OpenAI, summary of events: The board fucked up and fired CEO Sam Altman, but over the next several hours/days the situation was unfucked. As of this writing, the state of play is Altman is back as CEO and a majority of the board has resigned. Whether or not that status survives the long weekend, the ultimate outcome has been clear since Sunday night: Altman reinstated at OpenAI. The board’s last stand was Darryl Hannah in a tree, refusing to come down in protest — illusory relevance with the half-life of a Planet Fitness seven-day pass.
Microsoft hiring the entire OpenAI workforce was never realistic, despite the made-for-TV moment of 500 people boarding a plane for Seattle. Some of the problems: broken employee and partnership agreements with OpenAI and infringement of its IP rights; Microsoft’s assimilation of 500 different comp/equity agreements; the response of OpenAI investors (a16z, Khosla Ventures, Sequoia, Thrive, and Tiger) to their multibillion-dollar stakes getting effectively transferred to MSFT; and antitrust concerns over greater concentration in AI power. Satya knew this and was careful to say he welcomed the opportunity to work with OpenAI again should Altman return. Which was the better/more viable outcome for both of them all along.
The near-collapse of the Valley’s most important and successful startup is a $90 billion lesson that profit and mission don’t mix. OpenAI was founded as a nonprofit, then birthed a for-profit subsidiary. Serving “all of humanity” was adorable until 90 billion distractions showed up and the management team and investors began avoiding eye contact with the original mission. Altman and the board were supposed to straddle that divide, but it proved impossible. If this was a battle between capital and (concern for) humanity, capital smothered humanity in its sleep.
We should abandon the mythology that the market alone can produce the great taste of capitalism (shareholder returns) without the calories (pick your poison: climate change, labor exploitation, autocracy). Nothing drives innovation and value creation like the profit motive. But it can’t be trusted to do anything but make money. That’s why we need stronger government regulation and greater enforcement. The best ESG investment of ‘23 was the taxpayers’ investment in the SEC and DOJ, which are sending the CEOs of FTX and Binance to jail. The fiduciary obligation to “humanity” belongs with democratic institutions; it can’t be dependent on the better angels of billionaires.
The Line
However … the pursuit of profit has limits. And that brings us to the other major news of the week, which I believe is more serious and consequential. Last Wednesday, what Elon Musk had previously cloaked in dog-whistling retweets and bluster broke into the open with an explicit public endorsement. “You have said the actual truth” he wrote in response to the claim that Jews are pushing “hatred against whites” and “flooding their country” with minorities. This follows months of warnings from outside groups that antisemitic and other hateful content has surged on X. Mr. Free Speech has sued several of these groups and blamed the Anti-Defamation League for undermining X’s advertising business.
What has ensued is apologists “contextualizing” the statements of their friend, idol, and potential client. These same “leaders” were quick to judge the idiocy of a 19-year-old at a campus rally, but they’ve decided there’s “nuance” when it comes to one of their own. It’s fucking gross. You don’t need to be able to see into his Ketamine heart — you are your actions and your words, and Elon Musk is an antisemite.
Whether you agree this is what the man is, think he’s cosplaying a Nazi for business reasons, or believe he’s just a misunderstood genius, the question remains: What is to be done when the richest man on the planet, who controls the world’s most valuable car company and a global satellite communications network, uses his wholly owned social media platform to increasingly and unapologetically aid and abet bigotry and antisemitism?
This is the latest incarnation of an old problem. I wrote about it a year ago, when another well-known figure was promoting the same dangerous feculence. The post wasn’t about him (Kanye) but the appropriate response to his statements. We’re running it again, because our response to Elon is more important. Not only because of his power and reach, but because the situation has grown more dire. Hate crimes in the U.S. have been rising for a decade, and were up another 7% in 2022 — while antisemitic incidents were up 36%. In 2021 there were eight bomb threats against Jewish institutions. In 2022 there were 91. That was before October 7 and the war in Gaza. This October saw a nearly 400% increase in antisemitic incidents. And violence begets violence: Islamophobic incidents nearly doubled in the same period.
