When was the last year that the internet

felt good to you? I think everybody's

different answers to this. Mine, I

think, go fairly far back, maybe to the

heyday of blogging.

>> Words and getting up to 40,000 hits on

his blog a day.

>> At least before the moment when Twitter

and Facebook went algorithmic.

>> What we're trying to do is give everyone

in the world the best personalized

newspaper we can. But whatever your

answer to it is, I have not found many

people who think 2026 right now, this

internet with all of its anger and its

outrage and its AI sloth, this is what

we were promised.

>> A glitch spread graphic violent videos

to unsuspecting Instagram users.

>> This is living at the technological

peak.

>> In just three clicks, I can go from date

night ideas to mind control seduction.

But even if there is this growing

consensus that something went wrong with

the internet somewhere and that it is

driving our society somewhere we don't

want it to go, there's not really a

consensus of what to do about it. What

to do about these giant platforms

increasingly spammed up with ads and

sponsored results boosting content that

will keep us hooked and angry, isolating

and dividing us and deranging our

politics or making a few billionaires

ever richer. held up by an army of

lowwage workers in warehouses and on

delivery bikes. Something has gone so

wrong. But what do we do about it? My

guests today have two theories of the

case. Cory Doctoro is a longtime

blogger, an activist with the Electronic

Frontier Foundation, and a science

fiction writer. His new book is

Inshitification: Why Everything Suddenly

Got Worse and What to Do About It. Tim

Woo worked as a special assistant to

President Biden for technology and

competition policy. He's a professor at

Columbia Law School and author of

influential books on technology,

including his latest, The Age of

Extraction: How Tech Platforms Conquered

the Economy and Threatened Our Future

Prosperity.

I wanted to have them both on because

their books both feel to me like they

talk to each other. They feel like

they're describing something similar,

but in importantly different ways. And

so, I wanted to think through their

theories

and through what might be done about it.

As always, my email as Kleinshowny

Times.com.

Tim Woo, Cory Doctoro. Welcome to the

show.

>> Thank you very much.

>> Great to be here.

>> So, I just learned that you both went to

elementary school together.

>> Yep.

>> Yeah, that's true.

>> In suburban Toronto, a a weird little

school with like 80 kids. It was

kindergarten to 8th grade in one

classroom. Older kids taught the younger

kids. We more or less were left to go

feral and design our own curriculum.

They chucked us out of the school on

Wednesday afternoons to take our subway

pass and find somewhere fun in Toronto

to go do stuff. It was great.

>> Is there anything about that school that

would lead people to becoming sworn

enemies of our tech overlords?

>> Well, we love tech at the time. I mean,

we had we were early in on Apple 2.

>> Mhm.

>> And I frankly that's where it all

started in a way. You know, both of our

our our books have this kind of pining

for a lost age. And I think some of it

is this early era of computing when we

were just like so excited, so

optimistic, everything was just going to

be so amazing. And that that to me a

little bit was was fifth grade or grade

five as we say, you know, programming

the Apple 2.

>> Can I can I slightly uh uh add

problematize that? So, um I I do think

that like so we were both also science

fiction readers back then. And so I was

pretty alive to the dystopian

possibilities of computers at the time.

So I wouldn't call myself optimistic. I

would call myself hopeful and excited

but not purely optimistic. And I would

also like to say that like Pax uh um

John Hudman, nostalgia is a toxic

impulse. And when I when I think about

what I like about those days, it's not

that I want to recover those days. It's

more that I kind of dispute that the

only thing an era in which people had

lots of control over their computers

could have turned into is one in which

the computers had lots of control over

them. That there is probably something

else that we could have done when you're

spending time on the internet these

days, Corey, what feels bad to you about

it?

>> So, what I would do is contrast what

happens when things aren't great now

with how I felt about what happened when

things weren't great before. So, I think

when I was a a a laram on the early

internet and I saw things that sucked, I

would think someone's going to fix this

and maybe it could be me. Uh, and now

when I see bad things on the internet,

I'm like, this is by design and it

cannot be fixed because you would be

violating the rules if you even tried.

Tim, how about you? I feel it's like a

tool I cannot trust. You know, I feel

like the tools I like in my life, like a

hammer, you know, I swing it, it does

something predictable. The internet

seems like it's serving two masters.

>> You know, I search for something, I get

a bunch of stuff I don't really want,

and I don't really know what I'm

getting. Um, I go, I want to write like

one email or check one thing, I end up

in some strange rabbit hole and reading

and like three hours go by and I don't

know what happened. So, I feel like I'm

constantly at risk of being manipulated

or taken from, and I don't trust the

tools to do what they say they're going

to do. And I feel that makes using it

much, you know, kind of like living in a

fun house. So, I don't like that. So, I

want to make sure I give voice to

somebody who is not in the show at the

moment because this has a it's going to

have the flavor of

>> the prophet Elijah has entered the chat.

>> Yeah. Right. Yeah. three three uh

middle-aged guys who think the internet

went wrong somewhere along the way. Uh

when I was working on this episode with

my producer, one of the interesting

tensions behind the scenes was she

doesn't think the internet is bad. She

thinks Tik Tok is uh she said a perfect

platform. Um she's young kids and feels

Amazon is a godsend for a young parent.

Obviously there are many people like

this who are using these platforms

freely of their own valition happily.

So, what do you say to somebody who

says, "What are you [ __ ] all talking

about?"

Yeah. I mean, I guess I I'll start. I I

think that I I I well, the the middle-ag

thing though used to be better, which is

I I don't want to fall into that sort of

situation. I just think the deal is not

what it could be. And I think that, you

know, maybe as a consumer who sort of

lightly uses this, the internet is is

still useful. But if people I mean, I I

have children, too. And you know, I

think it's hard to deny that social

media um has been tough on kids and has

had all kinds of negative effects on

that and that really started

accelerating over the last 15 years or

so. But I think we have a highly

polarized political structure which is,

you know, made worse by social media. I

think we have a problem with inequality

which has gotten worse and worse and is

accentuated by the fact that the margins

are just so thin for independent

business. And I also think this vision

that it would be this um equalizer

leveler this this technology that made a

lot of people rich not just a few people

rich that it was you know more or less I

know easy but reasonable and and and a

lucrative thing to do to start your own

business that it would sort of change

some of the challenges of inequality and

class uh structure in the United States.

Now maybe those were very high hopes.

This is a key concept in in my book and

I think key to understanding the

economics of our time is the importance

of platforms

um which are you know any space or any

institution that brings together buyers

or sellers speakers or listeners. Every

civilization has had platforms. I was in

Rome a few weeks ago and you know you go

to the Roman forum and there it is. It's

all together. the buyers, the sellers,

um they have the courts, they have where

people gave their speeches. You know,

they're kind of the core of every

civilization.

And in some level, why I wrote this book

is I was I was interested in this

question of what our fundamental

platforms look like and how that

reflects on the civilization we are

building because I do think they have a

large impact. I think that's kind of

undeniable.

