Tom Valcanis
Life-long politics tragic, digital marketer and writer. Articles in the Age/SMH, the Big Issue, the Spectator, and editor of alt lifestyle mag Hysteria from 2016–2020. An advocate for free speech, free markets, and small government.
Have you noticed those convenient and life-changing apps we once lauded as the future kinda suck now?
When ride-sharing service Uber made its debut in 2010, it really was a game changer. Instead of owning a fleet of cars and dispatching them through a centralised hub, Uber instead asked, ‘What if you could hail a ride from your smartphone?’ and set about making it a reality.
Entrepreneurs could drive their own cars at their leisure and pick up passengers as they saw fit. Consumers had power once again. Uber facilitated the application to help supply meet demand. In return, it took a cut of the fare.
It ended up cheaper than government-regulated taxis, and far safer and convenient than listening to “13 Cabs, 13 Cabs, 13 Cabs” hold music at three in the morning, hopes fading that your call really is important to them, and they’ll be with you shortly.
Everyone was happy. Very happy.
Now, not so much.
Uber, AirBnB, virtually any other online app you can think of has succumbed to what’s now known as “enshittification.”
It kind of sounds like what it describes.
Any good business exists to make profit. When the government wants its pound of flesh, customers always lose out.
Coined by blogger and journalist (and three time Prometheus Award winner for best Libertarian Science Fiction novel) Cory Doctorow, enshittification is the process of having a once great product or service that genuinely creates value for customers, but abuses that initial trust to enrich their business customers. Services that were once free are now monetised. They hike once low (possibly loss leading) prices. The regular service you became accustomed to is suddenly locked behind expensive “gold” or “platinum” subscription models. You’re charged service fees on top of delivery charges on top of levies. They remove on-time service guarantees. They introduce ‘surge pricing.’
You know what I mean, because you’ve seen it before.
However, is it all just down to corporate greed? Maximising shareholder profits above all else?
Not quite. “My wife loves these e-cigarettes called Juul pods,” says Jason Sorens, PhD, founder of the Free State Project, quantitative political economist, and senior researcher at the American Institute for Economic Research. “They used to work great. You’d have one and refill it and use it for months. Now, she leaves them all over the place because they keep breaking, and they’re single use only.
“To sell these things, it made more economic sense to make a cheaper, crappier product made in China or Vietnam to lower standards. Because vaping is heavily regulated [in the US] and they need to deal with these regulatory pressures while still trying to turn a profit. Regulation has driven out a lot of competitors in a market like that.”
In the People’s Republic of Victoria, enshittification is the mantra of the ruling Labor Party. During their dismal tenure they’ve introduced a $2 Uber levy, a 7.5 per cent “short stay” levy on top of GST (targeting Stayz and AirBnB), plus land taxes, property taxes, electric vehicle taxes, toll road taxes, and payroll taxes.
Any good business exists to make profit. When the government wants its pound of flesh, customers always lose out.
“You need to have what we might call a deep market where you have a range of options available to people,” Jason says. “Part of this is just the competition, keeping companies honest, because as libertarians, we’re not pro corporation, right? We think that the best way to regulate corporations is to make them compete with each other for your dollar. So, we need that competition, but we also need just a range of options where if you want the fancy option that’s available to you and you can pay more for it.”
Enshittification doesn’t necessarily apply to our favourite apps, either. It applies to whole states, such as my Socialist Republic of Victoria homeland. The reason why is obvious: high taxes, bad business conditions, and an astronomically ballooning public sector debt. One only need drive across our neglected roads to see (and feel) managed decline in action.
Have you noticed those convenient and life-changing apps we once lauded as the future kinda suck now?
“Some people will make the calculation, between a cheap house or low rent with high taxes or a more expensive house with low taxes,” Jason says. “I live in New Hampshire, which is a low-tax, high-freedom, state. Compared with Vermont, which very high tax and low freedom [i.e., where Sen Bernie Sanders rules over.]
“I used to live on the Connecticut River and could see Vermont from my house. An economist from Dartmouth did a study and basically found that Vermont property values are lower because once you include the income tax, the income tax ends up being capitalised in the value of the house. It bids up the price of housing in New Hampshire because people don’t want to pay higher taxes, and you reach a kind of equilibrium point. We were just a few miles apart, but the price differences were significant, due to the tax regime in each state.”
New Hampshire makes the case that enshittification isn’t inevitable – if we vote with our dollars and at the ballot box.
“No one makes the federal minimum wage in New Hampshire; we don’t even have the minimum wage here,” Jason says. “Teenagers are making way above $7.25 now. We have the highest wages in the country. We’ve legalised medical marijuana. We relaxed laws on opening up microbreweries and on private sales of food and drinks. You have school choice, you get tax dollars back to fund tuition to private schools or even home schools. We cut licencing requirements and business taxes, and the economy has boomed.”
Sounds like a libertarian paradise to me. Can I move in?
This article was originally published by Liberty Itch.
