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mostlysignssomeportents · 1 month

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Meatspace twiddling

I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me next weekend (Mar 30/31) in ANAHEIM at WONDERCON, then in Boston with Randall "XKCD" Munroe (Apr 11), then Providence (Apr 12), and beyond!

"Enshittification" isn't just a way of describing the symptoms of platform decay: it's also a theory of the mechanism of decay – the means by which platforms get shittier and shittier until they are a giant pile of shit.

I call that mechanism "twiddling": this is the ability of digital services to alter their business-logic – the prices they charge, the payouts they offer, the particulars of the deal – from instant to instant, for each user, continuously:

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

Contrary to Big Tech's own boasting about its operations, the tricks that tech firms play to siphon value away from business customers and end-users aren't very sophisticated. They're crude gimmicks, like offering a higher per-hour wage to Uber drivers whom the algorithm judges to be picky about which rides they'll clock in for, and then lowering the wage by small increments as a way of lulling the driver into gradually accepting a permanent lower rate:

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

This is a simple trick. The difference is that tech platforms like Uber can play it over and over, and very quickly. There's plenty of wage-stealing scumbag bosses who'd have loved to have shaved pennies off their workers' paychecks, then added a few cents back in if a worker cried foul, then started shaving the pennies again. The thing that stopped those bosses was the bottleneck of payroll clerks, who couldn't make the changes fast enough.

Uber plays crude tricks – like claiming that a driver isn't an employee because the control is mediated through an app – and then piles more crude tricks on top – this algorithmic wage discrimination gambit.

Have you ever watched a shell-game performed very slowly?

https://www.masterclass.com/articles/how-to-do-penn-tellers-famous-cups-and-balls-trick-in-12-steps

It's a series of very simple gimmicks, performed very quickly and smoothly. Computers are very quick and very smooth. The quickness of the hand deceives the eye: do crude tricks with superhuman speed and they'll seem sophisticated.

The one bright spot in the Great Enshittening that we're living through is that many firms are not sufficiently digitized to to these crude tricks very quickly. Take grocery stores: they can get up to a lot of the same tricks as Amazon – for example, they can charge suppliers for placement on the most prominent, easiest-to-reach shelves, reorganizing your shopping based on which companies pay the biggest bribes, rather than offering the best products and prices.

But Amazon takes this to a whole different level – beyond simply organizing their product pages based on payola, they do this for search. You ask Amazon, "What's your cheapest batteries?" and it lies to you. If you click the first link in a search-results page, you'll pay 29% more than you would if you got the best product – a product that is, on average, 17 places down on the results page. Amazon makes $38b/year taking bribes to lie to you:

https://pluralistic.net/2023/11/06/attention-rents/#consumer-welfare-queens

Amazon can do more than that. Thanks to its digital nature, it can continuously reprice its offerings – indeed, it can simply make up each price displayed on every product at the instant you look at it – based on its surveillance data about you, estimating your willingness to pay. For sellers, Amazon can continuously re-weight the likelihood that a given product will be shown to a customer based on the seller's willingness to discount their products, even to the point where they go out of business:

https://www.businessinsider.com/sadistic-amazon-treated-book-sellers-the-way-a-cheetah-would-pursue-a-sickly-gazelle-2013-10

Twiddling, in other words, lets digital services honeycomb their servers with sneaky wormholes that let them siphon value away from one kind of platform user and give it to another (as when Apple silently began spying on Iphone owners to create profiles for advertisers), or to themselves.

But hard-goods businesses struggle to do this kind of twiddling. Not for lack of desire – but for lack of capacity. Jeff Bezos, owner of Amazon Fresh – an online grocery store – can change prices and layout millions of times per day, at effectively zero cost. Jeff Bezos, owner of Whole Foods – a brick-and-mortar grocer – needs a army of teenagers on rollerskates with pricing guns to achieve a fraction of this agility.

So hard-goods businesses are somewhat enshittification-resistant. It's not that their owners are more interested in the welfare of their customers, workers and suppliers – they merely lack the capacity to continuously rejigger the way their business runs.

Well, about that.