As we argued when we ran the following post last year, these trends have tragic historical echoes: the price of doing business with those who traffic in hate is not measured in dollars, but in lives. What this post is ultimately about is the difference between opinions and principles. Opinions are easy to hold and cheap to change, and their value is commensurate. Principles, on the other hand, are things for which you are willing to sacrifice. Willing to draw a line.
The following was posted on October 28, 2022
There was controversy this month involving Kanye West. You can catch up here; I won’t reiterate it. I believe Kanye is ill, and I’ll return to ignoring him soon after this post. This post is about Adidas, Gap, CAA, and his other corporate partners. It is about the moral obligation we have to draw a line.
Familiar Target
Authoritarian power, fascism especially, often rests on the persecution of a group. Fascists ascribe the problems of society to the influence of a minority and argue that controlling or eliminating that group will solve a social ill. The most popular target for this form of social weaponization, for hundreds of years, has been the Jews.
Making up 2% of the U.S. population, and only 0.2% of the world’s population, Jews are, year after year, the target of more anti-religious hate crimes than any group. In the two-year period 2001-02 bookending 9/11 — when Islamic terrorists killed 3,000 people — the FBI identified 636 anti-Islam hate crimes in the U.S., up from just 61 in the two prior years. Over the same period the FBI identified 1,974 anti-Jewish hate crimes — three times as many as directed at Muslims, more than half the religious hate crimes committed during the period.
The anti-Islam number was the anomaly. Year after year, more hate crimes are committed against Jewish Americans than against any other group except Black Americans. (There are six times as many Black Americans, and in total they suffer twice as many hate crimes.) The situation is similar abroad and over time. Persecution of the Jews is so common, there’s a Yiddish word for being massacred: pogrom. QAnon is strange and vile, but likely ends up only a stain on this American era. Antisemitism is history’s most enduring and deadly conspiracy theory.
That’s why special attention should be paid to tropes like “the Jewish media.” The real demon, of course, is demonization, of any target. The history of discrimination and violence against “out” groups is extensive, from the Armenian genocide, to the mass killings of Christians by ISIS, to China’s detainment of Uyghurs, and much, much more. In fact, the Nazis did not limit their attacks to Jews alone. They targeted Romani people, Black people, homosexuals, and the handicapped. Whoever the target, identifying a group, blaming them for society’s problems, and encouraging persecution, including violence, against them is the fascist playbook. We cannot ignore these tactics in the rantings of billionaire celebrities, regardless of what we think of their music, their shoe designs, or their mental health.
A companion tactic is the assertion of victimhood by the fascists themselves. “Replacement theory” is the noxious combination of both, asserting that the persecuted minority will somehow supplant the majority. The rhetoric of fascism is like a battery, drawing energy from contradiction. A self-proclaimed billionaire, for example, wailing about how oppressed he is.
New Normal
We have incorrectly conflated the liberal tradition of “free speech” with neutrality, with protecting the dark shoots of fascism in the name of tolerance. By the time speech has flowered into actions that cannot be ascribed to a “lone wolf” or the “mentally ill,” it has ripened into a movement. Movements are harder to stop, and the cost of resistance becomes so high that good people stop doing and saying the right thing as the understandable instinct for self-preservation kicks in. Later, we find eloquence and grace only in our regret.
I have the feeling that we let our consciences realize too late the need of standing up against something that we knew was wrong. We have therefore had to avenge it, but we did nothing to prevent it. I hope that in the future, we are going to remember that there can be no compromise at any point with the things that we know are wrong.
— Eleanor Roosevelt
Standing up against the rhetoric of hatred has nothing to do with censorship. There is no law forbidding people from employing the rhetoric of oppression, nor should there be. But no principle obligates us to accept them in media or business relationships.
A pillar of state-sponsored horror is the steady normalization of stereotyping and blaming. One person ranting about the Jews or anyone else is readily identified as an outlier and ignored. But as these claims multiply, as they have recently, they seem less outrageous. Political scientist Joseph Overton postulated that at any time there is a range of policies the population deems acceptable, but this “window of discourse” is not constant. It’s become a strategic objective of extremist groups to shift the “Overton window” over time toward their position by using rhetoric and advancing policies just outside the current scope of societal acceptance. And as the volume of hateful rhetoric rises, as research has shown, so too does hate crime.
Normalization Inc.
