Numlock News
The Numlock Podcast
Numlock Sunday: Ed Zitron on the Rot Economy

Paid episode

The full episode is only available to paid subscribers of Numlock News

Numlock Sunday: Ed Zitron on the Rot Economy

By Walt Hickey

Welcome to the Numlock Sunday edition.

This week I spoke to Ed Zitron, author of the excellent newsletter Where’s Your Ed At.

Ed’s a really incisive voice when it comes to the ways that companies have made their products worse, their user experiences more exploitative, and their business models more unsound than ever in the pursuit of more and more growth regardless of what else happens.

We spoke about consolidation in the tech industry, the growth-at-all-costs economy, and the future of social media.

Zitron can be found at Better Offline and Where’s Your Ed At.

This interview has been condensed and edited.

Ed, thank you so much for coming back on.

My absolute pleasure. I love being on this.

You are one of my favorite newsletter writers. You have Where's Your Ed At, which is just a delightful read, and very incisive, I would say, about a lot of the current state of tech and media and online discourse in general.

But you're coming on today because you have a very cool new project, a show that's coming out soon. Do you want to talk about it?

Yes, I do.

Let's start off talking about that, because when I heard that was coming out, I was very, very excited. What's the idea behind it?

There is a wonderful part of iHeartRadio called Cool Zone Media, run by Sophie Lichterman and Robert Evans. They have a remarkable amount of really cool shows like Code Politics, It Could Happen Here, and so on. They came to me late last year, and they were talking about doing a weekly tech show.

Basically, my newsletter has kind of the voice they've been talking internally about. It's going to be a weekly narrative show called Better Offline, a mixture of interviews and me just talking as I am right now, but a little bit more careful. It's going to be a bit different, but I'm very excited about it.

You dabbled a little bit in audio somewhat recently, is that right?

Yes. During COVID, I bought a really extra mic just for no reason. I think I just wanted something to plug into other things to kind of distract me from the world.

But yes, I've done a lot of podcasting recently. I did a show called 15 Minutes in Hell for a while, which is just 15-minute interviews. That kind of ran its course. Then I found myself with Better Offline happening, and with my day job running a PR firm, and with writing this newsletter; it was a choice of, do I do the thing that is paying me, but also that I really need to focus time on? Because it's a very different beast to do this kind of show.

I feel like 15 Minutes in Hell helped me run up to this. It gave me a bit more broadcast experience, and I really enjoyed doing that. But Better Offline is going to be something entirely different. One of the first episodes is about something called the Rot Economy, based on a newsletter I wrote in February 2023 about how—

A classic, if I may add, but go on.

It's how tech has been ruined by the growth-at-all-costs economy. Your tech products are getting worse so that these people can get richer and monetize the experience that little bit more. Who cares if it sucks?

One of the first episodes is that, and me and Robert Evans going through that. The second is my Vision Pro review, which is going to be something.

Yeah. I want to talk a little bit about your Vision Pro pre-write, “How Tech Outstayed Its Welcome.” I think that you are one of the more incisive voices when it comes to tech, just because I think that you actually try to view it as a business for consumers rather than people who are sending back missives from the future, which I think is sometimes how they see themselves.

What got you interested in the Vision Pro and essentially what it could mean for computing?

My day job, as I mentioned, is running a PR firm. Through that, I kind of see both sides of the coin: I see founders and companies building things and shipping them out and their experiences there, how they describe themselves and how they would want themselves to be described, and then I see that interaction with journalists and how journalists want to cover things.

All in all, I wouldn't say I'm jaded by it, but I've definitely seen a lot more than most. I think that this informs my perspective in being able to say, okay, this is how these businesses are made. This is how the sausage is made. And also, this is why they may be doing things from both sides.

I think this means that — and I realize the term “both sides” can mean many things here — but I think it gives me the perspective to say why they might be doing something beyond just “tech is bad tech.” There is a lot of coverage that’s just, “Tech is bad. They're trying to screw you,” without really having the next step of, are they? Or is this just a misalignment of engineers, plus investors, plus the markets, plus CEOs who oftentimes don't give a rat fuck about the product or the people using it. That battle between actual innovation and value creation, and then how the stock market and how venture capital views value in general.

And I'm a consumer, too. I actually buy this shit. I bought my Vision Pro with my own money. I use tech all the time. I am a tech enthusiast; I genuinely enjoy this stuff.

So my perspective isn't necessarily that everything sucks, though I get why people would come to that conclusion, but it's definitely not breathless hype either. And I guess that's rare? Usually it's one or the other. It's weird.