Grocers have been experimenting with "electronic shelf labels" in order to do "dynamic pricing" – that means that prices change quickly, in response to circumstances:

https://www.npr.org/2024/03/06/1197958433/dynamic-pricing-grocery-supermarkets

This doesn't have to be bad! As @planetmoney points out, it's a little weird that grocers don't discount milk whose sell-by date is drawing near. That milk is worth less to shoppers, because they have to use it more quickly lest it expire. Instead of marking down the price of perishable goods – day-old lettuce, yesterday's bread, etc – grocers put them on the shelves next to fresher, more valuable products, leading to billions of dollars' worth of food-waste and and unimaginable quantities of methane-producing, planet-cooking landfill.

In Norway, ESLs are pretty well established and – at least according to Planet Money's reporting – they are used exclusively to offer discounts in order to reduce waste. They make everyone better off.

But towards the end of the story, they note that Norway's grocery sector – which alters prices up to 2,000 times per day – has been accused of using ESLs to rig prices, hiking them and blaming them on pandemic supply-chain problems and loose monetary policy. Greedflation, in other words.

Greedflation is rampant in the grocery sector, all around the world. Remember when the price of eggs doubled and they blamed in on bird-flu, even as the CEO of the one company that owns every egg brand you've ever heard of boasted about how he could hike prices and suckers would just pay it?

https://pluralistic.net/2023/01/23/cant-make-an-omelet/#keep-calm-and-crack-on

In Canada, grocers rigged the price of bread, the most Les-Mis-ass form of corporate crime you can imagine (do you want guillotines, Galen Weston? Because this is how you get guillotines):

https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada

EU grocers – another highly concentrated industry – also collude to rig prices:

https://pluralistic.net/2023/09/17/how-to-think-about-scraping/

Which is all to say that while these companies don't have to use the twiddling capabilities that come with ESLs to enshittify their stores, we'd be pretty fucking naive to assume that they won't.

And here's the bad news: US grocers like Whole Foods (owned by Amazon, the company that wrote the enshittification playbook) are already experimenting with ESLs. So is Alberstons/Safeway, the massive, inbred conglomerate that has already demonstrated its passion for using twiddling to fuck over their workers:

https://knock-la.com/vons-fires-delivery-drivers-prop-22-e899ee24ffd0/

Economists love "price discrimination" – where prices change based on circumstance, trying to match the perfect price with the perfect customer. On paper, that sounds plausible: if I need a quart of milk for a recipe I'm making tonight and I get a 50% discount on some about-to-expire 2%, then everyone's better off. I get a discount and the grocer gets some money for milk they'd have to throw away at the end of the day.

But these elegant, self-licking ice-cream cones only emerge if the corporation offering the deal is constrained. Perhaps they're constrained by competition – the fear that you'll go elsewhere. Or perhaps they're constrained by regulation – the fear that they'll be punished if they use twiddling-tech to cheat you.

The grocery sector, dominated by a cartel of massive companies that routinely collude to rip us off, is not constrained by competition. And for years, regulators let them get away with ripping us off (though finally that might be changing):

https://www.nytimes.com/2024/03/21/us/politics/grocery-prices-pandemic-ftc.html?unlocked_article_code=1.ek0.t2Pr.g4n2usbxEcoa

For neoclassical economists, the answer to all this is "caveat emptor" – let the buyer beware. If you want to make sure that ESLs are only used to offer you discounts and not to gouge prices, all you need to do is note the price of everything you buy, every time you buy it, and triple-check it every time you go back to the grocery store. Just be eternally vigilant!

Thing is, the one thing computers are much better at than humans is vigilance. With ESLs and other twiddling mechanisms, you're a fish on a hook, and the seller is tireless in giving you a little more slack, then a little less, until you finally drop your guard.

Economists desperately want these elegant models to work, but "efficient market hypothesis" is a brain-worm that always turns into apologetics for fraud. Dynamic markets sound like a good idea, but they are catnip for cheaters. "Just be eternally vigilant" is miserable advice, and no way to live your life:

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

In his brilliant novel Spook Country, @GreatDismal describes augmented reality as "cyberspace everting" – that is, turning inside-out:

https://memex.craphound.com/2007/07/31/william-gibsons-spook-country/

The extrusion of twiddling technology from digital platforms into the physical world isn't cyberspace everting so much as it is cyberspace prolapsing.

