Pluralistic: Capital formation (14 Aug 2026)

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Originally published at: Pluralistic: Capital formation (14 Aug 2026) – Pluralistic: Daily links from Cory Doctorow



Today's links


Three weird male figures' heads. The figures have gigeresque throats made from dripping stalagmites and stalactites, and their crania have been replaced with clear domes. The three figures overlap, each smaller than the previous. In the rightmost, largest dome is the portrait of Ben Franklin seen on a US$100 bill. The middle dome contains a 19th century bank with Grecian columns. The left dome contains the US capital. The background is a heavily processed monochrome image of wiring in an early mainframe.

Capital formation (permalink)

Funny thing about competition: there's both a pro-market and an anti-market case for a competitive system.
https://pluralistic.net/2026/08/13/one-chokable-throat/#too-clever-by-half

If your theory is that markets deliver prosperity by spurring businesses to provide the superior products and services at lower prices needed to attract and retain workers and customers, then competition is a must-have. Without competitors, companies are "too big to care":

https://pluralistic.net/2024/04/04/teach-me-how-to-shruggie/#kagi

Meanwhile, if you think that the pressure of greed will always drive companies to cheat, and want companies held in check by democratically accountable lawmakers and enforcers, then you also want competition, because otherwise, disorganized sectors of hundreds of small businesses collapse into oligarchic cartels. Members of these cartels cease to compete directly with one another and instead collude to rip off workers and customers, leaving them aslosh in ready cash they can mobilize to capture regulators, securing an enshittogenic policy environment that reflects the easily arrived-at consensus that's only possible when you boil a sector down to a small handful of firms, each of them "too big to jail":

https://pluralistic.net/2022/06/05/regulatory-capture/

In other words: if your ideal is a world of high-quality products and services, produced by workers laboring under fair conditions, delivered to consumers at a fair price, then you want competition. Competition scares some people into running their businesses ethically; and competition ensures than an unethical operator can be held to account by government agencies charged with protecting workers and consumers.

Once you understand the role of competition as a counter-oligarchic check on corporate power, the rise of Big Tech and its authoritarian turn becomes much easier to understand.

Tech is uniquely hospitable to competition thanks to the intrinsic properties of digital computers. Formally, computers are "Turing-complete, universal von Neumann machines," which is to say that every computer can run every valid program. This means that any enshittificatory gambit assayed by a tech company – say, locking generic ink out of your printer; or blocking third party app stores for your phone or console; or sticking a dozen extra ads before every Youtube video – is technically doomed.

Every time a tech boss introduces a 10' pile of shit in a digital product or service you rely upon, they induce rival technologists to create 11' ladders made of code that they can costlessly, instantaneously distribute to every one of the enshittifier's customers and suppliers:

https://www.eff.org/deeplinks/2019/07/adblocking-how-about-nah

This explains the dynamism of early tech, which saw companies rising quickly to conquer their markets, only to yield to the temptation to extract more from customers and/or suppliers while underinvesting in improvements to their products and services. When this happened, new digital companies sprang into being, reverse-engineering the incumbents' products and launching "complementary goods" – plug-ins and mods – that fixed the defects in dominant products, usurping the market leader's place in the workflows and pocketbooks of its customers and suppliers:

https://www.eff.org/deeplinks/2019/10/adversarial-interoperability

For many years, this "adversarial interoperability" worked its magic on the burgeoning tech sector, creating a state of constant ferment where people who wanted to improve and then supplant the state-of-the-art were able to cheaply enter and capture the market, only to be taken down by the next generation of disenshittifiers when they, too, inevitably yielded to the temptation to replace innovation with extraction. Every pirate wants to be an admiral – but every admiral must then confront the pirates who rush in to fill the vacuum they create when they switch sides.

