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Books, essays and others Economics Politics & government Science & technology

[3027] The enshittification of the internet and the rise of technofeudalism

The internet was supposed to be a wonderfully liberating medium. A force for good that equalized power by circumventing gatekeepers of all kinds: information wanted to be free. Almost all internet-based companies was a social crusader out to right some wrong when it all started back in the day. Google’s motto was ‘Don’t be evil’. That was the promise of the late 1990s and the early 2000s when the internet was still new in its anarchic stage where almost everybody competed to do good. Nobody online had market power.

But anarchy is always a transient state. By the mid-2010s, it is clear many had placed too much hope on what is a tool that could either improve or hurt society. And that tool increasingly has been used to drag society towards worse equilibria.

For some time now, the internet is a shitty place to be in. We cannot live without it but we are miserable with it. More than anything, the internet collectively has inverted its promise. The cyberspace is now a surveillance tool masquerading as a crack designed to advertize and sell everything.

Enshittification by Cory Doctorow is a 2025 book that attempts to explain how we got here. The term enshittification as Doctorow defines it is a process of internet platform decay from the perspective of its users.

The concept itself could be used to describe other services off the internet although these days the internet has proliferated everywhere that it is not helpful to make the online/offline distinction anymore, as much as it is unhelpful to call any company a tech company. If Grab a tech company, or just a transport company? Is Stashaway a tech company, or just a financial service provider company? Is Amazon an internet and tech company, or just a retail platform?

The enshittification process

Enshittification is a 3-stage process.

It starts with platform operators (Twitter/X, Facebook, Amazon or Google etc), being good to everybody and that means generating massive consumer surplus to individual users. This is stage 1 (the so-called be good to users stage).

Once the number of users hits critical mass, stage 2 (the abuse users for businesses stage) begins with the platform treating individual users badly in order to attract business users. The bad treatment generally include targeted and intrusive advertisements utilizing personal and private data tracked by within the platform and elsewhere too. Here, the platform operators are draining consumer surplus and redirecting it to sellers. As a result, businesses flock to the platforms. Individual users feel and understand the abuse but most of them could not leave the platform because their social network is already entrenched on the platform. Only the determined would exit and seek social interactions via other means.

Stage 3 (the stage of abuse businesses for the platform) is when there is enough business users around with the platform becoming the essential marketplace where all the businesses’ customers are. To exit the platform is to lose a chuck of customers and revenue. Platform operators then proceed to treat businesses badly by draining producer surplus towards themselves. This is done via various platform fees and advertisement requirement (pay to be seen or we place your product on page 999 instead of page 1). At times, the platform itself competes with its business client by cloning the business and placing its products above the clients (similar to the cheatings that happened in various stock exchanges as told in Michael Lewis’s The Flash Boys). There are various details in the book showing that much of the advertisement is fraudulent (paying for ads that do not really exist or ads with no noticeable effects on earnings) but businesses could find no way to hold the platform accountable. And the fees are pure rentseeking and structured in a way that prevent businesses from selling elsewhere (and if businesses do sell outside, they are forced make it more expensive).

The end result is that everybody except the platform operators gets stuck in a shitty environment where most producer and consumer surpluses get channeled to the platforms.

For all the technological advancement we have seen in the past 2 or 3 decades, in the end, the whole internet gets boiled down to an age-old phenomenon: the middle men abusing their (dominant) position.

Generalizing an old competition problem

In many ways, enshittification appears to be the new term to describe an old problem reappearing in the digital world. It is an old-known problem in competition or anti-trust where the dominant player abuses his or her position to extract surpluses from consumers. It is what a monopolist/oligopolist does.

First, you dump into the market to kill off all competitors and once monopoly power is established, you engage in predatory pricing. In Malaysia, we have witnessed this with Grab that now charges exorbitant fares after all its effective competitors have been driven off the road due to aggressive discounts in the early days of the service.

When Doctorow offers a way out, the solutions he gives are more competition in the market along with more rigorous anti-trust actions by the state and greater labor power through unionization.

These are the typical suggestions against monopolistic power but of course, the difference between textbook solutions and the problems outlined by Doctorow is that the technological, political and regulatory challenges in the real world are many times more complex than what discussed in a competition university classes. Internet monopolists are more technologically competent than the regulators, which makes running anti-trust policy more difficult to execute when compared to more traditional sectors like aviation or steelmaking. Many times too, regulators do get captured by the monopolists.

An old condition in a new world: technofeudalism

All those platform fees are simply rent with another name.

The rise of rentseeking as a major source of revenue from internet giants causes Doctorow to digress and borrow Yanis Varoufakis’s concept of technofeudalism, explained in his 2023 book Technofeudalism.