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

https://pluralistic.net/2024/03/26/glitchbread/#electronic-shelf-tags

#pluralistic #fraud apologetics #caveat emptor #twiddling #competition #groceries #price discrimination #norway #electronic shelf tags #planet money #enshittification #constraints #greedflation #efficient market hypothesis brain-worms

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mostlysignssomeportents · 2 days

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Antitrust is a labor issue

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

This is huge: yesterday, the FTC finalized a rule banning noncompete agreements for every American worker. That means that the person working the register at a Wendy's can switch to the fry-trap at McD's for an extra $0.25/hour, without their boss suing them:

https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes

The median worker laboring under a noncompete is a fast-food worker making close to minimum wage. You know who doesn't have to worry about noncompetes? High tech workers in Silicon Valley, because California already banned noncompetes, as did Colorado, Illinois, Maine, Maryland, New Hampshire, North Dakota, Oklahoma, Oregon, Rhode Island, Virginia and Washington.

The fact that the country's largest economies, encompassing the most "knowledge-intensive" industries, could operate without shitty bosses being able to shackle their best workers to their stupid workplaces for years after those workers told them to shove it shows you what a goddamned lie noncompetes are based on. The idea that companies can't raise capital or thrive if their know-how can walk out the door, secreted away in the skulls of their ungrateful workers, is bullshit:

https://pluralistic.net/2022/02/02/its-the-economy-stupid/#neofeudal

Remember when OpenAI's board briefly fired founder Sam Altman and Microsoft offered to hire him and 700 of his techies? If "noncompetes block investments" was true, you'd think they'd have a hard time raising money, but no, they're still pulling in billions in investor capital (primarily from Microsoft itself!). This is likewise true of Anthropic, the company's major rival, which was founded by (wait for it), two former OpenAI employees.

Indeed, Silicon Valley couldn't have come into existence without California's ban on noncompetes – the first silicon company, Shockley Semiconductors, was founded by a malignant, delusional eugenicist who also couldn't manage a lemonade stand. His eight most senior employees (the "Traitorous Eight") quit his shitty company to found Fairchild Semiconductor, a rather successful chip shop – but not nearly so successful as the company that two of Fairchild's top employees founded after they quit: Intel:

https://pluralistic.net/2021/10/24/the-traitorous-eight-and-the-battle-of-germanium-valley/

Likewise a lie: the tale that noncompetes raise wages. This theory – beloved of people whose skulls are so filled with Efficient Market Hypothesis Brain-Worms that they've got worms dangling out of their nostrils and eye-sockets – holds that the right to sign a noncompete is an asset that workers can trade to their employers in exchange for better pay. This is absolutely true, provided you ignore reality.

Remember: the median noncompete-bound worker is a fast food employee making near minimum wage. The major application of noncompetes is preventing that worker from getting a raise from a rival fast-food franchisee. Those workers are losing wages due to noncompetes. Meanwhile, the highest paid workers in the country are all clustered in a a couple of cities in northern California, pulling down sky-high salaries in a state where noncompetes have been illegal since the gold rush.

If a capitalist wants to retain their workers, they can compete. Offer your workers get better treatment and better wages. That's how capitalism's alchemy is supposed to work: competition transmogrifies the base metal of a capitalist's greed into the noble gold of public benefit by making success contingent on offering better products to your customers than your rivals – and better jobs to your workers than those rivals are willing to pay. However, capitalists hate capitalism:

https://pluralistic.net/2024/04/18/in-extremis-veritas/#the-winnah

Capitalists hate capitalism so much that they're suing the FTC, in MAGA's beloved Fifth Circuit, before a Trump-appointed judge. The case was brought by Trump's financial advisors, Ryan LLC, who are using it to drum up business from corporations that hate Biden's new taxes on the wealthy and stepped up IRS enforcement on rich tax-cheats.

