Digital Hucksters, Crypto Scams and the Internet’s “Enshittification” with Cory Doctorow
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Hi guys, welcome to the Underworld Podcast. I'm Sean Williams in Wellington, New Zealand, and I'm acquiring a quote-unquote setup for video, which will be debuting soon, which I think makes me an influencer, so top of the world, Maa.

I'm joined for today's show not by Danny Gold in New York, but Corey Doctorow, an author, journalist and digital rights activist whose latest novel, The Bezel, is the second in a trilogy featuring the forensic lawyer Martin Hench, the last being last year's Red Team Blues. And Corey, the not-so-distant past, coined something called the enshitification of the internet, which...

I'm sure underworld listeners will understand all too well. So first of all, welcome to the show, Corey. And I guess as this is a podcast about organized crime, well, let's start right there. More specifically, you yourself got scammed a few weeks ago. You want to dive into that a bit?

Yeah, sure. I mean, it shouldn't surprise anyone that people who know a lot about scams can get scammed. Indeed, as you'll hear when I tell you what happened, it was the fact that I knew something about scams that made me especially vulnerable in this case. So I was on vacation over the Christmas break with my wife and we were in New Orleans and we got off the plane, checked off, dropped off our bags and needed some cash. So we went to an ATM from a big high street bank in the French Quarter in New Orleans and

and the transaction failed. The machine just threw an error. So later on, we were walking past a little credit union. I bank with a one-branch credit union, so that's great. You don't pay a fee to use another credit union's ATM, so I took some money out of that one. And we had a couple of days in New Orleans. It was really nice. And then my wife and kid were back at the hotel, and I was getting ready to leave and just going for one last walk and going out for my favorite sandwich. And

I got a phone call from my bank and the guy said, you know, Mr. Doctorow, have you just bought an iPhone in New York for $1,000? And I said, well, no, I haven't. God damn it. Either that Chase ATM had a skimmer in it

Or maybe it was that cheap Chinese ATM from the credit union that had a skimmer in it. Because I don't normally use this card. And here it is, getting scammed. God damn it. So this guy starts going through his very long spiel. And I've been through this before with my bank. It's, as I said, a one-branch credit union. They don't manage their own out-of-hours fraud stuff. It's a third-party company. They service a ton of banks. So they've got to ask you a lot of redundant information because it's not stuff they have to hand. And we're going through transactions. And it's just...

I can see the minutes ticking away and that sandwich is going to slip away with it. So I eventually tell him, you know, you've already frozen my card.

I got to go to the airport. I will call you guys after I'm on the other side of security and I'll call the after hours number. We'll sort it out. And he was really pissy about it, but I was like, forget it. I'm going to go. So I got my sandwich. We go to the airport and it turned out that that was the day when the door plug fell out of a Boeing 737 max and every 737 max in the American aviation fleet was immediately grounded and

And everyone who was on one of those flights had to get rebooked. Now, we weren't on one of those flights, but boy, oh boy, was there a long line to check in for our flight. And even though I'm like a 33rd order mason on British Airways, which gets me to the front of the American Airlines queue, we were still in line forever. And by the time we got to the gate, we just had a couple of minutes. So I called the out of hours number from my bank and they said, actually, you've reached the stolen card number. The fraud number is a different number, but if you've told them to freeze the card, it's probably fine.

So I board the plane. We get home. Sunday is the next day. Monday morning, I print out all the transactions. There's about $8,000 of the fraud and I go to my little one branch bank and, and,

I get to speak to a vice president because it's a one branch bank, right? It's like, it goes like manager, vice president, president. That's the, that's the bank, right? So she's really furious about this $8,000 because, you know, if Visa says that it was their fault, then they're going to have to eat the charge. I mean, it's not going to come out of my pocket, but like,

They don't have a lot of margin at these things, and so it'll eventually harm me too because they got my mortgage, my car note, my business account, my personal account, my kids' savings account. It's all there.

And so I said, you know, this is really partly that cack-handed, out-of-hours, janky call center you use. Those guys, they're just so rough. I told that guy to freeze my card on Saturday, and all this fraud happened on Sunday. She was like, well, that's not right. I'm going to go call them right now. And off she goes to her office, comes back 10 minutes later and said, they never called you on Saturday. I'm like, what? She said, yeah, that was the fraudster.

And I hadn't been skimmed. That was the thing I made up in my brain because I had just used a couple of dodgy ATMs and I was getting a call from my bank and I had vacation brain and I wanted to get that sandwich. And so I filled in all these blanks and I'm like, how did that guy manage to rip me off? Because I didn't give him anything important. I gave him my date of birth, but that's in my Wikipedia entry.

How did he even get my phone number? My phone number is a secret. I actually like pay to keep it off the internet. And how did he know what bank I banked with? And all he'd ever asked me for was the last four digits of my card. And, you know, that leaves... Wait, he asked for the last seven digits of my card. And at the time, I remember thinking, oh, another piece of bullshit from my bank's after-hours service thing. But then I look at the vice president and I say...