But that system of beneficial disruption was itself disrupted – not by technology, but by policy. In 1998, Bill Clinton signed the Digital Millennium Copyright Act (DMCA). Section 1201 of the DMCA makes it a felony to practice adversarial interoperability, establishing penalties of $500k and five years in prison for people who reverse engineer and modify products:

https://pluralistic.net/2026/01/14/sole-and-despotic/#world-turned-upside-down

DMCA 1201 created a one-way ratchet that progressively narrowed the possibilities for tech competition. As more and more US companies re-engineered their products so that modifying them would give rise to DMCA 1201 liability, American startups gave up on disrupting Big Tech, re-orienting towards "acqui-hires," when a startup's highest purpose is to be absorbed by a giant, sclerotic incumbent that mothballs its products and assigns its engineers to work on incremental maintenance (or worse, enshittification) for its dominant offerings.

Big Tech's pirates turned admirals, free to "disrupt" the weak and poor, while enjoying the legal entitlement to destroy anyone who dared to disrupt them. They embodied Frank Wilhoit's definition of conservativism: a class that the law that "protects but does bind" alongside a class that the law "binds but does not protect":

https://pluralistic.net/2026/07/08/wilhoitian/#human-rights-v-property-rights

It was fine for them to "move fast and break (our) things," but forbidden for us to "move fast and break kings." Disruption for thee, never for me.

Nor was this a merely American sickness. Having neutered domestic competitors that might threaten its tech incumbents, the US government set out to prevent other countries from challenging its world-girdling tech empires. For the past 25 years, the US Trade Representative has prioritized getting anticircumvention laws on the books of all of America's trading partners as a condition of free trade with the US, with the result that today, virtually every country in the world has a law that makes it illegal to disrupt American tech giants:

https://pluralistic.net/2026/05/05/three-is-a-magic-number/#coalitions

Anti-circumvention law is so obviously, manifestly an invitation to enshittify that when governments enacted these laws, they felt the need to include some kind of "safety valve" they could point to when critics raised anti-circumvention's potential for abuse. The world's would-be enshittifiers figured out a devious method to insert clauses into anti-circumvention that looked like anti-abuse measures, but which were, in practice, useless ornaments.

Many anti-circumvention laws – including DMCA 1201 – have a process for creating "exemptions" to the ban on reverse-engineering and modifying a device. The way these exemptions processes are written, they seem to say that if a company uses anti-circumvention law to block legitimate activity – say, if John Deere uses the law to stop you from fixing your own tractor – then you can go to some kind of governing body (in the US, it's the Copyright Office) and petition for an exemption to anti-circumvention. If that exemption is approved, then making that modification becomes legal.

Before I carry on, let me say here that even if that's how the system worked, it would still be grossly offensive. If you buy a device – a car, a tractor, a printer, a console, a phone – it is your property and you should not have to hire a lawyer to ask a government agency to create a legal exemption that lets you do otherwise legal things with it. You should not need to petition the government for the right to buy generic ink, use a third-party app store or take your car to an independent mechanic.

But this isn't how the system works. It's a scam. Anti-circumvention exemptions are a cheap trick. They only sound useful. A reasonable person who hears that the US Copyright Office has made it legal to use a third-party app store with your iPhone would assume that this means that if someone launches their own app store, they can give you the tools needed to unlock your iPhone and activate their store.

That's not how the DMCA exemptions process works. Under the statute, the US Copyright Office is only empowered to create "use exemptions," which allow you, the owner of the iPhone, to make use of a tool that unlocks your phone and installs the third-party app store. The Copyright Office does not have the power to create a tools exemption that would allow someone to make that unlocking tool and sell or give it to you. Making that tool remains a felony with a five-year prison sentence attached to it.

What this means is that if you want to use your own property in a way that was legal before DMCA 1201, that has been made legal again because you hired a lawyer who successfully petitioned the US Copyright Office to grant an exemption, you can only do so if you, personally reverse engineer your device effect the permitted modifications to it.

So: if the US Copyright Office legalizes alternative iPhone app stores, the only way to exercise this exemption is for every iPhone owner in the country to get a computer science degree, secure the use of a clean-room, decap the "secure enclave" on a spare iPhone's CPU, extract its cryptographic keys, and integrate them in a new version of iOS that they personally write and install on their phone. No iPhone owner is allowed to discuss how to do this with any other iPhone owner engaged in the same project, on penalty of a five year prison sentence.

