A profoundly stupid case about video game cheating could transform adblocking into a copyright infringement
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I’m coming toDEFCON! On Aug 9, I’m emceeing theEFF POKER TOURNAMENT(noon at the Horseshoe Poker Room), and appearing on theBRICKED AND ABANDONEDpanel (5PM, LVCC - L1 - HW1–11–01). On Aug 10, I’m giving a keynote called “DISENSHITTIFY OR DIE!How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses’ insatiable horniness for enshittification” (noon, LVCC - L1 - HW1–11–01).
Here’s a weird consequence of our societal shift from capitalism (where riches come from profits) to feudalism (where riches come from rents): increasingly, your rights to your actual property (the physical stuff you own) are trumped by corporations’ metaphorical “intellectual property” claims.
That’s a lot to unpack! Let’s start with a quick primer on profits and rents. Capitalists invest money in buying equipment, then they pay workers
wages to use that equipment to produce goods and services.
Profit is the sum a capitalist takes home from this arrangement: money made from paying workers to do productive things.
Now, rents: “rent” is the money a
rentier makes by
owning a “factor of production”: something the capitalist needs in order to make profits. Capitalists
risk their capital to get profits, but rents are heavily insulated from risk.
For example: a coffee shop owner buys espresso machines, hires baristas, and rents a storefront. If they do well, the landlord can raise their rent, denying them profits and increasing rents. But! If a great new cafe opens across the street and the coffee shop owner goes broke, the landlord is in
great shape, because they now have a vacant storefront they can rent, and they can charge extra for a prime location across the street from the hottest new coffee shop in town.
The “moral philosophers” that today’s self-described capitalists claim to worship – Adam Smith, David Ricardo –
hated rents. For them,
profits were the moral way to get rich, because when capitalists chase profits, they necessarily chase the production of things that people want.
When rentiers chase rents, they do so at the expense of profits. Every dollar a capitalist pays in rent – licenses for IP, rent for a building, etc – is a dollar that can’t be extracted in profit, and then reinvested in the production of more goods and services that society desires.
The “free markets” of Adam Smith weren’t free from
regulation, they were free from
rents.
The moral philosophers’ hatred of rents was really a hatred of
feudalism. The industrial revolution wasn’t merely (or even primarily) the triumph of new machines: rather, it was the triumph of
profits over rent. For the industrial revolution to succeed, the feudal arrangement had to end. Capitalism is incompatible with hereditary lords receiving guaranteed rents from hereditary serfs who are legally obliged to work for them. Capitalism triumphed over feudalism when the serfs were turned off of the land (becoming the “free labor” who went to work in the textile mills) and the land itself was given over to sheep grazing (providing the wool for those same mills).
But that doesn’t mean that the industrial revolution invented profits. Profits were to be found in feudal societies, wherever a wealthy person increased their wealth by investing in machines and hiring workers to use them. The thing that made feudalism
feudal was how conflicts between rents and profits cashed out. For so long as the legal system elevated the claims of rentiers over the claims of capitalists, the society was feudal. Once the legal system gave priority to profit over rent, it became capitalist.
Capitalists hate capitalism. The engine of capitalism is
insecurity. The successful capitalist is like the fastest gun in the old west: there’s always a young gun out there looking to “disrupt” their fortune with a new invention, product, or organizational strategy that “creatively destroys” the successful businesses of the day and replaces them with new ones:
That’s a hard way to live, with your every success serving as a blinking KICK ME sign visible to every ambitious person in the world. Precarity makes people miserable and nuts:
So capitalists universally aspire to become rentiers and investors seek out companies that have a plan to extract rent. This is why Warren Buffett is so priapatic for companies with “moats and walls” – legal privileges and market structures that protect the business from competition and disruption:
Feudal rents were mostly derived from land, but even in the feudal era, the king was known to reward loyal lickspittles with rents over
ideas. The “patents royal” were the legally protected right to decide who could make or do certain things: for example, you might have a patent royal over the production of silver ribbon, and anyone who wanted to make a silver ribbon would have to pay for your permission. If you chose to grant that permission exclusively to one manufacturer, then no one else could make it, and you could charge a license fee to the manufacturer that accounted for nearly all their profit.
Today, rentiers are also interested in land. Bill Gates is the country’s number one landowner, and in many towns, private equity landlords are snappinig up every single family home that hits the market and converting it to a badly maintained slum:
But the 21st Century’s defining source of rent is “IP” – a controversial term that I use here to mean, “Any law or policy that allows a company to exert legal control over its competitors, critics and customers”:
IP is in irreconcilable conflict with real property rights. Think of HP selling you a printer and wanting to decide which ink you use, or John Deere selling you a tractor and wanting to tell you who can fix it. Or, for that matter, Apple selling you a phone and dictating which software you are allowed to install on it.
Think of Unity, a company that makes tools for video-game makers, demanding a royalty from every game that is eventually sold, calling this “shared success”:
Every time one of these conflicts ends with IP’s triumph over real property rights, that is a notch in favor of calling the world we live in now “technofeudalist” rather than “technocapitalist”:
Once you start to think of “IP” as “laws that let me control how other people use their real property,” a lot of the seemingly incoherent fights over IP snap into place. This also goes a long way to explaining how otherwise sensible people can agree on expansions of IP to achieve some short-term goal, irrespective of the spillover harms from such a move. Hard cases make bad law, and hard IP cases make
terrible law.
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