Isn’t that a prerequisite for enshitification? Publicly-traded companies are required (by law, I think) to maximize profits for their shareholders, even if that means utterly ruining their original product (Reddit, Boeing, etc.), yes? What do you think?
Every single comment here is describing symptoms but not the cause.
Enshitification is the evolution to the final form, only possible after the company, thru merger/acquisition or stock manipulation (leveraged buy outs, acquiring controlling stake, shorting a company into insolvency, etc), has achieved a commanding monopoly.
Then it flexes it’s monopoly powers, the buttons fly off its shirt and the monster shows it’s true colors.
We have laws to prevent this. Lina Khan is the first FTC chair to start holding these companies to meaningful account in my lifetime (yea, Microsoft/netscape is exponentially smaller than todays issues). Meta, Google, Apple, Microsoft, Amazon all need to be broken up into a thousand different companies, same as we did with AT&T. Uber, Angieslist, homeaglow, all the contractors pretending they’re just networking hubs (like some union hall) need to busted up and gigwork made to contend with employment law, which it can’t, because it’s all bad faith exploitation.
And for fucks sake we need to make the fine for white collar crime that extends state lines to necessitate the forfeiture of the entire C-suite’s and board of directors assets, both domestically and internationally, upon threat of seal team 6. Empty their bank accounts and leave them with nothing, like they regularly do to employees. They’re so fucking smart they can earn it all again, right? Right!? Corporations are the largest thief in the land, just in WAGE THEFT. Everything else they do that’s slimy is all BONUS. The 2nd largest thief in all the land? the fucking Police force. The lunatics have taken over the asylum, democracy doesn’t work in mental institutions. We don’t need to defund the police, we need to fire all of them and start over with transparency. If casino employees can be video taped all day, so can cops. Fuck em.
What America truly needs is another Teddy Roosevelt. We need to revive the Progressive party with the Bull Moose as the symbol. Protect the environment, protect the family by protecting the workers, end legal loopholes and trustbust the 1% back down into the 10%.
And if we don’t? The path ahead is obvious, I for one, don’t want to live in Blade Runner, but that’s where we’re going until we stop fucking around and right ship.
Meta, Google, Apple, Microsoft, Amazon all need to be broken up into a thousand different companies, same as we did with AT&T.
And unlike with AT&T, after divestiture there needs to be an order in place that perpetually prevents the divested companies from ever merging or buying each other up. At this point AT&T has almost completely re-formed from the companies it was broken into, and that should never have been allowed.
And for fucks sake we need to make the fine for white collar crime that extends state lines to necessitate the forfeiture of the entire C-suite’s and board of directors assets, both domestically and internationally, upon threat of seal team 6. Empty their bank accounts and leave them with nothing
Absolutely this. We need to abolish corporate personhood, and hold company leadership directly responsible for the company’s behavior. Since it is the people who are doing these things. The “company” isn’t some autonomous entity that has a will of its own. People drive it, and those people should be held accountable.
Keep corporations as persons - restore public execution. If a man with the mind of a 10 year old can be executed, so can executives.
I’m really emotionally and mentally exhausted. But what you just wrote makes me think you are my spirit animal. I guess what I’m trying to say is that it’s nice to see that other people are identifying a major issue and care about it.
Nope! My company is private after getting bought last year and they are definitely fucking it up with “ai all the things” and “ai makes us more human” and strip mining out our actual work culture and replacing it with an even more soulless grind
it happens because people have a natural urge to think things constantly need improvement.
Can we talk about the enshittifation of Lemmy. Where everyone seems to be calling everything enshittified?
I’ll let others address the “enshittification” angle but I thought I’d point out that “shareholder value uber allies” is a relatively recent … “innovation” … in economic theory, brought about by failed Supreme Court nominee Robert Bork and Milton Friedman in the last half of last century:
https://www.chicagobooth.edu/review/what-made-chicago-school-so-influential-antitrust-policy
The rethinking of what the boards of companies are supposed to do (from maximize stakeholder value to maximize shareholder value) and how they can operate (from requiring justification to approve mergers to requiring justification to block mergers) really took off with them, and exploded when former union boss Ronald Reagan found “religion” (because Nancy’s pussy was just that good) and ruined the economy for workers.
