[Plura-list] How to shatter the class solidarity of the ruling class
Cory Doctorow
doctorow at craphound.com
Mon Apr 8 09:46:32 EDT 2024
Read today's issue online at: https://pluralistic.net/2024/04/08/money-talks/
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I'm touring my new, nationally bestselling novel *The Bezzle*! Catch me WEDNESDAY (Apr 11) at UCLA, then Chicago (Apr 17), Torino (Apr 21) Marin County (Apr 27), Winnipeg (May 2), Calgary (May 3), Vancouver (May 4), and beyond!
https://pluralistic.net/2024/02/16/narrative-capitalism/#bezzle-tour
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Today's links
* How to shatter the class solidarity of the ruling class: Maybe we can use the master's tools to dismantle the master's house?
* Hey look at this: Delights to delectate.
* This day in history: 2004, 2019, 2023
* Upcoming appearances: Where to find me.
* Recent appearances: Where I've been.
* Latest books: You keep readin' em, I'll keep writin' 'em.
* Upcoming books: Like I said, I'll keep writin' 'em.
* Colophon: All the rest.
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🌓 How to shatter the class solidarity of the ruling class
Audre Lorde counsels us that "The Master's Tools Will Never Dismantle the Master's House," while MLK said "the law cannot make a man love me, but it can restrain him from lynching me." Somewhere between *replacing* the system and *using* the system lies a pragmatic - if easily derailed - course.
Lorde is telling us that a rotten system can't be redeemed by using its own chosen reform mechanisms. King's telling us that unless we live, we can't fight - so anything within the system that makes it easier for your comrades to fight on can hasten the end of the system.
Take the problems of journalism. One old model of journalism funding involved wealthy newspaper families profiting handsomely by selling local appliance store owners the right to reach the townspeople who wanted to read sports-scores. These families expressed their patrician love of their town by peeling off some of those profits to pay reporters to sit through municipal council meetings or even travel overseas and get shot at.
In retrospect, this wasn't ever going to be a stable arrangement. It relied on both the inconstant generosity of newspaper barons *and* the absence of a superior way to show washing-machine ads to people who might want to buy washing machines. Neither of these were good long-term bets. Not only were newspaper barons easily distracted from their sense of patrician duty (especially when their own power was called into question), but there were *lots* of better ways to connect buyers and sellers lurking in potentia.
All of this was grossly exacerbated by tech monopolies. Tech barons aren't smarter or more evil than newspaper barons, but they have better tools, and so now they take 51 cents out of every ad dollar and 30 cents out of ever subscriber dollar *and* they refuse to deliver the news to users who explicitly requested it, unless the news company pays them a bribe to "boost" their posts:
https://www.eff.org/deeplinks/2023/04/saving-news-big-tech
The news is important, and people sign up to make, digest, and discuss the news for many non-economic reasons, which means that the news continues to struggle along, despite all the economic impediments and the vulture capitalists and tech monopolists who fight one another for which one will get to take the biggest bite out of the press. We've got outstanding nonprofit news outlets like Propublica, journalist-owned outlets like 404 Media, and crowdfunded reporters like Molly White (and winner-take-all outlets like the *New York Times*).
But as Hamilton Nolan points out, "that pot of money...is only large enough to produce a small fraction of the journalism that was being produced in past generations":
https://www.hamiltonnolan.com/p/what-will-replace-advertising-revenue
For Nolan, "public funding of journalism is the only way to fix this...If we accept that journalism is not just a business or a form of entertainment but a public good, then funding it with public money makes perfect sense":
https://www.hamiltonnolan.com/p/public-funding-of-journalism-is-the
Having grown up in Canada - under the CBC - and then lived for a quarter of my life in the UK - under the BBC - I am very enthusiastic about Nolan's solution. There are obvious problems with publicly funded journalism, like the politicization of news coverage:
https://www.theguardian.com/media/2023/jan/24/panel-approving-richard-sharp-as-bbc-chair-included-tory-party-donor
And the transformation of the funding into a cheap political football:
https://www.cbc.ca/news/politics/poilievre-defund-cbc-change-law-1.6810434
But the worst version of those problems is still better than the best version of the private-equity-funded model of news production.
