In their new book, Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We’ll Win Them Back (Beacon, 2022), Rebecca Giblin and Cory Doctorow explain how big market players squeeze creators and consumers through monopoly and monopsony — and outline a way to break free from their grasp.

Coauthor Cory Doctorow recently spoke to David Moscrop for Jacobin and discussed Chokepoint Capitalism, Doctorow’s anti-capitalist oeuvre, what chokepoint capitalism means for creators and consumers, its prevalence in the cultural industries, and how to fight against it.

The inescapable tollbooth

David Moscrop: I want to start with your book Chokepoint Capitalism and the concept behind it. What is “chokepoint capitalism,” and what distinguishes it from market monopoly or oligopoly?

Cory Doctorow: Well, chokepoint capitalism is about the other side of monopoly — it’s about monopsony. The corporate doctrine for the last forty years, and the state doctrine for the last forty years, has been that monopolies are okay provided they’re not raising prices on consumers. So, monopolists have figured out how to corral audiences or consumers within a walled garden — that’s made partially out of laws and partially out of technology — to make it hard for you to reach them as a creator or as someone who wants to bring something to market without going through them.

That is the chokepoint. And at that chokepoint, they extract from you whatever it is that you have to bargain with. This is the answer, we think, to the forty-years-long question, which is “Why do we keep making copyright bigger?” Why have we seen ever-longer terms, more subject matter, easier victories, higher statutory damages?

The entertainment industry is getting bigger and more profitable, and yet the share of income going to creators, both in real terms and proportionately, has just declined steadily over that same period. It’s because you have to go through a chokepoint with your copyrights in order to reach the audience. And whatever the person operating that chokepoint wants, you have to surrender if you want to reach that audience, including whatever copyrights you have.

There’s a good example in the book of how the extraordinary collections of long-lived copyrights in music that the three big labels have — Sony, UMG, and Warner — meant that when Spotify wanted to start, they could only do so with permission from those three companies, which gave them the power to bargain for whatever they wanted. They took big ownership stakes in Spotify. Then, they came up with arrangements for royalties that allowed them to get guaranteed monthly payments — a large portion of which they wouldn’t have to pay to any artist — and to suppress the price per stream so that the 30 percent of the market that they didn’t control would get so little from Spotify that they wouldn’t be able to make any money or grow or challenge them. This is a really classic example of how chokepoints ensure that whatever alienable right you give to workers will be taken away if the workers can’t take their labor to more than one place.

MEGO: “My Eyes Glaze Over”

David Moscrop: You discuss several examples in the book, and you’ve just given one. Do any others stand out as particularly egregious? They all seem egregious to me. But when you were doing the research, was there anything that stood out as like, “My God, the whole thing is perverse, but this is particularly perverse”?

Cory Doctorow: They’re all pretty bad. The thing about these accounting scams is that they are what the finance industry calls MEGO propositions. “MEGO” stands for “My Eyes Glaze Over.” You build a financial instrument or arrangement that is complicated, so it’ll be hard to understand, and then you tell people that it’s hard to understand because it’s complicated. And it’s just a way of baffling people with bullshit.

In the first half of the book, we just use examples from different industries as exemplary of how these different accounting scams work and unwind them, one after another, in what we hope is a kind of entertaining John Oliver way. The second half of the book we devote to technical solutions. In that first half of the book, we do have some eyewatering examples of theft.

We can stick with Spotify because it’s pretty wild and pretty MEGO as well. Spotify gave giant ownership stakes to the three major labels. That meant that the better Spotify’s cost basis looked on paper, the bigger the pop would be when they had their IPO, and the more those label shares would be worth. And so, the labels said, “We would like a very low per stream rate,” which means that the inputs for Spotify are now artificially cheaper, right? They’re less than they would normally cost because the streams are less than they would be if they were sort of bargaining on the open market.

[The labels are saying,] “We will take a low cost per stream, but we want a guaranteed minimum monthly payout from you.” Sony may be getting $30 million a month from Spotify, but because the price per stream is so low, only $15 million a month is attributable to the streams that were played.

If you add up all the streams and multiply them by the fraction — the penny per stream — it only comes out to $15 million. What that means is that the other $15 million is unattributed royalties. And Sony can keep these; they can give them to one artist, they can give them to all the artists. They can do whatever they want with them.