It is a neologism describing a condition where an increasing portion of revenue gets derived from rent (revenue arising from just controlling some assets/resources) instead of profits (revenue arising from productive activities minus the cost of running those activites). Varoufakis insists this represents a new kind of economic condition more akin to feudalism where long ago, landlords exacted rents from the working peasants who largely had no other choice but to work as farmers on someone’s else land. The peasants had to pay rent in various form to the landlords, regardless of profitability/harvest. Varoufakis further insists that this is a post-capitalism age, as capitalism is less about rent and more about profits.

A major component of enshittification of the internet fits Varoufakis’s framework well. Varoufakis is of course famous for this:

He is also the former finance minister of Greece during the European debt crisis, the former economist for Valve, the owner of the gaming platform Steam and all around leftwing economist.

Gamers should recognize these technofeudal trends quickly, where instead of buying and owning the games, they have to pay for subscription to play. There are also microtransactions (the worst of it, pay-to-win), which I would take as a subset of this trend.

But internet platforms are not the only guilty parties. Subscription-based model is proliferating in other sectors. In Malaysia, Perodua is selling its electric vehicles but with the battery must be rented from the manufacturers. Battery-as-a-service, as it is called. And then there is the more established term: software-as-a-service. SaaS is the ultimate example of technofeudalism; SaaS is a fancy term for rent-based businesses.

Electronic locks and anti-circumvention law

Central to much of the rentier tech economy (tech is a very loose term here) is the cover provided by a defective but mainstream intellectual property law.

Instead of copyrighting a new way of doing things productively, companies are copyrighting electronic locks to various machines (computers, printers, cars, etc) that should be open in the first place. Since the lock is copyrighted, hacking or breaking the them amounts to a crime while using the machines itself in whatever way mostly is not.

For example, a printer should be able to use third-party ink cartridges but the printer manufacturing prevents so by introducing an electronic lock. The lock allows only the use of the manufacturer’s own cartridges. Without the electronic lock, any ink with the right configuration would work with the printer. In fact, the use of any ink for the printer you own is not illegal. But the lock itself is copyrighted and breaking the lock is a crime. The protection for the electronic locks is the anti-circumvention law.

Because of this, the manufacturer, upon selling a printer, gets to enjoy repeat business through future ink purchases. And this is a rent and the law protects rents while stifling innovation instead of protecting intellectual property in order to encourage innovation.

Printers and cartridges are simple and maybe petty examples. But if you start to think about your smartphones and the restrictions its manufacturers impose on the users (famously, this is Apple), then the whole thing starts to become a more serious matter.

And one of the solution Doctorow proposes to fight technofeudalism, and rentiers in general, is to reform intellectual property law so that it returns to its original purpose: encouraging innovation.

No longer a curiosity: first degree price discrimination

Finally, I want to visit a section of the book that discusses the ability to track customers through all the private and personal data collected and sold by internet platforms through apps and in general, cookies everywhere, along with the ability to change prices dynamically/instantaneously based on those data due to the availability of electronic price display connected to the clouds.

Imagine two persons visiting an aisle just minutes apart. The first person would see a set of price different from the second person, because the retailers now have the technology to know a specific person’s preference (the tracking is so precise that you would think the apps are listening to you) and change prices based on that preference. By the way, this is already happening online where changing any price is a technological a trivial thing.

This is first degree price discrimination, where the seller is able to discriminate individual customers so effectively and completely that all consumer surplus gets extracted.

The concept itself is not at all new but 20 years ago when I was an economics undergraduate, such a thing was taken a did-you-know theory but with impossible application in the real world. It was a curiosity much like how the demand curve could slope upward. Today, it is not just a possibility. First degree price discrimination is becoming common and in all likelihood, the standard way of pricing if no regulation is forthcoming.

Perhaps this is the point of overly long book review: rapid technological advancement in the past 10 or 20 years is forcing a rethink of what we know of the world.

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Books, essays and others Travels

[3026] Elizabeth Pisani’s Indonesia Etc is a window to a more optimistic country

It is natural to make a list of countries one has visited before. Sometimes, that list comes in the form of emoji of flags. Sometimes, it comes in the form of map with the countries visited highlighted.

But is the list truly accurate? Have you really been to Russia if all you have visited was Moscow? The United States but just New York? India but just New Delhi? Japan but just Tokyo? Indonesia but just Jakarta? Malaysia but just the Twin Towers? Singapore but just… (okay maybe not all countries).