But I think that, you know, things have

gotten worse in in many dimensions. And

I guess it relates to my view of the

state of the country as well. I think

we've been in a better place in other

periods of American history. And I think

the internet's not the only cause, but I

think it's part of it. If I were having

this conversation with your producer and

we had some time to talk about it, I

would probably walk them through a

couple of the undisputed ways in which

some people have found the internet get

worse for them. So Tim has talked a

little about margins for small

businesses. Um there's also people who

are performers who found that the take

that's being given from the that's being

sucked out of their uh pay packet every

month is going up and up from the

platforms. There's people who would like

really not like to be snatched by ICE

snatch squads who installed ICE block on

their iPhone only to have Tim Cook

decide that uh ICE officers were a

member of a protected class and remove

that app and now you can't install that

app cuz the iPhone only lets you install

official apps. And I'd say like just

because this hasn't hit you, I I think

unless you have a theory about why you

are favored by these platforms, then you

should at least be worried that this

would come. And I would follow up by

saying like let's not fall into the trap

of vulgar Thatcherism. You know,

Thatcher's motto was there there is no

alternative. And I think tech bosses

would like you to believe that too. That

if you're enjoying having a conversation

on Facebook with your friends, which I

stipulate lots of people do. I think

that's absolutely the case and we should

value and celebrate that. That you just

have to accept that there is no way to

have a conversation with your friends

that Mark Zuckerberg isn't listening in

on. And that to ask for otherwise than

that would be like asking for water

that's not wet. It's just like not

possible. And what I'mating for is not

like you don't like that thing you like.

It's like I I like that you like the

thing you like. I want to make it good

and I also want to guarded against

getting worse because just because it

hasn't happened to you yet, uh it would

be uh um I think naive to think that it

would never come for you. So your books

are two frameworks for understanding

what I would call corporate capture of

the internet. The way we went from the

dream of a decentralized

uh user controlled internet to to

something that a small number of

corporations really run and have

enormous power over. And Tim the term

you focus on is extraction Cy. The term

you focus on is initification.

So I'd like you just both to define

those terms for me. What is extraction

Tim? What is inchification Cy?

>> So extraction is actually a technical

economic term that refers to the ability

of of any entity or any firm with market

power or monopoly power to take um

wealth or uh other resources far in

excess of the value of the good being

provided. Not not only the value being

provided but also it's its cost to

provide it. That's the technical

definition. So you might have a

pharmaceutical company. They have uh you

know there's a rare disease. They have

the only treatment for it and you know

maybe they're they're extracting as much

as they can. You know $100,000 uh a year

is about the usual. And I think the idea

of it comes from a sense something I get

from teaching at business school

sometime is that American business has

in my view moved increasingly to focus

its efforts on trying to find points of

extraction as a business model. um as

opposed to say improving the product or

lowering the price. You know, try to

find the pain points where your

customers really have no choice and then

uh take as much you can kind of like in

a poker game when you go all in because

you got the good hand. Now, there's

always been a little bit of that in

business or maybe a lot like in the

guilded age. But the question is what is

the ratio and how much of business is

providing good services uh for good

prices, you know, making a profit that's

fine and how much is just that different

thing of extraction. So Tim, I want to

before I move on to Corey, zoom in on

something you said there because a lot

of that definition seem to turn on how

you define value.

>> Yeah.

>> And I mean a lot of economists would say

price is a method of discovering value.

If you have a pharmaceutical people are

willing to pay $70,000 for that means

they value it at $70,000 even if you

think that is extractive. Mhm.

>> So, how do you know when a price when a

profit

is actually extractive versus when we're

just seeing that people value that

product very highly and bully on the,

you know, producer for creating

something people value so highly.

>> Yeah. So if someone for example, you

know, has no choice but they they are

desperate, let's say, for water and

someone is able to sell them, you know,

a bottle of water cuz they're dying for

$100,000 or something like that, um,

yes, that person does value it at that

level. But an economy full of nothing

but maximized monopoly prices where

people are in a position to extract

affirms is is uh not it's inefficient

for two reasons. One is too much money

gets spent on that water versus you know

other things like maybe pursuing an

education and second that the entity

that holds that much power actually has

a has a impulse to reduce supply reduce

output and therefore produce less of the

stuff so that they can extract the

higher price. So there's I mean this is

just classic monopoly economics I guess

I'm I'm getting into. I mean, everyone

inside themselves has something they are

willing to pay, but that doesn't mean

it's a good society when you're

constantly paying the maximum you are

willing to pay in every situation. It's

actually a very oppressive economy, I

think. So, Tim, when we're talking about

extraction for many of these platforms,

for a Facebook, for a Tik Tok, we're not

paying for them. So, when you say they

are extracted, what are they extracting

and from whom? When you use Facebook,

you are constantly being mined for your

time, attention, and data in a way that

is extraordinarily valuable and that,

you know, yielded something like 67

billion in profit last year. So, you

know, things that feel free. Is it free

when you suddenly spend, you know, hours

um wandering around random things you

didn't intend to? Is it free when you

end up buying stuff that you didn't

really want and wonder why you get it

later? Is it free when you feel that

you've, you know, had your

vulnerabilities exploited? I would say

none of that's free. You're poorer both

uh in your own consciousness and in

terms of what attention and your control

over your life. And you're poorer

probably in misspend money.

>> Cory, how about initification?

>> Well, before I do that, I also wanted to

react to something um that you were sort

of fainting at, Ezra, which is this idea

of revealed preferences, which you often

hear in these discussions, right? that

if you let Facebook spy on you, no

matter what you say about how how you

feel about Facebook spying on you, you

have a revealed preference. And Tim used

the word power when he responded to

that. And I think that, you know, if you

if you ask the neocclassicals, they'll

say, well, we like models, and it's hard

to model qualitative aspects like power.

So, we just leave them out of the model

and hope that it's not an important

factor. And this is how you get these

incredibly bizarre conclusions like if

you sell your kidney to make the rent,

you have a revealed preference for

having one kidney. But what we actually

know when we give people choices when

when the state intervenes or when

there's counterveailing power is that

often you get a different revealed

preference. You know, when Apple gave

Facebook users the power to tick a box

and opt out of Facebook spying, 96% of

Apple users tick that box. So the

argument that Facebook users don't being

mind being spied on, I think is blown

out of the water when you actually give

them a a way to express preferences, and

I assume the other 4% were like either

drunk or Facebook employees or drunk

Facebook employees, which makes sense

cuz I would be drunk all the time if I

worked at Facebook. But I think it's

hard to deny that people really don't

want to be spied on if they can avoid

being spied on.

>> All right. I think that's a good setup

to inshification.

>> Yeah, inshitification. It's really a

label I hung on both an observation

about a characteristic pattern of how

platforms go bad, but I think much more

importantly why they're going bad now

because we didn't invent greed in the

middle of the last decade. So something

has changed. I my thesis is that some

exogenous factors have changed. So the

pattern of platform decay is that

platforms are first good to their end

users while locking them in. That's

stage one. And once they know that the

users have a hard time departing when

they face a collective action problem or

when they have high switching costs, um

you can make things worse for the end

users safe in the knowledge that they

are unlikely to depart in order to lure

in business customers by offering them a

good deal. And so far so good. I think a

lot of people would echo that, but they

would stop there. They would say, "Oh,

you're not paying for the product, so

you're the product." So that this is

about luring in users and then getting

in business customers will pay for it.

