The Prof G Pod with Scott Galloway - No Mercy / No Malice: Enablers

Episode Date: July 16, 2022

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NMLS 1617539. I'm Scott Galloway, and this is No Mercy, No Malice. Our society suffers from an idolatry of innovators. This week, we break down the systems that enable a class of people who leverage their power to flout the rule of law. Enablers, as read by George Hahn. A few months ago, I wrote about powerful people's ability to override guardrails. Just as bad-mouthing your ex is poor form,

turning on the institutions that are the bedrock of your success is bad for the Commonwealth and plain tacky. Coco Chanel said the opposite of luxury is not poverty, but vulgarity. The culture among our innovators is the opposite of luxury. The idolatry of innovators leads to the misguided notion that people, usually men, of great achievement, usually in tech, should not be criticized, are not bound by a code of ethics, and are above the law. This is bad for society and eventually for the innovators themselves. Constraints are essential to enduring innovation. Corruption and economic growth are inversely correlated. Resistance builds strength, and a level playing field rewards talent versus cronyism.

Humans operate poorly in the absence of limits and structure, and given free reign, we lean into narcissism and dissipation. Worse than the absence of guardrails, the presence of enablers. Dr. Mariette Weddell-Weddlesborg, a psychologist who studies powerful executives, military operatives, and law enforcement personnel, has found the action, or more often, inaction, of those surrounding powerful leaders is critical to their unethical behavior. Enablers develop a cultural numbness to the behavior of the leaders whose past successes justify liberties that eventually gets baked into the culture of an organization. Ken Oletta's biography of Harvey Weinstein, subtitled The Culture of Silence, explores how abusers foster, quote, a culture

that normalizes the abnormal, end quote. Powerful people have typically demonstrated outsized talent or made a large contribution to society, so there's always cloud cover or even some justification for their missteps. We've developed an entire mythology around artists and innovators whose excesses are positioned

as features, not bugs. Picasso was terrible to his romantic partners. Two committed suicide. But Wikipedia launders his misogyny. Quote, The women in Picasso's life played an important role in the emotional and erotic aspects of his creative expression,

and the tumultuous nature of these relationships has been considered vital to his artistic process. End quote. No, he was an asshole. Since Steve Jobs, the gestalt in tech is that a talented, nice CEO is talented. A talented CEO who is unreasonable is a genius. The powerful skirt guardrails and remove them all together with enablers. For enablers, criticism of the leader,

no matter how justified, feels like criticism of the followers who've accepted his behavior. Shamelessness becomes the leader's superpower. The willingness to flout critics draws followers who lack the same power and conflate malformed behavior with leadership and validation of their success. Enablement is shitty work as the loyalty runs one way.

When consequences come for the powerful, and they usually do, enablers are cannon fodder. The January 6th hearings have featured a parade of Trump's abandoned enablers. This week, we heard from two men who stormed the Capitol, caught up in the proximity and promise of the most powerful man in the world. After months of consuming Trump's stop-the-steal dross on social media, Stephen Ayers spent 10 minutes inside the Capitol on January 6, recording the event on his phone.

For that, he's lost his job and house and gained a criminal record. He pled guilty to disorderly conduct. While nearly a thousand foot soldiers languish in the criminal justice system, earned ruination has yet to come for Trump's most powerful enablers. In Thank You for Your Servitude, Mark Leibovich paints a dispiriting picture of the abasement of Republican leadership at the feet of the former president, whom he calls Trump leg humpers.

With few exceptions, the GOP power structure has made a trade. Proximity to Trump's power is more valuable than fealty to their oath of office or self-respect. So far, they've been right. Roger McNamee, an early investor in Facebook, has spent the past decade calling attention to the dangers spawned by tech. After Elon announced his intention to renege on his contractual obligation to buy Twitter for $44 billion,

here's a clip of what Roger said on CNBC. I quite honestly view Elon Musk as being the sort of masthead and figurehead for a business culture that has just gone completely off the rails. You know, we've gotten into the mode in Silicon Valley that we use technology to exploit human weakness rather than to empower people. And we have supported a management culture that, frankly, is so self-centered, it just has no regard for the people who are touched by the product, has no regard for rules. And in the long run, that's just bad for investors. It's bad for the economy. It's bad for the country.

Examples that support Roger's point are ubiquitous. Travis Kalanick built Uber by violating transport and labor law until finally the bro-iest bro in Broville became too much for even his feeble board of directors. Zuck, more disciplined than Kalanick, has maintained an iron grip on his dangerous and destructive business, monetizing teen depression and cultural rage. Crypto, at this moment, feels more like a pyramid scheme built on other pyramid schemes versus an innovation that creates enduring value.

And then there's Elon. Elon Musk. Elon Musk. Elon Musk. Elon Musk facing new questions about his offer to acquire Twitter. Musk's diversions are not on the order of Weinstein's or Trump's. But as his Twitter misadventure illustrates, he too has leveraged success to replace guardrails with enablers.

