There’s a word that’s gained a lot of popularity in the last year: “ensh*ttification”. It refers to a trajectory many see with digital platforms: they initially offer immense value to users, only to systematically degrade that quality over time in order to extract maximum surplus for shareholders. 

We invited the coiner of this term, science fiction author and activist Cory Doctorow, on the podcast to discuss whether he thinks this decline is an inevitable feature of digital markets or a consequence of specific policy failures. And, most importantly, how he thinks it could be reversed.

For Doctorow, "ensh*ttification" is not simply a result of "revealed preferences", where users tolerate worse service because they value the platform, but rather the outcome of a regulatory environment that has permitted the creation of high switching costs and the elimination of competitors. 

Doctorow also argues that historically, interoperability acted as an engine of dynamism, allowing new entrants to lower the barriers to entry. But current IP frameworks, such as anti-circumvention laws, have been "weaponized" to prevent this, effectively allowing firms to enforce cartels and engage in rent-seeking behavior.

Finally, Doctorow offers a critical assessment of the current AI boom, arguing that the sector is creating "reverse centaurs", where human labor is conscripted to correct algorithmic errors, and warns of a potential asset bubble driven by inflated revenue attribution.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.