“Ensh*ttification”: A General Theory for the Life Cycle of the Firm?

By Lambert Strether of Corrente.

Betteridge’s Law, but hear me out. “Enshittification”[1] — I won’t use the asterisk in prose, since after all by now it’s a term of art — was declared 2023’s Word of the Year by the American Dialect Society. Cory Doctorow defined enshittification in Wired, “The ‘Enshittification’ of TikTok“:

Here is how platforms die: First, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.

I call this enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a “two-sided market,” where a platform sits between buyers and sellers, hold each hostage to the other, raking off an ever-larger share of the value that passes between them.

And a worked example:

When a platform starts, it needs users, so it makes itself valuable to users. Think of Amazon: For many years, it operated at a loss, using its access to the capital markets to subsidize everything you bought. It sold goods below cost and shipped them below cost. It operated a clean and useful search….

This was a hell of a good deal for Amazon’s customers. Lots of us piled in, and lots of brick-and-mortar retailers withered and died, making it hard to go elsewhere…. And Amazon sold us Prime, getting us to pre-pay for a year’s worth of shipping. Prime customers start their shopping on Amazon, and 90 percent of the time, they don’t search anywhere else.

That tempted in lots of business customers—marketplace sellers who turned Amazon into the “everything store” it had promised from the beginning. As these sellers piled in, Amazon shifted to subsidizing suppliers. Kindle and Audible creators got generous packages. Marketplace sellers reached huge audiences and Amazon took low commissions from them.

This strategy meant that it became progressively harder for shoppers to find things anywhere except Amazon, which meant that they only searched on Amazon, which meant that sellers had to sell on Amazon. That’s when Amazon started to harvest the surplus from its business customers and send it to Amazon’s shareholders. Today, Marketplace sellers are handing more than 45 percent of the sale price to Amazon in junk fees. The company’s $31 billion “advertising” program is really a payola scheme that pits sellers against each other, forcing them to bid on the chance to be at the top of your search.

Searching Amazon doesn’t produce a list of the products that most closely match your search, it brings up a list of products whose sellers have paid the most to be at the top of that search.

This is enshittification: Surpluses are first directed to users; then, once they’re locked in, surpluses go to suppliers; then once they’re locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.

(Here is a second worked example from Doctorow: Facebook, and how Facebook disposed of its surplus.) Enshittification, then, is a theory for the life-cycle of firms[2]. And Doctorow focuses, basically, on platforms, through the lens of user experience, whether consumers or businesses[3]. (Spoiler: That’s why I started thinking of Boeing; what’s more indicative of an enshittified aircraft firm than losing a cabin door in flight? I mean, other than flying into the ground at 450 — or, to be fair, 700 — miles per hour.) Doctorow expands on his thesis in the Financial Times, “‘Enshittification’ is coming for absolutely everything“:

There are four forces that discipline companies, serving as constraints on their enshittificatory impulses

“Companies,” not platforms:

Competition. Companies that fear you will take your business elsewhere are cautious about worsening quality or raising prices.

Regulation. Companies that fear a regulator will fine them more than they expect to make from cheating, will cheat less. These two forces affect all industries, but the next two are far more tech-specific.

Self-help. Computers [back to platforms] are extremely flexible and so are the digital products and services we make from them. …. That means that users can always avail themselves of programs that undo the anti-features that shift value from them to a company’s shareholders.

And, finally, workers. Tech workers have very low union density, but that doesn’t mean that tech workers don’t have labour power[3]. The historical “talent shortage” of the tech sector meant that workers enjoyed a lot of leverage.

One by one, each of these constraints was eroded, leaving the enshittificatory impulse unchecked, ushering in the enshittocene.

“Absolutely everything”? Enshittocene? Much as I stan for Doctorow, I’m not so sure. Digging more deeply into Doctorow’s view on tech workers:

For decades, tech workers’ bargaining power and vocational awe put a ceiling on enshittification… Tech was still constrained by their workers’ sense of moral injury in the face of the imperative to enshittify.

Remember when tech workers dreamt of working for a big company for a few years, before striking out on their own to start their own company that would knock that tech giant over? That dream shrank to: work for a giant for a few years, quit, do a fake start-up, get “acqui-hired” by your old employer, as a complicated way of getting a bonus and a promotion. Then the dream shrank further: work for a tech giant for your whole life, get free kombucha and massages on Wednesdays.

And now, the dream is over. All that’s left is: work for a tech giant until they fire you, like those 12,000 Googlers who got fired last year, eight months after a stock buyback that would have paid their salaries for the next 27 years.

Workers are no longer a check on their bosses’ worst impulses. Today, the response to “I refuse to make this product worse” is “turn in your badge and don’t let the door hit you in the ass on the way out”.

I’d like a bit more evidence on “moral injury,” and when it kicks in and when it doesn’t. I don’t deny that tech workers — like most workers, I would argue — want to “do a good job” (given some level of basic humanity from management). But somebody writes all those dark patterns. Somebody wrote the software that allowed Uber to steal driver’s tips. Somebody (back to Boeing) wrote the MCAS system. Somebody wrote, well, Palantir. And so on.

