Over Christmas, when people are not paying attention, the oligarchs have been busy updating their terms of services. These are “agreements” you must accept in order to use their service, which in most cases is a monopoly. In those rare cases when there is more than one supplier of the service, they work together in order to have identical terms of service agreements. The terms of service agreement is slowly becoming the constitutional order of the country.
One of the noteworthy changes comes from Amazon, which announced they would start packing ads into their video content. Until now, subscribers to their service did not get ads in video and audio content as they paid an annual fee. Now Amazon Prime users will get to pay the annual fee and get to see ads in their content. No doubt that for this additional service, Amazon plans to raise their annual fee in 2024. After all, it costs money to pack those ads in your content.
This is a familiar pattern. Cable television came with the promise that in exchange for a monthly fee you would not get ads. That remains somewhat true for premium services, like HBO, but with the end of over-the-air television, all of the ad-based channels are on a pay-for-view services now with their ads. If you want video content you pay for a service like Hulu or Apple TV so you can watch the content you used to have on your cable service, with all of the ads.
Sporting events are now ad platforms where a small portion of the presentation is the game you are trying to watch. An American football game is officially one hour, but with stoppages it lasts about ninety minutes. With ads and long breaks for proselytizing about the latest thing, the games take over three hours. Even the calling of the games is now packed with ads and lectures. “This description of what just happened is brought to you by our good friends at Pfizer” is a real thing now.
It is not just video content where we see this. It used to be that stadiums were named after a local famous person or the place where they were built. Maybe the owner of the thing named it for himself. Now they all have stupid names for fly-by-night companies that disappear once the suckers get wise. Three Rivers Stadium in Pittsburgh is now something called Acrisure Stadium. According to the company, “Acrisure is a fast-growing fintech leader that operates a global insurance broker.”
This tendency to tax you this way, and it is a tax, will soon be into every nook and cranny of your life if you let it. Agree to a lease on a new car and the entertainment system will soon require you to watch a video ad or take some sort of survey before you can start the car. When the car makers transition to options as a service, they will come with ads you must endure to use them. Turn on the heated seats in winter and you will be hit with ads for the latest sexual dysfunction drugs.
The people on the other end defend this dynamic on the grounds that their costs go up, so they have to find new ways to generate revenue. Amazon could keep it honest and raise their annual fee or separate it from the bundle of services they call Prime, but that would risk information symmetry. Their users could then decide if the fee is worth the content, rather than thinking about the free shipping or other stuff. Packing in ads muddies the waters and thus makes the user easier to fleece.
That is why it is best to think of the service economy as a tax economy, rather than a traditional marketplace. Like the government, these firms are deliberately entangling you in their service so they can take a little here and little there. Government is a protection service that is always adding fees, levies, and new taxes to the cost of the service in the same way we see with technology services. Like government, these services always first seek to be a monopoly.
Of course, this is why governments are supposed to prevent monopolies and oligopolies like we see today. Part of the protection racket that is government is to prevent privateers from preying on the people. It used to be that these terms of service agreements were limited by the courts. The one-way contract was always assumed to be the powerful preying on the weak, so the courts stepped in on the side of the weak to make sure the deal was fair. That no longer happens in America.
Putting all of that aside and just thinking about this process as a form of taxation, the question is why are these taxes rising? Inflation is one possible answer, but this process predates the rise in inflation. For a long time, they said we had low inflation, under two percent most years, yet the system is flooded with new taxes and new ways to tax people through new methods. Fifty years ago, ads were easily avoided, but today it is nearly impossible to live an ad-free life.
One way to start thinking about this is to look at the government in terms of per capita spending in constant dollars. Fifty years ago, the federal government accounted for about $4,500 per person. Today it is $20,000. Again, this is in constant dollars, so expansion of the money supply is included. That extra government comes with secondary and tertiary costs. It means millions of pages in new rules, which means millions of new expenses for complying with those rules.
Then you have the cultural effects. All of these new fads that are religiously enforced by these massive corporations are not free. It cost money to rearrange all of the video services to promote black content during the George Floyd campaign. It cost InBev real money to associate their brand with pedophiles. In other words, the cultural revolution as currently fought by the managerial system is packed with hidden costs and those hidden costs and paid for by thousands of hidden taxes.
When you start to think of these small changes cumulatively, they point to an inherent defect of the managerial system. The point of the system is to expand control of society which means ever expanding costs. This starts to crowd out other things, productive things like making stuff in factories. This requires new ways of raising revenue, which brings its own costs. Most importantly, the raison d’être of the system needs constant maintenance, which explains the culture war.
In other words, managerialism slowly crowds out the productive elements of society in favor of those that serve the system. This means the cost of the system grows while the effective tax base shrinks. Before long you end up with a society in which everyone is spending their productive hours either watching ads for penis pills or producing new ways to force people to watch ads for penis pills. At some point it must reach a crisis where the costs exceed the ability to tax.
In the small scale this happened in many American cities in the middle of the last century with the first waves of the cultural revolution. Progressive governments shifted from providing protection to social experimentation. This led to chaos, so business and taxpayers moved out of the cities. The shrinking tax base meant the only choices were to roll back the experiments or raise tax rates. They always chose the latter, so taxpayers continued to feel until many cities were insolvent.
What we are seeing now is those city experiments conducted on a continent sized country, enlisting the oligarchical power of corporations. The result must be the same as you cannot have an economy based on people lecturing one another on the latest thing any more than you can have an economy based on protecting people from muggers and drug dealers unleashed by the state. Just like the cities, the country will reach a point at which everyone agrees it is ungovernable.
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