That's not where it stops because the

business customers are also getting

screwed because the business customers

get locked in and you know this power

that the platforms end up with over

their business customers is then

expressed in stage three where they

extract from those business customers as

well. They dial down the value left

behind in the platform to the kind of

minimum like homeopathic residue needed

to keep the users locked to the

platform, the businesses locked to the

users and everything else is is split up

among the executives and the

shareholders and that's when the

platform's a palace of [ __ ] But the

more important part as I say is why this

is happening now. Broadly, my thesis is

that platforms used to face consequences

when they did things that were bad for

their stakeholders. And those

consequences came in in four forms. They

had to worry about competitors, but we

let them buy those. They had to worry

about regulators, but when a sector is

boiled down to a cartel, they find it

very easy to agree on what they're going

to do and make their preferences felt

because they have a lot of money,

because they're not competing with one

another and they capture their

regulators. They had to worry about

their workers because tech workers were

in very scarce supply and they were very

valuable and they often really cared

about their users and they could really

say no I'm not going to inshitify that

thing I missed my mother's funeral to

ship on time and make it stick because

there was no one else to hire if they

quit and they were bringing a lot of

value to the firm but of course tech

workers famously thought that they were

temporarily embarrassed founders and

they didn't unionize they didn't think

they were workers so when the power of

scarcity evaporated they had not

replaced it with power of solidarity.

And so now you have 500,000 tech layoffs

in three years and tech workers can't

hold the line. And then finally, there

was new market entry. There were new

companies that could exploit something

that I think is exceptional about tech.

I'm not a tech exceptionalist broadly,

but I'm an exceptionalist about this,

which is that every program in your

computer that is adverse to your

interests can be neutralized with a

program that is beneficial to your

interests. And that means that when you

create a program that is deliberately

bad, you invite new market entrance to

make one that's good. Right? If you lock

up the printer so it won't take generic

ink, you just invite someone to not only

get into the generic ink business, but

get into the alternative printer

firmware business, which eventually

could just be the I'm going to sell you

your next printer business. But what

we've done over 20 plus years is

monotonically expand IP law until we've

made most forms of reverse engineering

and modification without manufacturer

permission illegal, a felony. Uh uh my

friend Jay Freeman calls it felony

contempt of business model. And as a

result, you don't have to worry about

market entry with this incredible

slippery dynamic character of

technology. And when you unshackle firms

from these four forces of discipline,

when they don't have to worry about

competitors or regulators or their

workforce or new market entry through

interoperability, the same CEOs go to to

the same giant switch on the wall in the

seauite marked in shitification and they

yank it as hard as they can as they've

done every day that they've shown up for

work. And instead of being gummed up, it

has been lubricated by an init policy

environment that allows it to go from

zero to 100 with one pull. And that's

how we end up where we are today. All

right. I want to bring these out of

theory though, Corey. I I applaud how

well structured that was on the fly.

>> Um, and have you both walk through this

with an example that you use in your

books.

>> Sure.

>> And Cory, I want to start with you. Uh,

>> walk me through how you see

initification as having played out on

Facebook itself. Not all of Meta, but

Facebook where it started when it was

adding value to users in the the early

days to where you feel it has uh gone

now. Tell me your Facebook story.

>> Yeah, so Facebook uh really its big bang

was 2006. That's when they opened the

platform to anyone, not just people with

aedu address from an American college.

And Mark Zuckerberg needs to attract

users. And his problem is that they're

all using a platform called MySpace. So

he pitches those users and he says,

"Look, I know you enjoy hanging out with

your friend on MySpace, but nobody

should want to use a surveillanced

driven social media platform. Come to

Facebook and we'll never spy on you.

will just show you the things that you

asked to see.

>> We need to give people complete control

over their information, right? People

need to be able to say exactly who they

want to share each piece of information

that they're sharing, who they want to

share that with.

>> So, that's stage one. But part of stage

one, remember, is that there's a lock

in. It's just the collective action

problem, right? You love your friends,

but they're a pain in the ass. And if

the six people in your group chat can't

agree on what bar to go to this Friday,

you're never going to agree on when it's

time to leave Facebook or where to go

next. Especially if some of you are

there because that's where the people

with the same rare diseases you are

hanging out. And if some of you are

there because uh that's where the people

in the country you immigrated from are

hanging out. And some of you are there

because that's where your customers or

your audiences or just that's how you

organize the carpool for the kids little

league. And so we are locked in. And so

that ushers in stage two making things

worse for end users to make things

better for business customers. So think

about advertisers. Advertisers are told,

you know, do you remember we told these

rubes that we weren't going to spy on

them? Obviously that was a lie. We spy

on them from [ __ ] to appetite. Give

us pennies uh and we will target ads to

them with exquisite fidelity and uh so

the advertisers pile in, publishers pile

in too. They become locked to the

platform. They become very dependent on

it. And in stage three, advertisers find

that ad prices have gone way up. Ad

targeting fidelity has fallen through

the floor. Ad fraud has exploded to

levels that are almost incomprehensible.

Publishers famously now have to put

their whole article there, not just an

excerpt. And Woatide, the publisher that

has a link back to their website because

Facebook's downranking off platform

links is potentially malicious. And so

they don't have any way to monetize that

except through Facebook's own system.

And we've got a feed that's been, you

know, basically denuted of the things

we've asked to see. It has the minimum

calculated to keep us there. And this

equilibrium is what Facebook wants, but

it's very um brittle because the

difference between I hate Facebook and I

can't seem to stop coming here and I

hate Facebook and I never coming back.

It can be disrupted by something as

simple as a live stream mass shooting

and then users m bull for the exits. The

street gets nervous. The stock price

starts to wobble. The founders panic

although being technical people they

call it pivoting. And you know, one day

Mark Zuckerberg like arises from his

sarcophagus and says, "Harken unto me,

brothers and sisters, for I've had a

vision. I know I told you that the

future would consist of arguing with

your most racist uncle using this

primitive text interface that I invented

so I could non-conensually rate the

fuckability of Harvard undergraduates.

But actually, I'm going to transform you

and everyone you love into a legless,

sexless, low polygon, heavily surveiled

cartoon character so that I can imprison

you in a virtual world I stole from a

25-year-old comedic dystopian cyberpunk

novel that I call the metaverse. And

that's the final stage. That's the giant

pile of [ __ ] All right,

Corey, you got a good rant there, my

man.

>> Cory Cory could be a rapper if he uh if

he decided to get into that.

>> I give you real props on it. that the

world is crying out for a middle-aged

technology critic rapper.

>> Let me ask you at least one question

here so I'm not just too taken in by

your charisma, which is to say I think

that the

counter argument somebody would offer is

that I think two things. One is for all

the pivots, all the um all the scams, by

the way. I mean, I was a publisher

during the era of the Facebook fire hose

to publishers

>> and the era of pivot to video when

Facebook videos were getting these

astonishing view counts

>> and one fraudulent view counts.

>> That's what I was about to say. One,

they kept first all the money. They

promised everybody, you know, come get

this huge scale. We're giving you all

this traffic. You can build a business

here. There was no business to build

there at any significant scale. And two,

it turned out that the video view counts

were fraudulent, right? And so a huge

amount of the news industry, among other

things, pivoted to video and it was

based on lies

>> and and scams are there's a recent

Reuters report that Facebook was

actually charging um advertisers more

for these things that they knew were

scams.

>> 10% of their ad revenue is ads for scams

by their own internal accounting.

>> I'm really not here to defend Facebook

as an actor. But the one of the crazy

things amidst all of this, a thing you

really focused on there was moving from

showing us what we had asked to see to

showing us what I would say Facebook

wants us to see. There's just the FTC

versus Meta case. Tim was of course

involved in that.

