Tag Archives: political economy

Disenshittificatory countermanoeuvres?

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It’s been hard to remain unaware of Cory Doctorow’s concept of ‘enshittification’ – it was after all a 2024 word of the year. But I finally got round to the book Enshittification: why everything suddenly got worse and what to do about it, which is an excellent read. It has four sections: Natural History, Pathology, Epidemiology and Cure. The first three – as these headings indicate – describe the problem (through case studies – Twitter, Amazon, Facebook and the iPhone), anyalyse its structure, explain how it came about and spreads (policy choices), and proposes some counter-actions.

There are two key revelations for me. One is the sustained role of intentional policy actors in enabling big (mainly tech) companies to get away with this. For example, although the adverse effects of the DMCA are well-known, I had not previously known that it was made possible by US official Bruce Lehman doing what he described as ‘an end-run around Congress’ by bringing in the WIPO and international treaties that then had to be implemented in US law. The US law was then enforced extra-territorially by US Trade Representatives threatening tariffs on countries which did not implement similar domestic legislation. This long predated Trump’s passion for tariffs.

The other is the importance of interoperability. As Doctorow puts it, all computers are “Turing complete universal von Neumann machines” – they can run any programme. “The fact that every computer can run every valid program means that every enshittificatory gambit has a potential disenshittificatory countermanoeuvre.” The obstacle to doing so is – the DMCA and threat of legal action for breach of copyright by jailbreaking the software restrictions.

Everyone who does anything online is wearily familiar with the deteriorating experience, which makes the Cure section especially interesting. Policy was the cause, and policy is the cure. Doctorow emphasises antitrust policy and regulation. Economists who have studied digital markets will warmly agree. Enforcing interoperabiility is a key weapon – if we can’t force the companies to behave better, we could make them less important, reduce their gatekeeper status. Also, the more I think about it, the more I believe copyright law needs a broad rethink; it isn’t serving society well in sectors other than tech.

So there is technically well-informed good sense in these. But it leaves me thinking – as with many things I’ve read recently – that the barriers are political. There are clear policy options, implementable, and yet they seem outside the famous Overton Window. In this excellent Chicago Booth podcast with Cory Doctorow, he observes that political science has under-theorised the role of policy domains such as anti-trust, and this seems correct. Perhaps the EU, now that US hostility has been made so plain in the new National Security Strategy, will stop trading its digital enforcement for favours on tariffs; as the tariff weapon has already been fired it has lost some threat potential.

Hard to predict. But I have a strong sense, given evident public anger about the state of modern market economies, that something, somewhere, will start to give. It probably won’t be pretty.

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From woolly to concrete liberalism

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I got round at last to reading Abundance by Ezra Klein and Derek Thompson, and enjoyed the book. It’s a good read and makes its case well. The pro-growth case has traction beyond the US of course. UK ministers have been on about planning regulations hampering growth ever since the July 2024 election, and a John Collison article in the Irish Times recently got the Irish chatterati talking about it.

Did I agree with the case? Yes and no. I do think restarting economic growth – in an environmentally increasingly sustainable way – is essential. Social and political phenomena have many causes so the electoral success of far right populism (anathema to me as an old fashioned woolly liberal) is not caused in a simple way by the absence of growth since the mid-2000s. But that absence is certainly part of the story. My views about this have long been shaped by my PhD adviser Ben Friedman, and his book The Moral Consequences of Economic Growth. (As for the sustainability component – of course that’s essential, but I can’t think of any far right party/government that is not claiming climate change is a hoax. So significant political change has to come first.)

So Abundance does identify some barriers to growth and describe the implications. But the book is also strangely non-political in the sense that I didn’t find anything about how to get from here to the sunlit uplands of there. The book says, “What we are proposing is less a set of policy solutions than a new set of questions around which our politics should revolve.” OK, nobody wants another list of 10 bullet point policy solutions in the final chapter. But what is the political economy of getting from today’s polarised and disgruntled world of concentrated power and authoritarianism to the Abundance-land of pro-concrete liberalism, where building new things is welcomed by communities and technology works for everybody?

Top marks for optimism to the authors, and I enjoyed the read, but it didn’t rattle my pessimism about the current moment.

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The people’s AI?

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The title of Maximilian Kasy’s new book The Means of Prediction cleverly riffs off Marx’s concept of the means of production for th age of AI. These means, Prof Kasy argues, are data, computational infrastructure, technical skills and energy. The core argument is that these means rest in few hands, so the value being created by AI is concentrated in a relatively small number of technology companies and their founders and employees. What’s more, this concentration also skews the kind of AI systems being created: AI is designed to optimise some objective function, as I argued in Cogs and Monsters (and some recent as-yet-unpublished lectures).

This makes a powerful case for democratising AI, the book argues. Unless countervailing power from workers, consumers, and politicians is brought to bear, the technology will create further inequality and will not serve the public good, only private, profit-maximising interest. Kasy convincingly argues for collective means of control, rather than just individual protections such as GDPR: “Machine learning is never about individual data points, it is always about patterns across individuals.” Control over one’s own personal data does not protect privacy as long as similar people share their data.