Indonesia is a massive country and I can say I have been to more than just Jakarta. Yet most places I have been are on the island of Java. There are Batam, Bintan, Bali and others but these places could not tell you about Indonesia in totality. To truly understand a place, one has to read its literature, history, newspapers and maybe, travelogues.

It is in that spirit that I picked up Elizabeth Pisani’s Indonesia Etc. Having worked in the country and travelled extensively still all over the places, she reveals just how diverse the Indonesia is. So much so that one of several threads running through the 400-odd pages is the idea how Jakarta or Java could feel like a foreign country to many living outside of the Javanese sphere, especially in the outer islands such as the Lesser Sunda Islands or places like Maluku.

I suppose any capital of a sufficiently-sized country can feel like a foreign country to those who do not live in the city. It is true even for Kuala Lumpur with its modern cosmopolitan outlook that contrasts sharply with life on the peninsular East Coast or the interior of Sabah. But Indonesia is truly big that the definition of foreignness gets on to another level.

Just as Jakarta is foreign to the outer islands, so too the outer islands to Jakarta and more so to foreigners like me. Here is where place-description pulls me into the book. Indonesia is just such a place where place-writing can go on and on and you would never get bored out of it.

But the breadth of the travels comes at cost: the book can feel disjointed and sometimes, superficial. As I progressed farther along the book, I had the feeling that it was written for white tourists, or maybe for white expatriates. As a person with deep roots in the region, by the time I finished reading the book, I found myself dissatisfied. I found myself wanting more details on localized history, politics and society.

To explore this argument further, the depth is uneven as the author attempts to cover as many places as possible. But when there is depth, it is great. I love the details of Sumba’s gifting culture and Pisani’s own thoughts on how it is a form of social insurance and how it has evolved into more of a debt system than gifting. Or how the way people enjoy wayang kulit has changed as the puppet masters shifted from flickering candlelight or flame to much brighter electric bulbs.

The unevenness of the depth is no fault of the author however. Indonesia is a big country and to write with all the breadth and depth, it would probably take a lifetime or at the very least, thicker than the tomb that is David Van Reybrouck’s Revolusi (which is an excellent read). 

Revolusi inspects Indonesia’s turbulent independence period of the 1940s. Pasani’s meanwhile is a travelogue, a window to a specific period of history: a post-reformasi era during rapid decentralization and perhaps, a more optimistic country 10 or 15 years ago.

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Books, essays and others History & heritage

[3021] The River Road to China: recounting the 1866-1868 French expedition for the source of the Mekong

The song Begawan Solo used to play regularly on Malaysian television. It is an Indonesian serenade in the form of keroncong describing the longest river in Java.

Solo is one of the great rivers of Southeast Asia and when I think of great Southeast Asian rivers, the Salween, the Irrawaddy and the Chao Phraya would come to mind. Adding to the list is possibly the Kapuas and the Musi. But the greatest without doubt is the Mekong.

The Mekong River flows from the Himalayas, snakes through southern China and defines the contemporary boundaries of Myanmar, Laos and Cambodia before empties out into the South China Sea just south of Saigon.

The Mekong is the great river I am most familiar with. From the air, I have seen the river and its delta in Vietnam. I have been to Phnom Penh twice over the span of 14 years and marveled at the transformation of the city. I have walked the streets of Vientiane during what appeared to be a dry season when the river to the west looked meek with people walking across to either get into Thailand or Laos. Further upriver in Luang Prabang where I spent several weeks, the river was wide and fierce. To cross it as many did at the Laotian capital would be pure madness. I have been through the Chiang Khong border checkpoint, where the Thai-Lao Friendship Bridge crosses a gentler Mekong. And more recently, I have been to Sop Ruak where the Thailand-Myanmar-Laos tripoint is.

While geographically and politically familiar with the river, I had never really thought about the history of its exploration until when I picked up a little gem from Tintabudi bookstore some months back. It is Milton Osborne’s River Road to China. I am familiar with Osborne from a long time ago when I took a class on Southeast Asian history at Michigan. His work was one of the references we used in a class ran by Victor Lieberman.

By Hafiz Noor Shams. Some rights reserved.

River Road to China recounts the 1866-1868 French expedition’s attempt to locate the source of the Mekong and determine whether it was navigable. Based on my previous travels and embarrassingly basic geographical knowledge of the river, I would have bet it was navigable all the way up to at least the Myanmar’s section. At each section of the river that I have visited, the Mekong is wide except in Vientiane during what appeared to be a drought.

With a more limited geographical knowledge but with a whole lot more courage (or bravado), that was exactly the suspicion of the French empire, which was expanding its influence across the Indochina in competition with the British. The French were looking for inland access to southern China via the Mekong, while the British were doing so through the Salween in Myanmar. There was race to Yunnan and the supposed riches of southern China.