>> And one of the statistics that came out

during it is that only 7% of time spent

on Instagram is spent on things your

friends and family uh have actually

shown you, things people you follow are

showing you. Similarly on Facebook

itself it's under 20%. I forget the

exact number but it's very low.

>> They have moved under competition from

Tik Tok specifically although not only

to these AIdriven algorithmic feeds

showing you not what you have asked to

see but what they find will keep you

there. And what they are finding is that

it will in fact keep you there and

people are coming back to it and they

spend more time on Instagram when you

turn the feed into this algorithmic

feed. This is the whole revealed

preference thing that you were talking

about earlier. My personal experience of

Instagram when I go on it now is one

reason I try to go on it less

>> is that I can actually feel how much

more compelling it is. I like it less,

>> but the feeling of getting pulled into

something is much stronger.

>> And so I think if you had Mark

Zuckerberg risen from his

>> uh sarcophagus,

>> I was going to say office because I'm a

more polite person. Uh here he would say

we did this under competitive pressure.

Tik Tok was eating our lunch. We stole a

bunch of things from Tik Tok and now

we're doing better. We also stole a

bunch of things from Snapchat and now

we're doing better because in fact we

are under a lot of competition and we

are incredibly good at responding to

that competition in ways that our user

base responds to. This is not

initification. This is the magic of

competition itself and you know that

because look at our profit margin and

look at how much we've changed.

>> So let me say that I don't think

competition is a good unto itself. uh

and I think it is absolutely possible to

compete to become the world's most

efficient uh human rights violator. The

reason I like competition is because it

makes firms into a rabble instead of a

cartel. So in 2022 with two teenagers

reverse engineered Instagram and they

made an app called OG app. And the way

OG app worked is you give it your login

and password. It pretended to be you and

logged into Instagram. It grabbed the

session key. It grabbed everything in

your Instagram feed. It discarded the

ads. It discarded the suggestions. It

discarded all of the stuff that wasn't a

chronological feed of the people who

followed you uh the people you followed

rather uh that they had posted recently.

Facebook or Meta sent a letter to Apple

and Google who obliged them by removing

the app because there's honor among

thieves. So if you want to find out what

people actually prefer, you have to have

a market in which people who disagree

with the consensus that people are kind

of gut flora for immortal colony

organisms we call limited liability

corporations and that they are entitled

to dignity uh and moral consideration as

beings unto themselves. Those people

have to be offering some of the

alternatives to find out what they want.

But because under modern IP law,

something called the Digital Millennium

Copyright Act, it is a felony to modify

the app without permission,

when Meta sent the letter to Apple and

Google, they agreed that that was what

they would uh they would side with Meta.

And because you can't modify those

platforms to accept apps that haven't

run through the store, that that was the

end of the road for OG. But but I think

this is a little bit of a narrowed

example. As somebody who gets a huge

number of press releases for all these

pro-social apps that are built to

compete with Instagram and Tik Tok and

all of them, apps that are meant to

respect your attention, apps that are

meant to be virtuous in a way these apps

are not. And watches one after another

after another after another basically go

nowhere, get out competed. The point I'm

making is the example you're giving,

they were able to basically say there

was a term of service violation. Maybe

they should not be allowed to do that.

And people do. They This is where I want

to make sure my producer has a voice.

There are people who just absolutely

like Tik Tok. There are people who like

Instagram. They know there are other

things out there and they're not

clamoring for a competitor or an

alternative.

I I think suggesting that there is no

capacity to switch is going a little far

is

>> No, I'm not saying there's no capacity

to switch. I'm saying the higher the

switching costs are, the lower the

likelihood that people will leave. You

know, when we had popup ads in our

browsers and real pop-up ads, the the

Paleolithic pop-up ad that was a whole

new browser window that spawned one

pixel squared, autoplayed audio, ran

away from your cursor. The way that we

got rid of that was it was legal to

modify browsers to have pop-up blockers.

More than 50% of us have installed an ad

blocker in our browser. Docles calls it

the largest consumer boycott in human

history. And as a result, there is some

moderation upon the invasiveness of what

a browser does to you. That is in marked

contrast with apps because reverse

engineering an app because it's not an

open platform is illegal under American

copyright law. It violates section 121

of the Digital Millennium Copyright Act.

And so when we talk about how these

platforms uh have competed their way

into toxicity, we're excluding a form of

competition that we have made illegal.

for example, ad blockers, for example,

privacy blockers, for example, things

that discard algorithmic suggestions and

so on. Taking those off the table means

that the only competitors you get are

firms that are capable of doing a sort

of wholeless bolless replacement to uh

convince you that no, you don't want to

use Instagram anymore. You want to use

Tik Tok instead, as opposed to you'd

like to use Tik Tok or Instagram rather,

but in a slightly different way that

defends your interests against the

firm's interests. But I think that we

mustn't ever forget

that within digital technology and

living memory, we had a mode of

competition that we prohibited that

often served as a very rapid response to

specifically the thing you're worried

about here. you know that I have a

friend Andrea Downing who has um the

gene for breast cancer and she's part of

a breast cancer prevor group that was

courted by Facebook in the early 2010s

and they move there and this group is

hugely consequential to them because if

you have the breast cancer gene you are

deciding whether to have your breast

removed your ovaries removed the women

in your life your daughters your sisters

your mothers they're dying or sick and

you're making care decisions this group

is hugely important and discovered that

you could enumerate the full membership

of any faith Facebook group whether or

not you were a member of it. This was

hugely important to her friends there.

She reported it to Facebook. Facebook

said, "That's a feature, not a bug.

We're going to won't fix it. We're going

to keep it." They sued. It was

non-consensually settled when the FTC

settled all the privacy claims. And they

are still there because they cannot

overcome the collective action problem

that it takes to leave. Now, they will

eventually. When Facebook is terrible

enough, that community will shatter and

maybe it will never reform. That is not

a good outcome. All right, Tim, I want

to go to your story here. One of the

core tales you tell in your book is

about Amazon. So, walk me through the

process of moving toward moving a

platform from a kind of healthy

constructive platform to becoming an

extractive platform through your kind of

story of of what happened with Amazon.

Um Amazon is you may remember was once

upon a time a bookstore.

>> I do remember that actually. It's how

old I am.

>> And uh you know their basic idea was be

bigger and we'll sell more stuff. At

some point they opened the marketplace

um the Amazon marketplace which was

different because it was a platform. In

other words, it was a place that people

could come and sell their stuff. At

first it was used books. Then it spread

into other markets. And they uh realized

a few things. one is that fulfillment

would be very important. You know, eBay

in the old days, the the sellers had to

wrap it themselves and and send it off.

So, that that wasn't a very scalable

model. Um, and uh they understood they

had a good search engine. Amazon vested

hard in search and it worked and more

and more sellers came, more and more

buyers came and so the Amazon

marketplace um took over eBay and became

very successful and at that point I

would say you know maybe around 2010 or

something like that was fulfilling what

I think you know would would call the

dream of of the internet age which is a

lot of people would be able to go on

this place you know start their thing uh

make a lot of money it's it coincides

with the rise of the blog and and small

online magazines you know that whole era

that we are are talking about during

that period Amazon's take was below 20%.