Lots of other people contributed, including Clinton after he “won” the 1992 election with 40% of the vote due to Perot splitting the Republican vote. His campaign of fiscal conservatism but without less bigotry became the model for the Democratic Party for the next two decades.
Anyway, Biden’s FTC is finally working to help workers again, which might even release the death grip of the Chicago School from our economy. We’ll see after November I guess.
bill clinton didn’t start fiscal conservatism until after 1996 when newt gingrich swept congress, though.
Enshittification requires two specific conditions:
- when a company can get more profit by decreasing the quality of the goods/services that it offers; and
- when the company is willing to do so.
The company being publicly traded can cause #2, as the investors won’t be as emotionally attached to the goal of the company as the founders. However, it is not a prerequisite, with Reddit being an example (it started enshittifying way, way before the IPO).
No. Enshittification happens because of venture capitalism.
Startup companies get a lot of money early on with the hopes that, after the investment cash is spent, there will be a profitable company left in its place. That company can become publicly traded or get sold to another company. The key is that the investors make their money off the startup.
The flip side is that, without venture capitalist companies, a lot of these companies wouldn’t get the opportunity to grow.
it’s both publicly-traded companies and VC-owned companies. any product that is required to constantly report their earnings and risk their company being dissolved if they don’t increase profits year-to-year.
Enshittification happens because there is a lucrative incentive to sell access to users by cannibalizing the user service itself.
I don’t think that it’s a prerequisite but it’s definitely a catalyst.
Another catalyst is one company buying another. I cannot think of one example where the acquired company’s product/services got better after a M and A. OTOH, I can think of many examples of it getting worse. Confirmation bias? Absolutely. But still makes you go “hmm…”
I think there can be an intermediary step where things get a little better before they get much worse. I’m thinking of Youtube, which pre acquisiton, iirc, was getting slow and bad. Google infrastructure made it faster, but then, well…
This is really just the first step of enshitification - first they make things good for users, then introduce advertisers, then claw back all the value for themselves.
Or put another way
- "don’t worry you favourite thing will stay the same - we don’t want to mess with a winning formula!
- “these changes will benefit users!”
- “we have to comply with industry standards and best practices. please read our updated terms of service.”
- "in order to compete in a dynamic marketplace, we’re introducing an add supported tier!
- “we’ve made changes to our subscription model!”
- “we’ve made changes to our subscription model and we’re introducing adds on paid tiers! suck it!”
- “sure, you paid for it, but our agreements are expiring and we don’t value you as a human being!”
- “really, where else are you going to go? lololololol”
Another catalyst is one company buying another. I cannot think of one example where the acquired company’s product/services got better after a M and A.
I feel like there have been some positive outcomes of mergers and acquisitions but I am having trouble thinking of them. What comes to my mind is Meta acquiring Oculus, Activision merging with Blizzard, and Microsoft acquiring Minecraft. All of those have led to a shitty Russian nesting doll of launchers and DRM.
The positives might be harder to note though. There must have been a couple times where some kind of acquisition has brought a series into the mainstream.
I know a lot of people prefer the classic Fallout games but I do wonder how people would be aware of the series if it weren’t for Bethesda buying the right to Fallout for example.
After being acquired by Google, YouTube got better for years (before getting worse again). Android really improved for a decade or so after getting acquired by Google.
The Next/Apple merger made the merged company way better. Apple probably wouldn’t have survived much longer without Next.
I’d argue the Pixar acquisition was still good for a few decades after, and probably made Disney better.
A good merger tends to be forgotten, where the two different parts work together seamlessly to the point that people forget they used to be separately run.