And in terms of remedies (skipping over anti-trust, regulation, and self-help) Doctorow has this to say about labor:

Finally, there’s labour. Here in Europe, there’s much higher union density than in the US, which American tech barons are learning the hard way. There is nothing more satisfying in the daily news than the recent salvo by Nordic unions against that Tesla guy. But even in the US, there’s a massive surge in tech unions. Tech workers have realised they’re not founders-in-waiting. In Seattle, Amazon’s tech workers walked out in sympathy with Amazon’s warehouse workers, because they’re all workers.

Here again, I would like more evidence that “they’re all workers” (in their minds, as well as reality). Take examples from Seattle: Boeing, Starbucks, Amazon. Boeing’s machinists are demanding a seat on Boeing’s board[4]. There are at least fledgling union efforts at Starbucks and Amazon. Where are they on the demand by Boeing’s machinists? Could they be making similar demands of Starbucks and Amazon? And turn around is fair play: Where are the Boeing machinists on Starbucks and Amazon?

Now I want to pivot to Boeing (and soon, I promise, to Monarch Lathe). In both cases I will focus on the labor force, and how management destroyed the ability of that workforce to make a “maximally viable product” (as one might say). Maureen Tkacik’s “Suicide Mission“:

Like most neoliberal institutions, Boeing had come under the spell of a seductive new theory of “knowledge” that essentially reduced the whole concept to a combination of intellectual property, trade secrets, and data, discarding “thought” and “understanding” and “complex reasoning” possessed by a skilled and experienced workforce as essentially not worth the increased health care costs. CEO Jim McNerney, who joined Boeing in 2005, had last helmed 3M, where management as he saw it had “overvalued experience and undervalued leadership” before he purged the veterans into early retirement.

“Prince Jim”—as some long-timers used to call him—repeatedly invoked a slur for longtime engineers and skilled machinists in the obligatory vanity “leadership” book he co-wrote. Those who cared too much about the integrity of the planes and not enough about the stock price were “phenomenally talented assholes,” and he encouraged his deputies to ostracize them into leaving the company.

So Boeing builds a union-busting plant in Charleston, SC, with predictable and predicted results:

In 2023, [787] deliveries were halted in January, February, and again in August over problems with the shimming, the horizontal stabilizer, and God knows what else. [Totally-not-assassinated whistleblower John Barnett], and hundreds of others who had blown the whistle on Boeing’s managerial nihilism, had been thoroughly vindicated. But it was too late. There were no more cleanup crews left at Boeing; too much knowledge had been drained from the company.

And Barnett’s reaction:

It made him sick to think that the value of his Boeing shares had tripled over the same period during which he’d watched the company get so comprehensively dismantled. But it was downright surreal to watch the stock price nearly triple once more during the two years after he left the company.

(Stockholders may well be made sick too, since Boeing is on the path to liquidation. But nobody’s gonna claw back those management bonuses!)

And now [drumroll] here is the moment Monarch stans have been waiting for. First, what a machine!

Here is what happened to the workforce at Monarch. From John Legge, “Time Line History of The Monarch Machine Tool Company” (PDF):

It is the people that distinguish one company from another. Technology is free to everyone. Inventions are there for anyone to invent them. At any period in time, every company has the same tools at their disposal. It is then up to the employees of the company to have the intuition to grasp and used these tools, to create new manufacturing techniques, new process, new inventions and features to improve the design of their product. It is then up to the management of a company to foster an atmosphere of inventiveness, pushing for better, more efficient ways of doing things, and providing the resources to accomplishing the goals set forth. Thus, it is this chain of people that weave the history of a company. It is this same group of individuals that sets one company apart from another. Monarch evolved from making low-end lathes, to being considered the première lathe builder in the world, and to its decline in the 1980’s and 1990’s.

The failure of Monarch came at its own hand. Monarch was built on a foundation of quality and timely innovation in both product design and manufacturing. It maintained this foundation through a long chain of dedicated employees who spent their careers learning and then practicing their art. It was quite common to see three generations of a family working together. Machinist kept detail[ed] notes on how to machine critical parts; these notes were then passed on to their successor. With the breaking of this chain, Monarch started to slip.

The “chain” was not broken for putatively ideological reasons (“shareholder value”) but for reasons internal to the firm that left it unable to react to changing market conditions; reading between the lines, our elites selling off manufacturing to China. However, the point is the same as for Boeing, and Legge puts it more concisely than Tkacik: “It is the people that distinguish one company from another.”

* * *

So here we have two companies — Boeing and Monarch — whose products were, in a word, crapified, but which, I would argue, as companies, were not enshittified.

Why? First, neither Boeing nor Monarch were platforms; the use value of their products did not reach customers through a rent-collection middleman. Hence, their life-cycles were unaffected by surplus collection and distribution as Doctorow describes it. Second, of the four forces disciplining enshittification, self-help applies to neither, and regulation applies only to Boeing (though I grant the government — for example, Oak Ridge (!) — was an important Monarch customer).