But Nolan notes the emergence of a *new* form of hedge fund news, one that is awfully promising, and also terribly fraught: Hunterbrook Media, an investigative news outlet owned by short-sellers who pay journalists to research and publish damning reports on companies they hold a short position on:
https://hntrbrk.com/
For those of you who are blissfully distant from the machinations of the financial markets, "short selling" is a wager that a company's stock price will go *down*. A gambler who takes a short position on a company's stock can make a lot of money if the company stumbles or fails altogether (but if the company does well, the short can suffer literally unlimited losses).
Shorts have historically paid analysts to dig into companies and uncover the sins hidden on their balance-sheets, but as Matt Levine points out, journalists work for a *fraction* of the price of analysts and are at least as good at uncovering dirt as MBAs are:
https://www.bloomberg.com/opinion/articles/2024-04-02/a-hedge-fund-that-s-also-a-newspaper
What's more, shorts who discover dirt on a company still need to convince journalists to publicize their findings and trigger the sell-off that makes their short position pay off. Shorts who own a muckraking journalistic operation can skip this step: they *are* the journalists.
There's a way in which this is sheer *genius*. Well-funded shorts who don't care about the news per se can still be motivated into funding freely available, high-quality investigative journalism about corporate malfeasance (notoriously, one of the least attractive forms of journalism for advertisers). They can pay journalists top dollar - even bid against each other for the most talented journalists - and supply them with all the tools they need to ply their trade. A short won't ever try the kind of bullshit the owners of *Vice* pulled, paying themselves millions while their journalists lose access to Lexisnexis or the PACER database:
https://pluralistic.net/2024/02/24/anti-posse/#when-you-absolutely-positively-dont-give-a-solitary-single-fuck
The shorts whose journalists are best equipped stand to make the most money. What's not to like?
Well, the issue here is whether the ruling class's sense of solidarity is stronger than its greed. The wealthy have historically oscillated between real solidarity (think of the ultrawealthy lobbying to support bipartisan votes for tax cuts and bailouts) and "war of all against all" (as when wealthy colonizers dragged their countries into WWI after the supply of countries to steal ran out).
After all, the reason companies engage in the scams that shorts reveal is that they are *profitable*. "Behind every great fortune is a great crime," and that's just *great*. You don't win the game when you get into heaven, you win it when you get into the *Forbes* Rich List.
Take monopolies: investors like the upside of backing an upstart company that gobbles up some staid industry's margins - Amazon vs publishing, say, or Uber vs taxis. But while there's a lot of upside in that move, there's also a lot of risk: most companies that set out to "disrupt" an industry sink, taking their investors' capital down with them.
Contrast that with monopolies: backing a company that merges with its rivals and buys every small company that might someday grow large is a *sure thing*. Shriven of "wasteful competition," a company can lower quality, raise prices, capture its regulators, screw its workers and suppliers and laugh all the way to Davos. A big enough company can ignore the complaints of those workers, customers and regulators. They're not just too big to fail. They're not just too big to jail. They're too big to *care*:
https://pluralistic.net/2024/04/04/teach-me-how-to-shruggie/#kagi
Would-be monopolists are stuck in a high-stakes Prisoner's Dilemma. If they cooperate, they can screw over everyone else and get unimaginably rich. But if one party defects, they can raid the monopolist's margins, short its stock, and snitch to its regulators.
It's true that there's a clear incentive for hedge-fund managers to fund investigative journalism into other hedge-fund managers' portfolio companies. But it would be even *more* profitable for both of those hedgies to join forces and collude to screw the rest of us over. So long as they mistrust each other, we might see some benefit from that adversarial relationship. But the point of the 0.1% is that there aren't very many of them. The Aspen Institute can rent a hall that will hold an appreciable fraction of that crowd. They buy their private jets and bespoke suits and powdered rhino horn from the same exclusive sellers. Their kids go to the same elite schools. They know each other, and they have every opportunity to get drunk together at a charity ball or a society wedding and cook up a plan to join forces.