The boards at Elon's companies are a disgrace to the term. A board is charged with managing the CEO, hold them accountable for meeting business targets, coach them through difficulties, and act as fiduciaries for stakeholders. Committing securities fraud, as Elon did when he lied about the funding to take Tesla private, is a breach of the CEO's fiduciary duty.

Firing Elon wouldn't have been in the best interest of the Tesla shareholders, but neither was doing nothing. Demagoguery relies on a manufactured sense of aggrievement. Many of Elon's semi-anonymous keyboard flock may or may not own a Tesla or Tesla stock, yet they are rallying to the defense of their hero, the wealthiest man in the world.

Elon and his enablers need the criticisms of infidels to justify their culture of attack. His actual positions are fatuous. His professed love of free speech has nothing to do with actual civil rights, real civic engagement, or his own conduct. His reasons for abandoning the Twitter deal have been described by financial observers as risible and absurd, stupid. Elon was no more going to

fix Twitter than Trump was going to force Mexico to pay for the wall. There's a lesson for critics and those of us on the left who are outraged at the lack of outrage. Engaging with Elon or any person who commands a keyboard army only feeds those who find rallying to his support so satisfying. I'm guilty of this. Feeding the beast is also what happens every time we hear the national anthem of Wokistan. Policing every misstep from the approved orthodoxy can ruin careers.

Just ask college instructors how comfortable they feel having a real discussion about a social justice issue, like exploring or acknowledging both sides. It's the same sort of tribal intolerance and serves the interests of the powerful, not the powerless, as it rallies their enablers and deepens that bond. Intolerance should be the target of progress, not its tool. The woke mob's guardians of gotcha crusade is so inconsistent and hypocritical it gives rise to personalities whose invidious behavior is conflated with leadership, standing up to the mob. A senator and comedian are expelled and sanctioned, respectively, for playing grab-ass and not picking up on nonverbal cues during a tryst.

But three births, two women, one subordinate, one hush money payment, and 6,000 employees toyed with like Kong balls in the same quarter? That's Elon being Elon. Technology and the economic prosperity it's created are gifts to the world. We are net gainers from the Valley and big tech. The problem is with the word net. Roger McNamee put his finger on it.

Demagoguery and the predations of the powerful have been a problem for society since societies first existed. But they've reached a fever pitch in tech. The confluence of social and mobile that brings us all into a 24-7 shouting match has made the tower of idolatry higher and the blast area wider. Regarding Twitter, however, Elon has hit a guardrail that won't give way. I believe the Delaware Court of Chancery is the barrier Elon and his enablers can't intimidate.

He's trying to exit a hermetically sealed contractual obligation to pay Twitter shareholders $54.20 a share. His arguments are laughable. Twitter has sued him in Delaware, which, for bizarre historical reasons, often has jurisdiction over these corporate disputes. The Twitter complaint is compelling and reeks of truth. Also, the chancellors, i.e. judges, don't give a shit what Elon, his followers, or valley sycophants laundering his BS think of them. The court of chancery is built for speed. No jury, no opening arguments. Within a few months, expect Elon to be on the hook for $44 billion.

Either he's the new owner of Twitter, after paying twice its market value, or he'll settle with Twitter's board for billions. Note the plural. That's clearly what the market believes. Twitter's stock is trading around $36, above when Elon began acquiring shares, while the stocks of its peer group are off 15% to 60% since then. Similar to Yahoo and MicroStrategy, which became tracking stocks for Alibaba and Bitcoin, Twitter is now a tracking stock for a contract law case.

The likely natural level, sans musk, of Twitter stock is around $20 per share. The difference is the market's realization that shares in Twitter represent not only ownership in the IP and cash flows of the platform, but also a binding contract that will compel the richest men in the world to pay them $54.20 a share. Twitter shares will increasingly become a proxy for the veracity of the company's case against Musk. And the case against Musk is strengthening. Since Tuesday, when the complaint was filed, the market is flat to down. Twitter's stock, however, is up 12%. Why? The strikingly similar conclusions of legal scholars is that the court is not interested in burying Elon's children or prostrating themselves,

but upholding the agreement he signed. We are a nation of immigrants, innovation, and liberty. Also, we are a nation of laws. Life is so rich. The answer to that question is probably more complicated than you want it to be. The average U.S. company deploys more than 100 apps, and ideas about the work we do can be radically changed by the tools we use to do it. So what is enterprise software anyway? What is productivity software? How will AI affect both?

And how are these tools changing the way we use our computers to make stuff, communicate, and plan for the future? In this three-part special series, Decoder is surveying the IT landscape presented by AWS. Check it out wherever you get your podcasts. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you?

And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, how and when to use AI. A special series from Pivot sponsored by AWS, wherever you get your podcasts.