So not “absolutely everything.”

Third, the last of the four constraints on enshittification (those members of the working class stationed at a particular firm) should, IMNSHO, be at least heuristically first in the order of analysis. Amazon, Boeing, and Monarch had very different workforces, so step one is to understand them. (For example, at least in my experience, tech workers who are not themselves documentation specialists hate documentation; quite the reverse of workers at Monarch who “passed [their notes] on to their successors,” and from Boeing’s far more sophisticated, formal (and regulated) documentation process that John Barnett’s supervisors sought to bypass and destroy). I don’t know if I could prove this — too many confounders — but I would argue that the more power the workforce has over production — and Boeing, Monarch, and the early Google show this — the less crapified the product. Regulation, self-help — and [genuflects] even competition? — are in some ways kludges to make up for disfavored characteristics in the workforce. “If you have too many special cases, you are doing it wrong” (Jon Benteley). If “It is the people that distinguish one company from another,” then everything that is not the people is a special case.

Finally, a note to distinguish enshittifcation and crapification. Interestingly, “crapification” was first used by writer Hugh in a comment in May 2013, and in a post in July 2013. In each case, the context was labor. From the comment: “I should add that that the jobs crisis goes beyond unemployment. It also includes the crapification of the American work place: crap jobs paying craps wages with few or no benefits and no job security” (anticipating Graeber). From there, the usage broadens out to the declining quality of products and services (of which there are many, many examples in the following years; but none — at least in my recollection — framing crapification as part of a life cycle). However, as we see from Boeing and Monarch, if you want to crapify the product, crapify the job. Where job crapification comes in the life-cycle of enshittification is an open question; Doctorow seems to think it comes at the end (the Google firings) but I’m not so sure.

NOTES

[1] From Ursula LeGuin’s The Dispossessed:

Wallowing? The word he used was not wallowing, there being no animals on Anarres to make wallows; it was a compound, meaning literally coating continually and thickly with excrement. The flexibility and precision of Pravic lent itself to the creation of vivid metaphors quite unforeseen by its inventors.

(Dry, very dry.) Pravic is the constructed language used by the anarchist inhabitants of the planet Annares; one might speculate that there is a word for transforming non-excrement into excrement. But that word does not appear in the novel, oddly, considering its theme.

[2] I looked briefly at the literature on the life-cycle of firms; the article that came up most often was Victoria Dickinson’s “Cash Flow Patterns as a Proxy for Firm Life Cycle” (PDF):

Gort and Klepper (1982) define five life cycle stages: (1) an introductory stage, where an innovation is first produced; (2) a growth stage, where the number of producers increases dramatically; (3) a maturity stage, where the number of producers reaches a maximum; (4) a shake-out stage, where the number of producers begins to decline; and (5) a decline stage, where there is essentially zero net entry. I propose that cash flows capture the outcome of these distinct life cycle stages.

It would be interesting to see if Doctorow’s notion of “surplus” and cash flow patterns connect. That said, this master’s thesis has a table of life cycle theories, some with three stages, others with four or five, some with ten, which leads me to question whether the field supplies anything more than heuristics. Back to the rough ground of actual firms, then.

[3] All workers have labor power. That is what they sell to survive.

[4] No reason to wait for Elizabeth Warren.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

48 comments

  1. Feral Finster

    Was it not taught from old that the upper echelons of the corporation are dominated by sociopaths, that the middle echelons are clueless, whilst the lower echelons are losers?

    The entire series is worth reading, and includes much that is instructive about the lifecycle of the firm.

    https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/

    I would take issue, however, with the idea that firms are founded by sociopaths. Rather, at least in the VC world, sociopaths fire insufficiently ruthless founders.

    Reply
    1. old ghost

      Feral Finster wrote: “Was it not taught from old that the upper echelons of the corporation are dominated by sociopaths, that the middle echelons are clueless, whilst the lower echelons are losers?”

      Wow. This brought back memories. Way back in the 1970’s I worked for a manufacturer of heavy earth moving machinery. While I was classified as an “office worker” counting parts in a factory, I was really nothing more than a low paid worker on the factory floor.

      As an “office employee” I had first hand experience with the management, and they did seem to fit the label of a “socialpath” very nicely. If they screwed something up, the first thing they looked for was someone they could blame it on, and then fire. The people with degrees and a white helmet with manager in their job title did indeed view the production workers as “losers”.

      The factory floor supervisors had no input on what or how parts and machines were produced. The people performing the work on the factory floor had even less respect. Upper management referred to them as “trained monkeys”.

      Waste was impressive. If a machine was built, and parts were left over, they were put into a “ballast box” with the cement. When such waste was communicated to the office, a blue print would be brought out that showed where the unnecessary part was supposed to go.

      The people most concerned about production problems and waste were those on the factory floor. But we were told the office could never be wrong.

      In the end, the products were crap. Instead of producing 20 machines a week, they were producing 20 per year. Finished machines could not even be driven off the end of the line. They had to be towed into another room and “overhauled”.