Obviously, this is ridiculous, and iPhones are just the tip of the iceberg. It's also true if you want to enable independent repair of powered wheelchairs, whose manufacture is controlled by a duopoly of private-equity backed companies that have all but abandoned spending on repair, leaving wheelchair users stuck in bed for months while they await service:

https://www.eff.org/deeplinks/2022/06/when-drm-comes-your-wheelchair

This absurd situation is the same if you're blind and want to make use of an exemption that lets you reverse-engineer ebook formats so that you can run your ebooks through a Braille printer, screen reader or other assistive device. Under the exemptions rules for the world's anti-circumvention laws, every blind person is expected to personally reverse engineer the access control systems built into Adobe and Amazon's ebook formats, write an exploit that lets them extract the text of these restricted ebooks and then repackage that text in a new, open format:

https://pluralistic.net/2026/03/16/whittle-a-webserver/#mere-ornaments

This "use exemption"/"tools exemption" split is a near-perfect way of tricking people into thinking that these laws are more reasonable than they appear. When Canada passed its landmark right-to-repair and interoperability laws in 2024, many celebrated – missing the fact that under Canada's anti-circumvention law (Bill C-11, the Copyright Modernization Act of 2012), it remains illegal to undertake the reverse-engineering needed to exercise the rights these new laws (seemed to) enshrine:

https://pluralistic.net/2026/01/29/post-american-canada/#ottawa

For a quarter-century, I've made it my life's work to explain how bad and dangerous this system is, and, thankfully, I've started to make a little headway over the past few years. My core audience contains a lot of hackers who are rightly affronted at the existence of a body of law that criminalizes the kinds of exploration and modification that they've devoted their lives to.

Being hackers, they ponder this situation and start to think about how they can hack the law to escape it. Just lately, I've heard from a lot of people who think they can solve this problem by asking a chatbot to reverse-engineer and modify the firmware on their tractors, wheelchairs, ebooks, iPhones, what-have-you. You can't put a chatbot in prison for violating anti-circumvention law, right?

I regret to inform you that if you did this in a way that rose to the attention of a big corporate bully, they wouldn't blame your chatbot for writing the exploit: they'd blame you for prompting the chatbot to create this new tool.

Just yesterday, I heard from a reader who had a clever idea: what if you gave your unmodified iPhone to a hacker who knew how to install a third-party app store on it, and they modified that phone, and then sold it back to you for $10? The hacker would be making a use exemption, not a tools exemption.

This, too, will not produce the outcome we're seeking. Even if Apple can't convince a judge that selling you a modified iPhone is "trafficking" in a circumvention device (a very big "if"), this wheeze misses the wider point about how adversarial interoperability was able to disenshittify tech for the years when tech companies weren't just dishing out disruption, but also being disrupted themselves.

The interoperability-driven dynamism that disciplined or displaced tech companies that abused their market power was a mass phenomenon. The printer cartel doesn't need to be able to charge everyone $10,000/gallon for ink. If a few people at the margins figure out how to jailbreak their printers, that doesn't stop the grift. Even better if the people who do use generic ink have to depend on anonymous, shadowy businesses that don't have customer service departments you can call when your printer gets an update that breaks ink compatibility, or an address you can send a process-server to if you're stuck with thousands of dollars' worth of useless ink cartridges after one of those updates.

To make generic ink a viable check against the abuses of HP and its colored water mafia, you need a counter-industry. You need salespeople making calls on large enterprises who buy their ink by the ocean, offering them a better deal and a guarantee of uninterrupted service. To make good on that guarantee, you need an army of hackers who reverse-engineer every software update HP pushes out in a matter of hours, and you need another army of customer service reps who help people who can't figure out how to install that update.

As economists would say, you need "capital formation." You need the ability to raise or borrow money, a mailing address, an ad campaign, booths at conferences and free samples in the mail. You need to be able to show potential customers that you are insured in the event that you brick their devices, so switching to your product doesn't endanger their capital investments. You need to have a business whose doors can be beaten down by regulators in the event that you use your after-market mods as a tool to steal data or money from your customers.

