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Capital formation

Cory Doctorow delivers a startling thesis: the greatest threat to market competition isn't corporate greed itself, but the specific laws designed to stop people from fixing what they own. He argues that the very mechanisms meant to protect intellectual property have instead created a legal shield allowing giants to stifle innovation, turning a dynamic ecosystem into a stagnant oligarchy.

The Illusion of Market Forces

Doctorow begins by dismantling the idea that markets naturally self-correct. He posits that without competition, companies become indifferent to their customers. "Without competitors, companies are 'too big to care,'" he writes, noting that the pressure of greed only works when there is a viable alternative. The core of his argument is that competition serves a dual purpose: it forces ethical behavior through market pressure and provides a clear target for government regulators. When sectors consolidate into a handful of firms, they stop competing and start colluding, creating an "enshittogenic policy environment" where the rules are rigged to protect the few.

Capital formation

This framing is powerful because it bridges the gap between pro-market libertarians and anti-monopoly progressives. Both sides, Doctorow suggests, should want competition, but for different reasons. He argues that the rise of Big Tech's authoritarianism is not an accident of technology, but a direct result of policy choices that favored incumbents over challengers.

"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."

This observation about the technical nature of computers is crucial. Doctorow reminds us that digital machines are "Turing-complete, universal von Neumann machines," meaning any device can theoretically run any valid program. Historically, this allowed for "adversarial interoperability," where new entrants could reverse-engineer dominant products to offer better services or fix defects. Think of the early days of printer ink or app stores; if a company locked out generic supplies, a competitor would simply build a workaround. This dynamic kept the market honest.

The Legal Ratchet

However, Doctorow argues this system was deliberately broken by legislation. He points to the 1998 Digital Millennium Copyright Act (DMCA) as the turning point. Specifically, Section 1201 made it a felony to circumvent access controls, effectively criminalizing the reverse-engineering that once drove innovation. "DMCA 1201 created a one-way ratchet that progressively narrowed the possibilities for tech competition," he explains. The result was a shift in startup culture: instead of disrupting giants, new companies began aiming for "acqui-hires," selling themselves to incumbents only to have their products mothballed.

Critics might argue that strong intellectual property protections are necessary to incentivize the massive R&D investments required for modern technology. Without the promise of exclusivity, they claim, companies would not innovate. Doctorow counters that the law has swung too far, protecting extraction rather than creation. He notes that the US government has exported this model globally, ensuring that "virtually every country in the world has a law that makes it illegal to disrupt American tech giants."

The most damning part of his analysis concerns the so-called "safety valves" in these laws. Governments claimed that exemption processes would allow for legitimate uses, like repairing a tractor or using assistive devices for the blind. But Doctorow reveals these exemptions as a "cheap trick." The law allows a user to petition for the right to use a tool, but not for someone else to make the tool. "The Copyright Office is only empowered to create 'use exemptions,'" he writes, "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."

"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."

This absurdity highlights the disconnect between legal theory and practical reality. Whether it is a wheelchair user needing to fix their chair or a blind person needing to read an ebook, the current system forces individuals to undertake impossible technical feats to exercise rights they legally possess. This mirrors the issues seen in the "Ink cartridge" deep dive, where printer manufacturers use software updates to brick third-party cartridges, a practice now shielded by these same anti-circumvention laws.

The Necessity of Capital Formation

Doctorow concludes by addressing a common misconception: that individuals or small hackers can solve this alone. He dismisses the idea that a chatbot or a single hacker could bypass these restrictions effectively. "To make generic ink a viable check against the abuses of HP and its colored water mafia, you need a counter-industry," he argues. This requires "capital formation"—the ability to raise money, hire staff, and build a sustainable business model that can withstand the legal and technical onslaught of incumbents.

He illustrates that the dynamism of the past wasn't just about clever code; it was about a mass phenomenon where a counter-industry could emerge to serve the market. "You need salespeople making calls on large enterprises who buy their ink by the ocean," he writes, emphasizing that without the economic infrastructure to support interoperability, the law remains a one-way street favoring the powerful.

"Disruption for thee, never for me."

This succinctly captures the hypocrisy of the current regulatory environment. While companies are free to "move fast and break things," the law forbids anyone from "moving fast and breaking kings." The system is designed to protect the status quo, ensuring that once a company becomes dominant, it is insulated from the very competition that brought it to power.

Bottom Line

Doctorow's argument is a compelling indictment of how intellectual property law has been weaponized to cement oligopolies, transforming a dynamic digital landscape into a rigid hierarchy. The strongest part of his case is the exposure of the "use exemption" loophole, which renders consumer rights practically unenforceable. The biggest vulnerability in the current system is not just the law itself, but the lack of political will to distinguish between protecting innovation and protecting extraction. Readers should watch for upcoming legislative battles over right-to-repair and interoperability, as these will determine whether the digital economy remains open or continues to calcify.

Deep Dives

Explore these related deep dives:

  • The Age of Surveillance Capitalism Amazon · Better World Books by Shoshana Zuboff

    How tech companies turned human experience into raw material for prediction and control.

  • Ink cartridge

    The article cites the specific practice of locking generic ink out of printers as a tangible example of how tech companies use technical restrictions to eliminate competition and extract rent.

  • Turing completeness

    The article hinges on the technical reality that digital computers are universal machines, a property that allows any software feature to be replicated by competitors and explains why Big Tech must resort to artificial legal and hardware barriers to stifle this inherent competition.

  • Regulatory capture

    This concept explains the specific mechanism by which the article argues that market consolidation allows a handful of firms to stop competing and instead collude to rewrite the rules in their favor, turning democratic enforcers into tools for entrenching oligopoly.

Sources

Capital formation

by Cory Doctorow · Pluralistic · Read full article

Today's links.

Capital formation: Going legit means going mainstream. Hey look at this: Delights to delectate. Object permanence: London Copyfighters x Speaker's Corner; TSA v lipstick; Long Beach v photographers; China x David Cameron's internet censorship; McMansion Hell; Copyrighting an MTG deck; "Privacy preserving age verification" delenda est. Upcoming appearances: Edinburgh, Sydney, Melbourne, Brighton, London, South Bend. 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.

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 ...