Automotive nightmares, part 2: from Cory Doctorow

Hello @Nica and all, I came across a magisterial post by Doctorow, that focuses exactly on car electronics.

Cory’s story is like this:

  1. Modern cars are basically computers on wheels. “Basically” here refers to the business model: this is where the money is made.
  2. The business model underpinning car electronics (and therefore the car as a whole, seen as the money is made in the electronics) is extractive and dehumanizing.

    Your car’s digital infrastructure is a costly, dangerous nightmare – but for automakers in pursuit of postcapitalist utopia, it’s a dream they can’t give up on.

  3. Digital systems in cars are a problem because they are a source of “repair nightmares, costly recalls and digital vulnerabilities”. Also, drivers hate them, and they are the source of most complaints that car buyers have towards manufacturers.
  4. However, digital systems enable a “feudal” mode of rent extraction from drivers to manufacturers. This is exemplified by BMW renting you the seatwarmer in your own car, or Mercedes renting you your own car’s accelerator pedal (comes at 1,200 USD a year to unlock a fully functional accelerator curve).
  5. Onboard digital systems also dovetail well with the financialization of the automotive industry. Big Car makes way more money selling car loans, securitizing those loans into derivatives and speculating on those, than it does making cars. Onboard electronics allows digital versions of the loan shark’s goon: some Tesla models allegedly lock themselves, then blare their horns when the repossession man arrives.

So, maybe a humane solution to making onboard electronics more circular is to not have them at all. It’s not like they are delivering much well-being anyway. I would wholeheartedly support Edgeryders making this suggestion in TREASURE deliverables.

Update. I found another Doctorow post that focuses specifically on Tesla: Pluralistic: Tesla’s Dieselgate (28 July 2023) – Pluralistic: Daily links from Cory Doctorow.

Take Tesla’s batteries: you pay for the battery when you buy your car, but you don’t own that battery. You have to rent the right to use its full capacity, with Tesla reserving the right to reduce how far you go on a charge based on your willingness to pay. […] hat’s just one of the many rent-a-features that Tesla drivers have to shell out for. You don’t own your car at all: when you sell it as a used vehicle, Tesla strips out these features you paid for and makes the next driver pay again, reducing the value of your used car and transfering it to Tesla’s shareholders.

Doctorow believes that the techno-legal institutions that underpins all this is DRMs. If they were not in place, we would probably see a completely different approach to onboard electronics. In the current landscape, onboard electronics do “bullshit work”, making the world actively worse. If our data tell this story, then we can turn around and recommend to the EU to change the regulation around DRMs, not recycling, and by this route increase the circularity of cars: simply make it less profitable to equip cars with hard-to-recycle electronics.


Hi, Alberto-

Nice to be back to economics.

IMHO, Doctorow has a valid point. Intellectual Property is the source of the majority of profits being made in the United States at this time, and shareholders of firms that are built around IP ae making the vast majority of profits that have driven the Dow to new highs for the last couple of DECADES.

I wish he were not spouting expletives ALL the time – it seems to be the way to ensure that readers take in what you are saying, but I was taught 'way back when that expletives are a lazy writer’s method to galvanize the audience. And that aside, it ensures that your audience is all always only “fellow travelers”, and prevents anyone else form being persuaded by what you are actually getting at. But anyway…

United States businesses make most of their money from IP, and so the US government has been fighting hard to defend IP globally. In principle this is a great thing – it means that the design of a product can be separated from the manufacture of a product. Inasmuch as it is a very reasonable position that most of the value of a product resides in its design, this enables the value of the most valuable component of a given product can be allocated to its most valuable part. It enables the US, which has a lot of design infrastructure and a highly skilled, highly paid work force for designing products, to expand and enhance that part of the economy and take advantage of the long-standing US comparative advantage in resources of production of “high human capital” to expand the American economy. Very good, so far. But as we know, unless carefully regulated this can be manipulated to produce all sorts of negative effects. One is the manipulation of the location of the IP to a place other than where it was actually produced, to take advantage of tax benefits – this has definitely caught the attention of global regulators, and a lot of effort is being put into minimizing it. This is for obvious reasons – governments depend on tax revenues, and look less kindly on companies that try to take their income from them.

But it is in the area of consumer protection, as Doctorow points out, that companies can have the most pernicious effects. I don’t need to say it over again. Even if you are able to delete the scatology, the point is clear and well-made: companies have takes full advantage of the lack of consumer protections to increase their profits.

