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Received — 14 August 2026 ⏭ Activism

Pluralistic: Capital formation (14 Aug 2026)

✇Pluralistic: Daily links from Cory Doctorow
By: Cory Doctorow
14 August 2026 at 13:10


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 to 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 not 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 to 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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A screenshot of me at my desk, doing a livecast.

Recent appearances (permalink)


A grid of my books with Will Stahle covers..

Latest books (permalink)


A cardboard book box with the Macmillan logo.

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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The Enshittification of Everything (Part 3)

✇Robert Reich
By: Robert Reich
14 August 2026 at 10:01

Friends,

It is important to understand that Trump is not the cause of the enshittification of America. He is a consequence. Unless the system is fundamentally changed, the enshittification will continue even after Trump is long gone.

As I’ve shown, wealth and power in America now reside in a relatively small group of (almost entirely) men — the American oligarchy. My prime example has been Jamie Dimon, chair and CEO of JPMorganChase, the largest bank in the world — because he’s regarded by corporate Democrats as the most trusted business leader in America — but I could equally focus on Peter Thiel, Jeff Bezos, Mark Zuckerberg, Elon Musk, Larry and David Ellison, or any other billionaire using his vast wealth to create and enhance his political power.

The Core Contradiction

The oligarchy is not interested in serving America, yet it dominates American politics and essentially runs the American system.

The oligarchy is not committed to the common good. It does not seek to raise the wages of working Americans, reduce inequalities of wealth and opportunity, guarantee all Americans access to good healthcare and a world-class education, or stop climate change.

The oligarchy’s allegiance is to itself, and its major interest is enlarging its wealth and power. The easiest way for the oligarchy to accomplish this is to hold down the wages of working people, roll back regulations, enlarge its monopolies, find ever-cheaper places around the world to produce products and services, fight unions, and secure giant tax cuts for it and its corporations that result in less money for education, healthcare, and everything else most Americans need.

The oligarchy cannot fulfill both roles: It cannot advocate for its giant banks or monopolistic corporations and simultaneously lead the nation. Dimon may sincerely believe that he’s a patriot before he’s the CEO of JPMorgan, but we would be foolhardy to rely on it.

The difficulty is not that corporate power is beyond the control of the American government. It is that corporate power controls the American government. Yet giant American corporations have no special allegiance to the United States and no responsibility for the well-being of Americans.

This contradiction has spawned three big conventional ideas about the American system that are dangerously wrong.

Conventional but deceptive idea #1: Americans are richer than the citizens of other rich nations

A few Americans are, but the vast majority are not, when you consider all the public benefits that the citizens of other nations receive. Note, for example, that:

— Most citizens of other wealthy nations receive free or nearly free healthcare, and most get free or nearly free college tuition. Americans receive neither.

— Among the three dozen wealthy countries in the Organization for Economic Cooperation and Development, the United States has the lowest minimum wage when measured as a percentage of the median wage. The typical American worker puts in more hours on the job than Canadian, European, or Japanese workers.

— The United States is the only wealthy nation that does not guarantee paid family leave. In Europe, the norm is three months paid leave. At most, Americans get 12 weeks of unpaid leave.

— America is also the only rich nation that does not guarantee paid sick days. It is the only one that does not guarantee workers any vacation at all. The European Union’s 28 nations guarantee at least four weeks of paid vacation.

— In other rich nations, most people who lose their jobs receive more generous unemployment benefits than do Americans. Employers cannot fire workers at will, as they can here.

— American corporations distribute a smaller share of their earnings to their workers than do European or Canadian-based corporations.

— Top corporate executives in America make far more money than their counterparts in other wealthy countries, and inequality of income and wealth is far wider in the United States than it is in any other wealthy country.

— The American middle class is no longer the world’s richest. Considering taxes and transfer payments, middle-class workers in Canada and much of Western Europe are better off than in the U.S. The working poor in Western Europe earn more than do the working poor in America.

Why are most Americans poorer than the citizens of most other rich nations? It is because of the way power is allocated and wielded in the United States, by contrast with other rich countries. Consider:

— Labor unions are stronger in Europe and Canada than they are in America, able to exert pressure both at the company level and nationally. Only 6 percent of American private-sector workers are unionized. As former New York Times labor correspondent Steven Greenhouse has observed, “In no other industrial nation do employers fight so hard to defeat, indeed quash, labor unions.” Over 25 percent of Canadian workers belong to a union, as do 37 percent of Italian workers, 67 percent of workers in Sweden, and 25 percent in the U.K.