The book starts with a section explaining AI, followed by a section explaining how economists understand social welfare – this being the approach (as Cogs explains) that is being automated by AI. These are very clear and useful for people who are hazy about either, although as they are so introductory it did make me wonder about the target audience for the book. Having said that, there is such a lack of knowledge among the public and indeed lots of policymakers and politicians that these sections are probably sorely needed.

The final two sections go on to regulatory challenges and the need for democratising the development and use of AI. As Kasy points out, policy choices have always been choices, with winners and losers, and decisions have often involved predictions; after all this is what policy economists have been doing for decades. The increasing use of AI to make decisions automates and speeds up choices – the danger being that it does so with embedded biases and implicit decisions hidden by the technology, and the all-too-common presumption that the machine must be right.

The optimistic take on where we are is that the use of AI to make predictions and decisions will surface some of the implicit assumptions and biases, and so force more public deliberation about how our societies operate and affect different people. The pessimistic take is of course that they simply become more deeply hidden and entrenched. Depending on my mood, at present I think things could go either way. But that open prospect makes The Means of Prediction a very timely book. And – having pondered who it was aimed at – probably one that every official and politician should be made to read as they chirrup about using AI in public services.

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Building vs stopping

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I read Dan Wang’s Breakneck: China’s Quest to Engineer the Future, which some people I follow (like Henry Farrell and Richard Jones among others) have already reviewed. It is,  as they have said, a very interesting read – much more about China than about America, although the contrast he paints between the two is clear. The core of that contrast is that China’s leadership consists of engineers, and they focus on getting things built, while America’s consist of lawyers, who focus on stopping things.

However, the point Wang makes is subtler than ‘engineering good, lawyering bad’, although China’s success in building infrastructure and developing manufacturing industry has delivered astonishing increases in living standards. For, as a couple of chapters emphasise, the engineering mindset can go badly awry when applied to social issues – the one child policy and the covid lockdowns are the examples.

Nevertheless, there are lessons for the US (and the rest) in China’s approach. He writes: “[China] embraced a vision of technology radically different from Silicon Valley’s: the pursuit of physical and industrial technologies rather than virtual ones like social media or e-commerce platforms. In China. technology is not represented by shiny objects; rather, it is embodied by communities of engineering practice like Shenzen, where technoogy lives inside the heads and hands of the workforce.” This seems spot on in identifying a relative weakness of the US and UK models, both of which overlooked the importance of keeping those communities rooted at home. One of my favourite papers is Gregory Tassey’s in the 2014 Journal of Economic Perspectives, making this point. It also reminded me of Dan Breznitz’s point about the different pathways for industrial policy, and Silicon Valley not being the obvious model to emulate.

Another lesson for both countries lies in their contrasting but equally unappealing urban forms – China with its soul-less new mega-block developments and America with its bland suburbs. Neither seems to manage dense, walkable, attractive neighbourhoods on the whole – in China, Wang lived in the attractive French Concession area of Shanghai, an exception to the rule. Here is one dimension where many European countries do better than either superpower, as Chris Arnade often points out.

My other reflection on Breakout – which is a must-read – is that it already seems dated by recent developments in US politics. There are now many things the lawyers are not stopping, although still much that the engineers are not doing either. In the long run the lessons of both countries’ recent past will be relevant for economic growth and technological advance, but the short run seems much murkier than it did even a few months ago.

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The power of ideas

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Some years ago I read Masters of the Universe by Daniel Stedman-Jones, a history of the Mont Pelerin Society with a focus on how it came to have such a profound influence on policy, first in the UK and US through Thatcher and Reagan, and subsequently on the whole western world. It made a big impression on me, opening my eyes to the Milton Friedman assertion about how important it was to make sure the ‘right’ ideas were around, in the air, when a moment of crisis created political opportunities. The Mont Pelerin economists had kept the free-market faith from 1945 onwards, working at building their institutional network (mainly via Chicago) and seeding their ideas.

I’ve now read The Great Persuasion by Angus Burgin, which covers the same history from a slightly different perspective. Its emphasis is less on the practical politics, more on the evolution of the ideas of the Society’s members (including its internal rifts). One of the same points about Hayek and his colleagues jumps out, though: “In adopting this strategy [avoiding policy engagement], they demonstrated an extraordinary faith in the capacity of abstract ideas to generate substantive political change,” Burgin writes.

Indeed Milton Friedman, a great communicator, was one of the first leading lights to embrace public engagement much more actively – his most influential article was probably a New York Times essay, on maximising shareholder value, still distorting our economies. The book also underlines how much the core ideas of the Society shifted over time, from an initial postwar insistence on the importance of government and rebuttal of ‘Manchester’ laissez faire, with the shift from Europe to Chicago and the growing influence of right wing American donors – and of the dominance of economists as opposed to philosophers.

The two books are good complements, along with Quinn Slobodian’s books on neoliberalism. I haven’t yet read his latest, Hayek’s Bastards, but the earlier Globalists is well worth a read.

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