To understand how this worked, cast your mind back to the Office Suite Wars of the early 2000s. Back then, Microsoft ruled the desktop world, controlling more that 95% of the PC OSes, a share so large and so ruthlessly acquired and maintained that they were convicted of violating anti-trust laws.

Microsoft used illegal tying and predatory pricing to push every one of those PC owners into using Microsoft Office, which meant that even if you used a Mac, 19 times out of 20, the people you needed to collaborate with on memos, spreadsheets and slide-decks were using MS Office.

Microsoft made a version of Office for the Mac, but it was the single most curséd piece of packaged software ever offered to the market. Merely waving the Mac Office floppy around a workplace would cause files to spontaneously go corrupt on random PCs in the vicinity.

For Mac users, this meant that 95% of the time, they could not reliably collaborate with other computer users. For people like me – then a freelance CIO-for-hire who was helping small businesses connect their computers to each other and the internet – it meant that increasingly, we made CEOs swap their Powerbooks for Thinkpads and designers swap their PowerPCs for Dells with beefy graphics cards, moving the whole business to PC/Windows.

Apple solved this problem by reverse-engineering MS Office and producing the iWork Suite: Pages, Numbers and Keynote, which could perfectly read and write Microsoft's Word, Excel and Powerpoint files. That adversarial interoperability saved the company, but the gambit wasn't one-and-done.

Microsoft spent the next several years maliciously introducing changes to the Office file formats that broke compatibility with iWork, which Apple countered by paying an army of coders to swiftly analyze these new formats and update iWork to maintain compatibility with them:

https://www.eff.org/deeplinks/2019/06/adversarial-interoperability-reviving-elegant-weapon-more-civilized-age-slay

I think Apple was fated to win this expensive cat-and-mouse game, if only they could hang in there long enough. For every Mac in the field, Microsoft was supporting 19 PCs, and these computers ran a fragmented mosaic of Windows and Office versions. Every time Microsoft broke compatibility with Office to mess up one Mac user, they also messed up 19 PC users, all of whom had to be patched and updated to maintain compatibility. This gave Apple a powerful advantage that mounted with every turn of the game, so all they had to do was hang in there until the asymmetrical costs overwhelmed Microsoft.

Which is what happened. Eventually, Microsoft sued for peace and agreed to standardize the office file-formats at the International Standards Organization, ushering in an era of unprecedented compatibility. This ISO standardization is why you can now paste styled text from the Word application into a browser-based Google Doc or an application-based LibreOffice window. It's also a game Microsoft continues to cheat at, with a string of dirty tricks meant to leverage its dominance to shut out competitors altogether:

https://blog.documentfoundation.org/blog/2026/07/17/microsofts-main-tool-for-lock-in/

The rise (and impending fall) of a truly open format that lets every computer user collaborate on any document is an object lesson in the combined role that adversarial interoperability and capital formation play in disenshittifying technology. For Microsoft, a "competitor" isn't one hacker who can open a Word file in a program of their own devising, nor is a "competitor" the small number of users that single competitor can support.

Microsoft is an incorrigible, bullying cheat with a sick and rotten corporate culture: to stop the kind of ruthless princeling who rises to a position of power in a company like Microsoft from turning predatory requires severe, obvious penalties that follow directly from any extractive gambit.

To muster that kind of competition requires the kind of capital formation you only get from true legalization, not the anemic sham offered by anti-circumvention's "exemptions." Even where the competition is spread out across many shifting small businesses and individuals, the system of competition requires a stable backstop that produces the tools these small firms rely on.

In 2014, Ofcom, the UK's telecoms regulator, affirmed that Britons had the right to unlock their phones, even if their carrier had sold them a phone that was locked to its network. Overnight, every small shop acquired a phone-unlocking side-hustle. One morning as I walked from my flat to the tube, I passed three unlockers: one at a newsagent's, where they would take your phone and return it unlocked within a day; one at my dry-cleaner's, where a guy with a folding card table would unlock your phone while you waited; and another folding table guy right by the tube entrance who'd also work while you waited, and who charged £5 less than the guy at the dry-cleaner's.