      Reply
  2. Jeff W

    “Finally, a note to distinguish enshittifcation and crapification.”

    I’d like to acknowledge (by way of a link to the comment) the commenter here on NC, who, in January, 2024, in the context of a bit of a discussion about which term was “better,” made it clear that the two terms are different in meaning and distinguishable.

    Reply
  3. steppenwolf fetchit

    How many American companies stayed non-crapified until the Forcey-FreeTrade forcefield matrix was constructed around them? How many American companies did not begin to crapify until they were subjected to artificially legislated and negotiated and rule-made competition from companies from crap-to-begin-with social and regulatory systems with crap workplaces? Leaving them no way to survive with non-crap costs and non-crap workplaces? Often leading them to move to where the crap social conditions and crap workplaces were to begin with?

    How much did Forcey FreeTrade contribute to initiating, fast-forwarding and accelerating many descents into crapification?

    ( And by the way, did Boeing self-crapify? Or was it bought by a crap-to-begin-with company which then worked very hard and patiently to purge the non-crap people out of their new (Boeing) possession and replace them all with its own crap people and then their own crap-people choices after that?)

    Reply
    1. spud

      this is correct. market forces are really a race to the bottom. when your competitor gets a leg up price wise, almost all must follow. its how rational. self correcting, self policing, self regulating markets work, straight down.

      i imagine many companies did not want to dump their deplorable talent, machinery and factories. but our government was loaded with quacks by 1993, and turned over america and the world over to rational, self regulating, self policing, self correcting markets. and its all been downhill since.

      capitalism really should be called simply “MORE”

      http://thesgem.com/wp-content/uploads/2020/09/Rich-man-1280×640.jpg

      Reply
    2. Lambert Strether Post author

      > And by the way, did Boeing self-crapify? Or was it bought by a crap-to-begin-with company

      Boeing bought McDonnell Douglas, not the other way round. But the McDonnell Douglas managers, who were finance-oriented crooks, outcompeted the Beoing managers, who were engineering-oriented (albeit still exploiters; IIRC, hatred of the union by management far predated moving Boeing’s headquarters to Chicago*).

      NOTE * If the Boeing board wasn’t a collection of wankers, they’d sell the Chicago HQ for what they could get — why on earth Chicago? — and move back to Seattle.

      Reply
      1. steppenwolf fetchit

        Interesting . . . so Boeing bought McDonnell Douglas. Sounds like a healthy person going out and buying some tapeworms. Or like Troy deliberately buying a wooden horse full of Greek soldiers.

        Did the Boeing management deliberately choose to buy McDonnell Douglas? Or was Boeing quietly extorted into buying it in order to “save” it by a Federal Government determined to keep McDonnell Douglas’s production lines alive for some military aviation purpose?

        A National Protectionist Government ( if we had one) would have a plan ready for when Boeing decided to declare bankruptcy. Such a plan would involve the sort of crash-cramdown against “Boeing” that the Obama Administration used against General Motors. The remaining facilities and people in Seattle and closely connected to them would be called ” Good Boeing” and assisted to reclaim control over itself and survive. The Chicago and South Carolina facilities would be called “Bad Boeing” and ” Good Boeing” would be allowed to buy any machinery it wanted and valued from “Band Boeing” for pennies on the Benjamin if they were to physically relocate it to Seattle. And the remains of “Bad Boeing” would be left for dead and given all the assistance needed to make sure it stayed that way. ” Good Boeing” would be allowed to hire all the Barnett-quality engineers, line workers and etc. from “Bad Boeing” and bring them to Seattle.

        Reply
  4. ian

    My experience has only been with tech companies, but one thing I’ve seen time and again is taking on more and more managers. They gain an initial foothold by helping tech people deal with inevitable project complexities, then they start to create their own complexities requiring – you guessed it – more managers.

    Reply
  5. Martin Oline

    Here’s your Monarch comment: In the ’80’s I worked at a plastic molding company in San Rafael, CA where I occasionally operated two Monarch EE lathes. They were probably made in the late 50’s as the earlier ones had tubes in the controls. I thought they were fine machines but was amazed when I heard someone on tour had offered $20,000 each for them. The offer was refused.

    Reply
    1. Janeway

      Monarch powered American Can factories:

      1991 marked the closure of the American Can factory in my hometown. Located along several major rail lines and highways serving military installations, BRAC marked the end of any reason to stay in our little city other than family.

      The inevitability of the Base Realignment and Closure determination that our depot was no longer needed resulted in the loss of over 10,000 soldiers, officers, support staff and all their families. Once a facility was on the list, it was lights out.

      The local American Can factory shut down shortly thereafter for multiple reasons:

      (1) Loss of rail service. A military installation requires multiple railroads running in multiple directions paid for and maintained by the federal government. Once that ‘free’ money ends, who will pay to maintain the tracks and related infrastructure for the benefit of all? Answer – no one

      (2) Loss of labor. Robust government paid-for infrastructure requires manpower. Once you lose that amount of government sponsored employment, who will employ for the benefit of all? Answer – no one

      (3) Loss of hope. Residents see and experience that change. Once infrastructure and people are lost, who will invest for the benefit of all? Answer – no one

      My dad was one of those hired in the early 90s to remove the machinery from the American Can factory and package it up. On a few occasions I was able to go with him and the vastness of the space was intimidating. Monarch machines either were in use or used to create parts for other machines.