This scenario also allowed the big three labels to come up with this arrangement where the way streaming royalties are distributed doesn’t comport with the way most people think their payments will be turned into royalties. Say you have this favorite high school band, the Honey Roasted Landlords. Every day, for ten hours a day, you just stream that band, meaning you’ve given Spotify fifteen bucks that month. You might think that Spotify takes whatever share it takes out of that $15 and sends the rest to the Honey Roasted Landlords’ label, and that the Honey Roasted Landlords get the rest of it, or most of it minus whatever the label cuts out for themselves.

That’s not how it works at all. What happens instead is Sony or UMG or Warner takes all the money they’ve been remitted by Spotify, and then they divide the attributable portion of those royalties by the number of streams that each artist has had. That means that even if you listen to only the Honey Roasted Landlords, nearly all the money that Spotify passes on to their label goes to Kanye West. It doesn’t go to them — it goes to some other giant star. That’s another piece of the scam.

David Moscrop: What’s the net effect of chokepoint capitalism, particularly in the arts and culture sector? Is it suppressing creativity? Is it forcing artists to work hand to mouth? Is it suppressing labor rights?

Cory Doctorow: Yes to all of the above. On top of it, because the phenomenon is so poorly understood, you have creators who are increasingly in dire straits, whose share of income has declined and who are looking for an explanation out there in the world. And many of them, unfortunately, have been convinced that the problem is that the noble big entertainment companies are being ripped off by the wicked tech companies.

By the same token, there’s a kind of new generation of creators who’ve been told that the venal, old, creaking, antiquated entertainment companies are bullying the poor, innovative wonderful tech companies. We’re being asked to cheer for the one of two giants who are locked in a death match. And the hope is that, if we pick the right giant to back, it’ll reward our loyalty by dribbling a few crumbs for the ones who cheered it on.

What that means is that you end up getting policies that are favorable to these very large monopolists but not favorable to creators. Because although the monopolists are good at lobbying, the thing that makes them especially good at lobbying is the people who show up, who have some credibility, who say, “You should give this corporation what it’s asking for, because that will help me.”

“Unauthorised bread”

David Moscrop: Your politics and your critiques of technology and the market persist throughout your fiction, nonfiction, and activism. In reading Chokepoint Capitalism or How to Destroy Surveillance Capitalism, one picks up on themes that appear in the Little Brother world, in Walkaway, in the short story collection Radicalized. I want to get into some of those themes here, starting with the short story “Unauthorized Bread,” which is about proprietary technology. Does chokepoint capitalism intersect with the rise and proliferation of proprietary tech?

Cory Doctorow: Well, there’s this debate within the techno left, I guess you’d call it, about the term “intellectual property.” It’s generally frowned upon. We’re told not to use it because it’s a kind of sleight of hand. If you can call these regulatory monopolies’ copyrights “property,” then you can make them kind of a sacrament of the official religion of Western capitalism — and therefore inviolate.

The term “intellectual property” muddies more than it illuminates, because it’s not clear whether you’re talking about trademarks or copyrights or patents or, you know, some of the neighboring rights — like anti-circumvention and database rights and nondisclosure and noncompete rights — all these things that are arguably intellectual property. But a few years ago, I had this realization that the colloquial business use of the phrase “intellectual property” actually has an extremely crisp and well-defined meaning. And that is that intellectual property is anything that I can use to reach beyond the perimeter of my firm and exert control over my competitors, my customers, and my critics. Every day I find new examples of that going on.

Adobe’s software-as-a-service platform has just announced that from now on — unless you pay an extra $21 a month — all the Pantone colors in your Photoshop files, even ones that you made twenty years ago, are just going to be rendered as black. This is a way to control how your customers behave. It’s a way to force your customers to do something else. And if you want to clone the Adobe Creative Suite — if you want to add your own plug-in to the Creative Suite through reverse engineering that allows you to render those colors — again, all of that stuff is off limits.

A competitor who wanted to come in and say, “Go on using Creative Suite, but instead of $21 a month for five bucks, we’ll sell you a plug-in that recolors those pixels they’ve turned black,” that would be a terms-of-service violation. It would probably be an anti-circumvention violation. It might be a copyright violation. All of those violations would sort of stack up and immobilize potential competition. It’s a way of controlling both customers and competitors. This is a long way of introducing “Unauthorized Bread,” which is really about the use of digital rights management technology to control how you use your oven, your toaster, your dishwasher, the elevator in your building, and so on: a means to exert control.