— Most other rich nations are parliamentary systems in which workers are represented by parties that specifically advocate for them. The United States has a two-party system in which the winning party gets all of a state’s electoral votes, thereby discouraging third parties.

— Elections in other rich nations are less affected by big money than are elections in the United States, because other nations have stricter restraints on money in politics.

— Governments in these nations often devise laws through tripartite bargains involving big corporations and organized labor, which further binds their corporations to their nations’ workforces.

For all these reasons, Americans don’t get nearly as good a deal as do the citizens of other rich nations. Governments elsewhere impose higher taxes on the wealthy and redistribute more of it to middle- and lower-income households.

Conventional but deceptive idea #2: The “free market” is separate from government

The second conventional idea perpetrated by the American oligarchy is that we work and live in a “free market” that’s neutral and natural — existing outside government, unaffected by how power is wielded in the system.

We are repeatedly told that whatever inequalities and insecurities the market generates and whatever negative consequences it causes are beyond our control. Efforts to reduce inequality or insecurity are described as constraints on the market’s freedom, likely to cause grave unintended consequences.

By this view, if some people aren’t paid enough to live on, the “free market” has determined they aren’t worth enough. If others rake in billions, they must be worth it. If millions of Americans are unemployed or their paychecks are shrinking or they work two or three part-time jobs with no idea what they’ll earn next month or next week, that’s just the natural outcome of market forces.

If the planet’s survival is endangered because of fossil fuels, that’s at most an “imperfection” in the market. If government attempts to deal with such market imperfections, it must do so modestly and carefully because the “free market” knows best. As Jamie Dimon put it, “Don’t mess up the machine that creates the value so you can do these things. The economy is what gave us everything.”

This is bunk. In reality, the “free market” is nothing but a set of laws and rules about: What can be owned and traded (corporations? slaves? machine guns? nuclear bombs? babies? votes? the right to pollute?). On what terms (hostile takeovers? corporate monopolies? the right to organize unions? a minimum wage? the length of patent protections?). Under what conditions (uninsured derivatives? fraudulent mortgages? mandatory arbitration of disputes?). How to repay what’s owed (debtor’s prison? bankruptcy? corporate bailouts?). What’s private and what’s public (clean air and clean water? healthcare? good schools?). And how to pay for what’s deemed to be public (corporate taxes? personal income taxes? a wealth tax?).

These laws and rules do not exist in nature. The “free market” is created by people. The central issue is not more or less government. It’s who is government for? This is a question of power — who has it, and who doesn’t.

If democracy were working as it should, government officials would make the laws and rules of the “free market” according to what most citizens need. But in our current system, the rules are made mainly by those with the power and wealth to buy the politicians, agency heads, and even the courts and the lawyers who appear before them). As income and wealth concentrate at the top, so does political leverage.

As a result:

— Intellectual property rights — patents, trademarks, and copyrights — have been continuously enlarged and extended. This had created windfalls for pharmaceutical, high tech, biotechnology, and entertainment companies, which can preserve their monopolies longer than ever. It also means higher prices for American consumers, including the highest pharmaceutical costs of any advanced nation.

— Antitrust laws have been relaxed or nullified, resulting in larger profits and bigger political clout for the dominant corporations and higher prices and less leverage for workers.

— Labor laws have been weakened, allowing corporations to fire workers who try to join or form unions, with the only consequence that the corporation may be required to reinstate the workers and give them back pay after long and involved proceedings.

— Financial laws and regulations instituted in the Great Depression decade of the 1930s have been abandoned, allowing the largest Wall Street banks to acquire unprecedented influence over the economy.

— Bankruptcy laws have been loosened for large corporations but tightened for homeowners and graduates laden with student debt. The largest banks and auto manufacturers have been bailed out of a financial crisis, but homeowners — disproportionately low-income minorities — have not.

— Contract laws have been altered to require mandatory arbitration before private judges selected by big corporations.

— Securities laws have been relaxed to allow insider trading of confidential information. CEOs use stock buybacks to boost share prices and cash in their stock options.

— Tax laws have created loopholes for the partners of hedge funds and private-equity funds. They also contain special favors for the oil and gas industry.

— The top marginal income-tax rates have been lowered, corporate taxes have been reduced, and estate taxes on great wealth have been eliminated.

— Regulations that protect health, safety, and the environment have been repealed, rolled back, riddled with exemptions, or simply unenforced. Public health has declined.