The rise of fascism — the normalization of hatred — is concomitant with the accommodations of powerful people who register political and financial gain by looking the other way. “Appeasement” is historically associated with Neville Chamberlain, the U.K. Prime Minister who caved to Hitler’s territorial demands rather than risk war with Germany — only to make the eventual war more costly. Chamberlain is unfairly singled out. Much of the British ruling class supported his position, and the U.S. Congress passed law after law barring aid to those threatened by the Nazis until Pearl Harbor made such a position untenable. Accommodation inside Germany began years earlier, with Hitler’s rise to power (via an election) in 1932.
Although Chamberlain is the poster child for appeasement, often the key enablers of fascism are not politicians, but corporations. Large companies benefit from stability, the expansion of their nation’s sphere of influence, and the centralization of power at the expense of the individual — many of the central themes of fascism. It’s no surprise that corporate power is often the handmaiden to authoritarian rule. I write that not as an indictment of corporations — corporations are essential. They are how we organize human effort to accomplish extraordinary things, from electric cars to vaccines. But as corporations become more powerful, their rejection or enablement of hate speech takes on additional importance.
Corporate accommodation of and support for the Nazis is well documented, from Adidas to Volkswagen to Krupp to IG Farben. Multinationals flooded into Pinochet’s Chile as he murdered his political opponents by the thousands. Vladmir Putin’s Russia has made “oligarch” (once simply a term for a member of a ruling clique) into a synonym for business leader. The risk is even greater today, considering the role corporations play in modulating our national discourse. The pure pursuit of profit can lead to dark places. There has to be a line, a moral consideration in place.
Drawing that line can be hard, because the leaders of large companies are culturally inclined toward, if not political neutrality, avoiding political adventurism. Corporations take political positions for business reasons, and 99% of the time, the best position is none. Donate to both sides, lobby for regulatory capture, and then stand on the sidelines.
But neutrality in the face of evil is not neutrality. Amorality is too easily hijacked by the immoral. Hannah Arrendt was fascinated by Adolf Eichmann, the architect of Hitler’s death camp system. He evidently had no ideology of his own, just a “manifest shallowness,” she wrote, “which made it impossible to trace the incontestable evil of his deeds to any deeper level of roots or motives.” If Meta were to change its name again … “Manifest Shallowness” strikes me as a decent fit.
If you are neutral in situations of injustice, you have chosen the side of the oppressor.
— Desmond Tutu
Drawing the Line
Which brings us back to Kanye. And to the corporations that did business with him. Their decision to sever ties is important. Not because they need to “cancel” Kanye. It’s not about Kanye, but drawing a line, arresting the normalization of the demonization of a minority.
In the case of Adidas, the ink for this line will cost shareholders hundreds of millions, if not billions, in shareholder value. The shoe maker has been criticized for waiting 10 days to cut ties. Ten days is an eyeblink in history (and even if management made the decision in 10 minutes, the logistics and legalities of responsibly disentangling a multibillion dollar relationship take time). The company should be commended for its actions.
As expensive as it was, Kanye did Adidas, the corporate world, and maybe America, a favor. As John Oliver put it, “The answer to where you draw the line is literally always ‘somewhere.’” If you never draw one, you forget how. So when someone goes to “death con 3,” society’s writing hand rediscovers penmanship. It helps to practice our cursive so we know we can do it. Drawing a line is a chance to remind yourself, your employees, your shareholders, and your customers that you’d rather take a stand now, when the cost is only profits vs. something much worse.
The Line to Here
In writing and presentations, I often point out that much of my success is due to my circumstances — being born in America, getting a state-sponsored education, etc. But the real roots of my good fortune run even deeper. During the Blitz, my mom was a 4-year-old Jew, sleeping in the London tube. Had the British not drawn a line, and then the Americans and Russians, it’s likely that a 21-mile-wide strip of water would have been breached, and my mother’s life would have ended with a train ride. And someone else would be writing this newsletter.
It should be noted: The allies drew a line against fascism and potential invasion, not antisemitism. The costs would have been less dear had we drawn those lines earlier. The line on Kanye should have been drawn sooner. Every elected leader, citizen, and CEO must ask themselves, Where is my line? To answer the question: We must first decide there is one.
Life is so rich,