      Reply
  6. Wukchumni

    About the only companies that resist enshitification are hard liquor distilleries, most of which won a prestigious award @ the Exposition Universelle of 1889 in Paris, or the Worlds Fair in St Louis in 1904, but not much in the way of laurels since, not that it matters.

    Reply
  7. sidd

    Thanks for the memories. I have used Monarch lathes in the 80s and they were mighty fine. Two tenths of a mil runout at spindle nose does not surprise, for a well maintained machine.

    I have spent time on Cincinnatti Milacron, Leblond as well. Those were also very nice. Not to mention Bridgeport, Rockwell and the rest. All excellent pieces of American steel.

    After hours of running a lathe or a mill i used to begin to hear voices and sometimes songs. That was when i usually quit and went to the bar.

    I still have friends who have maintained well running examples today, but fewer and fewer. Much is gone but some remains.

    sidd

    Reply
  8. Carolinian

    A few weeks ago Construction Physics posted this report on the collapse of the US machine tool industry.

    https://www.construction-physics.com/p/what-happened-to-the-us-machine-tool

    As to Doctorow’s assertion that things used to be great but now they aren’t–glib as always. Here’s suggesting that a modern car made by in part by robots and controlled by electronics is likely to be more reliable than your 1950s car that had to get a new engine after 100k miles. In fact I was just reading an article that said China’s ever improving productivity stems from their investment in automation. The Brian Potter article above says that machine tools today are largely automated and the “labor” may consist of a few guys standing around to keep the machines running.

    Clearly this doesn’t work with airliners, but it was a plane made by union members in Seattle that blew he door off. Charleston has it’s problems but the poor management culture likely at the bottom of that. I guess what I’m trying to say is that craftsmanship is great but ever consistent automation is better as long as machines can be made to fit the task. The manufacturing world is certainly changing–not necessarily getting worse.

    Reply
    1. Johnny Conspiranoid

      “The Brian Potter article above says that machine tools today are largely automated and the “labor” may consist of a few guys standing around to keep the machines running.”
      The few guys standing around have to know everything about the kit that the pre-automation guys knew plus the stuff about the automation part.

      Reply
    2. Paris

      I read the original article and I liked it, as it is mostly focused on the IT sector. Then people here at NC always expand things to blame MBA’S and the finance people and you know the drill.
      .
      And I agree with you. Who said union workers make better things lol, quite the opposite. Detroit is an example, the American cars suck big time and you’re better off buying Japanese and Korean cars made in the non unionized South.

      Reply
    3. jhallc

      As a environmental geologist working in Massachusetts, starting in the mid 1980’s, I had a ringside seat to the decline of many manufacturers located along the Ten Mile River from North Attleboro to the Rode Island border. Many of these Jewerly, plating, and machine shops did not survive the 90’s. A few did and just barely, by finding a niche to exploit. One such family run business made precision torque wrenches. Initially they did well in the 70’s making tools for the Nuclear Power Construction Industry that required specific tolerances for the structures. When that business dried up they nearly went belly up in the 80’s. The costs associated with the environmental regulations that went into effect at that time, which required they treat the chrome and cadmium wastewater from their plating operations, were significant. The son that took over the business in the early 90’s managed to find a new outlet for the torque wrenches in the medical industry. If you’ve ever had an ACL replaced or a tooth implant, the screws were probably tightened using one of their wrenches. They are still in business making the wrenches in their small shop today. The only reason they survived was through the determination of the son to not to give up when many would have thrown in the towel.

      Reply
  9. flora

    Sorry. Two discrete variables per a single thinga-me-thing. No. But I understand the hopeful social consolidation of many current themes. But no. No. Not that. Sorry.

    Reply
  10. Yaiyen

    Searching Amazon doesn’t produce a list of the products that most closely match your search, it brings up a list of products whose sellers have paid the most to be at the top of that search.

    This is what is happening to google too but the differentce is most sites dont need to pay, google want only mainstream sites in the front page even if result dont match. This will destroy independent sites, i believe after 2016 google changed the search engine completely. Google in a way is destroying the internet what made it so great

    Reply
    1. Lambert Strether Post author

      > Searching Amazon

      The cat bed example is great. From the Wired article:

      Searching Amazon doesn’t produce a list of the products that most closely match your search, it brings up a list of products whose sellers have paid the most to be at the top of that search. Those fees are built into the cost you pay for the product, and Amazon’s “Most Favored Nation” requirement for sellers means that they can’t sell more cheaply elsewhere, so Amazon has driven prices at every retailer.