— Schools in working-class and poor areas have become dependent for most of their funding on local property taxes, which aren’t enough to provide excellent schools. Hence, the notion of equal opportunity has become a bad joke.

The result of this vicious cycle is a giant but hidden upward distribution of income and wealth from the bottom 90 percent to the top.

Another consequence is growing anger and frustration felt by people who are working harder than ever but getting nowhere, accompanied by deepening cynicism about our democracy. That anger, frustration, and cynicism is corroding the moral foundation of our society. It has elected Trump, twice.

Conventional but deceptive idea #3: Corporations exist only for shareholders

The late economist Milton Friedman famously urged CEOs to give up stakeholder capitalism — under which the welfare of workers, communities, and the nation as a whole was considered in corporate decision-making, as well as shareholders. “What does it mean to say that ‘business’ has responsibilities?” Friedman wrote in 1970. “Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”

Michael Jensen, an economics professor who arrived at the Harvard Business School in 1984, gave academic ballast to the notion that the sole purpose of the corporation should be to maximize shareholder returns. In his many papers, public lectures, and oversubscribed classes — from which generations of business school students launched careers on Wall Street and in management consulting — Jensen reasoned that hostile takeovers disciplined what he termed “inefficient firms.”

Jensen forgot one big thing. He overlooked those who would bear the burden of the changes he pushed for. There have been several unfortunate consequences to Friedman and Jensen’s mistaken idea.

— The rise of corporate takeovers (now often undertaken by private equity). As Jensen predicted, stockholders of targeted companies have done well. That’s because the so-called “efficiency” gains have gone to them, as well as to the raiders and top corporate executives.

The costs of these maneuvers and of the obsession with maximizing share values, however, have been borne by workers who have been sacked, or whose paychecks have stagnated and whose benefits have been cut, and by communities that have been left behind.

The academic conceit that workers are simply “resources” that will move to “higher valued uses” has proven to be crushingly and cruelly naïve. Human beings are not like financial resources. They do not move easily or seamlessly to different jobs and other places. They are rooted in families and communities. They have particular skills, established routines, abiding understanding of positions and roles. They depend on some degree of security, predictability, and stability. They want to be respected and valued.

When “efficiency” gains go to a comparatively few people at the top, while the costs and burdens are borne by many others — as has been the case since the 1980s — the common good is not improved. It is cast to the winds.

— The monopolization of America. After 1980, antitrust law all but disappeared. The new view — popularized by a Yale Law School professor, subsequently Judge Robert Bork — was that large corporate size produced economies of scale, which were good for consumers, and anything that was good for consumers was good for America.

Power was no longer at issue. This was exactly the message that America’s emerging corporate oligarchy wanted to hear. They used the façade of Bork’s pinched academic analysis to justify killing off antitrust. Since the 1980s, after the federal government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.

Monsanto now sets the prices for most of the nation’s seed corn. The government green-lighted Wall Street’s consolidation into five giant banks, of which JPMorgan is the largest.

Just four giant airline carriers now dominate the skies, down from 12 in 1980. American, Delta, Southwest, and United now control 80 percent of domestic seating capacity. Meanwhile, the merger of Boeing and McDonnell Douglas has left America with just one major producer of civilian aircraft, Boeing.

Three giant cable companies dominate broadband (Comcast, AT&T, Verizon). A handful of drug companies control the pharmaceutical industry (Pfizer, Eli Lilly, Johnson & Johnson, Bristol-Myers Squibb, Merck).

Just five giant high-tech behemoths preside over key portals and platforms (Amazon, Facebook, Apple, Microsoft, Google), together comprising more than a quarter of the value of the entire U.S. stock market.

Facebook and Google are the first stops for many Americans seeking news, and account for almost half of all advertising dollars spent in the United States. Apple dominates smartphones and laptop computers. Nearly 90 percent of all internet searches now go through Google. Amazon is now the first stop for a third of all American consumers seeking to buy anything.

All this consolidation has inflated corporate profits, suppressed worker pay, supercharged economic inequality, and stifled innovation. Amazon has put most bookstores out of business and is rapidly eroding retail businesses on the nation’s Main Streets. Google employs the world’s most widely used search engine to promote its own services and Google-generated content over those of competitors, like Yelp.

Facebook’s purchases of WhatsApp and Instagram killed off two potential rivals. This mega-concentration of American industry has made it harder for newer firms to gain footholds. The rate at which new businesses have been formed in the United States has been halved since 1980.

In many locales workers have less choice of whom to work for, which is also holding down their wages. Corporations are imposing additional conditions on workers that further weaken their bargaining power, such as noncompete, anti-poaching, and mandatory arbitration agreements.

