Today's links
- DoS a federal agency, then charge for access: Enq carries on a tradition of genuinely terrible startup ideas.
- "Inclusive Access" allows textbook monopolists to permanently consolidate their gains: Universities are auto-billing students for high-priced, self-destructing textbooks they can't loan or sell.
- Scottish Limited Partnerships are still laundering criminal millions: Offshore is actually onshore.
- This day in history: 2011, 2016, 2020
- Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
DoS a federal agency, then charge for access (permalink)
There's a hell of a zap that neoclassical economics puts on your head. After being brainwashed to think that markets "naturally emerge" wherever a shortage occurs, a certain kind of evil asshole will take it upon themselves to "create markets" and thus "solve the problem"
Remember Reservationhop? It was founded by an SF bro who couldn't get restaurant reservations so he had a brainwave: what if I found a "business" that creates fake identities and books every table in town and then auctions them off to would-be diners?
Markets in everything, right? He's just using markets to solve a distributional challenge by (checks notes) committing thousands of acts of fraud and selling something that doesn't belong to him. This guy's brain-worms are amazing:
https://brianmayer.com/2014/07/how-i-became-the-most-hated-person-in-san-francisco-for-a-day/
Markets in everything! Monkeyparking was another SF startup that let people sell their street-parking spot – before you drove away from the meter, you used an app to auction off the right for someone else to get the spot after you.
I mean, you don't own the spot. Monkeyparking doesn't own the spot. They were gonna go global, despite the fact that this is horrifically antisocial and radioactively illegal.
And they had competition! Sweetch, Parkmodo – yes, those are actual businesses that someone's brain-worms forced them to found.
Really.
Which brings me to Enq. They're a startup that has "solved" the problem that the IRS has been so consistently underfunded that no one can get through them on the phone.
Guess how they solved it. No, really, guess. You're gonna love this.
Enq has a giant phone bank that floods the IRS help-line with simultaneous calls, so no one else can get through. Then they sell the right to take over a mature on-hold call – one that is near to being answered by a human being – to busy tax professionals.
They claim they can cut your wait time – that they created with a Denial of Service attack on a federal agency – by 90%! Ransomware by another name.
The LA Times' David Lazarus called them "enterprising" ("find a need and fill it").
Founder and CEO Andrew Valiente told him, "When there’s a problem, there’s an opportunity."
Brain.
Worms.
https://www.latimes.com/business/story/2021-10-05/column-tax-calls-irs-enq
Yeah, Valiente isn't the reason that the IRS can't fully fund a call-center. But his denial of service racket isn't an "opportunity," it's an electronic assault on a federal agency.
He's not "finding a need and filling it," he's "finding a need and exacerbating it."
There's a reason the IRS hasn't solved this problem by offering gold memberships to large accounting and tax-prep firms – government agencies should not operate like airline frequent flier clubs.
The fact that people raised on neoclassical econ can't tell the difference between "addressing a distributional problem" and "making it worse but also letting rich people buy their way out of it" is basically the core problem with the world today.
I mean, it's great news for Riley Quinn and the Trashfuture podcast crew – they're never going to run out of hilariously awful tech startups to dunk on at this rate. But for the rest of us, it's just hell on Earth.
https://trashfuturepodcast.podbean.com/
(Image: Matthew G. Bisanz, CC BY-SA, modified)
"Inclusive Access" allows textbook monopolists to permanently consolidate their gains (permalink)
The student debt crisis isn't merely attributable to spiraling tuition prices – there's a whole menagerie of feral hogs scrumming to get their snouts in the student debt-trap trough.
Take textbook publishers.
This hyperconsolidated industry, dominated by a handful of merger-based megafirms, have increased the value of the textbook market to over $3.5b by the simple expedient of hiking prices by over 1,000% .
Faced with rampant price-gouging, students have turned to traditional methods of lowering the cost of textbook access – used markets, rental markets, etc.
Publishers sued over this – and lost.
Textbook publishers tried to counter this by bribing profs ("paying consulting fees") to assign a new edition of the standard textbook every year – an edition whose pages are sufficiently rearranged that last year's text can't be readily used in class.
As students figured out ways around this, textbook publishers started creating "e-learning resources" – password-protected websites that you could only access by buying a new textbook, shifting key materials from the textbooks to these paywalled sites.
This turned out to be devastating to secondary markets and low-cost access to educational materials, especially when the publishers roped university administrations into the scam, getting them to automatically bill students for their high-priced materials.
As is often the case with commercial scams perpetrated by large corporations that want to create a veneer of respectability, this has an Orwellian name: "Inclusive Access."
It's a con that aligns the interests of three entities: tuition-hiking college administrators, price-gouging textbook cartel, and monopolistic campus bookstores, now mostly run by Barnes and Noble, the sole national American bookselling chain.