      Search Amazon for “cat beds” and the entire first screen is ads, including ads for products Amazon cloned from its own sellers, putting them out of business (third parties have to pay 45 percent in junk fees to Amazon, but Amazon doesn’t charge itself these fees). All told, the first five screens of results for “cat bed” are 50 percent ads.

      Reply
  11. ciroc

    I think we should also give a name to the phenomenon of lower product quality achieving higher stock prices.

    Reply
    1. Lambert Strether Post author

      > higher stock prices

      Crapification Prime?

      The idea being that the capital accumulated through crapification will be used to produce more crapification (because that’s how we allocate capital these days. Stupid money begets stupider money).

      Reply
    2. Johnny Conspiranoid

      Directors can borrow money to buy back the company’s own stock (this used to be illegal). Buying the stock puts the price of the stock up and the directors receive a bonus according to the market value of the stock. Economies within the company are required to pay back the loan. This ends with the company going bust and the management walking away with the bonus money.

      Reply
      1. digi_owl

        Basically a variant on the corporate raiding that happened in the 80s using leveraged buyouts, where the target company would then be looted to cover the loans that enabled the buyout.

        And i seem to recall that tying CEO bonuses etc to stock value was at one point seen as a big nono. Not sure exactly when it all changed.

        Reply
  12. aaron

    I have grown to hate Doctorow’s branded terminology, when Marx already had his “tendency of the rate of profit to fall” as a much more holistic understanding of the process of how and why capital entities end up being driven to claw rents out of future profitability. It feels like yet another way to make up an “improvement” on economic theory that ends up distracting from the fundamentals that would be more predictive, and Doctorow’s prominence in places like Wired should be a strong signal that capital doesn’t find his analysis particularly threatening.

    Reply
    1. Lambert Strether Post author

      > Marx already had his “tendency of the rate of profit to fall” as a much more holistic understanding of the process of how and why capital entities end up being driven to claw rents out of future profitability

      Very well put, and I should have thought of saying it. (I do, however, like that Doctorow focuses on “surplus.” Progress! But how accumulated, one might ask?)

      My thought re the Bearded One, which I couldn’t get to, was to worry about teleology, which I’m vaguely thinking the later Marx, sadder and wiser, abandoned. But the idea that the bourgeiosie are relentlessly optimizing the productive forces, so that one day “we” will be so productive that we can transition to fully automated luxury communism, seems disproved by the cases of both Boeing and Monarch. Capitalism being a paperclip maximizer, what was optimized was capital accumulation through rents, fraud, and theft, none of which are especially “productive” of anything but immiseration of the working class (funny thing). Perhaps this is what Hudson is on about with neofeudalism if I have that right.

      Reply
      1. digi_owl

        His thinking was, as best i understand it, that the capitalists could not avoid being optimized as a basic function of market competition.

        Also, one should keep in mind that volume 1 was laying a simplified groundwork. The later two volumes that Engels edited together from notes etc brought in complications like finance. And i think in a passage there Marx remarked that industrial capitalists would be best served to team up with the working class to take on finance during a crisis. But that they invariably came to that realization far too late.

        And speaking of crisis, that is when Marx expected the industrialized nations to possibly transition away from capitalism. This in that such a crisis would leave factories fallows and workers idle. Workers that could occupy the factories and run them for the benefit of society rather than capitalists.

        And frankly if you look at the world today i dear say we have a surplus of capacity out there. Heck, we may well have had so since WW1. But the ongoing issue is that shipping the surplus to wherever it could benefit the most gets stuck in for profit logistics.

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    2. matt

      i feel as if doctorow’s writings tend to be ‘accessible.’ he is a writer and not an economist, and while his theories may lack rigor, they are a good introduction to these ideas. i myself was introduced to a lot of digital minimalist stuff through him.
      i feel doctorow and his branded terminology serve an important purpose. doctorow’s writings is to marx as instagram infographics are to actual critical race theory. his work is important as a communicator, as someone to spread the seeds of these ideas, but is lacking in economic rigor. he’s good for what he is though. a more intuitive explanation for those who have yet to read actual marx.

      Reply
  13. JCC

    Before I went to work for Hardinge Machine Tools in the mid 80’s as a Factory-based Field Service Engineer I was courted by the Cortland Division of Monarch Machine Tools for the same job.

    Monarch was a bigger company at the time, and both were the pinnacle of Super-Precision Machine Tools here in the US. I chose Hardinge only because it was closer to my home base (both were Upstate NY companies)

    Two factors changed both companies, and not for the better. The primary change was the off-shoring of our manufacturing industry, killing domestic sales, and the second was being bought up by Private Equity companies and the attendant outside management by financial “gurus” in order to increase “shareholder value”.

    Neither fit Doctorow’s description of “enshitification”, both primarily fit the disaster of the end of a US manufacturing base and the glory of Private Equity.

