Vol. II, No. 32
Covering 26 February - 10 March 2024
Monday, March 11, 2024
Late edition · A Relentless publication
All the fortnight that mattered, in technology and in the world, read next to what we were building at the time.
AMERICA

Super Tuesday makes the rematch official, and a country that wanted neither gets both

Trump and Biden swept the primaries; Nikki Haley, the last alternative, went home. The election almost no voter asked for is now the only one on offer.

Super Tuesday, March 5, ended the last pretence of a contest. Donald Trump and Joe Biden each swept nearly every state, and the next day Nikki Haley suspended her campaign, leaving Trump the presumptive Republican nominee and confirming the rematch that polls have shown, for a year, that most Americans did not want: Biden against Trump, a repeat of 2020, between the two oldest major-party nominees in the nation's history. Two days later Biden delivered a combative State of the Union address, visibly trying to answer the age doubts the Hur report had inflamed, energetic enough to quiet Democratic panic for a news cycle. Trump, facing four criminal trials, turned each court date into a campaign rally. The country now faces eight months of a contest it finds exhausting between two men it finds too old, with consequences it finds terrifying, and no way out but through.

EUROPE

Sweden joins NATO, and Putin's war produces the opposite of what he wanted

Sweden formally became the 32nd member of NATO on March 7, abandoning two centuries of non-alignment, after Hungary dropped the last objection. Together with Finland, which joined a year ago, it means that Vladimir Putin's invasion of Ukraine, launched partly to halt NATO's expansion, has instead doubled the alliance's border with Russia and turned the Baltic Sea nearly into a NATO lake. It is the clearest strategic self-inflicted wound of the war: two capable, historically neutral militaries brought into the Western alliance by the very aggression that was meant to keep the alliance at bay. The war grinds on in Ukraine with no such clarity, but on the map of Europe, Putin has achieved the reverse of his aim.

IN BRIEF

Apple opens up, and pays; Gaza starves; Haiti collapses; Oscars

The European Union fined Apple 1.8 billion euros on March 4 for stifling competition in music streaming, and days later, under Europe's new Digital Markets Act, Apple was forced for the first time to allow rival app stores and payment systems on the iPhone in the EU, cracking open a walled garden it had defended for 15 years. In Gaza, the humanitarian catastrophe tipped toward famine, with the UN warning of imminent starvation in the north; the US began airdropping aid and announced it would build a temporary pier, stopgaps that underscored the failure to secure land access. Haiti descended into anarchy as armed gangs seized control of the capital and the unelected prime minister agreed to resign. And Oppenheimer won seven Academy Awards on March 10, including Best Picture.

The Column

The gate in the wall

Apple spent fifteen years insisting its closed iPhone was the only way to keep users safe. Europe forced it open this fortnight, and the fight is usually framed as security against freedom. The more useful frame is older: what a user can do when the only door is locked.

Apple spent fifteen years insisting that its tightly closed iPhone, one app store, one payment system, one set of rules enforced by one company, was not a business model but a safety measure, the only way to protect users from the chaos and malware of a more open system. This fortnight the European Union forced the wall open, requiring Apple to permit rival app stores and payment systems, and the fight is being framed, by Apple most of all, as security against freedom, the safe garden against the dangerous wild. That framing is not wrong, exactly, but it misses the deeper question, which an economist named half a century ago and which cuts closer to what is actually at stake: the question of what a user can do when the only door is locked.

Albert Hirschman, in a small and brilliant book, identified the two fundamental responses available to anyone dissatisfied with an organisation, a product, or a state: exit, leaving for an alternative, and voice, staying and complaining, protesting, demanding change. His insight was that these two mechanisms discipline the powerful in different ways, that exit works through the market (lose enough customers and you reform or die) while voice works through politics (hear enough protest and you respond), and that the health of any system depends on at least one of them being available and effective. A closed platform is, precisely, a system engineered to eliminate exit: once you have bought the phone and the apps and the ecosystem, the cost of leaving is enormous, and Apple's genius was to make exit so expensive that it effectively vanished as a discipline, leaving users locked in a garden they could not leave. And when exit is foreclosed, Hirschman's framework says, only voice remains, and voice against a private company is famously weak, because you cannot vote in its board and it need not listen. What the European regulation does, in Hirschman's terms, is restore exit where the platform had abolished it, and thereby restore a discipline on Apple that the closed garden had removed.