That this happens is NOT due to “corporate greed” as such – as I am always pointing out, all humans are greedy all the time – the only difference is how influential they are in being able to capitalize on their greed. This, after all, is the reason why Marxism was a failure (sorry, Corey) – it had as hard a time balancing the interests of various groups in its way as more capitalist countries have had reining in capitalists. In Communist countries, as anyone who has ever lived in one can easily attest (generally with the same level of invective as Doctorow spills on Capitalists), the Party Elite are the ones who take greatest advantage of the surplus generated by production. Look at China – this is precisely what has been going on there for decades.

Another factor that Doctorow doesn’t take into account, but which is absolutely important, is the toll that this focus on extracting the surplus through IP protection takes on productivity. If a worker does not take home as much as they are worth, they are less inclined to work as hard. If a consumer is continually being milked for their surplus, they are less interested in acquiring the product. Productivity growth has been much lower in advanced economies than new technology would seem to make likely – surely a major factor is the imposition of such IP controls that favor producers.

So sure, Corey, this is a reason why the current iteration of the mixed economy in the USA, which is heavy on capitalism, is failing to provide a reasonable distribution of the surplus: it is too heavily influenced by those who make money from the generation of the surplus – and currently the surplus is most easily generated by IP. That said, don’t suppose that capitalists alone can benefit. We see in the US a revival on the Democratic side of the idea of unions. There is a lot of rhetoric about how they should revive, their influence has declined, etc. – all of which makes sense and is valid. Workers should also have a “fair” share in the surplus generated by their own production. But this is dangerous. In significant ways, workers and industrial capitalists are on the same side of the story – both want to be fed from the surplus generated by production and the benefits it confers on consumers. But nowhere in this fight is a real voice on behalf of consumers, the third party in the equation. Very broadly, the Republican Party represents the interests of producers; the Democratic Party represents the interests of workers (plus also producers, though to a somewhat lesser extent); consumers are represented by no one. This is because producers and workers each have a vital interest in this fight, can clearly see the benefit of working as a group on their own benefit (and sometimes together), but the interests of consumers are generally broad and diffuse, such that each consumer does not recognize a vital benefit in protecting their own interests.

This raises another point, which was cogently described by the conservative Nobel-winning economist James M. Buchanan: government workers, under the heading of “Public Choice Theory”. The problem in Communist systems has been that the surplus has been scooped up by government workers – this has also been a huge issue in developing countries, under the heading of “corruption” (a value-laden term, obviously). The point is that every person who runs a government department wants to increase the number of workers and budget of their department. In a government, there is not the same curb on expansion that exists in a company – a company has an incentive to keep departments within their bureaucracy at something like the value they contribute to the product produced – otherwise there is a reduction in the profits to everyone else – even in a company whose profits have been inflated by IP or other monopoly control this is true, though to a lesser extent – they are selling something, and need customers. A government in theory has access to all of the surplus in the country, via the tax system, and so they have much less constraint on spending from this perspective.

Ultimately, in order to function more efficiently, a government needs to balance ALL FOUR of these interests. To some extent this is happening, but the rhetoric around each group is so toxic that it makes it hard to realize that all of us are in it together.

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Really interesting, @alberto thanks for this!

This dovetails with that interesting discussion I had with a professor of sustainable infrastructure about our paper at the ISIE conference. She was sharing with me how in the urban infrastructure / building sector the current wisdom is that houses basically need to be “boxes” – minimalist approach, seemingly veering away from the “smart houses” trend. Maybe I can see if I can interview her as an expert, and link it with theses like the Doctorow one, as a discussion of other perspectives both culturally (the Doctorow take) and potentially “transferable” from adjoining industries/sectors?

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Philip, always nice to read you. :slight_smile:

Hmm… in the spirit of a fellow Augur, I need to point out that this is not really borne out by the evidence. From experimental economics to the literature on social response to natural disasters, we have proof of large swaths of the human experience where greed seems not the main motivator, at all.

This is also empirically dubious. Graeber’s Bullshit jobs, with its theory of managerial feudalism, but, in general, my favourite example is that Dilbert works in a private sector company, and a high-tech one to boot. It seems daring to deny that private companies are full of hangers-on that do not contribute to the bottom line.

Hmm… in that piece, Doctorow explicitly praises capitalists because, after all, capitalists despise rent and rentiers. Big tech is, in his opinion, not capitalistic, but feudal.

Interesting idea. Sure, why not?

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Point taken. I will hereby revise to “all people are as greedy as all other people, in general – there is not Capitalist monopoly on greed, such that it excludes their workers from being as greedy as they can be about their incomes, their customers as greedy as they can be about the price they have to pay, and government bureaucrats/regulators from being as greedy as they can be about the size and scope of their department.” With the proviso being “in some situations any of these groups, for reasons ranging from altruism to error to virtue signaling to the desire to get along with others, may moderate their acquisitiveness in favor of cooperation.”

