I received an email recently that challenged my worldview. The reader brought up "enshittification." It is a term coined by Cory Doctorow to describe how platforms die. First they are good to their users. Then they abuse their users to make things better for their business customers. Finally they abuse those business customers to claw back all the value for themselves. Then they die.

The reader asked me a simple question. If I believe in the free market, how do I answer for this? It seems like the natural evolution of every digital product is to turn into a "digital drug" where the quality drops but the addiction remains.

Peter Thiel once famously said that "competition is for losers." He was right. The goal of every business is to become a monopoly. If you have no competitors, you can degrade your product, raise your prices, and treat your customers like cattle. That is the capitalist dream.

But dreaming about a monopoly and keeping one are two very different things.

In a functioning market, "enshittification" is a suicide note. If a bakery starts using sawdust instead of flour to save money, they create a massive financial incentive for the guy across the street to open a shop that sells real bread. If a platform fills your feed with ads and tracks your location, they create a vacuum for a competitor to offer privacy.

So why doesn't that happen? Why do these tech giants get to degrade their products without consequence?

Because they have a moat. And if you look closely at that moat, you will see it isn't made of market innovation. It is made of government paper.

The Intellectual Property Trap

The reader mentioned mobile games evolving into addiction machines. They are right. But ask yourself why the market hasn't solved it. Why doesn't a competitor just clone the game, strip out the predatory microtransactions, and sell the "clean" version for a flat five dollar fee?

Because they would be sued into oblivion.

Copyright and patent laws are not property rights. They are government grants of monopoly. They are the state explicitly making it illegal for you to compete. When a company uses IP law to stop a competitor from offering a better version of their software, the "dependency" isn't being enforced by the market. It is being enforced by the state's threat of violence against anyone who touches the code, or anything "too" similar.

We see the same dynamic in the physical world. The reader asked about private roads and the fear that an owner might destroy the competition.

History actually shows us the opposite. General Motors didn't destroy the electric streetcar in a fair fight. They didn't win because consumers hated trains. They won because they used municipal franchise monopolies and massive federal highway subsidies to dismantle the rail network.

The government put its thumb on the scale. It used zoning laws and eminent domain to block the alternatives.

The Only Way Out

The incentive to optimize for quality only exists when you cannot force dependency.

If I cannot ban my competitors using IP laws, and I cannot block their construction using zoning boards, and I cannot get a bailout when I fail, I have only one option left to keep you as a customer. I have to actually be better than the other guy.

The Left looks at the degradation of the internet and blames capitalism. They think the solution is to use the state to break up these companies. They are wrong. The state is the weapon these companies used to kill their competition in the first place.

You want to stop enshittification? Stop building the moats. Abolish the intellectual property laws that make competition illegal.

If we stop protecting these monopolies from the consequences of their own greed, the market will punish them faster than any regulator ever could.