Can capitalism’s most unabashed champion rein in Labour?

Employers now believe it’s finally Payback O’ Clock. But things might not go to plan, even with a genius leading the counter-revolution

Photo by Daniel Lloyd Blunk-Fernández on Unsplash

In 2022, I wrote 48 of these ‘newsletters’ and most of them explicitly or implicitly advanced the thesis that the balance of power was shifting from Capital to Labour. (Albeit after around four long decades of the representatives of Labour being comprehensively outplayed – or sneakily bought off – by the representatives of Capital.)

For what it’s worth, I still believe that’s the long-term trend. As someone who has been on the planet long enough to remember what demographics mainstream centre-right political parties used to try to appeal to, I’m bemused that the likes of the Coalition, the Republicans and the Tories now believe advocating for the interests, economic as well as cultural, of the working stiff is the path to electoral success. Given ageing populations in almost all developed countries and many developed ones, I still believe that workers – especially younger, highly skilled workers – are becoming too rare and precious a commodity to abuse.

But history doesn’t move in straight lines.

For every action…
Transitions from one epoch to another are rarely straightforward. Contrary to what is commonly asserted, Russia didn’t entirely fall to Communism after the 1917 October revolution. Granted, significant portions of it were Sovietised. Nonetheless, a civil war between the Bolsheviks and the White Army raged until 1921, or 1923 if you want to count a few final battles in the Far East.

Royalist, anarchist and even socialist Russians, as well as Ukrainian, Estonian, Latvian, Lithuanian, Polish and Finnish separatists, all supported with troops, materiel or money from Britain, France, Italy, Greece, Germany, Japan and the remnants of the Austro-Hungarian Empire, made life difficult for the Communists for several years and ensured Lenin inherited an economy in smoking ruins.

Especially in retrospect, it’s obvious that the anti-Communist forces were never going to be able to turn the clock back to a Romanov-ruled Russia, but that didn’t stop them from giving it a red-hot go. The post-revolution civil war resulted in 7-12 million casualties. Around 1-2 million Russians, disproportionately aristocratic or upper-middle class types, fled their homeland.

European aristocrats and captains of industry in nations such as France and the US were appalled by the treatment of their counterparts in Moscow and St Petersburg. They yearned for a great man of history to mount a counter-offensive and somehow restore Tsarist Russia. A country where the serfs, while emancipated, still knew their rightful place.

As is a matter of record, no great man of history emerged a century ago to lead a counter-revolution against the dictatorship of the proletariat. But business owners, C-suite executives and even a goodly proportion of modestly remunerated frontline managers across the globe have now begun to hope a great man of history emerged in late 2022 to push back against the increasingly assertive demands of Labour.   

The name of this champion of the neoliberal ancien régime?  

All will be revealed momentarily, but first a little background.

It’s no fun being a nobleman when the peasants are revolting     
Things have been grim for the employer and executive class in recent years. Labour markets were already tightening, and workers getting a bit uppity, even before the kung flu resulted in borders slamming shut all over the developed world in early 2020.

It is a truth universally acknowledged among the think tank set that mass migration does absolutely nothing to weaken the employment prospects or bargaining power of native workers. Yet, inexplicably enough, in nations such as Australia, Canada, New Zealand, the UK and the US, unemployment rates fell to rates not seen since the post-war boom decades once millions of migrants and ‘students’ were prevented from moving from developing nations to developed ones each year. And once shutdowns, but not migration restrictions, were abandoned and help wanted signs began appearing in windows of businesses across the land, workers started bargaining from a position of power for the first time in many years.         

As detailed in some, um, detail in this very Substack, wage slaves who had long believed they had no choice but to meekly lap up whatever thin gruel was begrudgingly sloshed into their bowl by their employer started to realise they had options. Cue the Great Resignation, a mass refusal to return to the office once the mass hysteria around the Spicy Cough finally died down, quiet quitting and the growing prevalence of the four-day working week.

Employers and their managerial henchmen and henchwomen had a surprising amount of success in preventing wages from increasing much. (Given high inflation, real wages have been falling for almost all workers for over a year.) But, if they were under the age of around 60, managerial types did get their first taste of the challenges inherent in managing workers who believed they could (a) easily find another job or (b) survive relatively comfortably on the (temporarily supersized) dole. The kind of people who live to work found themselves having to grit their teeth as the type of people who work to live declared that they would only be coming into the office when they felt like it from now on.  

The officer class was enraged by the newfound assertiveness of the enlisted men and women. But they were impotently enraged, which I think we can all agree is the worst kind of enragement to experience. Especially if you’ve spent your life issuing orders rather than taking them.   

Week after week, month after month and year after year, those in charge dreamt of the labour market abruptly cooling and employees getting a much-needed dose of reality. While I haven’t been able to locate any instances of a prominent business leader publicly stating, “What we need is a savage recession,” I’d wager plenty of them thought it.  

We need a hero
As someone who has had an interest in economics for much of his life and has written a lot about business for the last decade, I’ve observed that driven business owners and vauntingly ambitious company men and women are inclined to hero-worshipping high-functioning sociopaths such as Jeff Bezos and Jack Welch.

Famously, Steve Jobs, ­a man portrayed as having Hannibal Lecter-levels of empathy by even close friends and family members, was the (anti)hero that workaholic entrepreneurs and aspiring CEOs worshipped for many years. Now those who need to find some ruthless prick of a corporate ubermensch to model themselves on look to Elon Musk.

As related in Ashlee Vance’s 2015 bio, here’s what Musk’s devoted, long-time personal assistant used to do for him. “She brought Musk meals, set up his business appointments, arranged time with his children, picked out his clothes, dealt with press requests, and when necessary yanked Musk out of meetings to keep him on schedule. As a result, she would emerge as the only bridge between Musk and all of his interests and was an invaluable asset to the companies’ employees… [she also] had an outstanding contribution in developing SpaceX’s early culture as she paid close attention to every detail and helped balance the vibe around the office.”