You've only got the one nine digit prefix for your Visa cards, right? So the last seven digits is the whole card number. And she said, yes. And I realized I had given this guy my whole credit card number. And that's how he had gone and done $8,000 worth of fraud.

So this is classic Swiss cheese security, right? There were a bunch of different defenses that all failed at once. This guy got very lucky. He called me while I was on vacation. So I had vacation brain. This is a well-documented phenomenon. I used to be a Disney imagineer. And when you're designing theme parks and you're thinking about the ways that people might get themselves into trouble, you have to remember that people on vacation switch their brains off.

Things that would be safe for people on their way to work...

they will absolutely impale themselves on while they're on holidays. And so I had vacation brain. I was in a hurry. There was that DC, the, the Boeing 737 max. I called the wrong out of hours number, the way the voicemail tree was structured at my, at my one branch credit union. It, it directed me to the wrong number. The out of hours fraud number was not clearly labeled in the voice menu. All of these things like kind of piled up together and,

And the different layers of Swiss cheese, which all have their own holes that are normally blocked by the layer behind them, all aligned as it does for everyone. And in that moment... And in the sandwiches as well, right? Yeah. Yeah. It's mostly provolone in the muffaletta. It's a good sandwich, though. If you're ever in New Orleans, I recommend it. A briny olive salad, three kinds of cold cuts, two kinds of cheese on a big crusty Italian loaf. It's very good. Yeah.

So here I was, right? I'm getting scammed because anyone can be scammed. And honestly, if he'd called me an hour later, I would have been on the way to the airport and I'd have said, freeze my card, I'll call you back later. And if he'd called me an hour earlier, I wouldn't have been in such a hurry. It was like he just got me by random chance right in that moment. In the same way that you can get a little cut on your arm.

And a little bit of staph bacteria that lives on your skin and is just like doing no harm to you at all just happens to be right next to that cut and it gets into your skin and gives you necrotizing fasciitis, right? That bacteria wasn't good at being bacteria, right? It just was lucky, right?

And this guy was lucky and he was lucky because he commits a million attempts at fraud a day and you throw enough darts and one of them is going to hit a bullseye. It seems such fertile ground for this right now. I mean, John Oliver is doing bits on cable television about pig butchering schemes. There's the FTX fiasco, Binance, all kinds of crypto stuff besides that too. Is this different from the kinds of crimes that went on in the past?

Are we now in a golden age for digital scams or have they always been like this? Well, that is kind of the thesis of these forensic accountancy novels I've been writing, Red Team Blues and The Bezel, that we are in a kind of golden age of scams and that tech and scams kind of go together like peanut butter and chocolate. I think that one of the things that primes people to participate in certain kinds of scams like crypto or like multi-level marketing is

is the sense that the opposite of scam is not legitimate business. That legitimate business and scam are on the same side, right? If you can, as a private equity company, buy a firm, cheat at suppliers, steal the pension, buy your competitors, slash costs, acquire debt you never plan on taking on, destroy a business and walk away with your hands in your pockets whistling,

Why shouldn't I think that I can buy shit coins and unload them on a greater fool as a totally legitimate form of economic activity? There's a story about the collapse of the Soviet Union in Albania. There was a huge Ponzi scheme that took over the whole economy. And even the finance minister had a downline.

And after it imploded, because Ponzi's always blow up, it's just like math, right? You just can't, you keep adding layers to the pyramid and you just run out of people. But after it imploded and they went and asked people like, why were you in this Ponzi scheme? They were like, well, we all knew it was a scam. We just thought we were on the right side of it, right? There's a story that's like, you can't cheat an honest man. This is a thing con artists say as a way of kind of

escaping moral culpability for for deceiving people and cheating them but it's it's not quite that you can't cheat an honest man it's that when people are desperate enough you can talk them into talking themselves into thinking that it's not really cheating i guess the tldr you get about internet scams in most media stories now when you've got that golden age of cons in the mid 90s the pyramid schemes i mean i've got a pal in tirana albania

He told me what all went down there. Folks raided the military. You had people with tanks on their front lawn. Crazy stuff. You had Triple M in Russia. I think that was another huge one. And then you go to the early 2000s, and most people say the internet has supercharged all these things. Con artists with absolute access to millions of marks. I mean, is that really the case? So there's definitely a bigger funnel, right? You can go to...

like a dark net carding site and you can get a bajillion credit card numbers. And then you can cross-reference it with some other database, like a known customers of a certain bank or phone numbers or something else. And you can put together a kind of like a Legion system where you can go, okay, well,

here's this person. I know a few facts about them. I can use as a convincer. So one of the things that happened with my little one branch credit union, because it's so cool to bank with a little one branch credit union. So this guy called me back and tried to do it again the following Friday, right after 5 PM on a long weekend, which is like the golden hour of scams. Cause everybody's out for the, for the weekend. And,

And I knew what he was about. And so I took notes and I was like, okay, here are some like, here's some things, right, that you could change at the bank that would armor you against this procedure. And I was speaking. And so I called up on the Tuesday after the long weekend, I spoke to the head risk officer at the bank.