It kind of depends how you count, but

you know somewhere between 15 to 20 20%

>> their take of what a small business is

>> of the sales of the sales. Yeah. Yeah.

So if you sold like $100 they take $20.

I mean it depend a little bit. There

were some storage fees and so on. So you

know it was it was a good place to make

money

>> and um what changed I think was once

Amazon had confidence that it had its

sellers and it had its buyers more or

less locked up. Um, and this is

basically over the the the the 2010s.

They bought a couple companies that were

potential threats to them. Diapers.com,

for example. It might seem ridiculous,

but Diapers, you know, could have been a

kind of a way in to threaten them.

>> Why don't you tell the diapers.com story

for a minute? It's a kind of famous

story in Amazon, but I think it's worth

telling. So there was a platform

launched to be an alternative to Amazon

and their thought was you know new

parents diapers you know every parent

needs diapers delivered quickly so why

don't we make that the beginning in the

same way Amazon started with books and

then Amazon saw this thought it was kind

of threatening and in the strategy of

the day just bought them um of course

the founders pretty happy um and Amazon

managed basically to capture this market

and and that's when I think it turned uh

to the extraction phase. Well, in the

last 10 years, Amazon's strategy has

just basically been for its marketplace

to to turn the screws and increase the

fees, change the margins so that many

sellers are paying, you know, over 50%

or more, you know, basically the same as

as brick and mortar businesses. And

Amazon prices are rarely uh any lower.

they they actually have done a lot to

try to prevent uh being priced anyone

pricing lower and I I think the one

thing I would focus on is their what

they call advertising which may be

familiar to you as as sort of the

sponsored results that you get when

you're searching. So what's going on

there is that sellers are bidding

against each other bidding down their

own margins to get higher up in the

search results. And that little trick,

that sort of one weird trick has become

this extraordinary cash cow. It's more

profitable than Amazon Web Services,

which is sort of surprising.

>> Last year it was 56 billion.

>> Just paying Amazon for higher for higher

rankings in their search results was 56

billion.

>> 56 billion. It's looking like it's going

to be over $70 billion. Corey, when I'm

searching on Amazon and I see that

Amazon's choice looks like a little

prize like that that product won a

competition uh where a bunch of editors

chose it as best one. What am I looking

at there?

>> So, that is broadly part of this thing

Tim was discussing where they're piling

on junk fees for the right to be at the

top of the results where if you're not

uh paying for Prime and paying for

fulfillment by Amazon and paying for all

these other things, you you aren't uh

eligible. And the more of these you buy,

the greater chance you have of being

chosen. But is that be are they

literally paying to be Amazon's top

choice? I I mean as a dumb consumer

maybe I look at that and I think oh this

is some algorithmic combination of is it

the best seller, what are its reviews,

etc.

>> Mhm. No, it's so you're right that it is

algorithmic but the algorithmic inputs

are not grounded primarily in things

like quality or customer satisfaction.

They're grounded in how many different

ways you've made your business your

business dependent on Amazon in such a

way that uh every dollar you make is

having more and more uh of that dollar

extracted by Amazon. There's some good

empirical work on this from uh Maria

Mazicado and Tim O'Reilly where they

calculate that the first result on an

Amazon search engine results page on

average is 17% more expensive than the

best match for your search. So that's

what you're seeing is basically the the

the Amazon top choice is the worst

choice.

So, this really feels to me like a place

where, to use Cory's word, things in

shitified. uh that when I go around the

internet now, when I play something in a

Spotify playlist or click on a song I

like and move to the radio version of

Spotify or when I search something on

Google or when I search something on

Amazon,

these used to be very valuable services

to me to search for something on Amazon

and see rankings uh weighted by how

popular the product is, how high the

reviews are, right? that like I took the

the waiting of the search as to some

degree a signal of quality. Certainly

Google the whole idea was that what

comes first in search was you know built

on page rank and it was going to be

quality and now

there is so much sponsored content in

every one of these results

and it is so unclear what is what and

who is paying for what and why I'm

getting this song or that result that

this whole industry uh or part of the

industry that you know one reason I

ended up on these platforms is because I

trusted these results

>> and now I trust

nothing.

>> Yeah. I mean it's going back to the

definition of extraction. I mean it's we

are kind of paying $70 billion

collectively to make search worse. So

when does this move from this is just

their business model and if you want to

find something else like go yeah go buy

something on Walmart, go buy something

on Target, go buy something at Best Buy.

You can do all those. I've done all

those. I just ordered a blender from

Kohl's versus we've moved to extraction

and we should see it as a public policy

problem. Yeah, I think that's the a

really great question. is a kind of

question we've faced um I I think

repeatedly in history when you start to

have a business model start to settle

down you see less um real disruptive uh

competition

um possible and Amazon is still you know

a great way to find a lot of product

it's the world's largest marketplace but

they have um I would say they they're

running themselves like an unregulated

monopoly and I I guess I would compare

it to electricity I mean, we'd all say

electric network is great. Um, we can't

do without they provide this incredible

service, but we really say, okay, we're

just going to put up with whatever

choices they charge. I don't think we

would. And I think at some level, once a

market has settled, at some point, you

got to call a limit. And we do that in

many other markets. Both of you spend a

lot of time on the number of small

acquisitions

that these companies make. And so not

where Google buys ways, but where Google

buys something very modest and and maybe

many of them get shut down or they aqua

hire the top people, but they're also

things that might have grown into

something bigger or else.

On the other side, sometimes it really

is the case that a big player buying

something smaller, they can scale it up

into something, you know, new like

Google, you know, bought, I mean, this

was actually a fairly big acquisition,

but Whimo and kind of amazingly like

they seem to have made driverless cars

work and I think access to Google's

compute and other things was not

insignificant in that. uh and you can

look at other cases where you know these

companies buying something small they're

able to build it into something you know

that ends up being a great uh option in

Microsoft Office or in Google Docs or

whatever it might be. So how do you

think about the ways in which that harms

competition

but also you know I've known founders

who get acquired and are excited to get

acquired because they think it will give

them scale and the capacity to compete

in a way they they wouldn't versus

Google just trying to do it itself. Um,

I think the antitrust level is one

thing, but the the sort of

anti-competitive versus proscale level

is like a much bigger challenge the way

Silicon Valley now works. And I'm I'm

curious to hear you talk through the the

pros and the cons of that.

>> You know, Joseph Shumpeder back in 1911

wrote a book about entrepreneurs

basically. And he said, you know, these

very unusual people who are willing to

go out and start a, you know, take these

kind of risks. They have some vision.

They do this kind of thing. and uh he

thought they were essential to economic

growth that they were these kind of

unusual almost like superheroes and

would do they do do these things and go

out and take these chances. the United

States economy in general has thrived

because it has a lot of those kind of

individuals and they can start things

and I think we've aired too far in

having all the brains under one roof and

you know it's starting to remind me of

of AT&T in in the '60s or IBM where they

they sort of became much more

centralized about innovation and big

ideas would never be developed. It

became kind of group thinky I think when

the justice department did a deal sued

AT&T tried to break them up and they

forced them AT&T to stay out of

computing forever and also license all

of their patents including the

transistor patent and all kinds of

people started quitting their jobs and

saying I'm going to start a

semiconductor firm and there lies the

origins of US semiconductors and also

frankly US computing without AT&T. So I

think we have done much better with

divided technological leadership. I I

frankly think that you know LLMs might

never have gotten started without open

AI being an alternative force because

they're obviously threatening to

Google's business model though. Don't in

a way you have to give Google some

credit on LM specifically. They you were

talking about transistors a minute ago,

but Google does the fundamental research

in transformers and releases it publicly

and and and creates in many ways the

industry

>> but doesn't do anything with it

internally until there's a competitor

that threatens them.