Giant firms that dominate an industry also gain political power. They provide significant campaign contributions, have platoons of lobbyists and lawyers, and directly employ many voters.

As a result, their CEOs’ phone calls to members of Congress are promptly returned. Items they want included in legislation are dutifully inserted; those they don’t want are scrapped. They get the tax loopholes, subsidies, bailouts, regulatory exemptions, and loan guarantees they seek. They can stop laws in their tracks. Never underestimate the monetary value of such largesse. The financial returns on political investments are among the highest in the whole system.

Power has shifted in exactly the opposite direction for workers.

— The near disappearance of labor unions. Starting in the 1980s and with increasing ferocity since then, private-sector employers have fought unions. Ronald Reagan’s decision to fire the nation’s air-traffic controllers, who went on an illegal strike, signaled to private-sector employers that fighting unions was legitimate.

But it was really the wave of hostile takeovers (now often engineered by private equity funds) — the shift from stakeholder to shareholder capitalism — that pushed employers to crush unions. Payrolls are typically 70 percent of a corporation’s costs. The most direct way to raise profits and share prices is to cut payroll costs. The first step was to bust unions.

Corporations have replaced striking workers with non-union workers. Previously, when management was responsible to all stakeholders, workers who went on strike typically got their jobs back as soon as a strike was settled.

Shareholder capitalism changed this radically. Now, striking workers often lose their jobs forever. As Fortune magazine observed, “Managers are discovering that strikes can be broken, that the cost of breaking them is often lower than the cost of taking them, and that strike-breaking … doesn’t have to be a dirty word.”

Corporations have also threatened to move jobs overseas if workers don’t agree to pay cuts. Corporations have fired workers who try to organize, a move that’s illegal under the National Labor Relations Act but happens all the time because the penalty for doing so — restoring fired workers to their jobs along with back pay — is small relative to the profits that come from discouraging unionization.

Corporations also mount campaigns against union votes, warning workers that unions will make them less “competitive” and threaten their jobs. All the while, corporations have been relocating to states where so-called “right-to-work” laws bar unions from requiring dues from workers they represent. The Supreme Court, in an opinion delivered by the court’s five Republican appointees, has extended “right-to-work” to public employees.

The pressure has come from corporate raiders and their more recent incarnations, private-equity and hedge fund managers, demanding ever higher profits. Institutional investors (the managers of mutual funds, insurance funds, pension funds, endowments, and private equity funds) are just behind them, rooting them on. As power has shifted from workers to them, many of these investors and financial managers have become fabulously wealthy.

Meanwhile, as unions have shrunk, so has their political power. In 2009, even with a Democratic president and Democrats in control of both houses of Congress, unions could not muster enough votes to enact a simple reform that would have unionized workplaces as soon as a majority of employees signed pro-union cards.

Obama didn’t fight for this. Some Democrats, threatened by groups like the Business Roundtable, wouldn’t vote for it. When the legislation was introduced, 180 business executives descended on Capitol Hill to meet with swing senators. Corporations ran $1 million worth of television ads against the bill in Nebraska alone in order to pressure one vacillating Democrat, Nebraska Senator Ben Nelson, to vote no. He obliged.

— Hence, record-setting inequality. This great shift in bargaining power from workers to corporations and their shareholders has pushed a larger portion of national income into profits and a lower portion into wages than at any time since World War II.

Most of these profits are going into higher share prices (fueled by share buybacks) and higher executive pay rather than new investment.

The declining share of total U.S. income going to the bottom 90 percent over the last four decades correlates directly with this decline in unionization. No other change in the system provides as clear a relationship.

Meanwhile, and for the same reason, the rising share of total income going to the richest Americans is inversely related to the share of the nation’s workers who are unionized. The American economic pie continues to grow but most workers are getting only crumbs.

Most of the increasing value of the stock market has come directly out of the pockets of American workers. Three researchers — Daniel Greenwald at MIT’s Sloan School of Business, Martin Lettau at Berkeley, and Sydney Ludvigson at NYU — found that “from 1952 to 1988, economic growth accounted for 92 percent of the rise in equity values,” but that from 1989 to 2017, economic growth was responsible for just 24 percent of the rise. Most of the increase in share values has come from “reallocated rents to shareholders and away from labor compensation.”

America’s shift from farm to factory was accompanied by decades of bloody labor conflict. The shift from factory to office and other sedentary jobs created other social upheaval.