And she and I were talking. She was like, it's not just us. Every credit union in America is getting this. There's a leak in the supply chain somewhere where you're getting phone numbers and banks, right? So those two pieces of information. And that was the convincer for me. It's not like I don't know the caller ID can't be spoofed. But this guy knew where I banked and he knew my phone number. And to a first approximation, you have to be my bank to know where I bank and know my phone number. So I was pretty convinced and a little distracted. Yeah.

So there's definitely a lot more bits and pieces of convincers you can get for...

It's the difference between a psychic doing a cold reading and a hot reading. In the same way that psychic con artists can do much more impressive hot readings now because they can do facial recognition on the audience as they come in and then look up their Facebook profiles. If they really want to go nuts, they can go to a credit reporting bureau and they can buy dossiers on all these people. Between the dark net and

social media and legit channels, you know, you can do a lot to convince people that you know a lot more than you know. It's kind of a Douglas Adams and the towel thing here where if you got the towel, they assume you've got everything else. If you know six facts about them that they think no one could possibly know, they'll assume that you know a hundred facts about them and will freely discuss them with you

and assume when you confirm that you already knew that, that you're telling the truth and not that they've given you new information. That's definitely the case. But the other thing that's happened is that we've had this kind of stripping away of the social safety net and the rise and rise of a kind of vicious trend

sort of idea that you are an entrepreneur of one, you know, that everyone's a brand, that you have to sell things, that your social relations exist solely as a kind of conduit to extracting value, that everything is transactional. Yeah.

So, you know, like the typical MLM victim, who's also a perpetrator, is a woman of low income who is raiding the social relationships in her friendship circle, which are really important to her survival, right? If you don't have any money, you rely on social capital, right? Your boss wants you to work late. The neighbor babysits your kid because you don't have cash, right?

And so you're taking these social relations that are so important to you and commodifying them. And the reason that it feels okay to do that is because you've been told that you're a brand, you're a company, you're an entrepreneur, you're not a person first. You're like an LLC with legs. And so...

All of that conduct that is so characteristic of executives, you know, the kind of insidificatory impulse to harm suppliers and customers in order to maximize return to shareholders. If you LARP that as a girl boss...

you end up committing the same sins, right? Like if you tell yourself you're the sociopath CEO of a multinational corporation in waiting and then approach your interpersonal relations in that spirit, then you will conduct yourself in this sociopathic and remorseless and unethical way.

In the onslaught of AI then, is it going to change this whole scene altogether or is it actually already done so? I mean, are there crimes or scams that you've seen that are employing AI already? I guess most of what we see is election interference, stuff like that. But I'm guessing crooks have access to this stuff too. So I'm guessing there's loads of criminality going on. Yeah, you know...

I think it's unseemly to focus too much on these kind of hypothetical harms when there's so many real harms, right? So I think the single most pervasive and successful piece of AI disinformation is that your boss can fire you and replace you with AI that will do your job as well as you can. And the most credulous marks who are most routinely convinced of this is your boss. So our bosses are completely, you know,

like relentlessly insatiably horny for firing us and replacing us with software. And there are lots of contexts in which it's happening. And it's not just like chancers running a corner shop, like air Canada fired their, uh, online support staff and replace them with a chat bot. And that chat bot just started lying to people. So very famously, there was a guy who, you know, yeah, gets on his chat and says, Mike, my grand's dead. I'm taking a, um,

you know, flight to her funeral. What's your bereavement policy? And the chatbot says, well, you got four weeks after you, after your flight to get us the death certificate. And so he takes the flight and then spends the next eight weeks fighting with Air Canada about it, eventually going to the regulator because Air Canada is like, no, that was wrong. And we disavow what the software said. Uh, and, um,

This guy, I think lots of people have heard this story, but I think a lot of people have missed the point of it, which is that this guy spent, it wasn't even eight weeks, it was 10 weeks, two and a half months fighting with Air Canada over 800 Canadian dollars and then went to the regulator. So this guy was like a Six Sigma pain in the ass, right? If that guy got all that way to get his money back, I guarantee you a thousand other people gave up.