This is the problem at the core of "mechanism design" grounded in "rational self-interest." If you try to create a system where people do the right thing because they're selfish assholes, you normalize being a selfish asshole. Eventually, the selfish assholes form a cozy little League of Selfish Assholes and turn on the rest of us.
Appeals to morality don't work on unethical people, but appeals to *immorality* crowds out ethics. Take the ancient split between "free software" (software that is designed to maximize the freedom of the people who use it) and "open source software" (identical to free software, but promoted as a better way to make robust code through transparency and peer review).
Over the years, open source - an appeal to your own selfish need for better code - triumphed over free software, and its appeal to the ethics of a world of "software freedom." But it turns out that while the difference between "open" and "free" was once mere semantics, it's fully possible to decouple the two. Today, we have lots of "open source": you can see the code that Google, Microsoft, Apple and Facebook uses, and even contribute your labor to it for free. But you can't actually decide how the software you write works, because it all takes a loop through Google, Microsoft, Apple or Facebook's servers, and only those trillion-dollar tech monopolists have the software freedom to determine how those servers work:
https://pluralistic.net/2020/05/04/which-side-are-you-on/#tivoization-and-beyond
That's ruling class solidarity. The Big Tech firms have hidden a myriad of sins beneath their bafflegab and balance-sheets. These (as yet) undiscovered scams constitute a "bezzle," which JK Galbraith defined as "the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it."
The purpose of *Hunterbrook* is to discover and destroy bezzles, hastening the moment of realization that the wealth we all feel in a world of seemingly orderly technology is really an illusion. *Hunterbrook* certainly has its pick of bezzles to choose from, because we are living in a Golden Age of the Bezzle.
Which is why I titled my new novel *The Bezzle*. It's a tale of high-tech finance scams, starring my two-fisted forensic accountant Marty Hench, and in this volume, Hench is called upon to unwind a predatory prison-tech scam that victimizes the most vulnerable people in America - our army of prisoners - and their families:
https://us.macmillan.com/books/9781250865878/thebezzle
The scheme I fictionalize in *The Bezzle* is very real. Prison-tech monopolists like Securus and Viapath bribe prison officials to abolish calls, in-person visits, mail and parcels, then they supply prisoners with "free" tablets where they pay hugely inflated rates to receive mail, speak to their families, and access ebooks, distance education and other electronic media:
https://pluralistic.net/2024/04/02/captive-customers/#guillotine-watch
But a group of activists have cornered these high-tech predators, run them to ground and driven them to the brink of extinction, and they've done it using "the master's tools" - with appeals to regulators and the finance sector itself.
Writing for *The Appeal*, Dana Floberg and Morgan Duckett describe the campaign they waged with Worth Rises to bankrupt the prison-tech sector:
https://theappeal.org/securus-bankruptcy-prison-telecom-industry/
Here's the headline figure: Securus is $1.8 billion in debt, and it has eight months to find a financier or it will go bust. What's more, all the creditors it might reasonably approach have rejected its overtures, and its bonds have been downrated to junk status. It's a dead duck.
Even better is *how* this happened. Securus's debt problems started with its acquisition, a leveraged buyout by Platinum Equity, who borrowed heavily against the firm and then looted it with bogus "management fees" that meant that the debt continued to grow, despite Securus's $700m in annual revenue from America's prisoners. Platinum was just the last in a long line of PE companies that loaded up Securus with debt and merged it with its competitors, who were also mortgaged to make profits for other private equity funds.
For years, Securus and Platinum were able to service their debt and roll it over when it came due. But after Worth Rises got NYC to pass a law making jail calls free, creditors started to back away from Securus. It's one thing for Securus to charge $18 for a local call from a prison when it's splitting the money with the city jail system. But when that $18 needs to be *paid* by the city, they're going to demand *much* lower prices. To make things worse for Securus, prison reformers got similar laws passed in San Francisco and in Connecticut.
