going before Judge Drain on Aug 9 and the smart money says Drain will permit the settlement, overriding state AGs' objections.

The Sacklers will keep billions. They will not have to admit to any culpability in the deaths they profited from. They won't even have to apologize. States, cities and individual victims will get pennies on the dollars for their claims.

It's true that a settlement will get some money (a mere fraction of the Sacklers' blood-fortune) into the hands of people and governments that desperately need it, but at the cost of any accountability. No Sackler will go to jail. No Sackler will go broke.

We tend to think of the opioid epidemic as a symptom of economic malaise, but there's strong evidence that opioid addiction was the result of the Sacklers' incredible, innovative frauds and not wider socioeconomic conditions.

Writing in Vox EU, David M. Cutler and Edward Glaeser show that there is no correlation between the opioid epidemic and either a rise in physical pain or emotional distress.

Between 1999 and 2009 – when opioid use was spiking – there was no significant rise in Americans reporting two or more painful conditions; what's more, Americans' reported life-satisfaction did not change significantly during those years.

The major change that explains the rise of opioids? The release of the Sacklers' Oxycontin, and their fraudulent claims about its safety, and their extensive campaign to bribe or trick doctors into prescribing opioids.

This tracks with the history of opioid addiction overall: the spikes in opioid troubles always correlate to technological breakthrough, like 1897's heroin, a "safe" opium alternative, or 1904's morphine, sold as a nonaddictive alternative to heroin.

Heroin and morphine went through the same cycle as oxy – sold as a safe alternative to existing painkillers, vastly overprescribed, and then revealed to be every bit as dangerous – or worse – than the products they replaced.

(Image: Geographer, CC BY-SA, modified)

This day in history (permalink)

#15yrsago Alanya to Alanya: feminist science fiction adventure
#20yrsago Muslim cleric okays divorce-over-SMS

#15yrsago Techno remix of Sen. Steven’s “The Internet is Tubes” lunacy

#15yrsago Felten’s paper on the complexities of Network Neutrality

#10yrsago 3D printed hair-clips inspired by Bruce Sterling’s “Kiosk”

#5yrsago To see the future, visit the most remote areas of the GBAO

#5yrsago Empirical proof that Terms of Service are “the biggest lie on the Internet”

#5yrsago Flawed police drug-test kits, railroading prosecutors and racism: the police-stop-to-prison pipeline

#5yrsago Negative Swiss 50-year bond yields just shattered the global insecurity barometer

#5yrsago Teen comes out to her family on Disneyland’s Splash Mountain

#1yrago Wirecard's vanished COO wanted 15,000 Libyan militiamen

Colophon (permalink)

Currently writing:

  • Spill, a Little Brother short story about pipeline protests. Friday's progress: 252 words (9712 words total)

  • A Little Brother short story about remote invigilation. PLANNING

  • A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown." FINAL EDITS

  • A post-GND utopian novel, "The Lost Cause." FINISHED

  • A cyberpunk noir thriller novel, "Red Team Blues." FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: Tech Monopolies and the Insufficient Necessity of Interoperability
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Upcoming books:

  • The Shakedown, with Rebecca Giblin, nonfiction/business/politics, Beacon Press 2022

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"When life gives you SARS, you make sarsaparilla" -Joey "Accordion Guy" DeVilla