Ask HN: Is there a correlation between interest rates and enshittification | Hacker News Reader

Ask HN: Is there a correlation between interest rates and enshittification

3 pointsquestinthrow2 comments

Hello there HN, I have been bothered by this question for a while. It seems that enshittification has become a common word nowadays because of all the degradation we're feeling when using popular platforms like Google, Youtube, more recently Unity and so on. Could this degradation be explained mostly due to the necessity of corporations to become more profitable now that interest rates have increased? It seems to me like its the end of an era where we expected everything to be free and high quality due to cheap money.

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https://fred.stlouisfed.org/series/FEDFUNDS

Are rates near zero the trend there?

More of an Econ theory argument:

Econ theory attributes economic returns to technology as those returns on investment not attributable to anything else. Ie the firm didn’t hire more accountants (or fire them), didn’t hire more workers (or fire them), and still saw increased revenue and profit. For exogenous to their usual business plan they saw increased profits. It sort of makes sense then that other exogenous events could diminish those same returns due to technology.

Further, the tech firms/industry sort of fills a “marginal contribution” niche similar to construction of real estate. Construction was very fast to respond to the increased rates-they’re who makes new real estate so that’s literally where “marginal thinking” plays a role in the market.

In reality, no, but I'm sure it's those sort of excuses they'd trot out if queried.

Most any product that starts to get top heavy, paying $$$ profits to shareholders and big bonuses, will eventually ask for more money from their clients / users, hoping the rest of the competition follows suit as well.

Just think of any streaming tv service be it first satellite and then the web, they've all gone from promises of no ads to - pay up sucker. The web world is no so different in that regard, just most of us notice this behaviour more since more often a person needs to use it every day.

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