10.11.2022

Twitter year zero

What the hell is Elon Musk up to? Paul Demarty reads the tea leaves and spills the beans

After announcing that his takeover of Twitter had been concluded, Elon Musk - the billionaire and walking Peter Pan complex - updated his profile on the site to read “Chief Twit”. It must be conceded that flashes of self-awareness occasionally puncture his otherwise inconquerable narcissism.

As I write, the bio now reads “Twitter Complaint Hotline Operator” (he has also changed his listed location to “Hell”). The complaints were already flooding in his direction back when his bid was announced in the spring, before he got cold feet, and before the éminences grises of the Delaware court of chancery forced him to go through with it, whatever his opinion of the matter. Various rightwing nobodies, and other sufferers from persecution mania, demanded he resolve their grievances with the liberal-technocratic ‘trust and safety’ team, despite his not even being remotely in charge. Conversely, the liberals blamed him just as absurdly for a supposed plague of “literal Nazis” signing up.

Now, of course, he is in charge. His initial actions have been quite something to behold. At the centre of the whole affair is his decision to fire half the company’s employees by email - a necessary context for all the new feature trial balloons he has launched. For all the shock this mass layoff generated, and rightly so, it was actually less than the 75% rumoured by leaks in advance of the November 3 ‘night of the long knives’. How do we account for something like this? What is Musk actually trying to do, and is he likely to succeed?

There is one model that we may fairly straightforwardly apply to the case. Musk has undertaken a hostile leveraged buyout of a distressed company, after the fashion of Gordon Gekko and the real-life private equity firms on which his character was based. Twitter has long been a financial basket case. It has never achieved sustained profitability. Its user numbers have grown modestly, but effectively topped out in the low hundreds of millions: not inconsiderable, then, but chump change compared to Facebook (around three billion), Instagram (1.2 billion), and the upstart, Tiktok (one billion). There are only two practical ways to make money in the social media business: charging users and advertising. Advertising is a scale business; there are just not enough ‘twits’ to make the numbers add up, though in principle the fact that the median Twitter user is of a more desirable demographic - richer, better educated and so on - than their Facebook equivalent might offer some recompense.

These are hard problems to fix - so why fix them? Just follow the private equity playbook, slash costs ($4 million a day in losses, according to Musk), extract a bunch of money in loan interest ($1 billion a year under the takeover package) and sell it back to public markets for a profit, even if what returns is a shell of its former self. Halving the workforce - including in expensive positions in engineering and so forth - will cut you some costs. Musk is also demanding reductions in infrastructure spending in the order of $1 billion (infrastructure, here, meaning the running costs of the computers and associated services involved in actually making the application work). Two years from now, a much-reduced but finally profitable Twitter will be refloated. Greed is good!

There are reasons to suppose that this will not work so well on this occasion - one being that Musk and his consortium (the Saudis, inevitably, included) bought the troubled bluebird at what looks likely to be the absolute peak of its conceivable valuations, in the last decadence of an extremely frothy tech bubble. How long will it take for the present hostile macroeconomic environment to become more clement for a long-malfunctioning machine like Twitter? (Privately, it seems, the banks backing Musk’s takeover are preparing for the mother of all haircuts.)

The behaviour of the new regime, beyond the autocannibalistic cost-cutting, also does not quite fit the template. Your typical asset-stripper likes to work with a smile - Gekko’s ‘greed is good’ speech promises a bright future to the doomed employees of a paper company. As in art, so in life: vulture capitalists will assure their new charges of great ambitions for the future, and keep their counsel for a while - to work out who can be fired most easily and what juicy morsels can be extracted. It is slow and methodical - a kind of anaesthetised corporate vivisection.

Blue checks

Musk, by contrast, has gone at it like a meme-spewing Pol Pot. For a man who claimed, once upon a time, to have a plan - a more liberal censorship regime, algorithmic transparency, a clampdown on fake users - he seems rather to be flailing from one grand initiative to the next, all of which needed to be done yesterday. Remaining Twitter employees - who more or less universally loathe Musk - leak relentlessly, and are being subjected to inhuman speedup, as they attempt to launch several new products with a week’s notice and are reduced in number by half.

His erratic tweeting has led to an advertising boycott - especially since the key concern for digital advertisers is “brand safety”: that is, you do not want your feel-good, body-positive-cosmetics commercial to appear sandwiched between two cartoon drawings of Pepe the Frog leading Jews into a gas chamber. (In spite of the culture war narratives around this whole fiasco, cuts have actually been far smaller to the trust and safety team than the company at large, interestingly.) So, along with costs, there is at least a short-term hit to revenue - which is not good, and seems to have been wholly avoidable by just following the Bain Capital script more closely.

