The Breakdown - Coinbase’s New Policy: Anti-Woke or Just A Joke?

Episode Date: September 30, 2020

Monday, Coinbase CEO Brian Armstrong published the innocuously titled “Coinbase Is a Mission-Driven Company.”  While the post talked a lot about Coinbase’s core mission, its real goal seemed to be to make clear Coinbase would not be engaging with any other social or political issues beyond that, and to the extent employees wanted to do so they needed to do it on their own time.  The reactions were intense, immediate and in many instances, totally opposite.  In this episode, NLW breaks down the entire social media reaction and the arguments for and against this policy.

The ironic thing and the thing that shows just how far we've gotten away from being able to have hard conversations is that I think there's a lot of folks who I'm seeing on both sides of this who feel like the central issue is their inability to express their full perspective for fear of retribution and reprisal. When people of all political persuasions feel that, you know you have a system that is really, really screwed up. Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by crypto.com, BitStamp, and nexo.io, and produced and distributed by CoinDess. What's going on, guys? It is Tuesday, September 29th, and today something interesting happened.

I joked this morning on Twitter that my podcast today was going to be called Everyone's Angry at Everyone for Everything, and that's really what it has felt like for the last few days. Twitter. We have infighting in the Bitcoin community, we have a defy hack that people are throwing blame around, and of course we have the reactions to this Coinbase post about effectively saying that employees need to be silent politically, at least on company time. I went to record a show today that was half about the Defy hack and half about the Coinbase post and the response to it. What I found, however, is that they're each big enough subjects on their own to really be their own thing. And frankly, I try to think about subjects that would be interesting for everyone who listens, but I realize that these are areas that may have really divergent focuses for different

sets of breakdown listeners. Because of that, I'm doing something that I've never done before, and I'm actually splitting today's podcast into two. The first is about Coinbase and their new, no politics at work policy and whether it can actually work. This has created an incredible amount of conversation and controversies. So here's my attempt to break it down for you. First of all, what happened? Coinbase yesterday published a blog post called very innocuously, Coinbase is a mission-focused company. There is a lot of obfuscation in this post, but the real core important thing that it says is that Coinbase will advocate and be a voice for matters that relate directly to its specific mission around financial empowerment, but all other politics can get the hell out.

Coinbase won't be a corporate advocate for other social and political issues, and further, it expects employees who want to dig into those issues to do so on their own time. There were, as you might imagine, radically divergent takes on this particular piece. But before I get into each of those sides, I want to actually shout out the folks who are sitting here, probably having very complicated and complex feelings about this. You may be more quiet than the other folks who are screaming about it on Twitter, but I guarantee you you're not alone. There were a few people who tried to have some nuance on this on Twitter.

I saw Mike Dutas from the block say something about basically supporting Coinbase's desire to focus on their mission, while also supporting individual employees' rights to be activists in whatever way they want. I saw Bloomberg Betas Roy Bahat respond to Paul Graham's very pro Brian Armstrong Post saying that he was trying to sort through it all. Vitalik responded to a sub-tweet threat about this saying, I think both opponents and proponents are wrong in calling the approach a political. It's not. It's explicitly a strategy of we're going to avoid these particular axes and focus on axes that don't already have millions of people pulling hard on both sides of them. I'm very pro the right to be neutral on any specific issue.

You're either with us or against us is the slogan of warmongers. But on the other hand, we focus on making money because that lets us do more good later is a dangerous and dark road. So, complicated feelings. Anyway, like I said, I just wanted you to know that with an issue like this, it's okay to have complex thoughts about it. With that, let's go into the two sides as they started to become defined. Let's first start with the side that came out thinking that this was a good thing that Brian Armstrong was a courageous leader to use a word from a tweet that I saw. One key part of their argument has to do with an argument for productivity, that the infiltration of the workplace with a lot of politics is a net drain on the productivity of the company.

The side that tended to embrace Brian's posts tended to accept his focus on their mission, versus other missions. Some pointed out that corporations aren't the right vehicle for social change. Avichel Garg from Electric Capital had a whole thread that kicked off with this tweet. It said, ironic capitalism, simultaneously believing capitalism is broken, and corporations should be the arbiters of morality.

Even if you don't agree with that, I would encourage you to go check out that thread. It had some of the most complex and civil conversation around this whole thing that I saw anywhere. Others who were supportive of Brian Armstrong pointed out that this was likely a very commonly held view among CEOs. Another position that I saw was that it's better for a company to set up its position in advance on these issues so that employees know coming in. Zach Cantor tweeted, Great reminder that there are many ways to run a company as a founder slash CEO,

and many places to work as an employee, and that problems brew in consensual relationships when one or both sides aren't clear about expectations. But finally, it has to be said that the central pillar of people who liked Armstrong's post and Coinbase's position are from people who feel very intensely that wokeness, whatever that means, has gone too far. That we are on a slippery, woke slope to some combination of socialism or thought policing or whatever end point people think that this leads to, and that this type of move from leaders might help us wrench back the other direction. Why Combinator founder Paul Graham had probably the most popular retweet of Brian's post saying, yet again, Brian Armstrong leads the way.