The counterargument, and Apple makes it with real force, is that the wall genuinely does protect users, that the App Store's curation really does keep out the malware and the scams that plague more open systems, and that most users neither want nor benefit from exit, they want safety, which the garden provides and the wild does not, so that forcing the garden open serves the sophisticated minority who want alternatives at the cost of the majority who wanted protection. There is truth here. The curation is real, the safety is real, and a certain kind of user is genuinely better off inside the wall. But notice what the argument assumes and Hirschman exposes: that the company which built the wall can be trusted to keep the garden in the users' interest rather than its own, and the whole point of exit is that it is the mechanism which makes that trust unnecessary, which disciplines the gardener regardless of his intentions by giving the users somewhere else to go. A garden with no exit requires you to trust the gardener; a garden with an exit does not, and the difference between those two is the difference between a safety that depends on the goodwill of the powerful and a safety that does not.

Because that is what the fight is actually about, beneath the security framing, and it is why Brussels was right to force the gate. The question is not whether the garden is safe today; it may well be. The question is what disciplines the gardener when his interest and the users' diverge, as it eventually will, and the answer, for fifteen years, was nothing, because exit had been engineered away and voice was toothless against a trillion-dollar company. The regulation does not tear down the wall; it puts a gate in it, and the gate matters not because most users will walk through it but because its mere existence changes the gardener's incentives, restores the discipline of exit, and converts a safety that depended on Apple's goodwill into a safety that Apple must now compete to provide. Apple says the gate makes users less safe. Hirschman's framework suggests the opposite: that a user who can leave is a user who need not trust, and that the freedom to exit is not the enemy of safety but its most reliable guarantor, because it is the one discipline that works whether or not the gardener means well.

The Ledger
AI
A political fortnight, but the Apple DMA story is an AI story in waiting: the "closed is safer, trust us with control" argument that Apple just lost in Europe is exactly the one the AI incumbents are making to justify their own gatekeeping. Watch whether Brussels turns the same lens on them.
Data centers & power
Quiet this fortnight; the numbers refresh next earnings season. The build-out continues to outrun the public conversation about how to power it.
Rates
Markets settled on mid-year for the first Fed cut as data stayed strong. Powell told Congress the Fed was "not far" from confidence on inflation but not there yet.
Real estate
US 30-year mortgage 6.88 percent (March 7). Range-bound, still frozen, still hostage to the cut that keeps not quite arriving.
India tech
Apple's forced opening in Europe is watched closely by every company that builds on someone else's platform, India's app and services firms included. A more open mobile ecosystem, if it spreads beyond the EU, changes the economics of building for a billion phones.
What we called wrong
Nothing to retract. The Apple column extends the "Brussels effect" thread from No. 26: Europe, again, writing the rule the rest of the world will feel, this time prying open the most valuable walled garden in technology.
The Back Page

Twenty days

Amid the seven Oscars that Oppenheimer swept up on March 10, one award went somewhere that mattered more than any statuette. "20 Days in Mariupol," a documentary by the Ukrainian journalist Mstyslav Chernov and his Associated Press colleagues, won Best Documentary Feature, the first Academy Award in the history of Ukraine. It is not an easy watch. Chernov and his team were the last international journalists in the city of Mariupol as Russia besieged and bombed it in the first weeks of the war, and the film is the footage they risked their lives to record and smuggle out: the maternity hospital hit, the mass graves dug, the children who did not survive. Accepting the award, Chernov said something no Oscar winner has said before or, one hopes, will need to again: that he would give it back, gladly, in exchange for Russia never having invaded his country, in exchange for the people in his film being alive. It was the most honest sentence spoken on that stage, and it hung there for a moment over a room full of people in gowns, a reminder of what the cameras that usually chase glamour can do when they are pointed, by brave people, at the truth instead. Ukraine's first Oscar. Its director wishes it had never been possible to make.