Graeber and Wengrow, in The Dawn of Everything, emphasize this. Perhaps excessively, but again, point taken. I very much like this book, by the way – if you haven’t read it you must.

Graeber on Bullshit Jobs… I like less… Dilbert is fictional, I believe? (although I do enjoy the comic) Anyway, that’s why I say “something like the value” – there is a good deal of leeway, but not as much as in government. I used to live in the Middle East, and later I traveled in the region as a sales representative for an equipment firm. The norm was that (literally) in every department there were two people who did all the work, and who were always there – almost always they were the deputy head (almost never the head, who was a figurehead, or a relative of someone important) and his secretary. Everyone else collects a modest salary for showing up one a week or once a month. This is, by my understanding (which includes a fair amount of firsthand evidence) the norm in large swathes of the world. No company could afford this level of inefficiency.

Doctorow is using a Marxist terminology in his separation of capitalists from so-called feudalists. But even by the Marxian definition, capitalists are the owners of the means of production, which these people surely are – I think Doctorow is simply manipulating his definition so as to cast aspersions. Tech company owners are operating as monopolists, if they can – it is arguable that IP offers them the chance to be monopolists. The extent to which they are extracting both producer surplus (arguably, again, also part of the producer surplus which would otherwise go to workers) and consumer surplus is valid, but this is a well-documented monopolist trick.

Hmm… I will have to disagree again. The main economic agents of pre-capitalist economies were people: farmers, craftsmen, traders etc. The main economic agents of capitalist economies are companies, the great majority of which are for-profit. For-profit companies are greedy by statute; and have no equivalent in pre-capitalistic economies, as for-profit humans do not exist outside of psychopathology. Capitalism has the lion’s share of greed. In fact, it proudly claims so, because it allegedly makes things more efficient.

In some contexts I have witnessed this can be interpreted as badly executed welfare. More efficient than having desperate people roving the streets, for sure. Designing and deploying an advanced welfare system would be better, but there is a capacity problem (like Ha-Joon Chang reminds us, it took western countries centuries to build the institutions that we would like developing countries to build in years).

And don’t get me started on the levels of inefficiency implied by, say, Uber. Or the American health care system. When you have the power, you don’t need to be efficient: “competition is for losers”, and everyone wants to graduate from mere capitalist to robber baron. It’s just better for the bottom line.

Hmm… no, my understanding is that capitalists are the owners of the means of production in capitalism. In feudalism, the lords own the means of production (the land). Godfrey inherited Bouillon and parts of Lorraine (prime real estate at the time) from his uncle, but that did not make him a capitalist! And even “owning”, as in “freehold owning”, is a modern, predominantly capitalistic concept. Godfrey was lord of the land, but in an important sense he was only holding on to it on behalf of Henry IV; and he would have promptly agreed that his title to the land came with responsibilities with respect to the people in it. He was not free, for example, to sell it, or destroy it.

In my reading, Doctorow is pointing out that a key tenet of capitalism in the Smith-Keynes-Hayek sense is euthanizing rentiers; and that, in the name of capitalism, the (especially American) élites are bringing rentiers back.

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Hi, Alberto-

We are getting to smaller but more recalcitrant disagreements…

On greed: there you are again – the reflexive left desire to turn the Other/the Enemy (capitalists) into something non-human – which in modern terms means subject to psychological pathology. I’m unconvinced. I know a lot of capitalists and hopefuls, and they are pretty human – not pathological. I don’t know a lot of Captains of Industry, or Captains of Shareholdership, so… maybe, but I would need much more compelling evidence. It worries me that you so often veer in the direction of fiction, and fiction critical of capitalism in particular – yes, the film Wall Street proclaimed that Greed is Good. Milton Friedman was the single economist who came closest to that, but really this was showmanship too – it made him into the conservatives’ darling and the liberals’ bete noir, and he reveled in both…

Greed is a psychological pathology, as well as a Christian sin. To start, I don’t mind mentioning that the left has a surprisingly strong Christian moralistic inclination that makes this sin probably the most important one – I spend a fair amount of time criticizing the extent to which conversations about economics get derailed by theology. But actual businesses are supposed to be run in accordance with the need to control costs to become a better competitor, by enabling customers to get lower prices – even in a monopoly this is not completely absent. But the left vastly overstates the case that the US, for example, is dominated by monopolies – Amazon, Apple, Alphabet and Meta are often offered as examples – but of course these companies have competitors, and they are, as oligopolists, acutely aware of them. Amazon competes with Walmart at the highest level, as well as Target and even Alibaba globally; Apple competes with Samsung most obviously in cell phones, as well as Xiaomi (which is actually the world’s largest smartphone manufacturer) and others; Alphabet’s (Google’s) biggest competitor is actually Meta (Facebook) – the one is not a search company, nor the other social media as such – they are both “companies that sell advertising by providing information on customer activities”.