The French expedition led by Ernest-Marc-Louis de Gonzague Doudart de Lagrée and also later Marie Joseph François Garnier met their first challenge near Sambor, approximately 200km to the northeast of Phnom Penh by river. The Sambor rapids were difficult but it could be negotiated, especially with stronger ships of the mid-19th century. de Lagrée, his men and local guides definitely did with more primitive boats after a struggle that came physically and psychologically.

Public domain image. Wikipedia: https://commons.wikimedia.org/wiki/File:Mission_M%C3%A9kong_05310.jpg
The principal expedition members at Angkor in 1866. By Émil Gsell.

de Lagrée had been to the Sambor rapids before and he had thought it was impossible to pass. But the expedition did pass the rapids and that raised hope.

That hope was quickly dashed. The Khone Phapheng Falls at the modern Laotian border are the uppermost reach of navigable Mekong. Khone Phapheng Falls are in fact the widest waterfall in the world. I never knew that, thinking Iguazu Falls on the Argentine-Brazilian border being the widest. But no. The Khone Phapheng Falls have a width of nearly 11km, Iguazu is only nearly 3km.

Unlike the Iguazu that rises close to 100 meters, the Khone Phapheng is just 21 meters tall in a series of cascades. In many ways, the Laotian falls are a gentle feature. But that was enough to block any steamship from going upstream. Years later, the French ended up building a rail line to sidestep the problem presented by the Falls.

Now knowing the Mekong was unnavigable, there was still an objective left: find the source of the Mekong. And so, the expenditure pressed on but in a disastrous fashion due to tropical diseases, the limits of French medical knowledge of that time, political realities of the Indochinese interior and simply, European imperial arrogance. de Lagrée in fact spent a second half of the expedition suffering from what seems to be malaria and died unceremoniously in Yunnan away from the Mekong after a failed surgery. de Lagrée shared the fate of another French explorer, Alexander Henri Mouhot, who popularized in Europe the ruins of Angkor but died out of malaria. Mouhot is buried in a tomb in the outskirts of Luang Prabang.

The rest of the team attempted to look for the source but they eventually abandoned the mission due to a civil war in Yunnan between Muslim rebels and the Chinese imperial forces. It was too dangerous to proceed.

While there was strong suspicion about the location of source of the Mekong by the end of the 19th century, it was only truly discovered by the 1990s technology. We today know that the Mekong originates from Lasagongma Spring, deep in the Tibetan Plateau.

Finally, there are two other points I would explore slightly further.

One, the expedition played a role in expanding French influence in Southeast Asia. During the expedition, France controlled the Mekong delta (French Cochinchina) but one surviving member of the expedition, Garnier, briefly captured Hanoi on the delta of the Red River in northern Vietnam on the pretext of securing free river passage in yet another attempt to access Yunnan but this time, via the Red River. While he died in a battle near Hanoi and the city itself was liberated by the Vietnamese soon after, in the longer run, France ended up ruling the whole of Vietnam because Garnier showed it was possible.

Two, I wonder if there were non-Europeans who had traversed the length of the Mekong before the French exploration. It seems quite plain that the locals who worked as porters and navigators for the French knew about the rivers more than their employers. More than that, there were Malay fishmongers all the way from the Malay Peninsula in Phnom Penh when de Lagrée spent days dining with the Cambodian king, Norodom I. He was familiar with the king given that earlier, he played a role in forcing Cambodia to become a French protectorate. More curiously, there were Malay bombmakers as far north as Dali, the northernmost city along the Mekong that the French explorers visited. If there were Malays along the upper reaches of the Mekong, surely it would not be an overreach to expect others like the Thais, Laotians, Cambodians. Vietnamese, Chinese or any other local groups that had explored the river.

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Books, essays and others Economics

[3018] Piketty and Sandel on creating a sense of belonging through progressive tax

During the GST debate in Malaysia, there was a strong push to cut personal and corporate income taxes. Indeed, the government of the day did cut income tax across multiple income band and lowered the rate for those in the top income tax bracket. There were at least four supporting reasons behind the proposal.

One was that it would soften the GST blows faced by households and companies. Second, related to the first, it would the GST more politically palatable. Third, there was a sense that it was fairer (and easier) to tax consumption instead of income. And finally, there was an idea that it was fairer to have flatter tax rates.

It is the fourth point that came across my mind as I read Equality: What It Means and Why It Matters recently. The book records a conversation on economic, political and social equalities between economist Thomas Piketty and philosopher Michael Sandel.