The locus of that control seems technological, right? I’ve built a little technological lock, and it stops you from putting the bread of your choice into your toaster. But what really stops you from putting the bread of your choice into that toaster is the law. The law says if you reverse engineer this because it’s got digital rights management, you violate the Digital Millennium Copyright Act of 1998, whose Section 1201 provides for a five-year prison sentence and a $500,000 fine for first offense for reverse engineering digital rights management.

Surveillance capitalism and Big Tech lies

David Moscrop: We’re painting a bit of a capitalist hellscape portrait here, supported by a legal structure that tends to accompany neoliberal politics. I want to flesh out the next element of that, surveillance capitalism, which is something that you study and write about. I think when people hear it, they have a sense of “Oh, I think I know what that is.” But it’s a bit amorphous. So, what is surveillance capitalism?

Cory Doctorow: It depends on who you ask, because I think the foremost proponents of the theory of surveillance capitalism don’t agree with my views. Those would be people like Shoshana Zuboff. To give you the best version of Zuboff’s argument [is to state] that markets are incredible allocators, that they aggregate all of the decisions that we make about what we’re willing to buy and what we aren’t willing to buy and at what price. They create these efficient systems where signals are given to producers who either lay on more production or draw down production based on the market’s signals. Then, in the end, you get the best possible of all distributions.

But the surveillance platforms use Big Data to manipulate us so that we’re not really making decisions anymore. The decisions are being made for us. The combination of longitudinal, very deep dossiers on your preferences that the platforms have nonconsensually compiled — with algorithms that figure out how to use psychological trickery — means that instead of making decisions, you’re being handed decisions. And in this scenario, capitalism — the price signals — breaks down.

I don’t think that’s true. And I don’t think it’s true first because I am just skeptical of the core underlying claims: the first being that markets are efficient allocators but the second one, and I think more controversial, is that the Big Tech platforms have figured out how to bypass our cognitive faculties — that somehow Big Data has become a mind-control ray.

The foremost proponent of the claim that Big Tech can manipulate your behavior is Big Tech. And the place that you find that claim is in its marketing literature. Because after all, when you’re selling ads to advertisers you need to convince those advertisers that they should pay a premium to advertise on your platform because you have some unique special advantage. The special advantage that tech platforms advertise is this psychological manipulation.

Now, the Big Tech platforms lie about everything. This is an area where I think everyone who talks about surveillance capitalism absolutely agrees. They lie about how they treat their workers. They lie about where they realize their income for tax purposes. They lie about how they will conduct themselves after engaging in anticompetitive mergers. They lie about which data they collect. They lie about how they use that data. They always lie. So, it would be remarkable if the one time they were telling the truth is when they were boasting about how great their products were.At the same time, everybody’s who’s ever claimed to have figured out how to do mind control was a bullshit artist or deluded or both. Rasputin, Mesmer, MK Ultra, pickup artists — doesn’t matter. They’re all terrible people. They’re all people who dream of taking away other people’s free will. But none of them did it.

The CIA did destroy people by dosing them with lots and lots of hallucinogens. It didn’t brainwash them. It wasn’t The Manchurian Candidate. It poisoned them. It’s quite different. And the psychological research that purports to form the technical basis for the claims about mind control is not great. It’s stuff from the replication crisis. It’s kind of warmed over Skinnerianism — behaviorism — which is not really a dominant theory in psychology today.

So, the parsimonious explanation for what’s going on with Big Tech is that it’s lying about their mind-control claims. When we see people who believe outlandish things — who find them through Big Tech — we can turn to material explanations. Why do people believe outlandish things about institutions? Like vaccines don’t work — and the medical authorities that are supposed to regulate them don’t give a shit about them and allow giant companies to dominate them and capture them and sell products that are unsafe. That part’s true, right? Vaccines do work, but the part where the regulators are captured by the firms they’re supposed to be regulating? They have allowed incredibly ghastly, awful things to come to pass — because they were asleep at the switch.

Look at the opioid epidemic. It was grounded in this junk science, this thing called the Jick Letter, where in the 1980s a doctor at Boston University, Dr Jick sent a letter to the New England Journal of Medicine. It was five sentences long. It said, “We’re treating people postoperatively and palliatively with opioids at higher doses than we’d historically used, and we’re not seeing the degree of addiction that we anticipated.” From that it became the most cited work in the history of the New England Journal of Medicine. And from that, the Sackler family built up this edifice of junk science that said doctors should prescribe opioids and keep prescribing them and keep people on them for very long periods of time.