I want to get to a thing that you write about a little bit in that piece that I've thought a lot about, but before I do that, there's something in what you just said, that there’s this misalignment of engineers who want a thing, project managers who want to get the dollars down, CEOs who don't give a damn — it’s not just tech. That reminds me of a company called Boeing that has recently had that exact same misalignment of interests.

Yeah, which is insane, that that is one of those companies as well. You can't growth-at-all-costs planes. Well, I guess you can — then people might die.

When I wrote “The Rot Economy,” it was very much about tech, but it's become obvious that applies to a lot of the economy in general, which is really upsetting to me because it's not like I want the Rot Economy to exist, but it very much does. And the way that Boeing has handled things, the idea of cost cutting with something like a plane that goes in the sky, is just very upsetting to me indeed.

Yeah. It's one of those things where once you start looking for it, you start seeing it everywhere. I had a book come out in the fall about movies, and one thing that I feel like I've talked a lot about since then is, what is the version of that within media? Is it cranking out Moana 2 and Toy Story 5 and all this instead of actually trusting the innovators on that kind of stuff? It just seems like you've cracked something fundamental about this era of the economy.

Yeah. And when it comes to the media, the answer is affiliate marketing and SEO. Or the pivot to video. I put that in the “How Tech Outstayed Its Welcome” piece, but the media just is run by people that don't read or write.

It drives me insane on an almost daily basis. The Messenger had some really talented people and some colossal fuckwits actually running it. There was what, $3 million in revenue, $2 million of which was taken up by Tweedledee and Tweedledum making $1 million each? You had editors there yelling at people to crank out more stories that were basically the most half-assed version of Business Insider's old aggregation strategy. And it's so frustrating, because there were some great reporters over there. They actually had a good thing, but they spunked it all on real estate and executive salaries.

To really get back to what the Rot Economy means and where this applies so much, it’s a misinterpretation. It really is just conflating scale with success. Bigger is not always better. Indeed, bigger can be so much worse, especially when bigger means you are losing more money than you are spending, which is generally a no-no in the business world (unless you are a publicly traded company, in which case it's good).

But then you get companies like Meta and Google, which make $10 billion and $20 billion of profit in a quarter and still lay off 10,000 people just to show more growth, more growth, always bigger, always bigger. Not better, worse user experience, unhappier employees, laid off employees, but more money, more funny money, just to be clear. It is very upsetting and it upsets me the more I think about it, which is good because I do it a lot.

You now have a show in which you think about it, that people can find on Sirius.

One thing I wanted to talk about in particular was, again, I just think the crux of a lot of this was in that piece you wrote, “How Tech Outstayed Its Welcome.” In 2014, we saw a mass consolidation of the tech industry. You went through a big list of these major acquisitions — Microsoft buying Minecraft, Google buying DeepMind, Facebook buying Oculus, and just all this consolidation.

I think that consolidation is so much of what this puzzle really is. It's the thing that at the end of the day is casting the shadow that is the Rot Economy. I wanted to ask about your point of view, particularly from tech, on just how has consolidation made things worse for people who either consume media or use devices or any of these kinds of services?

There are two kinds of consolidation to think of: consolidation of resources and consolidation of power. In the case of resources, the one where no one really realizes how bad it is is Qualcomm. My mate does PR over there, Sasha. I'm sorry, mate. But Qualcomm, in the mid-2010s, hoovered up most of the audio codec and Bluetooth world. They just own that now, which means that one company has a lot of the power in most wireless tech.

That's never good. But the idea that one of the largest tech companies owns pretty much the only VR company? Not great. The idea that one of the major communication platforms is owned by Meta in WhatsApp? Mojang, the $2.5 billion acquisition of Minecraft — Mojang makes Minecraft by Microsoft — is probably the mildest one of them all. But the worst, of course, is the $500 million for DeepMind by Google.

The problem with all of these resource accumulations is that you don't really get competition. These were all very smart acquisitions. These were really smart. They were quite forward-thinking. Because now, what are you going to do? Compete with Google or Facebook or Qualcomm or Amazon? What are you going to do? No one has been able to compete with Amazon with Twitch, and Twitch sucks. Twitch is terrible. They lay people off. They treat creators like crap, and they can.

Microsoft couldn't even compete with Amazon with Twitch. The result of that is just worse. There's less competition, less interesting things happen. Creators, the ones making these companies the money, make less. They make worse shit, and they have to make it for a worse company.