They make out like bandits, at students' expense. Despite the obvious antitrust issues here, a federal judge dismissed a case against the publishers:
That's not surprising, as antitrust was neutered 40 years ago, transformed into a monopolist's charter, which tolerates (indeed, actively encourages) monopolistic abuse. That's finally changing, but too slowly for students buying textbooks.
https://www.eff.org/deeplinks/2021/08/party-its-1979-og-antitrust-back-baby
So student advocates are pushing back in the court of public opinion. Inclusiveaccess.org is a new website that counters the publishers' disinformation campaign and advocates for a fair deal on textbooks.
https://www.inclusiveaccess.org/
The publishers claim that by pre-billing students for access to digital textbooks, they save them money over the print-and-ebook bundles that were the norm. That's true, but it's still more expensive than used textbooks, or even ebook-only textbook programs.
And of course, they're vastly more expensive that open access textbooks. If universities want to auto-bill students for textbooks, they could reduce those bills by 95% and then use the remaining sum to fund academics to write and update open access course materials.
In many disciplines, open access texts are now the gold standard. Intellectual property law is absolutely dominated by OA casebooks and primary texts. That is truly "inclusive access."
https://pluralistic.net/2021/08/14/angels-and-demons/#owning-culture
Publishers aren't charities. If they can't offer a better product at a better price than universities can do for themselves through OA materials, they don't deserve to make a dime. No one owes monopolists a living.
Universities routinely form consortia to collaborate – a consortium that produced open courseware would be an enduring, system-wide transformation for the better.
By simply cutting monopolists out of the picture, an open access textbook consortium could pay profs higher rates to contribute chapters, and even give stable jobs to the precarious freelance editors who coordinate the textbook monopolists' titles.
(Image: Inayaysad, CC BY-SA, modified)
Scottish Limited Partnerships are still laundering criminal millions (permalink)
A key lesson from the Pandora Papers is that "tax haven" is a gross misnomer. In reality, the distant, finance-blighted treasure islands are not where the dirty money ends up – of course not, there's nothing to buy there.
The "offshore" sector is like a pinball flipper – plutes and crooks bounce their money off of these tiny, out-of-the-way places, and they fire it back across the ocean, typically through an "onshore-offshore" secrecy haven.
https://pluralistic.net/2021/10/04/avoidance-is-evasion/#transparency
In the USA, there are several states that compete to be the intermediate resting place these secret fortunes: Delaware, the granddaddy of them all, has been surpassed by Wyoming, Nevada, and, most recently and ferociously, South Dakota.
In the EU, onshore-offshore nations like Cyprus, Malta and Luxembourg bend over backwards to launder great, ugly fortunes into the rich world, where they can acquire real-estate, yachts, supercars, and large stakes in voracious private equity firms.
But when it comes to onshore-offshore, no one can hold a candle to the UK. It's not just its globe-spanning commonwealth of treasure islands, nor the close-to-hand Channel Islands.
It doesn't even stop with the notorious crime-zone euphemistically called "The City" – a square mile so filled with scum and villainy that it had to annex Canary Wharf to make room for more.
You also find it in Scotland. The Scottish Limited Partnership is the UK's most favored "financial secrecy vehicle," a friendly home for the former USSR's most brutal dictators, gangsters and oligarchs, who laundered over $100b through SLPs.
https://www.heraldscotland.com/business_hq/15793004.revealed-shell-firms-avoid-transparency/
Tories in the UK Parliament defeated the SNP's efforts to meaningfully regulate to end the corruption:
https://twitter.com/alisonthewliss/status/991345455631142914
The ensuing "investigation" was dead on arrival, deliberately so limited in scope that it could not possible produce real reform:
https://www.nakedcapitalism.com/2018/12/uks-reform-limited-partnership-law-dead-arrival.html
The "crackdown" that it produced was understaffed and anemic:
https://www.heraldscotland.com/news/16192718.staff-shortages-threaten-crackdown-shell-firms/
Today, SLPs remain a favored vehicle for laundering the world's dirtiest criminal money, like a Ukrainian crime gang that defrauded Europeans of eur10m/month.
They were able to do so because they were able to violate the SLP compliance rules – and they were able to do that because no one is enforcing those rules, allowing them to dissolve and reform numbered, anonymous companies to avoid scrutiny.
It turns out that if you do nothing meaningful to end financial crimes, and instead just put on a pantomime about ending financial crimes, criminals will not cooperate with the pantomime, and will continue to commit crimes.
This day in history (permalink)
#10yrsago Tempo: transformative, difficult look at advanced decision-making theory https://memex.craphound.com/2011/10/07/tempo-transformative-difficult-look-at-advanced-decision-making-theory/
#5yrsago Yahoo didn’t install an NSA email scanner, it was a “buggy” NSA “rootkit” https://www.vice.com/en/article/53dkdk/yahoo-government-email-scanner-was-actually-a-secret-hacking-tool
#1yrago Congress's Big Tech trustbusting smackdown https://pluralistic.net/2020/10/07/google-and-platos-cave/#break-em-up
#1yrago Hackers can remotely lock IoT cock-cages https://pluralistic.net/2020/10/07/google-and-platos-cave/#power-play
Colophon (permalink)
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