The Food and Drug Administration and other medical regulators around the world sat by and let it happen. And now a million people have died in the opioid epidemic in the United States alone. And, so, it’s not unreasonable to say, “I don’t trust institutions.”

When you don’t trust institutions, and when you don’t have the individual expertise to evaluate technical claims about vaccines or aviation safety or education or what have you, you’re just kind of left in this epistemological void. Or you have to find people who seem like they know what they’re talking about and who say things that you otherwise agree with. These people tend to be charming and charismatic, and you end up latching on to whatever it is they say.

I think that explains an awful lot about the rise of conspiratorialism. It doesn’t require that we believe in this kind of metaphysical loss of free will arising from Big Data manipulation, which is not to say that privacy isn’t hugely important. It really is. And the tech firms should be held to account for their invasions of our privacy. But they should be held to account for the invasions of our privacy because of the way that invading our privacy violates our human rights, not because mind control is taking away our free will.

Coordinating socialism

David Moscrop: I want to get into Walkaway because that book has stayed with me. Walkaway is premised on a postscarcity world. I often say that our primary economic problem today isn’t scarcity, it’s the distribution of abundance. In some sense, we’re in the Walkaway world now. How do firms condition the distribution of abundance?

Cory Doctorow: You’re right that Walkaway is about scarcity, but I think, more to the point, it’s about coordination, which gets to your question about distribution. The motif of digital technology is that it makes it cheaper to find people and that it makes it cheaper to coordinate your work with people. And this is where Ronald Coase really had the right end of the stick when he wrote the theory of the firm — that the reason we build institutions is to allow us to coordinate our labor, because when we can coordinate our labor and do joint projects, we can become superhuman, right? Two people can do more than one person can. That is literal superhuman capacity — beyond the capacity of one human. But for every person that you add to a project, you need to add more meetings and overhead and administration, and it is very hard to keep all that coordination going.

Without some kind of underlying technological substrate, eventually you can get to a point where adding more people makes things slower, not faster. It reduces your superhuman capacity. And that’s why we create religions and political parties and governments and corporations and bowling leagues. Imagine organizing bowling games without a bowling league. You would have to do a lot of last-minute phone calls, right? The institution is what makes it possible to coordinate.

What the internet has done for forty years is eroded the cost of coordination. We can now build encyclopedias with the kind of overhead that we used to devote to really ambitious bake sales. It’s pretty amazing. When you think about what it’s done for mass movements and political protest, it’s likewise amazing.

So, with Walkaway, I said to myself, “Well, what if we could use technology to solve even more ambitious coordination problems?” What if we could build buildings, skyscrapers, or luxury resorts with the kind of organizational overhead that we currently have for, say, Wikipedia? What if we could build a space program the way that we build the CANoe Linux operating system? That was the underlying prompt for Walkaway.

The thing that coordination gets you in Walkaway is what the Seriously Wrong podcast out in British Columbia calls library socialism. You can’t solve the problem of abundance and material wealth by trying to give everyone one of everything — that is actually no solution at all, because it imposes on everyone the duty to organize and store and maintain everything. Instead, you could have a scenario where there are goods that are better than you would ever buy on your own but that are held collectively through a public institution that’s digitally connected. This digital connection knows where the good is at all times, so you can always find it and measure how it’s used so it can be made better.

That means that rather than, for example, having a drawer at home that has the minimum viable drill for those two times a year you need to make a hole in your wall, you’ve got this drill that would put the most amazing professional drill to shame that’s never more than five minutes away. You don’t have to remember what drawer you put it in, and it’s a delight to use. And when you’re done, you put it somewhere, and then the next person who needs it comes and rings your doorbell or gets it from wherever you’ve dropped it off.

That’s a far more abundant future than the one we have now. It’s not one that requires more material than we have now. In fact, it requires substantially less material than we have now. It puts us in a position where we can have more with less.

This is an area where I tend to side with people like Leigh Phillips — who wrote Austerity Ecology and the Collapse-Porn Addicts and cowrote The People’s Republic of Walmart — that the project of the Promethean left is one of material and technical abundance. It doesn’t require that we just give one of each thing to each person. Rather, it says that we use superior coordinated technology and solidarity to create a world of abundance beyond our greatest imagining.