Meta acquiring Oculus
As someone with industry experience working with VR, I can tell you it’s a mixed bag. I think there’s certainly no way Oculus (and consumer VR in general) takes off the way it did without Facebook’s dollars behind it, and it’s certainly paved the way to the outstanding quality of standalone HMDs that are on offer today. However, it killed the initiative for PCVR hardware with the non-consolation that Meta, Pico, and HTC offer “Link mode” on all their headsets and it’s iffy on good days, which makes B2B PCVR very difficult to facilitate without some serious legwork on lowering latency over the air connections. Would that we could revive the Rift S, that headset was perfect for our needs.
I recently discovered the excellent suite of Affinity Photo, Publisher and Designer. Not open source, but very good and they sell them at a reasonable price with no subscription. Seemed pretty ideal. Then a week or two ago they sent out an email saying they had been bought by Canva. I kind of hate Canva because it functions like one big infuriating ad for their subscription service. They promised Affinity would not change, but I have never known such promises to be kept after an acquisition. It’s pretty disappointing.
'Member before publicly traded companies? We had dudes like Rockefeller and Carnegie. Company towns, rats in the sausage, kids getting caught in giant cogs…
No, it’s not because they’re publicly traded. It’s because people like money, and if they have enough they can pay to not look at the side effects of getting it - whether that’s dead kids or just no privacy and bad content.
You dont have those things not happen any more because of the stock market, you dont have to endure those things any more because regulations prevent it.
I can guarantee you 100% that if corporations could use child labor again, or dump rats in a meat grinder and sell it, they would in a heartbeat.
Yep. No disagreement.
OP was asking whether public trading causes shitty business behavior.
Ah fair enough, that makes more sense then. Read it as an argument for the free market
It wasn’t, although it wasn’t an argument against per se either. Both were/are markets.
What actually needs to happen with internet enshittification is probably some kind of regulation. People just don’t understand the magic boxes well enough to not fall prey. The EU is on it, at least. With Boeing, probably the Enron formula. We’ll see how many accidents it takes to create movement on that, considering it’s a company that makes the big banks look disposable by comparison.
While I think shareholders can be a driving factor, I see it way more often with VC-funded companies. The “2.5x year over year” growth mantra that places like YCombinator stipulate have disastrous effects on small tech companies. Often, these startups have an incentive to keep taking additional funding rounds, which appears to tighten the grip the VC has over them.
Try growing the next Microsoft or Google or Amazon out of that model. I’m not convinced that it’s possible. At least if you bootstrap your own company, you don’t have the same binding obligations…even if it takes way longer to get to a place that’s self-sustaining.
IIRC most successful VCs invest very early and get out often early-ish too. The real enshittification that dangers the actual position of the company often happen much later. At that point the company is traded publicly and there’s a large anonymous body of shareholders - they only care about profits. VCs are actually a little smarter and care about longer time frames as in that early stage often much larger (relative) growth rates are possible.
At a late stage (think Google, Twitter, Facebook, Reddit etc today) growth is much more difficult. How could Google grow today? They’ve saturated the search market years ago. So the only way of making more money is by sucking more money out of their existing user base. And they absolutely need to do it, as there’s huge pressure on the managerial class to do it, because the shareholders demand it. If the managerial class doesn’t do this (because often some older idealistic people know it would compromise the quality of the product), or they aren’t capable of doing it - they will get replaced by people who are more willing or capable - even if it’s detrimental for the company when viewed longer-term. VCs i would argue care all about profits, “but”. (they are smart enough to see the big picture. They are also small enough or “few enough” that they can communicate among themselves in order to agree on a more wise plan. That’s why they often get out once most of the possible (easy) growth has been achieved. They either know that now growth is much more difficult, or that the company’s value is much more stagnant - ow might decrease even. They can get out and invest their money in other more promising endeavours.