Will they win? It's hard to say. Despite what you may have heard, the case against the FTC order is very weak, as Matt Stoller explains here:

https://www.thebignewsletter.com/p/ftc-enrages-corporate-america-by

The FTC's statutory authority to block noncompetes comes from Section 5 of the FTC Act, which bans "unfair methods of competition" (hard to imagine a less fair method than indenturing your workers). Section 6(g) of the Act lets the FTC make rules to enforce Section 5's ban on unfairness. Both are good law – 6(g) has been used many times (26 times in the five years from 1968-73 alone!).

The DC Circuit court upheld the FTC's right to "promulgate rules defining the meaning of the statutory standards of the illegality the Commission is empowered to prevent" in 1973, and in 1974, Congress changed the FTC Act, but left this rulemaking power intact.

The lawyer suing the FTC – Anton Scalia's larvum, a pismire named Eugene Scalia – has some wild theories as to why none of this matters. He says that because the law hasn't been enforced since the ancient days of the (checks notes) 1970s, it no longer applies. He says that the mountain of precedent supporting the FTC's authority "hasn't aged well." He says that other antitrust statutes don't work the same as the FTC Act. Finally, he says that this rule is a big economic move and that it should be up to Congress to make it.

Stoller makes short work of these arguments. The thing that tells you whether a law is good is its text and precedent, "not whether a lawyer thinks a precedent is old and bad." Likewise, the fact that other antitrust laws is irrelevant "because, well, they are other antitrust laws, not this antitrust law." And as to whether this is Congress's job because it's economically significant, "so what?" Congress gave the FTC this power.

Now, none of this matters if the Supreme Court strikes down the rule, and what's more, if they do, they might also neuter the FTC's rulemaking power in the bargain. But again: so what? How is it better for the FTC to do nothing, and preserve a power that it never uses, than it is for the Commission to free the 35-40 million American workers whose bosses get to use the US court system to force them to do a job they hate?

The FTC's rule doesn't just ban noncompetes – it also bans TRAPs ("training repayment agreement provisions"), which require employees to pay their bosses thousands of dollars if they quit, get laid off, or are fired:

https://pluralistic.net/2022/08/04/its-a-trap/#a-little-on-the-nose

The FTC's job is to protect Americans from businesses that cheat. This is them, doing their job. If the Supreme Court strikes this down, it further delegitimizes the court, and spells out exactly who the GOP works for.

This is part of the long history of antitrust and labor. From its earliest days, antitrust law was "aimed at dollars, not men" – in other words, antitrust law was always designed to smash corporate power in order to protect workers. But over and over again, the courts refused to believe that Congress truly wanted American workers to get legal protection from the wealthy predators who had fastened their mouth-parts on those workers' throats. So over and over – and over and over – Congress passed new antitrust laws that clarified the purpose of antitrust, using words so small that even federal judges could understand them:

https://pluralistic.net/2023/04/14/aiming-at-dollars/#not-men

After decades of comatose inaction, Biden's FTC has restored its role as a protector of labor, explicitly tackling competition through a worker protection lens. This week, the Commission blocked the merger of Capri Holdings and Tapestry Inc, a pair of giant conglomerates that have, between them, bought up nearly every "affordable luxury" brand (Versace, Jimmy Choo, Michael Kors, Kate Spade, Coach, Stuart Weitzman, etc).

You may not care about "affordable luxury" handbags, but you should care about the basis on which the FTC blocked this merger. As David Dayen explains for The American Prospect: 33,000 workers employed by these two companies would lose the wage-competition that drives them to pay skilled sales-clerks more to cross the mall floor and switch stores:

https://prospect.org/economy/2024-04-24-challenge-fashion-merger-new-antitrust-philosophy/

In other words, the FTC is blocking a $8.5b merger that would turn an oligopoly into a monopoly explicitly to protect workers from the power of bosses to suppress their wages. What's more, the vote was unanimous, include the Commission's freshly appointed (and frankly, pretty terrible) Republican commissioners:

https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-moves-block-tapestrys-acquisition-capri

A lot of people are (understandably) worried that if Biden doesn't survive the coming election that the raft of excellent rules enacted by his agencies will die along with his presidency. Here we have evidence that the Biden administration's anti-corporate agenda has become institutionalized, acquiring a bipartisan durability.