This chatbot didn't steal from one person, right? So the most pervasive form of AI disinformation is the disinformation that says fire your employees and replace them with AI. And the second most pervasive piece of disinformation is the information that the chatbots that have been hired to do our job for us produce, right? That's like the really important stuff. There's also a lot of AI harms that are like not hypothetical election harms. They're not...

you know, the spicy autocomplete waking up and turning us all into paperclips or whatever. There are things like the algorithm telling the police to go to your neighborhood of color and just like start throwing young men up against a wall and turning their pockets out. And the algorithm telling the banker not to offer a loan to someone who lives in a neighborhood that's predominantly black. And the algorithm taking away your kids or the algorithm saying you're, um,

you don't get the job or the algorithm that allows landlords to collude to raise prices without speaking to one another directly. And those are really serious algorithmic harms. And to the extent that AI is capable of getting us to believe conspiratorial accounts of how our institutions work,

I think that's downstream of the institutions failing, right? In the same way that like that guy knowing my phone number made me believe that he was calling from my bank. Someone showing up and saying, you know, computer says, no, you have, you have one hour to get this data to us or, you know, make this payment or do something else or some grotesque, terrible thing is going to happen to you. Like you're going to lose your car, your house or your Liberty or your kids or whatever. All of that is credible information.

Because the institutions themselves have been starved and and shitified to the point where they routinely conduct themselves this way. And then when someone comes up with a conspiratorial account and says, like, the vaccines are bad for you because the pharma companies want to murder you and their regulators will let them get away with it.

The reason that story rings true is on the one hand because the pharma company has been trying to murder us for years. I mean, the Sacklers once threatened to sue me for writing about their role in the opioid epidemic. And the regulators are, in fact, asleep at the switch and letting them attempt and commit murder. And all the quite sensible grown-ups, when they hear that vaccines are considered unsafe by these conspiratorialists, instead of saying...

you're right, pharma is crooked, their regulators are crooked, they will kill you to make a nickel, say, you're so deluded, of course this stuff is fine for you. And look, I have six jabs. I get the greatest 5G reception you can imagine. But it's not because I think pharma is on the up and up. And I think if you think pharma is on the up and up,

You're nuts, right? Like, you've got your head in the sand and some pharma company is going to kill you with Vioxx or with OxyContin or with some other drug that's in the pipeline. And so, you know, like, I think that... This episode is brought to you by Shopify.

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We focus on AI election disinformation as a kind of paternalistic exercise in assuming that everyone who believes in conspiracies is just a moron, and also as deflection so that we don't have to confront the deep systemic problems that make conspiratorial accounts so credible.

And AI companies want us to focus on election disinformation because if we were focusing on the manifest unsuitability of AI for all of its industrial applications, their share price would go down. But

if we decide that AI shouldn't be used for election disinformation, they don't lose a penny. They're not trying to sell AI for election disinformation. So this is an act of distraction. It misses the real here and now points. And if you really care about conspiratorialism, it also fuels conspiratorialism to focus on

The account of conspiratorialism that says conspiratorialists are fools who've been duped because everything is fine. And that is just going to make people who have been hurt by the system easier pickings for the con artists who want to convince them about QAnon or whatever, George Soros or any of that other stuff. In Naomi Klein's new book, Doppelganger,

She quotes someone who says that anti-Semitism is the socialism of fools. That, you know, if you start with this kind of thought that rich people are part of a kind of system that benefits them at the expense of everyone else, and you go, okay, well, it's a systemic problem, and here's how capital functions, and here's how labor markets function, and here's why the state is liable to capture by capital, then you become a socialist. Right.

But if you fall back on, there's a room in Davos full of people who look like Weimar-era caricatures of Jewish bankers who are responsible for all of it. You become an anti-Semite. But the problem with the anti-Semitic account is the location of this problem with a cabal of individuals and then the scapegoating of Jews.

The problem with that account is not the idea that there are elites who act with impunity and whose leadership has been disastrous for our planet, our economy, our species, and so on. Speaking of this blurring of legal, illegal, con, not con, let's move on to the bezel. I listened to the audio book this past couple weeks, so my border terrier thanks you for the extra workouts. Very good. It's a revenge thriller about Marty Henge, this forensic accountant who encounters this, well...

Well, first of all, a Ponzi scheme on Catalina Island in California. But then it moves on to a critique of the prison industrial complex. So, yeah, with the last book, which focused on crypto scams, you've kind of run the gamut of the past 25 years of cons from the dot-com bubble onwards, right?

I mean, how did you settle on which kind of issues or crimes to embed in a narrative? And second, perhaps most importantly, is cab candy a real thing? I mean, is the startup putting candy in cabs, right? Well, for that, you kind of have to understand a little of the context here. So I write as displacement activity for anxiety. So life gives you SARS, it makes SARS-CoV-2. During lockdown, I wrote nine books. Holy shit.

And one of them was this novel Red Team Blues. And the conceit of Red Team Blues was that I was going to write the final installment in a long running kind of detective series with this kind of two fisted, wise cracking, beloved character that, you know, you've read all your life and followed the adventures of. Here's his final adventure. And I was going to do that without writing any of the other books.

Just the final one, right? Just straight to pudding. No meat, no veg. And so I set out to do this and I wrote it really fast. It just came so easily. I wrote it in six weeks from the day I started to the day I finished the first draft. And I sent it to my editor who is like a beloved dear pal. We met on a BBS when I was 18. He's been my editor for all my novels and books.