None of these people were electrical engineers or software developers or hackers. They just followed recipes that were provided by one of a few well-capitalized firms that sold them a subscription to jailbreaking tools that were kept up to date for every make and model of every phone.

One frequent excuse for the ban on repair tools for cars or wheelchairs or tractors is that these devices are now so computerized that they require specialized knowledge if they are to be safely serviced. Even if that's true, that's exactly what a legal toolchain provides.

The guy who fixed my solar panels wasn't a software engineer, he was an electrician who had the customer-service phone number for the company that made my solar inverter. If that company had a viable competitor who could offer their own firmware for my solar installation and was hungry for my business, maybe that technician would have gotten through in three minutes rather than three hours.

And if that alternative firmware was defective, then I could join a class action suit and get made whole – something that is nearly impossible to imagine happening with solar OEMs, who face so little competition that they all put binding arbitration clauses in their terms of service that take away your right to sue, no matter whether they cheat you or burn your house down:

https://pluralistic.net/2026/05/06/champerty-loves-company/#circle-of-life

That's the amazing thing about digital tools. Through software, experts are able to package up their expertise into self-executing code, which can costlessly, instantaneously be distributed to everyone in the world who needs it. But paying those experts isn't cheap, and neither is supporting their tools.

I love William Gibson's maxim that "the street finds its own use for things," but if you can't neutralize a large, dangerous monopolist with individual tinkering – the best you can hope for is some measure of individual relief..

It's true that in these adversarial interoperability fights, the upstarts enjoy a tremendous advantage, but that advantage isn't infinite. For the guerrillas to outlast the empire, they have to be able to wage a long, persistent fight.

To marshal the resources needed to sustain that fight and to maintain the logistics demanded by its supply lines requires the good guys to be allowed to fight in the open, without the looming threat of criminal prosecution, a threat that forecloses on capitalization and mass adoption.

Enshittification isn't downstream of cruelty, it's downstream of greed. The point of enshittification is to exploit the control a firm can exercise over the customers, suppliers and workers it holds captive in order to extract more from them. The titanic profits this exploitation delivers are a powerful lure for would-be disenshittifiers and investors who would fund their liberatory revolution.

Don't get me wrong, I love my hackers and I sit in awe of the awesome leverage of writing code that can be costlessly, instantaneously distributed to everyone who needs it. But so long as governments and the law are on the side of extraction and enshittification, the disenshittificatory insurgency will be starved of resources, condemned to remain marginal and inadequate.

Hey look at this (permalink)


A shelf of leatherbound history books with a gilt-stamped series title, 'The World's Famous Events.'

Object permanence (permalink)

#25yrsago Berkeley Breathed: the Onion interview https://web.archive.org/web/20011201062719/http://www.theonionavclub.com/avclub3728/avfeature_3728.html

#25yrsago Chinese going mobile crazy http://news.bbc.co.uk/1/hi/world/asia-pacific/1492584.stm

#25yrsago Free wifi in NYC https://web.archive.org/web/20011024070700/http://www.villagevoice.com/issues/0133/meyers.php

#20yrsago RIAA’s “abundance of sensitivity” ends harassment of grieving family https://memex.craphound.com/2006/08/14/london-copyfighters-speak-at-speakers-corner-on-aug-27/

#20yrsago London Copyfighters: Speak at Speaker’s Corner on Aug 27! https://memex.craphound.com/2006/08/14/london-copyfighters-speak-at-speakers-corner-on-aug-27/

#20yrsago TSA wins the war on lipstick https://memex.craphound.com/2006/08/14/tsa-wins-the-war-on-lipstick/

#15yrsago RIP Paul Meier, father of the randomized trial https://www.nytimes.com/2011/08/13/health/13meier.html?_r=1

#15yrsago Long Beach Police Chief: we detain photographers, and I don’t have any guidelines for that policy, photography is classed with attempts to acquire weaponized smallpox https://web.archive.org/web/20110927230257/http://www.lbpost.com/life/greggory/12188