I mentioned consolidation of power, and I think Meta is the one that is really the worst of those. So much of the news industry is beholden, still is beholden, to Meta and Google, and we are now seeing a media industry destroyed by these companies. So many really good sites — I'm not going to name them because I actually like the people there and I don't want to put too many people on blast — but there are enough really good websites, great places, great journalists who are putting out, “The worst top 11 apps to download.” “When does the Super Bowl start?” “Where can you stream the Super Bowl?” Putting out trash so that they can attract traffic from Google.

So many companies destroyed themselves pivoting to video because Facebook made up these metrics. These companies didn't look and make sure that the traffic was actually good, that it was actually making the money. They just said, “Well, Facebook says the number goes up, so we're going to follow Facebook.”

This consolidation of power is only something that happens as a result of failing to see who the enemy is, and it is fair to see Google and Facebook as the enemy. They do not, and Google especially, does not have the incentive to get you good results anymore, and that's why Google sucks.

It's been very bad. Search has deteriorated in a level that I did not even expect. Adam Rogers, who you've written with at the Business Insider discourse section, was very big on that topic for a while. I was shocked recently how deteriorated it's become.

It’s a result of them not having to bother. I think Google pays Apple, what, $10 billion or $18 billion a year just to keep Google as the exclusive thing on the iPhone, and specifically to stop Apple from creating a search competitor? This is the world we live in.

I realize that there's always going to be stuff like this within capitalism. It is an end result of these things. But the problem is, Google and the markets really are at fault here. Google is incentivized to grow at as much scale as possible, to make as much money off of each user as possible. They don't give a rat fuck if the experience sucks now.

It sucks. Google is bad. You can't even just go to Google and click “News” on certain results now. If you go to Google and want Google News, and you want to actually organize it by date, so you could see, say, the news that happened today versus the news that happened in general, you actually have to do a little trick to make Google do it. It's obscene. It's disgusting. And Sundar Pichai gets paid, what, $280 million a year? Must be nice. Wish I could just mess up at my job every day and have everyone give me a bunch of money. That sounds delightful.

But this is where we are right now. Sometimes I get asked, what do we do about it? And the answer is, I’ve got no goddamn clue.

I think one of the things to do is talk about it. Actually have these conversations on big platforms, and continually put pressure on these companies, so at the very least, regular people are more aware of these problems and why they are happening.

Yeah. I could not agree more, because I have always run up against the wall that there's nothing that one individual actor can do to compel these companies to do it. And it does feel like awareness, like shame is at times the only thing that you can do to mitigate some of this industrial consolidation.

Joanna Stern of the Wall Street Journal is one of the main reasons that Apple changed their mid-2010s MacBook butterfly keyboards, which were terrible for a while. Joanna went out there and did this piece where you could actually click it and show what happens on a MacBook Pro's keyboard, and it would have like double F's and double S's. Amazing journalism.

Or Nick Bilton, who I have questions for. Nick Bilton is the reason they don't give you quite as much of a hard time about having your phone on airplane mode, because he went out and found that it does nothing. It doesn't change anything.

That’s the thing: These companies can change things. The government can change things when you bring these things to attention. And I don't know, there are some that might argue with me that the government shouldn't compel search engines to give good results, but I wish the markets were actually intelligent. I wish the markets did not reward shit.

The publicly traded consolidation is bad, but it's particularly bad when it seems like the main incentive for investors for these large companies is actually just risk aversion, right? Where they want that safe quarterly return.

Well risk aversion, it depends what “risk” means here. Because if it's risk about pissing off customers, they definitely don't care. They care about growth. I don't think risk aversion is actually there, because if it were, I personally wouldn't understand why Tesla was so big.

If you were scared about risk, consider the numerous situations with Autopilot, or the fact that their CEO goes on Twitter, or X, or, or whatever it's called these days, and is just like, “Yeah, the 14 words, very important.” What is going on here? Markets don't care.

However, I think his pay packet situation with the Tesla board? Entire podcast about that. Yeah, he's screwed. He is absolutely screwed.

You think so? The Delaware courts, they’re efficient, and they seem to have efficiently said no to every element of that.

The big thing there isn't him having to return the stock package. That's bad for him. He will mostly lose options, so he can't really exercise options. Half of his money comes from that, too. It's not great, but what's really bad is that they're going to make them reorganize the board, and Elon Musk will not have power there anymore. Thus, it won't be good.

Also, we've seen how he works with his other companies, and he's not actually that great at business. I don't know, that whole thing's very funny, but he is the rock king. Elon Musk is the example of someone who has benefited so much from the growth-at-all-costs economy. His business goes back to the original, back in 2000, I think it was, which had a massive leak where people could just send money from your account.