I love him, but he's not going to think that I'm maligning him when I tell you that he is not the world's most reliable email correspondent. So having sent him the book, I expected like months to go by. And instead, the next morning I had an email in my inbox. It was just three lines. That was a fucking ride. Wow. And he bought three of them.

And this was great, but it's also like, this was Marty Hench's last adventure. He's 67 in this book. How am I going to write another one? There is some precedent for it. You know, Conan Doyle brings back Sherlock after he pushes him over Rickenbacker Falls, but that was because Queen Victoria offered him a knighthood.

And my editor is a very powerful man in New York publishing, is vice president of the Macmillan Company, one of the big five, but he can't knight me. And so I figured I would just like leave Marty in retirement and then I would write the books out of order.

And the cool thing is that when you write the books out of order, there's no continuity problems. Because you're not foreshadowing, you're backshadowing. And the more detail you put in, the more of a premeditated motherfucker you seem to be, even if you're just making it all up. So...

I wrote two more of these. There's actually two more planned. You call it a trilogy. It's an infinitology. Because Marty is the zealot of high-tech finance crime. His origin story is that he starts during the heroic era of the PC in 1982 in Silicon Valley, and he stays in it until 2022 with crypto. And so 40 years, every high-tech scam you can imagine, which means that you just pick a high-tech scam and you can just stick Marty in it.

Now, the dot-com era is one that I lived through. I started a venture-backed dot-com in 1999, moved to San Francisco to be the founder on the ground there. I'm from Toronto. And then ended up leaving when our venture capitalists screwed us and stole the company from us when Microsoft offered to buy it and going to work for the Electronic Frontier Foundation, a digital human rights nonprofit that I've been with for more than 20 years now. Yeah.

And so I know that milieu really well. And so when I thought I was going to write...

something from the era in which yahoo was destroying every promising web 2.0 company it was just like i i the whole thing just kind of snapped into place i knew exactly the milieu and yeah cab candy was a real company that got a real term sheet from our real venture capitalist for millions of dollars to have cab drivers drive around with their their boots full of candy for stoners

It was amazing. That is definitely better than 99.9% of startups I've seen. Honestly, it...

The fundamentals are better than literally every cryptocurrency startup. All of them. Like, combined. And so you start with this Ponzi scheme where folks are selling hamburgers for extortionate prices on the island. And then you flip the book into the prison industrial complex, this mad Philip K. Dick-like peer into weird prison companies skimming off all sorts. I mean, I've had my own experiences with this stuff. When I was reporting the Joe Exotic stuff like five years ago,

The Oklahoma prison system had this crazy messaging system called Tiger, of all things. I was spending so much cash calling this guy. So this is already happening, right? So sleazy, borderline illegal. No, it's ripped from the headlines. And the point of paying attention to this is not merely that we should have empathy for our fellow humans who are locked in cages and America locks people up like...

like no country in the history of the world, there's more people in American prisons than there were in South Africa during apartheid or Stalinist Soviet Union or China at any point in its history. It's the world beater in locking people up. But you should care about this, like not merely because of that travesty, but also because there's this thing I call the shitty technology adoption curve, where if you've got something really ghastly you want to do to people with computers, you

You don't inflict it on affluent white guys like me first, because when I complain, people pay attention. You find people whom you can abuse with impunity and you sand the rough edges of that technology down on their bodies. You normalize it while working your way up the privilege gradient, you know, asylum seeker, mental patient, prisoner, parolee, blue collar worker, you know,

you know, gig worker and then white collar worker. And, you know, before you know it, you go, you get this, I kind of soup to nuts picture where 20 years ago, the only people who had dinner under the gaze of a CCTV camera were, you know, people who were in a super max prison. And today it's just like anyone who's like unwise enough to buy a home automation system from, you know, Google or Apple or God help us all Facebook, um,

And that's the shitty technology curve in action. So, you know, William Gibson says the future is here. It's just not evenly distributed.

The future is most concentrated, the dystopian future is most concentrated in prisons. And they are the early adopters of the things that will ruin your life in 15 years. And if you want to know what's coming and if you want a chance of heading it off, you need to pay attention to what's being done to prisoners too. Yeah, and you mentioned the confluence of the late capitalist side of it with the laws themselves, right? I mean, you've got the three strikes legislation in California, right?

The decay in prison funding, everything just piling on and piling on the pressure against this prison demographic, making theirs and their families' lives as difficult as possible. And you really flesh that out. Well, that's why it's a revenge story, right? Because in my fantasy, every one of those people who sits bloodlessly in a boardroom coming up with these schemes...

with the perfect anonymity that they all go down, right? That's my fantasy. I know it's never going to happen. But, you know, there's this old idea from the webcomic Penny Arcade, the internet greater fuckwad theory, that anonymity plus the internet makes people into fuckwads. And I don't think it's true. Like, first of all, the number of people who use their real names to be unbelievably awful is...