    Reply
    1. Glen

      One of the machine shops I supported had three Monarch EE’s, and two Hardinge Toolroom lathes. (I bought the second Toolroom lathe for the shop, it was the last year these were available new.) But like I said, that was just one of the shops I supported, across the whole site we must have had over twenty Monarch EEs, some that still had the original tube amplified DC spindle motors, and several more Toolroom lathes. For a long time, we were able to get rebuilt/refurbished EEs if we had an old one to ship as a “core”. I think these guys were not the original Monarch, but made a whole business out of re-building them:

      https://monarchlathe.com/products/lathes/toolroom/monarch-ee-series

      But that was not the first time I had seen EEs. It was a very common lathe in machine shops on Navy ships, and at Navy bases.

      And I agree with you that the American machine tool industry seemed to die as the American manufacturing base died. But there was a time when it seemed like every factory I worked in had smaller support shops with Monarch EEs, Hardinge Toolrooms, and Bridgeport Knee Mills.

      Reply
      1. Lambert Strether Post author

        > And I agree with you that the American machine tool industry seemed to die as the American manufacturing base died. But there was a time when it seemed like every factory I worked in had smaller support shops with Monarch EEs, Hardinge Toolrooms, and Bridgeport Knee Mills.

        Presumably if we’re going to revive America’s industrial base, that will involve reviving the American machine tool industry?

        Reply
        1. Martin Oline

          I had a metaphor for tool maker because people generally believe you make socket sets or wrenches. I would say that I made hands for machines. You can buy a machine off the shelf that applies force, heat, motion, etc., or combinations of them to a process for creating something. If what you want to create is new and unique (aren’t we all) you have to customize the machine to produce your brilliant innovation. It is not available ‘off the shelf’. That requires a tool maker of some kind who can produce assemblies that are an order of magnitude more precise than the finished product. That also means the machines that are used to do that are also more precise than what you make. Imported cars from the 1970’s were made with much finer precision than the standard Detroit iron. These cars lasted far over 200,000 miles because the parts had less clearance and better engineering. This is a little more sophisticated than an ape using a twig to fish termites out of their nest but it is similar.
          In order to make smaller assemblies some common sense is also required. I remember when they were starting to lay up atoms to make miniature machines. It seemed so cool. The finished thing looked great but it didn’t work because the scientists did not include the gaps or clearances needed to make a moving or sliding machine. Looked great in the display case with a magnifying glass, though.
          Likely, if mankind has a future at all, it will require a machine tool industry that can provide means to make precise mechanisms that in turn generate other items. This will mean the old standby machine tools but also newer methods / machines to reduce the scale thus assuring precision and reliability.

          Reply
          1. Retired Carpenter

            We used to have three levels in the metal shop:
            Model makers,
            Tool and die makers,
            Machinists.
            The first two categories have long lead times and are critical to any “re-industrialization”.

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            1. rowlf

              The famous Tool and Die maker obituary:

              Tim Schrandt, age 63, of Spillville, IA died on Friday, March 29, 2019 at Gundersen Health System in LaCrosse, WI after a short battle with cancer.

              A funeral service will be held at 11:00 a.m., Thursday, April 4, 2019 at the St. Wenceslaus Catholic Church in Spillville with Deacon Pat Malanaphy presiding, burial will be in the church cemetery with full military rites.

              Visitation will be from 3:00 – 7:00 p.m. on Wednesday, April 3, 2019 at the St. Wenceslaus Catholic Church in Spillville and also after 10:00 a.m. at the Church on Thursday morning.

              Tim Schrandt (Lynyrd) made his last inappropriate comment on March 29, 2019. If you are wondering if you may have ever met him, you didn’t -because you WOULD remember. For those of you that did meet him, we apologize, as we’re sure he probably offended you. He was world renowned for not holding back and telling it like it is.

              Tim was born to William (Bill) Schrandt and Mary (Schrandt) Manning on June 11,1955 – 100 years too late. Given Tim’s demeanor he would have been the perfect weathered cowboy in the old west or rough and tough pioneer, or maybe he just should have been Amish.

              Tim was the 4th of 8 kids, the bottom rung of the top tier (the big kids). Instead of taking his place on that rung, listening to the older kids and doing as he was told by his older siblings, he decided to anoint himself “king” of the 4 little kids. Tim spent his childhood and early adulthood ordering them around and in general, tormenting them. He was a great orator, (not like Shakespear, but more like Yogi Berra), as he always had something to say, and always had to get in the last word.

              His position as “king” and orator was challenged by the nuns at St. Wenceslaus school in Spillville. He may have met his match. We’re not saying the nuns won, but they put up a good fight, we mean literally – he got into a fist-a-cuff with a nun. In fairness, she probably started it. You didn’t take a swing at Tim and not expect one back. Tim’s fondness for authority (his own – not others) followed him to South Winneshiek High School in Calmar and later into the Army. This provided for many interesting episodes and stories, detentions and demotions, and a few “run ins” with the law, not just locally, but globally.

              Tim worked at Camcar/Stanley Black and Decker in Decorah as a tool and die maker for 30 plus years. Tim worked with many friends and “a bunch of morons”. His words, not ours. Well not exactly his, words because that would have included a bunch of swear words.

              Tim leaves behind a hell of a lot of stuff that his family doesn’t know what to do with. So, if you are looking for a Virgin Mary in a bathtub shrine (you Catholics know what we’re talking about) you should wait the appropriate amount of time and get in touch with them.