Securus tried to outrun its problems by gobbling up one of its major rivals, Icsolutions, but Worth Rises and its coalition convinced regulators at the FCC to block the merger. Securus abandoned the deal:
https://worthrises.org/blogpost/securusmerger
Then, Worth Rises targeted Platinum Equity, going after the pension funds and other investors whose capital Platinum used to keep Securus going. The massive negative press campaign led to eight-figure disinvestments:
https://www.latimes.com/business/story/2019-09-05/la-fi-tom-gores-securus-prison-phone-mass-incarceration
Now, Securus's debt became "distressed," trading at $0.47 on the dollar. A brief, covid-fueled reprieve gave Securus a temporary lifeline, as prisoners' families were barred from in-person visits and had to pay Securus's rates to talk to their incarcerated loved ones. But after lockdown, Securus's troubles picked up right where they left off.
They targeted Platinum's founder, Tom Gores, who papered over his bloody fortune by styling himself as a philanthropist and sports-team owner. After a campaign by Worth Rises and Color of Change, Gores was kicked off the Los Angeles County Museum of Art board. When Gores tried to flip Securus to a SPAC - the same scam Trump pulled with Truth Social - the negative publicity about Securus's unsound morals *and* financials killed the deal:
https://twitter.com/WorthRises/status/1578034977828384769
Meanwhile, more states and cities are making prisoners' communications free, further worsening Securus's finances:
https://pluralistic.net/2024/02/14/minnesota-nice/#shitty-technology-adoption-curve
Congress passed the Martha Wright-Reed Just and Reasonable Communications Act, giving the FCC the power to regulate the price of federal prisoners' communications. Securus's debt prices tumbled further:
https://www.govtrack.us/congress/bills/117/s1541
Securus's debts were coming due: it owes $1.3b in 2024, and hundreds of millions more in 2025. Platinum has promised a $400m cash infusion, but that didn't sway S&P Global, a bond-rating agency that re-rated Securus's bonds as "CCC" (compare with "AAA"). Moody's concurred. Now, Securus is stuck selling junk-bonds:
https://www.govtrack.us/congress/bills/117/s1541
The company's creditors have given Securus an eight-month runway to find a new lender before they force it into bankruptcy. The company's debt is trading at $0.08 on the dollar.
Securus's major competitor is Viapath (prison tech is a duopoly). Viapath is *also* debt-burdened and desperate, thanks to a parallel campaign by Worth Rises, and has tried all of Securus's tricks, and failed:
https://pestakeholder.org/news/american-securities-fails-to-sell-prison-telecom-company-viapath/
Viapath's debts are due next year, and if Securus tanks, *no one* in their right mind will give Viapath a dime. They're the walking dead.
Worth Rise's brilliant guerrilla warfare against prison-tech and its private equity backers are a master class in using the master's tools to dismantle the master's house. The finance sector isn't a friend of justice or working people, but sometimes it can be used tactically against financialization itself. To paraphrase MLK, "finance can't make a corporation love you, but it can stop a corporation from destroying you."
Yes, the ruling class finds solidarity at the most unexpected moments, and yes, it's easy for appeals to greed to institutionalize greediness. But whether it's funding unbezzling journalism through short selling, or freeing prisons by brandishing their cooked balance-sheets in the faces of bond-rating agencies, there's a lot of good we can do *on the way* to dismantling the system.