You know, we all know this, right? Facebook has had a real names policy since its inception. It should be the most polite place on the internet if greater internet fuckwad theory was right. But there is a greater corporate fuckwad theory because every corporation that does something really awful, it's done by someone anonymous, right? Like, do you know who took the decision to, you know...

dial down the proportion of material in your Instagram feed that comes from your friends to like a little homeopathic crumb and dial up the ads and suggestions, right? Like no one knows who that person is. Like if they did, we'd be out there billing guillotines on their lawns. So these people operate with the impunity of anonymity. You know, it's the banality of anonymity. I remember when I was writing on the Guardian article,

I had an interview or rather I did an investigative piece where I spent weeks talking off and on with the vice president of communications of a multinational multimillion dollar corporation discussing something her company was doing. And she was just telling me the stuff that her company wanted the press to know. She wasn't a whistleblower, right? She wasn't, she wasn't leaking secrets. And then at the end of this, I was like, well, I think I've got everything I need. How should I reference you in the article? And,

And she said, oh, you mustn't name me. You can quote a spokesperson familiar with the situation. And I was like, wait, what? You are a vice president at a multinational corporation. And moreover, you are the vice president in charge of talking to the press.

And that corporation was in fact a press outlet. I think I can tell you that without outing who this was, right? So what on earth are you talking about? And so I wrote the, I published the piece, but then I published another piece or I wrote another piece for the Guardian about how it's mad that the press does this. And it's the only column I wrote in 10 years on the Guardian that they spiked.

Because my editor was like, no, this is fine. Like, just when you read about, when you read spokespeople apologizing for terrible things corporations have done, count how often they're just, they're unnamed, right? How infrequently. It is absolutely standard practice in Anglosphere media to afford anonymity to corporate spokespeople. And my editor's line was something like, well, if they're lying, it's their job.

And why should we punish them, right? It's the company's problem if they're lying, not theirs. This feels like a chatbot story all over again. It really is. Yeah. They're kind of a moral crumple zone for the corporation. I'm sorry. We were about to plug my book some more, but I had to finish that.

Let's move on to in-shitification then. I'm in my late 30s, so I can remember when all the internet was a bit more interesting, right? Diverse, a bit weird, freaky, and then it kind of just got boring with all the big firms taking over the place. Yeah, there's a software developer in Wellington named Tom Eastman who says, I'm old enough to remember when the internet wasn't just five giant websites, each filled with screenshots of text from the other four. And I think that's the best account of it I've ever heard.

Yeah, that's right on the head. Is it just that the internet's getting shitter? It's more than that, right? It's captive workers, captive users, kind of the whole shebang around us. Well, I think it's a combination of several things. So the first is that digital services can go rotten in ways that...

Physical services can't just because they can change the business logic really quickly, like the expected wage for driving your Uber or the price. You know, all of this stuff can just change from moment to moment, second to second and be totally personalized. There's a thing called algorithmic wage discrimination that Uber practices where, you know, drivers are offered a different payout, a different per mile and per minute and.

based on how selective they've recently been in taking offers. And the more selective you are, the more the algorithm gives you. But then as you become less selective, it draws your pay down in tiny little increments that have a certain amount of randomness in it, so it's hard to detect the pattern. And the idea is to gradually bring you down to the point where you're accepting a very low wage, which is almost certainly also correlated with you having jettisoned everything else that you were doing that allowed you to bypass low-wage jobs.

And so that's just, that's a thing that bosses would have loved to have done since time immemorial. You know, you think about like coal bosses memorialized in 19th century angry folk songs, right? They would have done this if they could have. They just didn't have like enough guys in green eye shades to do it, right? When an algorithm can do it, you can just, I call it the Darth Vader MBA. You know, I have altered the deal. Pray I don't alter it further. You could just change the rules from moment to moment and second to second.

And then, you know, the constraints that stop firms from doing this have slipped away. So the first constraint is competition, where the fear that you might take your business elsewhere if you figure out what they're doing can stay their hand. And if it doesn't, if they have too much hubris or greed, then you can go somewhere else.

And, you know, 40 years ago, we stopped enforcing antitrust law, competition law, and it's been drawn down ever since all over the industrial world. And so now we allow firms to buy all their major competitors and merge with smaller competitors and to, you know, do predatory pricing. So again, Uber took control.

$32 billion from the Saudi royal family and then just pissed it up a wall, discounting every ride so that 41 cents on every dollar was subsidized by the Sauds.

And then, you know, everyone goes, well, I guess this is a going concern after 13 years. All the rival taxi firms have gone out of business. We've had a massive disinvestment in public transit because why would you spend money for public transit when you can get private hire cars so cheaply? And then they just start jacking the price up after the IPO and they flip the shares to suckers who assume that a pile of shit this big has to have a pony underneath it.

