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After being unable to raise $1M for my latest startup, I stare in anger and awe and sadness at the latest antics of Elon Musk lighting a match to his $44B acquisition of Twitter. Twitter was the last social media app that I participated in. As Musk allows the crazies back on including the folks pushing misinformation about Covid, I had enough. I pulled the plug on Twitter in the same way I did after watching Zuckerberg and Facebook almost single handedly destroy American democracy.
However, I can’t stop watching the talking heads and reading the pundits about different views of the dumpster fire of Twitter.
Yanis Varoufakis wrote a thoughtful article “Don’t Be Fooled. This is what Elon Musk is Really Up to With Twitter.”
“Elon Musk had good reasons to feel unfulfilled enough to buy Twitter for $44 billion. He had pioneered online payments, upended the car industry, revolutionized space travel, and even experimented with ambitious brain-computer interfaces. His cutting-edge technological feats had made him the world’s richest entrepreneur. Alas, neither his achievements nor his wealth granted him entry into the new ruling class of those harnessing the powers of cloud-based capital. Twitter offers Musk a chance to make amends.
“Since capitalism’s dawn, power stemmed from owning capital goods; steam engines, Bessemer furnaces, industrial robots, and so on. Today, it is cloud-based capital, or cloud capital in short, that grants its owners hitherto unimaginable powers. . . .
“For while he was busy working out how to make mass-produced electric cars desirable and to profit from conquering outer space, Amazon, Google, Alibaba, Facebook, and Tencent’s WeChat were wrapping their tentacles firmly around platforms and interfaces with “everything app” potential. Only one such interface was available for purchase. Musk’s challenge now is to enhance Twitter’s own cloud capital and hook it up to his existing Big Data network, while constantly enriching that network with data collected by Tesla cars crisscrossing Earth’s roads and countless satellites crisscrossing its skies. Assuming he can steady the nerves of Twitter’s remaining workforce, his next task will be to eliminate bots and weed out trolls so that New Twitter knows, and owns, its users’ identities.
“In a letter to advertisers, Musk correctly noted that irrelevant ads are spam, but relevant ones are content. In these techno-feudal times, this means that messages unable to modify behavior are spam, but those that sway what people think and do are the only content that matters: true power.
“As a private fief, Twitter could never be the world’s public square. That was never the point. The pertinent question is whether it will grant its new owner secure membership in the new techno-feudal ruling class.”
Buried in the article was my introduction to “cloud capital.” While I didn’t like the rationale of the article, there was new learning to counter my sadness at Twitter being ruined.
I mentioned this article to my friend and colleague Katherine. She laughed and said that she was wrestling with the conspiracy theory implications of Musk owning both Starlink and Twitter. She mused that the combination of owning both of those along with the abuse and control of “free speech” had dangerous implications for our future.
Megan McArdle of the Washington Post added her opinion “Has Elon Musk succeeded by luck – or does he know what he’s doing?” She concludes:
“Risky behavior can be a way to force everyone in a company to rise to the occasion and overperform, as happened with Tesla in 2013. That’s clearly what Musk is hoping for now, demanding that people commit to become “hardcore” or leave the company. But “existential stakes” also necessarily mean there’s a real danger the company won’t survive. So, while it might be too early to write Twitter’s obituary, it’s fair to acknowledge that the fate of the “digital public square” now rests on one man’s audacious gamble. In the end, both Musk and Twitter may well come to grief.”
Her article reminded me of employees at Microsoft in the days when millionaires were being created regularly. I always wondered when the arrogant ones would pontificate if they had confused luck with intelligence.
As I pondered these swirling ideas during my daily free writing, I got to wondering about the range of companies that Musk owns or controls or has extensive investments in. The New York Post shared this article on “the companies Elon Musk owns or has a stake in, from Tesla to Twitter.“
- CoFounder of Paypal
- SpaceX which includes Starlink
- Neuralink – the brain implant startup
- Wyoming Steel and Real Estate
- OpenAI – researchers producing GPT-3, DALL-E, Whisper, ChatGPT
- The Boring Company
This morning I was reminded of the Musk reach with articles about NeuraLink and the introduction of ChatGPT by OpenAI.
I was also reminded of Brian Arthur’s academic work on increasing returns businesses. I came across his ideas when I saw an article that he had testified in the case against Microsoft acquiring Intuit.
“Mr. Arthur argues that Microsoft has used its clout to gain great advantage in applications like word processing (Microsoft Word) and spreadsheets (Microsoft Excel). Bundled with Microsoft 95, due in August, is the company’s on-line service, Microsoft Network, which will almost instantly be on millions of more computers than rivals like America Online, Compuserve and Prodigy. If Microsoft acquires Intuit, it would have a major head start in electronic banking, he says.
“The Government, Mr. Arthur contends, should intervene to make sure that a company’s control of one market does not give it a major edge in new high-tech markets — to prevent one runner in a 100-yard dash starting at the 40-yard mark. In his view, that could mean blocking the Intuit merger to preserve competition in home banking and in on-line services making Microsoft Network have an arms-length relationship with Microsoft’s Windows.”
Are we are the point where Elon Musk should be required to divest of one or more of his businesses?
One of the bedrocks of our democracy is the Rule of Law combined with the sharing of facts. During the last 20 years we’ve witnessed the filter bubbles that result in very few shared facts across strata of politics or economic life. With the ability to control physical communications (Starlink) and a public forum (twitter) and the ability to connect directly to the brain and the ability to create deep fakes or synthetic media, Musk now controls the ability to disseminate a wide range of alternative facts.
So is Musk driving his investments and control of communications and the new economy by luck or by design or by intent?
Trying to discern what is truth or facts or an authentic person’s real views is now harder than ever.
Even before we ask whether it might be appropriate to require that Musk divest one or more of the businesses he’s invested in, we should ask: “How was it possible for a single individual to accumulate so much wealth, so many businesses, and so much influence?” My own answer to this is that if markets were competitive and taxes were fair, there would be no billionaires — even though we’d still have millionaires; those who’ve earned extraordinary rewards for extraordinary contributions. If Congress were doing its job, it is exceptionally unlikely that Musk could have done what he has done. Whether or not that would be a good thing is something that deserves a great deal of careful consideration and debate.
Bob, thanks for your response. I hope all is well with you. Your comment is essentially what Brian Arthur was trying to get at with his concept of increasing returns businesses. I think the tax issue is critically important. The other issue I didn’t tackle is that so much of the income from SpaceX is from the government.