After 12 years of loyal service, Musk’s assistant asked for a raise. I have no idea how much she was already being paid or how large a raise she wanted, but it can be reasonably assumed both sums were beyond trivial to Musk. Musk tells the assistant to take leave for two weeks while he thinks about it. When she returns, he fires her. He later muses, “When she got back my conclusion was just that the relationship was not going to work anymore. Twelve years is a good run for any job. She’ll do a great job for someone [else].”

The average person hears that story and thinks, “What an arsehole”.

Most time-poor high flyers hear that story and think, “That seems like Musk cutting off his nose to spite his face.”

But a certain type of would-be Patrick Bateman hears that story and thinks, “One day, I too will unemotionlessly dispatch any underling who has the unmitigated gall to get ideas above their station.”   

The midnight email cheered in corner offices around the world

Subject line: A fork in the road

Copy: Going forward, to build a breakthrough Twitter 2.0 and succeed in an increasingly competitive world, we will need to be extremely hardcore. This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.

Twitter will also be much more engineering-driven. Design and product management will still be very important and report to me, but those writing great code will constitute the majority of our team and have the greatest sway. At its heart, Twitter is a software and servers company, so I think this makes sense.

If you are sure that you want to be part of the new Twitter, please click yes on the link below:

[Google form link] 

Anyone who has not done so by 5pm ET tomorrow (Thursday) will receive three months of severance.

Whatever decision you make, thank you for your efforts to make Twitter successful.

Email sent by Elon Musk to his new employees shortly after buying Twitter

As our academic friends like to say, let's unpack this text and tease out how it was sweet, sweet music to the ears of those who own and/or run businesses.

·       It’s an “increasingly competitive world”. Do you know what really ramps up competition? Globalisation. Your grandfather probably didn’t have to worry about having his job outsourced to someone in China or India. Or being replaced by a Chinese or Indian individual in possession of a skilled migrant visa. Chances are your grandfather didn’t even consider attending university and quite possibly didn’t even finish high school. Nonetheless, he somehow managed to live a comfortable middle-class lifestyle (home and car ownership, job security, savings in the bank etc) even if he worked a blue-collar or low-level white-collar job.

The Molotov cocktails of the Brexit vote and Trump’s election made it clear that a vast portion of the working class and a significant portion of the suburban/exurban middle class had had quite enough of four decades of globalisation and race-to-the-bottom wage competition, thank you very much. Then a global pandemic suddenly meant first-world employers no longer had ready access to migrant workers with modest expectations and, more often than not, a ferocious work ethic.      

But with the pandemic all but over, migrant flows resumed, the Brexiteers and Trumpers floundering, the turbocharged digital transformation of 2020-2022 having made it easier than ever to outsource work to developing nations, and a recession seemingly looming, Musk and his many fanboys believe that the competitive world they know and love is now returning.   

·       “We will need to be extremely hardcore. This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.” This is the money quote; 24 words that deliver a hammer blow message – the party is now very much over – to workers who’ve grown pampered and entitled in an uncompetitive world.

There will be no more working from your lounge room, or quiet quitting, or whining about unpaid overtime, or fretting about your work-life balance, or taking advantage of that unlimited leave policy your company introduced in fatter times. Just lots and lots of “extremely hardcore” grinding. And if that’s not a prospect that appeals, don’t let the door hit you on the arse on the way out.

·       “Twitter will also be much more engineering-driven… those writing great code will constitute the majority of our team and have the greatest sway.” Many of those who own and/or run businesses believe, accurately or otherwise, that an insufficiently competitive world resulted in companies unnecessarily creating a lot of ‘bullshit jobs’ occupied by surplus elite types with qualifications in lesbian interpretive dance.

This is a type of 21st century producerism that’s particularly appealing to tech bros like Musk. It posits that it is the engineers who do the real work. Anybody who is not an engineer is, at best, unnecessary and, at worst, an impediment to those admirable innovators ceaselessly striving to put a dent in the universe.

(Interestingly, Muskian producerism isn’t confined to right-leaning business leaders, as anyone who has ever sat through a left-leaning professor’s lament about the administrative bloat afflicting the modern-day university system can attest.)

A few months before Musk bid for Twitter, Quillette founder Claire Lehmann wrote an article for The Australian (paywalled) headlined, ‘Overpaid woke jobs must be first for the chop’. Lehmann observed, “Managerial roles such as human resources managers, diversity officers, sustainability consultants, social media managers, communications officers, sensitivity readers and, more recently, gender affirmation advisers enable an entire class of university graduates to proselytise their values while working in roles that are largely insulated from market forces. These are the jobs of the ‘Brahmin left’, the ascendant class of university graduates who view themselves as a priestly class holding sacred knowledge inaccessible to the masses.”
 
In one fell swoop that saw two-thirds of the workforce liquidated, Musk eliminated many of the woke roles at Twitter. Many tech CEOs have been doing likewise over the last six months. And many more CEOs are likely to get with the woke-job-eliminating program throughout 2023.  

As always, it will all come down to supply and demand
Musk, along with millions of other business owners and senior managers, is betting that a recession will definitively shift the balance of power back to Capital.

Musk and his many admirers may end up being proven right. But, if many countries are headed into recession, it’s looking to be a somewhat unusual one. An economic downturn where historically low unemployment rates, especially outside of the retail and hospitality industries, don’t rise enough to terrify workers into exceptional performance.

So, Musk might just turn out to be more of an Alexander Kerensky than a Napoleon.