Within the context of flatter taxes, both parties highlight the importance of the middle class in forming any social compact. The middle class is important because in most settings if not all, it is the middle class who would fund the arrangements the most. Such compacts involve the financing of public institutions and infrastructure that in theory would introduce positive externalities that no private endeavor could bring. 

But the middle class needs to be to convinced to come on board and pay up. It is not enough for them to become the beneficiaries of any institution generating positive externalities. This is especially so when they know the poor would not be paying as much as they do, if at all. Jealousy and a perverse kind of envy when it comes to taxation (or lack of) are something that need to be kept in mind.

This could be addressed by having a progressive taxation regime, where members of the upper class are required to pay more through steeper tax rates.

As Piketty states it in the book:

It’s also what contributed to building a new social contract where the middle class would accept contributing to the social state. They knew that they would benefit from it, but also that people at the very top were going to pay a lot more than they would. Whereas today, of course, there’s a big suspicion by the middle class—more than suspicion—that people at the top are not paying their fair share. It makes them say, “Okay, then I’m not going to pay for people who are poorer than me.” [Page 17. Equality: What It Means and Why It Matters. Thomas Piketty. Michael Sandel]

Of course, the tax monies received by the authorities have to be put to good use and that means for the betterment of society. That betterment at the very least is the various effective functioning public institutions, which are central to the creation of sense of community and belonging, but also long-term public investment in a myriad of fields.

That sense of community and belonging achieved through some social compact financed by progressive taxation is a profound point at a time when far right extremists are championing identity politics and driving a plural society, like the one in Malaysia, apart.

From here, Piketty (and Sandel) are presenting progressive taxation is a tool to fight off the far right. It is a tool to create institutions that inculcate that sense of civic community and belonging to rival whatever the far right is offering.

Piketty and Sandel had the conversation (which has been edited into a book format) from the standpoint of the political left. I would not classify myself as a leftist. Yet, the ideas are useful for a person like me, who believes in civic nationalism with a dose of liberalism.

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Books, essays and others Politics & government Society

[3017] One day in Babel

As a member of the generation who grew up and still believes in the multicultural project under the aegis of liberal democratic order, the 2020s is a decade of constant disappointment at home and abroad. The disappointment stems from betrayal of various parties that used to express liberal sentiments but now has turned against it for whatever reason.

Criticisms of the current state of affairs are everywhere, including in contemporary literature. Two books from my recent readings rise to the top of my mind. Omar El Akkad’s non-fiction One Day Everybody Will Have Always Been Against This and RF Kuang’s fantasy-scifi-historical fiction Babel or The Necessity of Violence.

One of those betraying parties are many liberals in the West.

El Akkad’s thesis is clear from the book title itself, with ‘this’ being the genocide in Gaza and apartheid across occupied Palestine. He points out the hypocrisy of Western liberals, especially US liberals, where human rights are held up only for some but not others. That has been a constant criticism of the US and Western Europe (the centers of such liberalism) for a long time but the idea has gained its greater purchase in the past several years, especially with the wildly different approaches taken by then with respect to Ukraine and Palestine.

El Akkad’s criticism goes deeper than simply highlighting the hypocrisy. He believes many western liberals are really interested in messaging and virtue signalling all to make themselves look good. When push comes to shoves, they would create a caveat to wriggle their way through the issues while pretending there is no hypocrisy involved after all.

This, I believe, is one of several reasons why Western liberals no longer hold the prestige they once had in the eyes of many Asian liberals. I have summarized my thoughts on the matter on Kam Raslan’s A Bit of Culture over radio some weeks back. In the same show, I recommended El Akkad’s work as a book to be read.

That hypocrisy is one of several themes explored in Babel. But more than that is another relevant but more damning fatalist criticism developed from that hypocrisy. It is that people of different culture, or more specifically, minorities in a white world would never be considered as equal. Set during the European industrial revolution on the eve of the Opium War, the novel traces the life of the hero and his small cohort at Oxford, some who are radicalized over the injustices of British colonialism.

Babel is an excellent novel and I enjoy Kuang’s writings. In fact, Babel is my second Kuang’s work I have read, with the first being Yellowface. Even so, I won’t yet be as pessimistically fatalistic about multiculturalism as Babel is, even in this current decade of disappointment. Babel takes place during a time of severe power imbalance between the Western world and everything else, where the subscription to the idea of equality can easily be corrupted by hypocrisy that those in power.

With the ongoing multidecades-long rise of Asian economies, the gap representing power imbalance is shrinking and for some, has been reversed. This, I hope, would make that same hypocrisy harder to sustain and a more genuine inclusivity more achievable.