The more recent power shift from workers to large corporations and their shareholders — and consequentially, the dramatic widening of inequalities of income, wealth, and political power — has happened far more quietly, but it has had a more unfortunate and more lasting consequence for the system: an angry working class vulnerable to demagogues peddling authoritarianism, racism, and xenophobia.

Corporate profits have reached record levels and share prices have soared. This has been a boon to shareholders, especially the richest 1 percent of Americans who own about half of the value of all shares of stock, and the richest 10 percent who own over 90 percent.

Top corporate executives, whose pay is linked to share prices, have reaped a bonanza. Pay on Wall Street has reached jaw-dropping heights. But most Americans have not benefited. Many have lost ground. For most, wages have been flat or have declined, their jobs have become less secure, and their pensions have been turned into 401(k)s or have disappeared altogether. Abandoned communities now litter the nation. Entire regions of the country have been left behind.

Executives claim they have a “fiduciary obligation” to maximize shareholders’ returns. This argument is rubbish. It’s also tautological. It assumes that shareholders are the only people worthy of executive concern.

Yet as a practical matter they are not the only parties who invest in corporations, or who bear some of the risk that the value of their investments might drop. All Americans are stakeholders in the American economy.

Workers who have been with a firm for years develop skills and knowledge unique to it. Others may have moved their families to take a job with the firm, buying homes in the community.

The community itself may have invested in roads and other infrastructure to accommodate the corporation. When a firm abandons those workers and those communities, these stakeholders lose the value of their investments. Why should no account be taken of their stakes?

Corporation after corporation began laying off workers in the 1980s without easing the often difficult transitions that followed — without providing workers with severance payments, job retraining, job search assistance, job counseling, help in selling homes whose values predictably dropped when businesses left town, or help moving to where jobs existed.

They laid off large numbers of workers without aiding affected communities that were being jettisoned, or seeking to attract other businesses to make up for their losses of jobs and tax revenue, or finding other uses for the abandoned infrastructure of schools, roads, pipes, and real estate. And without giving workers and communities sufficient advanced notice so they could plan their own transitions.

Absent any of this, millions of Americans were left to fend for themselves. It was a systemic change that would scar the nation for decades, contributing to rising anxiety, anger, and resentment across the land, and eventually lead to the election of Trump.

As big corporations have grown larger over the last 40 years and labor unions weaker, wages have stagnated and profits have increased. It has been a direct transfer: A steadily larger portion of corporate revenues have been siphoned off to profits and a shrinking portion to wages. A growing share of the total economy, likewise, has gone to profits and a smaller share to wages. The stock market has soared. Workers have slumped.

Shifting Power Back to Workers: We’ve Done it Before

The way to end this vicious cycle is to reduce the huge accumulations of wealth that fuel it, and to get big money out of politics. But neither can can be accomplished when wealth and power are compounding at the top. It’s a chicken-and-egg dilemma.

Yet such vicious cycles have been reversed before. In the early 20th century progressives reclaimed our economy and democracy from the robber barons of the first Gilded Age.

The political power that flowed from concentrated economic power was a central concern of the thinkers, writers, and muckrakers of that Gilded Age, starting in the 1890s. “Liberty produces wealth, and wealth destroys liberty,” wrote Henry Demarest Lloyd in his popular 1894 book Wealth Against Commonwealth. “The flames of the new economic evolution run around us, and we turn to find that competition has killed competition, that corporations are grown greater than the State … and that the naked issue of our time is with property becoming master, instead of servant.”

The field now called economics was then called “political economy,” and the public quickly came to understand that corporate power could undermine both the economy and democracy. Recall that this was the era of the robber barons whose steel mills, oil rigs and refineries, and railroad laid the foundations for America’s industrial might, but who also squeezed out rivals who threatened their dominance, ran their own slates for office, impoverished their workers, and brazenly bribed public officials — even sending lackeys with sacks of money to be placed on the desks of pliant legislators.

“What do I care about the law?” railroad magnate Cornelius Vanderbilt famously growled. “Hain’t I got the power?” Forty-eight of the 73 men who held Cabinet posts between 1868 and 1896 either lobbied for railroads, served railroad clients, sat on railroad boards, or had relatives connected to the railroads.

The public became enraged. “The enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economic conquests only, but for political power,” warned Edward G. Ryan, chief justice of Wisconsin’s Supreme Court. “Which shall rule — wealth or man; which shall lead — money or intellect; who shall fill public stations — educated and patriotic free men, or the feudal serfs of corporate capital?” Reformer Mary Lease charged that “Wall Street owns the country. It is no longer a government of the people, by the people and for the people, but a government of Wall Street, by Wall Street and for Wall Street.”