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🌓 Hey look at this
* Paul Di Filippo Reviews The Bezzle by Cory Doctorow https://locusmag.com/2024/04/paul-di-filippo-reviews-the-bezzle-by-cory-doctorow/
* The MOnSter 6502 https://monster6502.com (h/t Mark Steckel)
* A ‘Law Firm’ of AI Generated Lawyers Is Sending Fake Threats as an SEO Scam https://www.404media.co/a-law-firm-of-ai-generated-lawyers-is-sending-fake-threats-as-an-seo-scam/
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🌓 This day in history
#20yrsago 600 quintillion possible spellings of viagra https://cockeyed.com/lessons/viagra/viagra.html
#20yrsago Librarians’ struggle with Open Access publishing https://web.archive.org/web/20040602232759/https://www.ibiblio.org/griffey/wp/index.php?p=204
#20yrsago National Federation for the Blind protest at Authors Guild in NYC today over Kindle text-to-speech https://web.archive.org/web/20100810074412/https://nfb.org/nfb/NewsBot.asp?MODE=VIEW&ID=432
#5yrsago Bernie Sanders is the most popular candidate among Hispanic voters https://theintercept.com/2019/04/06/bernie-sanders-latino-hispanic-voters/
#5yrsago How the super-rich defeated the IRS’s crack Global High Wealth unit https://www.propublica.org/article/ultrawealthy-taxes-irs-internal-revenue-service-global-high-wealth-audits
#5yrsago Airbnb guest uses network sniffer to find hidden webcam, Airbnb finds no wrongdoing https://arstechnica.com/information-technology/2019/04/airbnb-guest-found-hidden-surveillance-camera-by-scanning-wi-fi-network/
#5yrsago Occupy Gotham: my essay about the class war at the heart of Batman https://www.flickr.com/photos/doctorow/32609256107/
#1yrago Clarence Thomas and the generosity of a far-right dark-money billionaire https://pluralistic.net/2023/04/06/clarence-thomas/#harlan-crow
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🌓 Upcoming appearances
* UCLA Institute for Law, Technology and Policy, Apr 10
https://pages.e2ma.net/pages/1972582/47480
* The Bezzle at Harvard Berkman-Klein Center, with Randall Munroe, (Boston), Apr 11
https://cyber.harvard.edu/events/enshittification
* RISD Debates in AI (Providence), Apr 12
https://involved.risd.edu/event/9777963
* The Bezzle at Anderson's Books (Chicago), Apr 17
https://www.andersonsbookshop.com/event/cory-doctorow-1
* Torino Biennale Tecnologia (Apr 21)
https://www.biennaletecnologia.it/evento/come-sfuggire-al-merdocene-e-costruire-un-internet-migliore/
* The Bezzle at Book Passage Corte Madera (Marin County), April 27
https://www.bookpassage.com/event/cory-doctorow-bezzle-martin-hench-novel-corte-madera-store
* Canadian Centre for Policy Alternatives (Winnipeg), May 2
https://www.eventbrite.ca/e/cory-doctorow-tickets-798820071337
* Wordfest (Calgary), May 3
https://wordfest.com/2024/event/wordfest-presents-cory-doctorow-2/
* Massy Arts (Vancouver), May 4
https://www.eventbrite.ca/e/solo-reading-cory-doctorow-the-bezzle-tickets-876989167207
* Tartu Prima Vista Literary Festival (May 5-11)
https://tartu2024.ee/en/kirjandusfestival/
* Tim O’Reilly and Cory Doctorow on “Enshittification” and the Future of AI (May 14)
https://www.oreilly.com/live-events/tim-oreilly-and-cory-doctorow-on-enshittification-and-the-future-of-ai/0642572001651/
* Media Ecology Association keynote, Jun 6-9 (Amherst, NY)
https://media-ecology.org/convention
* American Association of Law Libraries keynote, (Chicago), Jul 21
https://www.aallnet.org/conference/agenda/keynote-speaker/
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🌓 Recent appearances
* Digital capitalism course: What is digital capitalism? (Transnational Institute)
https://www.youtube.com/watch?v=oCzWpEQcd7E
* The Scam Economy (Lost Dollar Business Club)
https://www.youtube.com/watch?v=SChg9ZiY_bk
* Private Prisons, Finance Ghouls and The Bezzle (It Could Happen Here)
https://www.iheart.com/podcast/105-it-could-happen-here-30717896/episode/private-prisons-finance-ghouls-and-the-161844728/
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🌓 Latest books
* The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books (US), Head of Zeus (UK), February 2024 (the-bezzle.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3062/Available_Feb_20th%3A_The_Bezzle_HB.html#/).
* "The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)
* "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).
* "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.
* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59?sk=f6cd10e54e20a07d4c6d0f3ac011af6b) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
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🌓 Upcoming books
* Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025
* Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025
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🌓 Colophon
Today's top sources:
Currently writing:
* A Little Brother short story about DIY insulin PLANNING
* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025
* Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM
* Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM
Latest podcast:
Subprime gadgets https://craphound.com/news/2024/03/31/subprime-gadgets/
This work - excluding any serialized fiction - is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.
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Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.
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"*When life gives you SARS, you make sarsaparilla*" -Joey "Accordion Guy" DeVilla
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