This guy has been doing this shit forever. He's been growing companies unsustainably forever. Tesla is surprisingly stable, considering Elon Musk runs it, but the fact the Cybertruck got made is just proof that this guy is out of ideas, and also that the markets don't care, because, “Oh, Tesla's entering a new industry. Oh, Elon Musk, he's able to make things happen anywhere.”

I cannot wait for someone to get egg on their face over that guy. I'm so fucking sick of him.

I want to talk a little bit more about the consolidation of industry and the consolidation of power, because that is a really, really compelling thing to me.

Musk is a guy who really does have the consolidation of power element down. He's a major government contractor. He has not consolidated the industries that he's in; he's got competitors in the satellite communications business, and he's got an entire industry in China and in Detroit that's kind of gearing up to take out Tesla. It seems like he's one, though, that has actually done a similar job to what Facebook has done, in that he's just simply rolled up the means of communication under his company.

I think to a degree, he has done what Uber has done in a different way. You can't just get rid of SpaceX. You can't get rid of the fact that Elon Musk owns a large chunk of the EV infrastructure. And he has made the move so that multiple car companies would just be able to use those going forward. He is tough to get. He's like a tick. You can't just pull that asshole out.

It's the same thing with Uber, pushing these big unsustainable companies that become necessary infrastructure. It's like we need to seize the means of production at some point, but that's a whole different conversation.

These companies will fall apart at some point. These can't go on forever, but the markets demand eternal growth. There is a point at which Facebook dies, and I don't think people are aware enough of how bad that will be. Facebook is so based on ad-tracking cookies, tracking your stuff, and the EU, under the GDPR, fined them $410 million, I think it was.


European users get to opt in on whether they share their data now. That is their advertising business. That's the entire thing. And they will eventually fall apart. The party is still going for now, but now it's like, okay, how long for?

All right, I'll put it to you. How long for?

It seems like the Facebook mainstream site is deteriorating and serving an increasingly niche audience, at least in the States. It's doing significantly well overseas, but — I don't know if you’ve read Ryan Broderick's stuff, but Garbage Day is just so illuminating with that. It's like the top five posts on Facebook are Catholic orthodoxy as a fan page, every single month for the past several months. That's not a sustainable thing.

I actually think 10 years.

Really? 10 years. Why?

This is going to sound horrible: A lot of boomers need to die. I don't mean that through war or famine, I mean just age.

I think that Facebook might overwhelmingly be reliant upon an older generation, and when that generation starts aging out — plus the fact that, let's be honest, the ad return on Facebook sucks. Facebook ads are not working that well. The world is moving against targeted advertisement. And I think at some point the ride has got to stop.

Why else is he so desperate to get us into the metaverse or generative AI? He needs another trick and he's not a product guy. He's actually very bad at it. I don't think Facebook and Meta will die, but I think there is going to be a contraction that people don't expect.

That's interesting. The WhatsApp of it is also compelling because that is just such a vital communication system the world over, but it's also not really a money generator.

How's it making money? That's the thing. How's it making money? Where's the money from that? Wow, you've got 16 bazillion users. Where's the money coming from, mate? All his money comes from Instagram and Facebook ads. That's all of it.

Look at how flimsy Twitter has become the moment the ads started falling away. So much of the tech industry is reliant on ads. That feels like the upcoming crisis. I just don't know when the party will stop there.

I work in an ad-supported business through media, but if you look into my browser extensions, you might perhaps find occasionally enabled some sort of ad-blocking facility. It does seem like the levy is beginning to tip on some of that stuff.

I think Chrome is moving it. I think they're directly just going to remove the party cookies now. iOS app transparency means that every time an app wants to share your data, you have to accept it. And perhaps people will, but I think the data is that only 15 to 20 percent of people click “yes.”

Perhaps it takes time, but at some point people are just not going to funnel money into Facebook, because it's not just the fact that Facebook makes money off of ads; it's that the person buying the ads actually needs to see some kind of return. If that return starts going, what the hell do they do?

At some point, as well, Mark Zuckerberg's going to get bored of that company. And I think the thing to remember with Meta is, when was the last time Mark Zuckerberg had any good idea? None of his ideas are good. He really doesn't have them. Every company he tries to build within Facebook — Instagram Stories is probably the only kind of successful thing they've built, and it was a rip-off of Snapchat. Instagram itself is becoming a worse product every day and people use it, but it's like, do they like it? Probably not.

TikTok is...evil. It feels bad. I can't use it; it overwhelms me. But it's successful and people like it. It's a good entertainment platform because it has fostered that level of content. And yeah, it's found a way of screwing the user that's a little more quiet. But we're just at a very murky time in tech. And I don't think that people, enough people at least, realize how all of this stuff works.