>> Yeah, that's right. That it's just

striking how good of an actor they were

for a period on AI specifically, right?

Like treating it like like they had a

Bell Labs.

>> I agree with that. It actually is a lot

like Bell Labs in the sense that Bell

Labs kept inventing stuff. I mean, Bell

Labs collected these, you know, a lot of

amazing people and then never let things

come to market. The internet being

probably the best example of it.

>> Yeah. I I um so I I I think when you

look at these companies and their

acquisitions, what you see is that these

companies very quickly suffer from what

both Brandeise and Tim called uh the

curse of bigness. Um that they're find

it very hard to bring an actual product

to market that they invent inhouse. When

you look at Google, they've had like one

really successful consumerf facing

product launch and that was in the

previous millennium and almost

everything they made in this millennium

failed, right? They they did not it

either didn't launch or when after it

launched they shut it down. Whereas

their giant successes um their video

stack, their ad tech stack, documents,

collaboration, maps, um their uh

navigation, server management, all of

this stuff. These are mobile, right?

These are companies they acquired from

someone else and operationalized. And

I'm an exops guy. I'm a I'm a recovering

CIS admin. So I'm not going to say that

that's nothing, right? It's it is a

skill unto itself. The careful work to

make things work and make them resilient

and scale them.

>> But the idea that that has to happen

under one roof, I think is is um a false

binary, right? I mean, one of the things

Google did arguably far more efficiently

than they than they hired um uh

innovators is they hired operations

people. uh and and those are the people

who really do the yman service at Google

cuz the innovators, the product managers

never get to launch. They only get to

buy other people's products and refine

them. You know, it comes down to what

you think of is the track record, I

guess, of monopolized innovation. And it

has some hits, but I'm saying a much

more mixed model, I think, historically

is a lot stronger. Um, if you look at

the 70s, 80, if you look at the entire

track record of US innovation, I think

monopoly innovation, you know, leads you

towards AT&T, Boeing, um, you know,

General Motors kind of model as opposed

to what the best of Silicon Valley has

been.

>> And meanwhile, I think you mentioned

aqua hires for people who aren't

unfortunate enough to be steeped in the

business of Silicon Valley. An aqua hire

is when a company is purchased not for

the product it makes but because the

team who made it have proved they can

make a product and then they shut down

the product and they hire the team and

aqua hires are I think a leading

indicator of pathology in tech and

investment. An aqua hire is basically a

postgrad project where venture

capitalist sink some money into you

pretending that you're going to make a

product. It's a science fair demo in the

hopes that the company will buy you and

in lie of a hiring bonus will give you

stock and in lie of a finder fee will

give them stock. But no one's trying to

actually capitalize a product or a

business. I think anytime you see a

prepoundonderance of aqua hires in your

economy that should tell you that you

need to sit down and figure out how to

rejigger the incentives because your

economy is sick.

Corey, we've been talking here about

these markets as really having two

players in them, which is well maybe

three. We've been talking about users,

sellers, and platforms.

But something the yearbook focuses quite

a bit on is a fourth, which we need to

talk about too, which is labor.

>> There are huge numbers of people working

for these companies, huge number of

people delivering Amazon uh packages and

Walmart packages.

And one thing that that both of you

focus on is the way in which as these

companies become bigger and more

dominant, their labor practices can

become I don't know if initification is

the term you would use there, but but

but shittier or more extractive.

Can you talk a bit about that side of

it? What has happened to the labor

practices?

>> Yeah, I I mean we could we could talk

about the other tech workers, right? The

majority of tech workers drive uh for

Uber or for Amazon or work in a

warehouse and they certainly don't get

like free kombucha and massages and a

surgeon who'll freeze their eggs so they

can work through their fertile ears.

They're in a factory in China with

suicide nets around it. But uh I think

if we an example that kind of pulls this

all together, how you get monopoly,

regulatory capture, the degradation of

labor with technology that is uh relies

on blocks on interoperability. I I think

we could do no better than to talk about

nurses. Um, and I'm going to be making

reference here to the work of Vina

Dubel, who's a legal scholar who coined

a very important term, algorithmic wage

discrimination. In America, hospitals

preferentially hire nurses through apps,

and they do so as contractors. So,

hiring contractors means that you can

avoid the unionization of nurses. And

when a nurse signs on to get a shift

through one of these apps, the app is

able to buy the nurse's credit history.

And the reason for that is that the US

government has not passed a new federal

consumer privacy law since 1988 when

Ronald Reagan signed a law that made it

illegal for video store clerks to

disclose your VHS rental habits. Every

other form of privacy invasion of your

consumer rights is lawful under federal

law. And so among the things that data

brokers will sell anyone who shows up

with a credit card is how much credit

card debt is any other person carrying

and how delinquent is it. And based on

that, the nurses are charged a kind of

desperation premium. the more debt

they're carrying, the more overdue that

debt is, the lower the wage that they're

offered on the grounds that nurses who

are facing economic uh uh privation and

desperation will accept a lower wage to

do the same job. Now, this is not a

novel insight, right? Paying more

desperate workers less money is a thing

that you can find in like Tennessee

Ernie Ford songs about 19th century coal

bosses. But the difference is that if

you're a 19th century coal boss who

wants to figure out how much the lowest

wage each coal miner you're hiring is

willing to take, you have to have an

army of Pinkertons that like are

figuring out the economic situation of

every coal miner. And you have to have

another army of guys in green eye shades

who are making uh annotations to the

ledger where you're calculating their

pay packet. It's just not practical. So

automation makes this possible. And you

have this vicious cycle where the poorer

a nurse is, the poorer they become. the

lower the wage they're offered. And as

they accumulate more consumer debt,

their wage is continuously eroded. Um,

and and I think we can all understand

like intuitively why this is unfair and

why as a nurse you might not want it,

but also like do you really want your

catheter inserted by someone who drove

Uber till midnight the night before and

skipped breakfast this morning so they

could make rent? This is a thing that

makes everyone except one parochial

interest worse off. And this is not a

free floating economic proposition. This

is the result of specific policy choices

taken in living memory by named

individuals who were warned at the time

that this would be the likely outcome

and who did it anyway. I want to stay on

the the the labor question on a couple

other levels, but I I want to ladder

this one up for a second, Tim.

>> Sure.

>> Which is because I think this is getting

at something we're starting to hear a

lot about, which is anger over

algorithmic pricing of various kinds.

So, when I was walking up to do the

podcast today, the Chiron on on CNN was

about uh an investigation finding that

Instacart was uh charging many different

people many different prices.

>> And so, the price you were seeing on

Instacart wasn't the price, it's your

price. And I could imagine a

neocclassical economist sitting in my

seat right now and saying

pricing becomes more efficient when it

discriminates. that the market will be

more efficient if it can charge, you

know, Ezra a higher price for kombucha,

uh, if I'm getting that delivered, uh,

because of things it knows about me and

my kombucha habits. And it charges

somebody else a lower price because it

knows they value the kombucha less or a

nurse a higher price and or a higher

wage and a lower wage depending on their

uh, situation. That in fact, we're just

getting better and better and better at

finding the market clearing price. And

this is what economics always wanted,

right? we're we're finally hitting the

utopia of every person having, you know,

the market clearing wage and the market

clearing price. Uh why don't you agree

with that?