So, you know, you have the drawdown of competition. It means that companies don't fear losing your business.

It also means that sectors become dominated by very small cartels. Five or fewer companies dominate everything from bottle caps to vitamin C to intermodal shipping to cheerleading, professional wrestling, athletic shoes, beer, spirits, tobacco, finance, the internet, media, right? So all of these sectors are super concentrated. And one of the things you get when you're that concentrated is

is a certain ease of resolving your differences. That there's this thing that economists call the collective action problem, where like 100 people find it really hard to agree on anything, but like five, they can figure it out. And so where you might once have had

being told different things by different firms that were sort of checking each other's more outlandish claims to keep regulation in the zone of kind of evidence basis. Once a sector is down to four or five firms, they just all speak with the same voice in front of their regulators and the courts and what have you and

And also because they've abolished so-called wasteful competition, right? They're all extracting supernormal profits and they can mobilize that to take their priorities and make it happen. Now, those things happen with every kind of firm, not just tech firms. But with tech, there's two other dimensions. So the first is self-help that historically, because computers are so universal, they're so flexible, right?

The thing that allowed companies to move value around so quickly also allowed users, whether they were suppliers or customers, to take some of that value back. So like historically, if you were in a boardroom thinking about a digital product and someone said, you know, fellas, I've been thinking about it and we can get like another 2% gross revenues if we make the ads 20% more invasive, someone else in that room who just didn't give a shit about the users at all or their well-being or their experience still might say, okay,

Alright, but what happens if 40% of our users then type into a search engine, how do I block ads? Then the expected revenue from those users, it's not 100%, our current baseline, doesn't go up to the 102% you're hoping. It goes down to zero and it stays there forever because no one ever went back to the search engine and typed, how do I uninstall this ad blocker?

And so that constituted a certain constraint on the worst conduct of firms. And again, where it failed, you had remedies. You could get third-partying for your printer. You could block ads. More than half of all web users block ads. You could do all kinds of things, alternate clients for Facebook, whatever.

And the same regulatory capture that allows companies to flout regulation, to abuse our labor rights, our consumer rights, our privacy rights, also allows them to mobilize regulation against would-be competitors. This podcast is supported by FX's English Teacher, a new comedy from executive producers of What We Do in the Shadows and Baskets. English Teacher follows Evan, a teacher in Austin, Texas, who's been a teacher for a

who learns if it's really possible to be your full self at your job, while often finding himself at the intersection of the personal, professional, and political aspects of working at a high school. FX's English Teacher premieres September 2nd on FX.

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And so the Australia-U.S. and the New Zealand-U.S. free trade agreements incorporate something called anti-circumvention that makes it a crime to reverse engineer apps. And so there are ad blockers for the web, but there's no ad blockers for apps because the reverse engineering step is itself a crime. And so as a result, that constraint goes away as well. And then the final constraint was labor.

Because even though tech workers have historically had very low union density, they still had a lot of bargaining leverage because they were in short supply. And

it's a curious kind of bargaining leverage you get from feeling important. It makes you, um, very vulnerable to a certain kind of exploitative flattery where your boss says, Oh, the reason we're having you work in this whimsical campus where you get, you know, free kombucha and massages and like, we'll freeze your eggs if you work through your fertile years is because, um,

You guys are like entrepreneurs in waiting, right? You're like temporarily embarrassed founders. You're heroes of the tech revolution. And that's why you have to sleep under your desk and miss your mother's funeral in order to ship this app to this deadline I've set. And the thing about appealing to workers' sense of mission instead of their sense of precarity is

is that they will feel a sense of mission. And so while workers might not have flexed their muscle when they were being worked like government mules, they did often step in and say, I refuse to inshittify this thing that I put so much effort in because I would experience a profound moral injury if you made me do it.

Well, fast forward to last year. Google fires 12,000 workers just months after doing an $80 billion stock buyback that would have paid their wages for the next 27 years. 260,000 tech work jobs disappear from the U.S. economy. Workers aren't telling their bosses, no, I won't inshutify this, because their boss's answer is, great, you know, turn in your badge. Those things aren't cheap, and don't let the door hit you in the ass on the way out. And so as all of those constraints collapse...

Companies are able to engage in the shell game where they allocate value to their users, bring users in, lock them in, use the fact that those users are there to bring in business customers, lock them in, draw down the value that those business customers and those end users have, give them to their shareholders, and keep everyone locked in. And that's why every platform exists.

is turning into a pile of shit all at once. These constraints have all collapsed. They all have the flexibility of digital tools to play games with the value. And there's a playbook that works really well to hollow out a service and extract all the value that business customers and end users create for it. That's an optimistic point to get to towards the end of our conversation, Corey. I was going to ask you in this world, right, where nobody seems to care about this stuff, cops, politicians, that...