The shareholders of large publicly traded companies are not that coordinated as they cannot really agree on anything other than just “growth”. More sophisticated strategies would have to be negotiated (and communicated) among thousands. The only unifying bond among shareholders is that they want profits. Think about it: many shareholders often don’t even know what companies they own as they are often part of other investment packages. Maybe you’re retirement plan has invested in stocks of 50 different companies, or 10 different fonds that have invested in others still. That is a form of dilution (?). It’s very difficult to communicate any strategy more sophisticated than “profits”. (a side effect is also that many people have invested indirectly or wothout knowing in endeavours that make their life more shitty/expensive when they retire - without knowing it.) There isn’t enough nuance in the wants of the masses as to want any more sophisticated strategy than simply “growth”. That’s why only short term growth can be thought.
Of course sometimes also large companies can grow 2.5x or something like that. But it’s rare and takes more time. The exception makes the rule here. Early stage growth that VCs bank on is much more explosive i think. More like 10x or 100x.
EDIT: sorry i typed this on mobile and it shows.
Publicly-traded companies are required (by law, I think) to maximize profits for their shareholders,
The is not true, stop spreading misinformation
They may not have to maximise profits but the shareholders will question every decision that doesn’t maximise profits so the result is the same. That’s why activist investors that push companies to more ethical behaviour are important.
They may not have to maximise profits but the shareholders will question every decision that doesn’t maximise profits so the result is the same.
If that were true, we wouldn’t see the obscene salaries of C-suite level execs skyrocket… That money cuts into the profits as well, you know?
They are ok squeezing their workers while giving themselves the sweet life on the company’s dime
That’s why activist investors that push companies to more ethical behaviour are important.
This is a fairy tale force, like Santa or the boogie man. You’ll never get ethical behavior from profit seeking entities
Some false premises in this thread — corporations are not required to maximize profits. Even if maximizing profit was mandatory, this is a pretty subjective topic — is short term profit while pissing off your customers “maximizing profit,” or is sacrificing short term gains for long term customer loyalty “maximizing profit”? It’s not a rhetorical question, and I think you can find examples of both.
Corporations are also not all pursuing endless growth; in addition to “growth stocks” there are “dividend stocks.” Some companies aren’t aggressively pursuing growth, but are making profit, and the stock reflects this. It feels almost antiquated in the “to the moon” era, but these companies do exist.
This is like the “there are some responsible assault rifle owners” argument. Although corporations are not required by law to maximize investor returns, CEO “compensation” is often tied to “performance” so the incentives of those with the most decision power make it de facto required to maximize returns to investors. That’s why Musk needed to convince his board of directors (who are there to represent the best interests of the share holders) to approve some ridiculous pay package. His “performance” in their eyes is proportional to share holder profits so if they’re happy, he gets his absurd pay package, which is why his incentive is to maximize profits for shareholders by any means necessary.
Corporations are inherently the vehicle of non-mutually-beneficial capitalist profit-seeking. They cannot really be anything else. That’s what differentiates them from e.g. a profitable ‘mom-and-pop’ grocer.
The purpose of incorporating as a business is to limit liability by separating the assets and incomes from the owners and investors, in order to allow profits to be gained without actually engaging in a good-faith exchange with prospective business partners/customers (since corporate bankruptcy limits their ability to recoup losses from the individuals running the business).
Weapons are a means to do harm, but they are not something that the mere ownership of implies a threat from; most people do not being their guns everywhere. If they do bring it somewhere, that indicates an adversarial stance towards the place or persons who they’re meeting. Put another way, “gun ownership” is very different than “having a gun present at all times with which you could threaten someone”.
Corporations, on the other hand, are at all times and in all business dealings leveling that threat of one-sided liability/risk, because it is intrinsic to them as corporations. You can own a gun without threatening to shoot anyone with it. You can’t operate a corporation without threatening to evade rightful liability.
So it’s possible to be a “responsible assault rifle owner”, but it’s not possible to be a non-exploitative corporation.