              Tomorrow would be fine.

              In addition to his stuff he leaves behind two great boys who he was extremely proud of, Cody (Jenny) Schrandt and Josh (Lydia) Schrandt were the product of his marriage to Crystal Hilmer. He will be missed by his two granddaughters that he adored and taught to cuss, Peyton and MacKenna. Also left to keep the stories alive (but damn, there won’t be any new material) are his mother Mary Manning and siblings Mike (Rita Dixon) Schrandt, Marty (Clint) Berg, Becky Schrandt-Miles, Bill (Grease) Schrandt, Pam (Rick) Barnes, Peter (Sandra) Schrandt and many nieces, nephews and cousins that wanted to hang out near him, because you just knew he was going to say or do something good. It’s not that he was such a great storyteller, it’s that he WAS the story!

              To his siblings amazement he was actually able to snag a good woman, Cheryl Murray, and hold on to her for the past 13 years, and as far as we know restraints were not used. Tim also created great memories and stories for Cheryl’s kids Alex (Christina) Murray and Samantha (Evan) Luedking and grandkids Tatum and Grace.

              He will be having a reunion with his infant daughter Ashley, his brother Duke, his dad Bill Schrandt, many aunts and uncles and a handful of cousins that passed before him. Tim was in charge of getting the beer and ice for our family reunions, so they will be happy to see him.

              Family writes hilarious obit for Iowa man: ‘Good luck, God!’

              I’ve had all three types Retired Carpenter mention as neighbors when I lived in Ypsilanti Michigan. Not very PC and not the Pepsi generation but they built stuff and welcomed G-jobs. The Model Maker was a real hard-ass to be around.

              Reply
  14. SocalJimObjects

    If there’s hope to be found against the creeping ensh*ttification/crapification, then look to the country of Japan, where the artisan/craftsman culture is still very strong. Here’s one video that shows the process of making a top end kitchen knife, https://www.youtube.com/watch?v=tbbky_RwFyc. The thing about Japan is that there are still plenty of people in the country who demand and appreciate finely made things, while most people in the West have very little idea about craftmanship in general.

    Reply
  15. Ed S.

    A great article and a great review.

    Whenever I read about the death of US Manufacturing (which is what generated the real wealth in the US) I think back to an interview with Tim Cook from about 10 years ago. He was asked about US Manufacturing and why Apple products were made in China. Link to the transcript is below (cntl-f “tool” and you’ll find the section); in so many words he said that China devoted resources and education to training tool makers. And the US didn’t.

    What he didn’t say was that the US didn’t devote resources and education to training tool makers because companies like Apple had relocated all of the employment out of the US some 15 to 30 years previously. Why would any individual undergo the time, effort, and expense to train for a skill for which there was little or no employment available?

    https://www.cbsnews.com/news/60-minutes-apple-tim-cook-charlie-rose/

    Reply
    1. Paris

      Tim Crook and his overpriced toys at Apple – funny, Apple is only a “consensus” in the US of A. American consumers defy intelligence.

      Reply
    2. digi_owl

      One thing to note about Cook was that he was the logistics man at Apple while Jobs was still around, and pretty much responsible for overseeing the outsourcing to Foxconn etc.

      Reply
    3. Glen

      So take this for what it’s worth, I cannot provide any links.

      All the way back in the 70-80’s during the Cold War, the DOD asked the DOE to study what was going to happen if Silicon Valley was allowed to continue to send chip production overseas. I worked for the DOE, had a DOE clearance and knew the people working on the study (it was the team of people that made recommendations about what was banned IT technology and related tech). At the end of the study, the TL:DR short answer for allowing offshoring of this tech was essentially “Game Over”, and then went into details. This recommendation went back to the DOD but obviously it was never implemented.

      So when people now say “whocuddaknowed” what was going to happen if we off shored our cutting edge tech? We knew, we told the DOD. It’s just another in a list of completely lame excuses for our TINA economy and our trillion dollar security state. Did we know de-regulating Wall St was gonna be a problem? Yes. Did we know terrorists could fly airplanes into buildings? Yes.

      Reply
    4. griffen

      I think the circumstances predate Apple and Tim Cook by roughly 25 years and likely farther back than this. Capital and ownership moving the expense of raw labor inputs began to wreak havoc to the furniture and textile industries in North Carolina and especially textiles in South Carolina…move factories to Mexico then again to elsewhere much further away…

      Always think this book is a good read on the barons of industry like Rockefeller and Carnegie following the US Civil War. The Tycoons.

      https://www.goodreads.com/en/book/show/16127

      Reply
  16. JustTheFacts

    Techies are losing even more of their power due to management delusions about LLMs replacing them: the world of computers is going down the same path as Boeing did. It’s not particularly surprising that AT&T lost all their customers’ social security numbers. We can expect worse, as cheap incompetent people glue code they do not understand as fast as possible to keep up with managements’ expectations of higher “productivity”.

    Reply

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