Antitrust — anti-monopoly — law was viewed as the means of breaking the link between the economic and political power of the new combinations. On introducing his antitrust bill in 1890, Republican senator John Sherman of Ohio thundered, “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life.” Sherman’s bill passed the Senate 51 to 1, moved quickly through the House without dissent, and was signed into law by President Benjamin Harrison on July 2, 1890.

Theodore Roosevelt — condemning the “malefactors of great wealth” who were “equally careless of the working men, whom they oppress, and of the State, whose existence they imperil” — used Sherman’s Antitrust Act against E. H. Harriman’s giant Northern Securities Company, with which Harriman dominated transportation in the northwest. As Roosevelt later recounted, the lawsuit “served notice on everybody that it was going to be the Government, and not the Harrimans, who governed these United States.”

President William Howard Taft broke up John D. Rockefeller’s sprawling Standard Oil Trust in 1911. President Woodrow Wilson explained the danger of excessive economic and political power in his 1913 book, The New Freedom: “I do not expect to see monopoly restrain itself. If there are men in this country big enough to own the government of the United States, they are going to own it.”

Wisconsin’s “fighting Bob” La Follette instituted the nation’s first minimum wage law. Presidential candidate William Jennings Bryan attacked the big railroads, giant banks, and insurance companies.

The reform movement spread. Suffragettes like Susan B. Anthony secured women the right to vote. Reformers like Jane Addams successfully pushed for laws protecting children and the public’s health. Organizers like Mary Harris “Mother” Jones spearheaded labor unions.

The progressive era welled up because millions of Americans saw that wealth and power at the top was undermining American democracy and stacking the economic deck. Millions of Americans overcame their cynicism and began to mobilize.

In many important respects, the progressive era laid the foundation for the New Deal of the 1930s and the prosperity of the first three decades after World War II — featuring a growing middle class, a steadily more inclusive democracy, and a nation beginning to grapple with problems like poverty, inequality of opportunity, and environmental decay.

Black Americans and women slowly gained footholds in the system. Mass production begat mass consumption, and mass consumption relied on steady jobs with good wages. This balance relied on strong unions, a government willing to regulate corporations, and large corporations rooted in their communities and responsible for the well-being of their employees and neighbors as well as shareholders.

But over the last 40 years, the gains made then have disappeared. The opposite has occurred: The middle class has shrunk, democracy is malfunctioning, and the nation has turned its back on climate change, poverty, widening inequality, and the evils of racism and xenophobia.

As I’ve said, the economy doesn’t have to be a zero-sum game in which winners do better only to the extent losers do worse. But power is necessarily a zero-sum game. Certain people have it only to the extent other people do not. The connection between the economy and power is critical. As power has concentrated in the hands of a few, those few have grabbed nearly all the economic gains for themselves.

The oligarchy has triumphed not because Jamie Dimon, Jeff Bezos, Mark Zuckerberg, Elon Musk, Larry and David Ellison, or Trump have directly conspired to make it happen. I doubt any of them think about the system as a whole. They have triumphed because no one paid attention to the system as a whole — to the consequences of the shifts from stakeholder to shareholder capitalism, from strong unions to giant monopolistic corporations, and from regulated to unfettered finance.

The choices that the American public assumed were at stake — the so-called political “right” versus “left,” Republican versus Democrat, free market versus government, socialism or capitalism — distracted us from the more fundamental questions about power: Who is gaining it? Who is losing it? For what purpose? Are we satisfied with the results?

Through it all, Americans have clung to the meritocratic tautology that individuals are paid what they’re “worth” in the “free market,” without examining changes in the legal and political institutions that define the market. The tautology is easily confused with a moral claim that people deserve what they are paid.

Yet this claim is meaningful only if the system’s legal and political institutions are morally just. It has lured us into thinking nothing can or should be done to alter what people are paid because the market has decreed it. By this logic, the oligarchy is natural and inevitable. It is not. It is a cancer on our society. It is the cause of the enshittification of America.

Unless reversed, today’s concentration of wealth could soon resemble the kind of dynasties common to European aristocracies in the 17th and 18th centuries. Six out of the 10 wealthiest Americans alive today are heirs to prominent fortunes. The coming tsunami of artificial intelligence is likely to further entrench and enlarge oligarchic wealth.

It is time for fundamental structural change.

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