>> Yeah, I mean the fundamental question is

is that really the kind of world you

want to live in? In other words, do you

constantly want to live in a place where

you are being charged the maximum you

would pay for something? Now you know

that could rebound to the benefit of

people who are very poor but it is to in

economic terms it's always only about

producers taking everything from the

market and I just think it's a very you

know just moving away from the the

efficiency potentially of it. I think it

makes for a very unpleasant

lifestyle to be constantly feeling

you're being exploited. And the other

thing I'll say is there's also a huge

amount of effort people make trying to

move what category they're in um and you

know pretend to be poor. So it I think

it is overrated

and relies on um I guess it relies on

overly simplistic models of what makes

people happy.

There's a way in which efficiency

housing is an interesting term in

economics

because in economics is in life you want

things to be somewhat efficient

>> but too much efficiency becomes truly

inhuman. Uh I find this even in the the

the very modest uh example of like

personal productivity uh efforts. You

know, it's great to have a to-do list.

>> If I really force myself onto the

scaffolding of a to-do list at all

times, I I feel like I cease to be a

human being and and and become a a kind

of machine always just getting things

done and responding to the emails and

and and this is a place I think it was

important and when you said it raises

the question of what kind of world you

want to live in because the truth is

that I don't want to live in a maximally

efficient world. I have other competing

values. You know the competitive

efficient market is good up to a point

and after a point it becomes something

corrosive to human bonds, human

solidarity, just in time scheduling

makes sense from the perspective of

economic efficiency and not if you want

healthy families in your society

and and and I I think being able to

articulate that question of what kind of

world you want to live in, not just what

kind of economy works on models, I think

is uh is is important and and often a

lost political

art in my view.

>> Yeah, I I I agree. And I feel there's,

you know, there are some intuitive

feelings like people feel it's unfair.

People don't like being ripped off, but

people hate paying junk fees. The the

original word for that, by the way, was

[ __ ] fees, but there was inside

government. We felt we had to we

couldn't have the president say that.

So, yeah, I think that gets the heart of

the matter. I mean you had also talked

about you know human attention and human

attention turns out to be quite

commercially valuable but do you ever do

you really want every second of your

time and every space you inhabit to

being mined for your attention and its

maximum value even if that contributes

to the I guess overall GDP of the

economy. I mean, I'd like to have some

time for my kids and friends in which no

one's making any money. And you know,

it's an example of a commodity that is

very close to who we are. Um, at the end

of your days, you know, what your life

was was what you paid attention to. And

the idea that you can with maximum

efficiency mind that at every possible

moment seems to me a recipe for a very

bad life. I think one way to frame this

rather than around efficiency is around

optimization.

And I I think that we can understand

that for a firm the optimal arrangement

is one in which they pay nothing for

their inputs and charge everything for

their outputs. So optimization things

are optimal from the perspective of the

firm when they can discover who is most

desperate and pay them as little as

possible or who is most desperate and

charge them as much as possible. But

from the perspective of the uh users and

the suppliers, things are optimal when

you get paid as much as possible and are

charged as little as possible. And so

much of kind of the specific

neurological injury that arises from

getting an economics degree is organized

around never asking the question sort of

optimal for whom. I mentioned before

that we don't have any privacy law in

this country. One of the things that a

privacy law would let us do is to become

unoptimizable.

All optimization starts with

surveillance. Whether it's things like

Tik Tok trying to entice your kids to

spending more time than they want to

spend there, or whether that's

advertisers uh uh finding ways to follow

you around and hit you up with things

that you're desperate for, or whether

it's discrimination in hiring or in

lending. All of this stuff starts with

an unregulated surveillance sector. We

have platforms that take our data and

then sell it and use it and and recycle

it and become sort of the Lakota of

information where they use the whole

surveillance package. Uh and uh we do

nothing to curb that behavior. It is not

an incredible imaginative lift to say

that we might tell them to stop. I want

to pick up on surveillance because when

you talk about the

harms to an economy working in a human

way, I think that the

new frontiers and how you can surveil

workers

>> Mhm.

>> are I think this is going to become a

very big political issue and probably

should be already.

>> So the category that this that this

falls into, it's broadly called bossware

and there's a whole lot of different

versions of it. Like if your firm buys

Office 365,

Microsoft will offer your boss the

ability to stack rank divisions within

your firm by like how often they move

the mouse and how many typos they make

and how many words they type. And then

this is amazing. They will tell you how

you perform against similar firms in

your sector, which is like the most

amazing thing I can imagine that that

Microsoft is finding customers for a

sales pitch that says, "We will show you

sensitive internal information about

your competitors." And apparently none

of those people are like, "Wait, doesn't

that mean you're going to show my

competitors sensitive commercial

information about me?" So you have this

on the kind of the the, you know,

broadstrokes level, but I have this

notion I call the shitty technology

adoption curve, right? If you've got a

really terrible idea to uh that involves

technology that's incredibly harmful to

the people it's imposed on, you can't

start with me. I'm a mouthy white middle

class guy with a megaphone and when I

get angry, other people find out about

it. You have to find people without

social power and you grind down the

rough edges on their bodies. You start

with prisoners. You start with uh people

in mental asylums. You start with

refugee uh and then you work your way up

to kids and then high school kids and

blue color workers and pink color

workers and white color workers. And it

starts with like the only people who eat

dinner under a CCTV are in supermax. And

20 years later it's like no, you were

just dumb enough to buy a home camera

from like Apple or Google or god help us

all Facebook. Right? So that is the

shitty technology adoption curve. And if

you want to know what the future of

workers is, you look at the least

privileged workers at the bottom and

then you see that technology working its

way up. If you look at drivers for

Amazon, they have all these sensors

pointed at their faces, sensors studded

around the van. Um, they're not given a

long enough break even to deal with

things like period hygiene. And so, uh,

women who drive for Amazon who go into

the back of the van to deal with their

periods discover that, uh, that's all on

camera cuz that's all being recorded.

Um, all of this stuff is subject to both

manual and automated analytics. And at

one point, Amazon was docking drivers uh

for driving with their mouth open

because that might lead to distraction

while driving. And so, as you say, it

kind of denudes you of all dignity. It

really is very grim. And, you know, Tim

and I used to ride the Toronto Transit

Commission buses to uh to to school in

the morning when we were going to

elementary school, and we loved the

drivers who would sing and tell jokes

and remember you. This is the thing that

makes uh working uh in the world, being

in the world great. It's having a human

relationship with other humans, not

having standardized labor units that

have been uh automated and standardized

to the point where they can be swapped

out. You know, if you give a a cashier a

cash register, instead of making them

add up things on the paper, you could

give them the surplus to talk with the

customers and have a human relationship

with them. Or you could speed them up so

that you fire nine ten of the cashiers

and you take the remainder and you make

them work at such an accelerated pace

that they can't even make eye contact.