To address this shortfall, Musk’s cunning plan is to expand the site’s existing subscription offering, Twitter Blue. The latter has proven something of a damp squib, so how to get people to pony up? Simple: make ‘verified’ status part of the package. Before now, users could apply for this by some opaque process, including the submission of valid ID documents; having done so, they obtained the famous blue checkmark icon next to their names (verified users are nicknamed ‘blue checks’).

According to the current state of the plans, as I write (and boy is this ever a moving target), a Blue subscription will become a precondition for verified status; but also merely paying the fee will be enough to get that status. This is straightforwardly an absurd proposition. The whole point of verification in the first place was to stop scam artists and trolls impersonating those considered ‘notable’ - a fact that various blue checks (typically journalists, and therefore typically liberal, and therefore typically not among Musk’s admiring fans) have attempted to dramatise by changing their screen names to ‘Elon Musk’ and tweeting about the joys of drinking pints of your own urine, among other things. (Such ‘protestors’ have had their accounts suspended, and their blue checks revoked.)

Perhaps this soi-disant business genius knows something I - a mere working-stiff computer programmer - do not (certainly that is the view of many of his weird and pathetic fanboys, with whom I have been trading barbs over the last week), but it does not have the general vibe of a successful product launch.

Blue murder

There is the alternative scenario: Musk, having been sold a pig (or a bird) in a poke, is engaged in a childish revenge tantrum, like the superpowered six-year-old in the famous Twilight zone episode who must be kept happy by the townsfolk lest he destroy what remains of the world. He has slammed hard into the limits of his power, and rages against it with all the artery-popping intensity he can muster.

A Marxist analysis must find this prima facie reductive: capitalism is a system, after all - a total world order whose laws of motion are by their own nature obscure to its participants. We cannot reduce Twitter’s terrible week to mere quirks of this quirkiest of personalities: capitalism is a realm of radical unfreedom even to those who appear to be its protagonists, the John Galts, Gordon Gekkos and Elon Musks of the world. As I argued recently, and as Marx argued long ago, the result is the transformation of capital into a kind of god - a god whose power is rivalrously counterposed to our own.¹

But those whom the gods wish to destroy they first make mad. They did not have much work to do in Musk’s case; but, like Liz Truss a month ago, he is getting a crash course in his own impotence. Unlike her, there is no institutional apparatus to put an end to his madness. Unless he departs from the regulatory expectations of the American state so drastically that he can be removed by legal action, he is just doomed to stay there, unable to sell the business and unable to make it a success, radically in hock to creditors despite the vast “net worth” his defenders keep reminding me of. Just a six-year-old 51-year-old, around whom a cloud of panicking courtiers, resentful users and restive workers now revolves.

The outcome of any given billionaire’s direct conflict with the ‘powers that be’ of capital and the state is unpredictable (the only guarantee is that, on a long enough timeline, the house always wins). It is even more unpredictable in a situation of increasingly dire general economic crisis, with especial augurs of doom in the tech industry. Predictions are therefore somewhat perilous. What we can say confidently, with the benefit of our professional expertise, is that Twitter will get worse.

Halving the engineering staff and demanding drastic cuts in infrastructure costs will take its toll. Twitter will be worse in the most narrow ways: it will be slower; it will fall over completely more often, like the old days of the ‘fail whale’; its spam problems will get worse; its censorship decisions will become more opaque (since there will be fewer human users around to even pretend to review them). According to Musk’s fans - and indeed the wider circle of people who prefer him to the ‘woke mob’ they hope he will replace - nobody sacked on Friday did anything useful: they were merely burning money on malfunctioning censorship algorithms and liberal, virtue-signalling PR stunts. This is extremely likely to be wishful thinking. It is difficult to see the site disappearing altogether - for all their rage, where else will the blue checks go? Reddit? - but it remains a possibility.

What certainly should disappear - for the time being at least - is the always-fantastical image of Musk (and other industry characters like Meta’s Mark Zuckerberg, Larry Page and Sergey Brin of Google, and so forth) as irreplaceable geniuses whose decisions cannot be gainsaid. On such a cocktail of fancy were these men (and the occasional woman) not only placed in charge of this generation of tech companies, but given golden shares that ensured their perpetual control and supposedly insulated them from the dead hand of the public markets of their day. Such control is obviously an illusion today.

They were the new captains of industry, we were told; but capitalism dispensed with such individuals over the last century-and-a-half, and their modern imitators are mere simulacra. They always were. As the investment guru, Warren Buffett, famously said, when the tide goes out, you see who has been swimming naked.

When it comes to Musk, he is not waving, but drowning.

paul.demarty@weeklyworker.co.uk

1. See ‘Rishi’s one real god’ Weekly Worker October 27: weeklyworker.co.uk/worker/1416/rishis-one-real-god.↩︎