It really does seem that the only businesses that fundamentally make sense to me are YouTube, to some extent, and then TikTok because it's just burning the rocket.

Yeah. Also, even TikTok will have some problems at some point because they're just burning money.


You've got to respect that level of business where they're like, I just have to burn a few billion dollars. Fuck it. Who's going to tell us no? Who's going to stop us?

I believe TikTok at some point will try and go public, and that is going to be one of the worst conversations in tech ever. The Sinophobia is going to go off the charts. I mean, we saw it with Tom Cotton being just a horrifying racist.

That was difficult to watch. It was a straight-up hard thing to see.

That was disgusting. It was just pure racism happening in real time. I feel bad for the bloke he was interviewing. It was rough on him because, I don't know, I don’t think white people get the experience that people of color get. I don't think there's a comparison. It’s disgraceful that our leaders are like that.

But also, here's one good thing to say as well: Where the fuck is the rest of the tech industry? Mark Zuckerberg, Tim Cook, all these assholes needed to be quote tweeting that and saying, “This is inexcusable.”

Right. It's insane that they weren't. That's just a very basic collegial thing. Other industries do that. It just felt like there was no internal support for that because they’re adversarial when it comes to that kind of thing.

Yeah. It's frustrating.

I want to go back a little bit — could you talk a little bit about Qualcomm? I had never heard that story, and that just sounds so interesting. They bought the Bluetooth audio codec. What does that mean?

So, this is a very complex one that could be an entire podcast, but Qualcomm back in the 2010s bought a company called CSR that owned a great deal of the high-resolution Bluetooth codec and hardware and patents — specifically the APTX audio codec family that underpins basically all wireless audio. They also owned a bunch of GPS patents that CSR owned. So this is not just an accumulation of stuff or companies; this is the accumulation of a form of monopoly.


So that happened. That was just one bit of one part of one article I wrote, but that there is why Qualcomm is where they are today. And I don't know the right way of going about antitrust when it comes to stuff like this. There is a degree of like, companies should be able to buy other companies, fine, whatever. It would take a significantly long horizon to do this, but there needs to be some kind of governmental awareness of how these things work and what someone could do.

Qualcomm at the time was huge. They were already huge. Perhaps we don't want that happening; perhaps the solution is that Qualcomm needs to divest CSR. It's just, you can't do it now. You can't unring that bell. These little acquisitions at the time might feel innocent, but they're so much worse. They're so much darker.

It just frustrates me that we don't have the people in the government who notice these things as they're happening. But also, to be fair, most journalists didn't either. Most journalists didn't know about this. This is one part of one article, a 3000-plus-word article. There were so many things that happened in the 2010s the ramifications of which we are right now only just becoming aware of.

Yeah. The institutional knowledge element, absolutely. It just seems like there are only a few publications in journalism that genuinely understand how tech works. If I told your typical American Senator that it's bad that Qualcomm's buying CSR because the APTX audio codec means that Bluetooth — that would give them a stroke.

They would have stopped listening at Qualcomm. They'd be like, sounds like a Star Wars thing; not interested.


So you have, again, a really phenomenal newsletter, Where's Your Ed At, and you recently launched this podcast. Where can folks find you? Where can they find your work? What are you going to be on about soon?

The easiest place to find everything is The new podcast Better Offline is going to be on basically all podcast platforms, and radio first, of course. also has my newsletter and the badass new logo. Oh man, the logo for this podcast is absolutely banging. And the only thing more banging is the theme song.


It’s instrumental, don’t worry, but Matt Osowski did the theme and it’s incredible. The podcast comes out February 21, and every Wednesday you get a new episode. It’s going to be great. I was quite a quiet child growing up, I was not particularly social, but I really like broadcast. I really enjoy it, and I like doing a good job of it, so I look forward to you listening.

It’s great. Again, you just have one of the most compelling voices on all this stuff. I feel like you have a way to just slice through, whether it’s branding, whether it’s what people want their tech to be, to get at truly what it is. I think there are very few voices as good as yours when it comes to getting to the heart of why things feel bad sometimes when they ought to be moving forward and advancing.

Thank you for having me on, I love doing this. And yes, please listen to the show.

Absolutely, I’ll be sure to link it out. Thanks for coming on.

My pleasure.

If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.

This post is for paid subscribers

Numlock News
The Numlock Podcast
Numlock News is a daily morning newsletter that pops out fascinating numbers buried in the news, highlighting awesome stories you're missing out on. Every Sunday, Walt Hickey interviews someone cool. Sometimes he records it in quality befitting a podcast.