There were things in Cory's description

there in his answer there that in my

view we should just make a social

decision to outlaw. Like I am willing to

say politically like I want to vote for

the people who think you can't eyeball

surveil workers

>> and if other people want to stand up and

say the surveillance of workers eyeballs

is great that like that's a good values

debate to have in a democracy and and

and I know where I I fall on that. Then

there are other things right you know I

I'll use as an example of I'll build on

the cash register example to say that

I really struggle with what I think as a

public policy measure one should think

about the rise of automated checkout in

the way we've seen it. I watch people

turned into these managers of machines.

So, they've gone from being somebody

who, you know, did check out with me and

asked me how my day was and asked them

how their day was, and now they get

called over because the three apples I

put on the weighing machine didn't weigh

in correctly, and it seems dehumanizing

to them, dehumanizing to me. I also get

it. How do you think about weighing

that? Right. There's the stuff that is

genuinely like grim and dystopic and

maybe we should just outlaw. And then

there is stuff like

the just generalized automation in which

there genuinely can be a consumer

surplus from that. Like time is a

surplus for me. Things moving faster is

a surplus for me. More checkout stations

is a surplus for me. And there's a cost

on the other side of it.

>> Well, the first thing I'd say is we

should be making more of these kind of

decisions

>> about what we really care about and what

kind of world we want to inhabit. I

mean, one of the things that I think

happens is by default, um, we don't pass

any laws or have new ethical codes. I

mean, ethics does a lot of work and we

just sort of allow a trump card to to

new stuff because it's new. And, you

know, I I get that you don't want to ban

everything new that shows up, but I feel

that we have over the last 15 years or

so sometimes just kind of taken a

position that, you know, the people

don't get to vote on this. I mean, a

good example is everything to do with

children. Um, you know, I don't think

there's a lot of people uh who think

it's a great thing to surveil children

and, you know, uh have targeted ads for

children and know, you know, and try to

create addictive technologies for

children. Uh, you know, when I worked in

government, we tried to pass just basic

even child privacy laws. We couldn't get

a vote ever. And so, one of the things

that's going on is we're not even

deciding these things as as society. And

that that gets to, you know, the problem

of Congress not taking votes on popular

issues. But I also think this relates to

our conversation earlier about

competition and when it's good and when

it's bad because I think for almost any

endeavor, there's such a thing as

healthy competition and such a thing as

toxic competition. You know, I think

this is we were talking about attention

markets earlier. What is good healthy

competition in attention markets? It's

like making really great movies,

new TV shows that people love, you know,

podcasts that people want to listen to.

Uh toxic competition was the stuff

you're talking about. Essentially,

different forms of manipulation and

addiction. And we've had this kind of

like hands-off, we cannot try to direct

things in a positive direction. I think

that has been a giant mistake. So, first

I would say we have to even try to make

the decisions. You know, how would I do

the tradeoff? I mean, I guess I would

start with the most unredeeming toxic

stuff and ban that first and then see if

we can, you know, I I mean, that's maybe

easy, but we haven't been able to even

do that. And I I was sort of shocked

when I worked in government that we just

could not get a vote on what seemed like

stuff. I had 90 privacy laws. I mean,

even national security was really into

this stuff. They're like, it's too easy

to spy on everybody. And um you know,

that's a problem for us as a national

security issue. and we just could not

get a vote on even the most basic

anti-serveillance which would suggest

like if you download a dog walking app

it shouldn't be just like tracking you

and uploading every kind of information

about you that that should be illegal. I

have been very uh

I have been disturbed we've not been

able to do more on surveillance and

privacy and I've also been struck by how

badly what has been done elsewhere seems

to have worked out. Um, I call this

terms and conditions capitalism where

you just move the burden onto the the

the consumer. So, Europe uh has put out

some very sweeping rules that have given

me the opportunity to individually

decide which of the 303 cookies on every

website I visit might be good, it might

be bad. Um, similarly, nobody's ever in

my view to a first approximation read an

iOS terms and conditions update. And I

have found that a lot that that very

often it seems to me where policy makers

end up after the debate is saying well

as long as there is disclosure then the

consumer can decide but the consumer in

a very rational way does not want to

decide.

>> Yeah.

>> So it is ended up I think in a very

dispiriting place. Instead of creating a

structure in which I'm confident what

companies are are doing is well-bounded,

it has demanded of me a level of

cognitive work I'm not willing to do and

I think nobody else is willing to do to

oversee those companies myself with not

really great options if I don't like

what they're doing. And and and so I'm

curious how you think about that.

>> No, I couldn't agree more. I feel like

if the byproduct of government action

is that you are clicking on more little

windows like that is government failure.

And I would trace it to

frankly a lack of courage on on the part

of government um and the regulators or

the officials or you know to to make

decisions that are really supposed to

help people. uh it it's much easier to

say, well, you know, I'm afraid to do

something, so I'm gonna help them

decide. So, I agree. I think the GDPR

has actually failed to prevent

surveillance.

>> That being the European government that

created all those pop-ups. Yeah, GDPR,

the European privacy laws succeeded um

you know in creating as a lot of popups

and things to mess with succeeded in

making it harder to challenge um big

tech companies in Europe because they're

overregulated and the little guys have

to also go through all this all this

stuff. And so yes, I think this has been

a failure. I think for people to start

to believe in government again, it has

to help us in situations where we are

not strong enough to deal with something

much more powerful or something that has

a lot more time to think about it. I

mean, it's like we're playing poker

against experts. You know, at some point

we need to get backbone and have

government on people's side. Now, I'm

starting to sound like a politician, but

I but I but I mean it. People say that,

but really doing it makes making, you

know, helping people when they are

powerless or distracted or don't have

energy to deal with things.

>> Cory, so look, I I love you both, but I

think you're dead wrong about the GDPR

just as a factual matter about where it

comes from, what it permits, what it

prohibits, and why it failed. Cuz I I

agree it failed. So, you may ask

yourself, how is it that GDPR compliance

consists of a bunch of cookie compliance

dialogues? And the answer to that is

that European federalism allows tax

havens to function within the

federation. One of the most notorious of

those is Ireland. And almost every

American tech company pretends that it's

Irish so that its profits can float in a

state of untaxable grace in the Irish

sea. And because of the nature of the

GDPR, enforcement for uh these [ __ ]

cookie popups, which are the uh progeny

of the big American tech companies,

starts in Dublin with the Irish data

commissioner, who to a first

approximation does nothing. That that

sounds bad, but I want to get you to

explain the core mechanism you're

describing here better cuz I actually

don't know it because the GD that bill

did pass and then all of a sudden the

entire internet filled with these

pop-ups. So that's only because the

companies went to Ireland, broke the

law, and said, "We're not breaking the

law, and if you disagree, you have to

ask the Irish data commissioner to

enforce against us." A few people, um,

Johnny Ryan with the Irish Civil

Liberties Association, uh, uh, Max

Shrems with NOIB, this none of your

business, this, uh, nonprofit, European

nonprofit. They've dragged some of those

cases to Germany. More importantly,

they've got the European Commission to

start modifying the way the law works.

So you can just you can tick a box in

your browser preferences and it can come

turned on by default that says I don't

want to be spied on and then they're not

allowed to ask you. So the answer is

just going to be no. And so I think that

corporations want you to think that is

transcendentally hard to write a good

law that bans companies from collecting

data on you. And what they mean is it's

transcendentally hard to police

monopolies once they've attained

monopoly status because they are more

powerful than governments. And if that's

their message, then a lot of us would be

like, well, we need to do something. We