Outmaneuvering Uber with automation

David Moscrop: As Michel Foucault says, wherever there’s power, there’s resistance. Sometimes, critiques of capital and tech oligopoly and monopoly make it seem like these folks are not just pervasive but invincible. But they’re not. There’s resistance, there’s pushback, there’s possibility. You’ve talked about some examples already. Are there any groups or individuals or strategies or tactics that stand out to you right now as particularly effective and inspiring?

Cory Doctorow: We tell this story in the book about Uber drivers, and it’s interesting because Uber drivers are also in a chokepoint capitalist market. There are riders who want rides, and there are drivers who want to give rides. And then, in the middle, there’s this rent seeker, and there’s no way for drivers to reach riders without passing through the chokepoint that Uber has erected for itself. And they are the most atomized and vulnerable workers imaginable. They’re not even supposed to have any way to meet each other, let alone talk to each other or coordinate holistic action.

In California, these workers who are so atomized and so divided were forced by their contracts to sign off on something called binding arbitration. That means that if Uber steals from you, you’re not allowed to sue them. You can only go to an arbitrator, who’s a fake, corporate judge — someone who’s paid by Uber to decide whether Uber is guilty of screwing you over. Even if you convince them that Uber is screwing over workers — and statistically, it’s far more likely with these arbitrations that they find in favor of their paymasters than they do in in favor of the people their paymasters are said to have wronged — it’s administrative. It has no evidentiary value. There’s no precedent. The next person who comes along can’t cite your case in order to win theirs. This is all of great advantage to Uber, who immediately set about stealing wages from their drivers.

The drivers came together with technologists and a law firm and figured out how to automate arbitration claims. Now, for each arbitration claim the rewards that can be awarded to damaged parties are much smaller than you would get out of any courtroom. You’re not going to get punitive damages and so on. But they’re actually pretty expensive administratively. It costs a couple thousand dollars to pay the arbitrator to hear the case.Thousands and thousands of Uber drivers all filed arbitration claims at once. In aggregate, the cost of paying the arbitrators, even if Uber won every one of those cases, would exceed the amount that they would have to pay if the drivers could just bring a straightforward class-action suit. And Uber, in an amazing turn, had to go to court and say, “Your honor, what kind of idiot would think that these binding arbitration clauses could possibly be enforceable? This is clearly unreasonable. It had no business being in his contract.”

They ended up paying the Uber drivers $150 million. This is the power of solidarity, even among these atomized workers. Solidarity combined with technology, combined with ingenuity, combined with coordination.

In the last chapter of the book, we cite the work of James Boyle, who’s a copyright scholar who runs the Center for the Public Domain with Jennifer Jenkins at Duke University. James talks about the origin of the term “ecology,” and he says that before the term ecology was coined or became widely used, it was not really clear how different issues connected to one another. If you care about owls and I care about the ozone layer, is it really obvious that your charismatic nocturnal avians are on the same plane as my concern about the gaseous composition of the upper atmosphere? But the terminology turned a thousand issues into one movement.

Monopoly and monopsony harm many different constituencies. There were thirty professional wrestling leagues, right? Now, there’s one, and the Trumpist billionaire who owns it reclassified all his workers as contractors and took away their medical insurance, and now they’re all begging for pennies on GoFundMe so they can die of their work-related injuries with dignity in their fifties. There’s only one cheerleading league, and it’s the only game in town, which is why parents continue to let their kids compete in it, even though there were louder and more urgent whispers about a sex abuse scandal that was finally breached and is ghastlier than anyone could have imagined.

There are three giant companies that do all the world’s shipping. For years, people have been saying, “Hey, you do get these economies of scale for making the ships bigger, but aren’t you worried that eventually one of them is gonna get stuck in the Suez Canal?” Only to be told, “Go fuck yourself. What do you know about shipping?”

Whether it’s pharma, finance, beer, athletic shoes, eyeglasses — every one of these is controlled by a cartel or an oligopoly or an oligopsony. In every circumstance, they’re hurting workers and customers and eroding our ability to make good policy. Because when there’s only three or four companies in a sector and it’s time to regulate them, it’s pretty easy for them to come together and come up with a common position and say, “Look, anything except this would mean the death of our industry.”

We need to figure out how to turn anger about all of these seemingly different issues into one movement. If we can figure out how to get people to recognize that they’re not angry about running shoes or cheerleading or professional wrestling or beer or eyeglasses — what they’re actually angry about is capitalist monopoly, and what they actually want is pluralism — then we have the basis for a mass movement that really can make political change.

This article was originally published on Jacobin.