I predict most successful companies will follow Coinbase's lead, if only because those who don't are less likely to succeed. But now, let's discuss the other side of this. What are the points that the people who weren't as receptive or interested in what Brian Armstrong had to say trying to make. One line that I saw a lot was some version of, this is an impossibility because corporations are just part of a society whether they like it or not. Jacob Rothstein tweeted, this coinbase thing reads like satire. In 2020, if your company doesn't have a stance, unquote, causes unrelated to your core mission, there's no way it's going to be a welcoming place for anyone whose existence is threatened by the status quo. Expanding this point, I saw a lot of folks

basically saying that this is almost destined to lead certain types of employees to feel unsafe, or at least not able to be their full selves. Lee Quinn from CoinDesk tweeted, Got a love when problematic men congratulate other problematic men for telling women and people of color to shut up. Adding some fuel to this particular take are reports that this also is in some way, a response or a reaction to an earlier in the year walkout from team members around Coinbase's executive silence around the BLM movement. What's going on, guys? I'm excited to share that one of this month's breakdown sponsors is Crypto.com. Crypto.com offers one of the most cost-efficient ways to purchase crypto out there, as they've just waived the 3.5% credit card fee for all crypto purchases.

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The company offers instant crypto credit lines against all major cryptocurrencies, with interest rates starting from only 5.9% APR. NXO also lets you earn up to 10% annually on your Fiat and digital assets. What's more, interest is paid out daily and you can add or withdraw funds at any time. Get started at nexo.io. Another take which directly kind of contradicts the, it's better if both sides understand what their perspective is coming into it thing, is that this doesn't respect the power relationship between employer

an employee. In other words, it's easy on Twitter to say, hey, if you don't like it, go get another job. It's much harder for people who are in that job to actually leave it, given that there is economic uncertainty all around us. For some, the key issue was that this idea that the company can be mission-oriented in one dimension, but not interested in politics and social action and others, is that it's extremely difficult to draw the lines around which politics count for what. Natasha Tiku tweeted, By all means, let's keep politics and broader societal issues

out of a mission to squints, bring economic freedom to people all over the world. Another critique, and this is one I definitely resonate with, is the idea that this big tech save the world rhetoric has been explicitly used to attract people to the industry for like two decades. Mike Kruzaniski tweeted, The tech industry has sold itself on, quote,

making the world a better place for as long as I can remember. So tech leaders probably shouldn't be surprised when their employees want to do that. Finally, a really important critique, I think, is the idea that this is just frankly impractical. Casey Newton tweets, my favorite new contrarian Silicon Valley theory is that you can remove politics from your workplace by wishing it in a medium post. So there you have kind of the broad arguments that I saw from either side of this discussion. Which ones might we want to unpack a little bit more? First off, let's talk about Coinbase specifically. or rather, I think that the debate underlying this is important enough to potentially

separate or try to separate the message from the messenger. In other words, you could hate Coinbase and not really respect Brian Armstrong as a leader and still have a meaningful conversation about the role of politics and social action in the workplace and from the standpoint of corporate leadership writ large. I think that's really the key discussion here. It's not about Coinbase specifically. it's about this larger world of how corporations are going to interact with the world and what their responsibility is. So let's separate message from Messenger, at least for the sake of this

exploration. Another bit to unpack is this argument that politics is causing disruption. Is there evidence of this? And the reality is that there is at least some. There's a massive HR company network called SHRM, and they did a survey in 2019 that found a few things. 42% of U.S. employees had personally experienced political disagreements in the workplace, a majority, 56% say politics and the discussion of political issues has become more commonplace in the past four years, more than one-third, 34% say their workplace is not inclusive of differing political perspectives, and 12% have personally experienced political affiliation bias. Now, important to note is that these numbers don't have any positions around them.

We don't know if the third that are saying that their workplace is not inclusive of differing political perspectives are more on the right or the left or something else entirely, right? These just reflect the fact that there is a meaningful percentage of employees who think that politics is causing some sort of disruption in their workplace environment. Now, of course, there are radically different approaches to addressing this. Coinbase has chosen a route of shutting down that side of things. other firms might try to figure out how to have these conversations in a more healthy way. If that sounds snarky, I don't mean it to. I'm just saying it's really important to remember that corporations are not some monolithic thing. They have agency to decide how they're going to

approach problems, even if they're correct in identifying something as a problem. Next up, let's explore this idea of corporations being the wrong vehicle for change, that point that Avichal was making that we read before. I'm sympathetic to the idea that I believe underline lies a lot of that thread that I was reading from, that there is a different type of political process and a different type of political and public space for changing the world and society around us that isn't just the corporation, that isn't just businesses. However, I also do believe that it's hard to deny that corporations have a demonstrable impact on that world. So many of the decisions that businesses make from how they operate, sure, but more importantly, in many ways,