And while there hasn't been a lot of press about that anti-corporate agenda, it's pretty goddamned huge. Back in 2021, Tim Wu (then working in the White wrote an executive order on competition that identified 72 actions the agencies could take to blunt the power of corporations to harm everyday Americans:

https://www.eff.org/deeplinks/2021/08/party-its-1979-og-antitrust-back-baby

Biden's agency heads took that plan and ran with it, demonstrating the revolutionary power of technical administrative competence and proving that being good at your job is praxis:

https://pluralistic.net/2022/10/18/administrative-competence/#i-know-stuff

In just the past week, there's been a storm of astoundingly good new rules finalized by the agencies:

A minimum staffing ratio for nursing homes;

The founding of the American Climate Corps;

A guarantee of overtime benefits;

A ban on financial advisors cheating retirement savers;

Medical privacy rules that protect out-of-state abortions;

A ban on junk fees in mortgage servicing;

Conservation for 13m Arctic acres in Alaska;

Classifying "forever chemicals" as hazardous substances;

A requirement for federal agencies to buy sustainable products;

Closing the gun-show loophole.

That's just a partial list, and it's only Thursday.

Why the rush? As Gerard Edic writes for The American Prospect, finalizing these rules now protects them from the Congressional Review Act, a gimmick created by Newt Gingrich in 1996 that lets the next Senate wipe out administrative rules created in the months before a federal election:

https://prospect.org/politics/2024-04-23-biden-administration-regulations-congressional-review-act/

In other words, this is more dazzling administrative competence from the technically brilliant agencies that have labored quietly and effectively since 2020. Even laggards like Pete Buttigieg have gotten in on the act, despite a very poor showing in the early years of the Biden administration:

https://pluralistic.net/2023/02/11/dinah-wont-you-blow/#ecp

Despite those unpromising beginnings, the DOT has gotten onboard the trains it regulates, and passed a great rule that forces airlines to refund your money if they charge you for services they don't deliver:

https://www.whitehouse.gov/briefing-room/statements-releases/2024/04/24/fact-sheet-biden-harris-administration-announces-rules-to-deliver-automatic-refunds-and-protect-consumers-from-surprise-junk-fees-in-air-travel/

The rule also bans junk fees and forces airlines to compensate you for late flights, finally giving American travelers the same rights their European cousins have enjoyed for two decades.

It's the latest in a string of muscular actions taken by the DOT, a period that coincides with the transfer of Jen Howard from her role as chief of staff to FTC chair Lina Khan to a new gig as the DOT's chief of competition enforcement:

https://prospect.org/infrastructure/transportation/2024-04-25-transportation-departments-new-path/

Under Howard's stewardship, the DOT blocked the merger of Spirit and Jetblue, and presided over the lowest flight cancellation rate in more than decade:

https://www.transportation.gov/briefing-room/2023-numbers-more-flights-fewer-cancellations-more-consumer-protections

All that, along with a suite of protections for fliers, mark a huge turning point in the US aviation industry's long and worsening abusive relationship with the American public. There's more in the offing, too including a ban on charging families extra for adjacent seats, rules to make flying with wheelchairs easier, and a ban on airlines selling passenger's private information to data brokers.

There's plenty going on in the world – and in the Biden administration – that you have every right to be furious and/or depressed about. But these expert agencies, staffed by experts, have brought on a tsunami of rules that will make every working American better off in a myriad of ways. Those material improvements in our lives will, in turn, free us up to fight the bigger, existential fights for a livable planet, free from genocide.

It may not be a good time to be alive, but it's a much better time than it was just last week.

And it's only Thursday.

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

https://pluralistic.net/2024/04/25/capri-v-tapestry/#aiming-at-dollars-not-men

#pluralistic #labor #antitrust #trustbusting #noncompetes #indenture #ftc #matt stoller #david dayen #tapestry #luxury fashion #capri

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