The congressional hearings where greybeards are grilling Mark Zuckerberg, they're comical, right? Is there an upside, something we can look forward to, or is it just a sliding scale future of scams, cons, and criminalities from here on? Well, anyone who studies finance scams knows Stein's Law, anything that can't go on forever eventually stops.

We are definitely reaching peak indifference to scams. People are pissed off. And, you know, the thing about the inshittification analysis that says, like, it starts with weakening competition law, which leads to regulatory capture, which allows firms to also abuse their workforce and their customers and their suppliers, right?

is that it implies a set of remedies, of prophylaxes, of cures. We restore competition law, which is going brilliantly all around the world. We are seeing a resurgence of competition law not seen since the Reagan years, since the Thatcher years.

We have a new Federal Trade Commission chair in the United States, Lena Kahn, who's done more in three years than her predecessors the last 40 years combined. She's absolutely brilliant and she deserves the job. But the reason she's in that job is not just because she's brilliant. It's because this is the moment in which someone who's brilliant the way she is ends up in that job, which is why you're also seeing...

antitrust and competition law in the European Commission and the European Union with the UK and the Digital Markets Unit and the Competition and Markets Authority. Canada, which has like never had a fit for purpose competition law, has finally, finally said that they are going to put in the minimum standard for competition law, which is what's called the harmful dominance standard.

abuse of dominance standard right which is like just like literally you could not bring up someone on competition law charges merely because they abused their dominance until well it hasn't yet been made law but it's now it's on the order paper and

China's Cyberspace Act is like, it really takes aim at Chinese tech giants. It's funny because, you know, Nick Clegg, who's this absolute piece of shit, who used to be the Deputy Prime Minister of the United Kingdom and is now Facebook's speaker to government, so four million a year going around the world saying, if Facebook is weakened, the internet will fall to China and the Chinese Communist Party will take over the internet, right? We are your bulwark. We are the West's champion.

It's so obviously nonsense. You just have to look at how China relates to its tech giants. Like they're rounding up tech leaders in China and sticking them in gulags. That is not how you treat the leadership of firms that you think of as the projection of soft national power abroad. It's what you do when you think of them as your rivals, which they are in the same way that multinational corporations are rivals for the legitimate power of every government. And so, um,

We're in this unprecedented moment for competition. It's actually looking very good. There's a huge backlash. It's a moment in which the bureaucrats and the politicians who are pushing this agenda really need our support. In the United States Congress, there's an effort to just gut the budgets of the Department of Justice Antitrust Division and the Federal Trade Commission.

Same in the UK, same in the EU. Like corporations don't like this. The Wall Street Journal, Rupert Murdoch's business paper of record has published 80 editorials condemning Lena Kahn, the Federal Trade Commission chair for being a time waster who gets nothing done. Like Rupert Murdoch does not pay his editorial board to write 80 editorials about someone who gets nothing done.

This is the tell is in the frequency. And so they need our support. We need to craft regulation that is harder to capture. And we need regulatory institutions that are more capture resistant.

We also need to restore the right of technologists to reverse engineer and unilaterally modify the services that we use. We need to escape those obligations the United States has imposed on so many countries around the world to block circumvention.

And we need to build out tech worker unions, which finally are becoming an important force in union organizing all around the world because the power of individual bargaining is very weak compared to the power of collective action and solidarity. And if we do all of that, we can claw back.

the old good internet and create a new good internet. We can make the "in-shitter-net" like an embarrassing transitional phase between those two good internets. We can take the part of the old good internet that was bad, which was that you needed to be a technically savvy person like me to have individual technological self-determination. We can get rid of that. We can keep the ease of use that we got with Web 2.0 and its successors.

But we can bring back the self-determination, the right to decide how the service that you use works to escape services that aren't serving you.

understand and alter the deal yourself instead of just being a prisoner of the Darth Vader MBA. We can restore all of that and have an internet that is fit to be the digital nervous system for a planet in crisis that needs to resolve the climate emergency, fascism, genocide, all of these other fights that are far more important than how the internet is regulated, but the internet's the terrain on which we win or lose those fights. Awesome. Thanks for your time, Corey. Appreciate it. The

The bezel. Is it out now or? Oh, yeah. No, it's out. It's out. You're in New Zealand, right? I've been operating on this assumption. You are. So there it's out from Bloomsbury's head of Zeus division. I don't know how it's selling in New Zealand. It's an American national bestseller. It was just days after it came out. So it's doing quite well here. I hope to get back to NZ at some point or something.

I forget what I'm supposed to call it now. Oh yeah. Aotearoa, New Zealand. Yeah. Aotearoa, New Zealand. I hope to get back at some point. Um, every visit I've had has been just superb. Uh, if anyone for the Wellington writers festival is listening, I'm, I'm happy to come back anytime. Oh, I'll, I'll get them on the case then. That'd be awesome. Yeah. Thanks so much again. Thanks. All right. Cheers. Yeah.

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