LOL – this is the first time I have seen anyone make the tortuous argument that the corruption of government department over-staffing is actually welfare! Family welfare, maybe…

Yes, I hate the US health care system, and definitely let’s not get started on that one…

My take on Marx is that he was a sociologist and social reformer masquerading as an economist. His sociology was actually quite good – this is why sociologists are the group of academics most inclined to still cite him; his economics-as-social-criticism less so. So when Marx refers to the feudal mode of production, he was not only referring to ownership, he was referring to an entire social setup that was not possible to disaggregate it into bits that could somehow be stuck into some other society. So, OK, “ownership of the means of production” refers to a feature of modern capitalist society – but that is OK – no, we have not somehow changed the nature of our society backward into a feudal one, no matter what Doctorow the non-economist, non-sociologist fiction writer says. Let’s not even go there. It is purely rhetorical. Rhetoric is absolutely the field of fiction writers, especially those who are speculative, and Doctorow does it well (when he isn’t swearing constantly, IMHO).

Yes, Adam Smith was an enemy of LAND rentiers. The best example of this, actually, is NOT Tesla or Meta, but Saudi Arabia and Nigeria and Mongolia and all the countries which are selling natural resources – this is literal rent on an existing God-given natural resource, for which value is being reaped without labor of the same value being needed. But no – Meta is reaping value from a couple of things, which are fascinating, but the understanding of which are impeded by Doctorow’s rhetoric: 1. it demonstrates a “new”-ish Resource of Production, which is DATA – data is information about how to design things as well as information on the activities and characteristics of economic actors; 2. IP, which is government-conferred “temporary” monopoly, in the form of patents and copyrights, which can have astronomical value; and 3. as I mentioned before, the clever extraction of both consumer and producer (and worker, to an extent) surplus for the benefit of workers.

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I do not believe that. I do believe that healthy humans are not exclusively, and probably not even primarily, motivated by greed. I also know plenty of business owners (I am one myself!). They do not charge their children for hugs, or push their friends to the curbs if they do not come with power networks. In order to be solely motivated by greed you have to be non-human: the CEO of the fossil fuel company is not necessarily a sociopath, but his role is to act as a proxy for the company. The company is not a human, and – under the Maximizing Shareholder Value Doctrine – is a sociopath. Shell knowing about clmate change for 50 years, and burying it, so we all burn (including the children and grandchildren of those who made that decision) to make a buck: go ahead and tell me that’s not sociopathic behavior.

Even here, information is a really poor fit with property rights. Imagine you and I went to school together. Who owns that information, and hence has a right to sell it to Meta? Me? You? Fifty-fifty? The school? Can you think of any allocation that makes sense? And please, let’s skip “it does not matter who has the initial endowment, as long as the markets are perfect”. It matters a lot, and the closer we get to human rights the more detrimental markets can be. In the 16th century, we had well-functioning markets for humans (slaves). Later, we acknowledged that was a bad idea. People having a right to life did not mean (in fact, excluded) that they could sell that life to others. I could wilfully sign a contract selling my kidney for money, but the law would nullify it. Privacy, autonomy, peace of mind are better thought of as human rights than as property rights. There’s a whole discussion about this in Debt.

Really? I am surprised. Public sector jobs are widely used to buy social peace across the world. In this sense they are welfare in the original functional sense: Bismarck, a German aristocrat who despised the masses, introduced a state pension system because he was convinced it would prevent a revolution.

This argument, Philip, looks circular to me. You refute Doctorow’s idea that society has transitioned to a form of techno-feudalism by saying:

  1. Big tech owns the means of production.
  2. “ownership of the means of production” refers to a feature of modern capitalist society.
  3. But we have not changed our society, it is still capitalistic.
  4. Therefore, those that own the means of production, Big Tech, must be capitalists.
  5. A society where capitalists own the mean of productions is capitalistic.

And this is below your intellectual stature. We engage with the arguments, not with the credentials of those making them. In passing, Doctorow has his own credentials used to be the chief editor of Boing Boing: he is on first name basis with all these tech moguls, and I dare say he knows tech business much better than I (maybe not than you). I find his argument intriguing, and there is a sense in which welfare is being destroyed by these companies, rather than created. His concept of enshittification is… empirically convincing.

If you mean “for the benefit of shareholders”, we agree here.

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About this discussion, Philip, today I saw this hilarious and exasperating profile of Verizon: Pluralistic: The long bezzle (10 August 2023) – Pluralistic: Daily links from Cory Doctorow.