what they decide to focus on have implications for the larger world as a whole. Now again, if you take it at face value, Armstrong's point in this post is that they're not deciding to not have a role in the world. They're deciding to focus that role on what their core mission is and not be, quote, unquote, distracted by all the other things that people care about that are maybe important in the world, but not for them to have a real stake in. But I do think that to some extent it's difficult to intellectually accept that there's some clear line of which social issues you're going to engage with and which you're not. In fact, one of the other things that I saw some people talk about online, and certainly you're going to have more of a libertarian bias in this,

is the idea that they would have liked this post better if it said, look, politics aren't for the workplace, full stop, rather than trying to kind of guise it or couch it in this other mission language. It's like, are you trading one mission for another? Or are you saying that you're primary role is to just engage with society as a business. This gets me to, I think, another point, which is really important to unpack, which is the idea that you can easily draw these lines. Part of the visceral reaction that people are having against this post is that to them it negates the feelings of being a certain type of person. It's not like these are causes for these employees. It's not like they're asking Coinbase to support their favorite charity.

When you're talking about something as deeply entrenched as Black Lives Matter, a fundamental position and outlook on society and the way that it should be structured, it's hard to lump that into just some political or cause bucket that's separable from everything else about a person. And let's do focus on the hypocrisy thing for a minute. And again, I've already said that I'm taking Coinbase specifically out of this analysis in some ways, but tech has absolutely sold a vision for years. It was an absolute recruiting tactic

that unlike Wall Street and unlike Big Energy and unlike other soulless industries, this was a space where people wanted to change the world. Don't be evil, said Google, right? Well, what do you expect your employees to be? This is something that I always saw as a really interesting phenomenon on when it came to corporate social responsibility. In many ways, using social responsibility

and the corporation's relationship with the world as a recruiting technique is a self-fulfilling prophecy for the future. What I mean by that is that when you make a decision to go to company X over company Y, in part because of the values that company X is selling, even if the current crop of corporate leaders is selling those values simply as a recruiting technique, if people stick around long enough and become the next crop of corporate leaders, all of a sudden those values aren't insincere anymore. They were real because the people that have them were recruited on the basis of them. So yes, I think it's reasonable to look at these tech companies that have spent two decades trying to recruit the best talent in the world from all over the world on the

basis of their positive impact on society. To now tell them that they can't engage with any issue other than the one that's right in front of them, it does stink a little bit of hypocrisy, I have to say. Ultimately, though, for me, the biggest thing is I don't know that you're getting this genie back in the bottle. Telling adults what they can and can't do and what they can and can't talk about is very difficult. We live in a world where the barriers between our work lives and our non-work lives have been increasingly permeable, and at least in part on the basis of corporations wanting to have more access to our lives, our time. Employers can't say, check your politics at the door

and then also expect you to pick up your email at 9 p.m. I think that there's just something inherently contradictory about that. And I'm saying that even though I'm sympathetic to the desire to have the ability to focus, I share concerns about where corporations are supposed to fit as vehicles for social change. I do worry about the other side of this, which is at the extreme the potential for thought policing from employers around current in vogue political issues.

Basically, my two sense is this. I don't think this is a neutrality stance. I think that even being or trying to be apolitical is a political stance. I think that it will be successful in pushing out some portion of employees who want their workplace to have a broader sense of employee lives, as well as for recruiting those who want that whole dimension of people's lives to exist outside of the firm. I think that this will be extraordinarily appealing to many CEOs, and I think that some corporations will try to follow suit. At the same time, this is a market, and it's a market for talent,

and it's a market for everything else, and I think that other companies, other firms, will head in the exact opposite direction. Ultimately, if that happens, I wouldn't be surprised to see a balkanization of the private sector, where people are grouped based on who agrees with whom in terms of how politics is supposed to interact with the workplace. In this way, the workplace itself will become just another political marketplace where people will self-select into the one that best reflects their pre-existing beliefs. The ironic thing and the thing that shows just how far we've gotten away from being able to have hard conversations is that I think there's a lot of folks who I'm seeing on both sides of this who feel like the central issue is their inability to express their full perspective for fear of retribution and reprisal.

When people of all political persuasions feel that, you know you have a system that is really, really screwed up. Anyways, guys, I think this was a conversation that maybe started in crypto, but very clearly had a much bigger resonance. And so I wanted to at least explore and give you the different sides that I saw. This question is likely one that's going to play out again and again and again in our markets, in our society, and in our politics. So being able to piece through these different positions and to be able to hold the other perspectives in head

while making our own decisions feels incredibly important. So hopefully this was useful, and if not, I'll be back to my regular scheduled market content tomorrow. Until then, be safe and take care of each other. Peace.