#15yrsago David Cameron’s net-censorship proposal earns kudos from Chinese state media https://web.archive.org/web/20110815220203/https://www.globaltimes.cn/NEWS/tabid/99/articleType/ArticleView/articleId/670718/Riots-lead-to-rethink-of-Internet-freedom.aspx

#15yrsago Empirical manners: towards a science of harmonious norms https://www.antipope.org/charlie/blog-static/2011/08/rewilding-etiquette.html

#15yrsago Tiki Room resurgent https://passport2dreams.blogspot.com/2011/08/every-cloud-has-silver-lining.html

#10yrsago After New Zealand spooks misidentified pro-democracy activist, NSA spied on him for them https://web.archive.org/web/20160815040057/https://theintercept.com/2016/08/14/nsa-gcsb-prism-surveillance-fullman-fiji/

#10yrsago Even the woo industry thinks Gwyneth Paltrow’s “smoothie dust” ads are too much https://web.archive.org/web/20160811225548/https://consumerist.com/2016/08/09/ad-and-supplement-self-regulation-groups-have-issues-with-gwyneth-paltrows-smoothie-dusts/

#10yrsago It’s pretty easy to hack traffic lights https://www.usenix.org/system/files/conference/woot14/woot14-ghena.pdf

#10yrsago Private prison contractor’s $1B no-bid deal to run immigration jails guarantees 100% occupancy payouts https://web.archive.org/web/20160815022103/https://www.washingtonpost.com/business/economy/inside-the-administrations-1-billion-deal-to-detain-central-american-asylum-seekers/2016/08/14/e47f1960-5819-11e6-9aee-8075993d73a2_story.html

#10yrsago Court of Appeal reverses Labour disenfranchisement ruling, but Corbyn still likely to win https://web.archive.org/web/20160813134816/http://www.newstatesman.com/politics/staggers/2016/08/high-courts-judgement-wont-stop-jeremy-corbyn-winning

#10yrsago John Oliver on subprime auto-lending and its killswitches https://web.archive.org/web/20160816154135/https://consumerist.com/2016/08/15/john-oliver-keegan-michael-key-explain-why-subprime-car-loans-are-so-awful/

#10yrsago Worst of McMansions: architectural criticism of inequality’s most tangible evidence https://web.archive.org/web/20160814031109/http://mcmansionhell.tumblr.com/

#5yrsago Provocateur copyrights a Magic: The Gathering Deck https://pluralistic.net/2021/08/14/angels-and-demons/#owning-culture

#5yrsago Disneyland at a stroll https://pluralistic.net/2021/08/15/disneyland-at-a-stroll-part-vi/

#1yrago Bluesky creates the world's weirdest, hardest-to-understand binding arbitration clause https://pluralistic.net/2025/08/15/dogs-breakfast/#by-clicking-this-you-agree-on-behalf-of-your-employer-to-release-me-from-all-obligations-and-waivers-arising-from-any-and-all-NON-NEGOTIATED-agreements

#1yrago "Privacy preserving age verification" is bullshit https://pluralistic.net/2025/08/14/bellovin/#wont-someone-think-of-the-cryptographers

Upcoming appearances (permalink)

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Recent appearances (permalink)


A grid of my books with Will Stahle covers..

Latest books (permalink)


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Upcoming books (permalink)

  • "The Post-American Internet," a geopolitical sequel of sorts to Enshittification, Farrar, Straus and Giroux, 2027

  • "Unauthorized Bread": a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, April 20, 2027

  • "Enshittification, Why Everything Suddenly Got Worse and What to Do About It" (the graphic novel), Firstsecond, 2027

  • "The Memex Method," Farrar, Straus, Giroux, 2027


Colophon (permalink)

Today's top sources:

Currently writing:

  • “Once Is Enemy Action,” a science fiction novel about the origins of modern technofascism. Today's words: 570 (5421 total).

  • "The Post-American Internet," a sequel to "Enshittification," about the better world the rest of us get to have now that Trump has torched America. Fourth draft completed. Submitted to editor.

  • A Little Brother short story about DIY insulin PLANNING

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