The Era of the Business Idiot, Part 1

0:00This is an iHeart Podcast.

0:58We'll see you next time. at washablesofas.com. Authors are subject to change and certain restrictions may apply. Parking shouldn't slow you down. ParkWiz gives every driver a shortcut. Book ahead, save up to 50 % and skip the hassle of circling the block. Park smarter, park faster. ParkWiz. Download the ParkWiz app today and save every time you park. So I love Square. They make paying for stuff at a store really easy. I just use them at Court Street Grocers to buy a sandwich here in Brooklyn, New York. Their stuff's reliable, easy to use and it just works for both businesses and their customers.

1:31Square keeps up so you don't have to slow down. Get everything you need to run and grow your business without any long-term commitments. And why wait? Right now, you can get up to$200 off Square hardware at square.com slash go slash better offline. That's S-Q-U-A-R-E dot com slash G-O slash better offline. Run your business smarter with Square. Get started today. In business, they say you can have better, cheaper, or faster, but you only get to pick two. What if you could have all three at the same time? That's exactly what Cohere, Thomson Reuters, and Specialized Bikes have since they upgraded to the next generation of the cloud.

2:08Oracle Cloud Infrastructure. OCI is the blazing fast platform for your infrastructure, database, application development, and AI needs, where you can run any workload in a high availability, consistently high performance environment, and spend less than you would with other clouds. How is it faster? OCI's block storage gives you more operations per second. Cheaper? OCI costs up to 50 % less for computing, 70 % less for storage, and 80 % less for networking. Better? In test after test, OCI customers report lower latency and higher bandwidth versus other clouds. This is the cloud built for AI and all your biggest workloads.

2:50Right now, with zero commitment, try OCI for free. Head to oracle.com slash strategic. That's oracle.com slash strategic. CallZone Media. Hello and welcome to Better Offline. I'm your host, Ed Zitron.

3:15Better Offline. And welcome to the Business Idiot Trilogy. What that means will soon become obvious. So on May 15th, Bloomberg profiled Microsoft CEO Satya Nadella, revealing that on some level, Satya Nadella is kind of a fucking idiot. The article revealed that, assuming we believe him and this wasn't a thinly veiled ad for Microsoft's AI, the co-pilot consumes Nadella's life outside the office as well as at work. He likes podcasts, but instead of listening to them, like with his ears, he loads transcripts into the co-pilot app on his phone so that he can chat with the voice assistant about the content of an episode in the car as he commutes to Redmond.

3:53At the office, he relies on Copilot to deliver summaries of messages he receives in Outlook and Teams, and toggles among, allegedly, at least 10 custom agents from Copilot Studio. Now, the article does not say what they do, doesn't seem like they bothered to ask, but he allegedly views them as his AI chiefs of staff, delegating meeting prep, research, and other tasks, again unnamed, to the bots. And to quote Satya Nadella in this article, he says, I'm an email typist, and he jokes about this, noting that Copilot is thankfully very good at triaging his messages. None of these tasks are things that require you to use AI.

4:30You can read your messages on Outlook and Teams without having them summarized, and I'd argue that a well-written email is one that doesn't require a summary. Podcasts are not there to be chatted to or about with an AI. Preparing for meetings isn't something that requires AI, nor is research, unless, of course, you don't really give a shit about the actual content of what you're reading or what you're saying, just that you are saying the right thing and that you know the facts of some kind. To be clear, I'm deeply unconvinced that Nadella actually runs his life in this way. But if he does, Microsoft's board should fire him immediately.

5:03It's an admission of negligence akin to a taxi driver admitting he swallows a couple of glugs of Cram Royale before he starts a shift. In any case, this article is rambling, it's cloying, and it ignores Microsoft AI CEO Mustafa Suleiman's documented history of abusing his workers. Ten custom agents to do what? What do you mean by other tasks? Why are these questions never asked? Is it because the reporters know they won't get an answer? Is it because the reporters are too polite to ask probing questions, knowing that these anecdotes are likely entirely made up as a means to promote a flagging AI ecosystem that costs billions to construct, but that doesn't seem to do anything, and the reporter in question doesn't want to force Satcher to build a bigger house of gods and he needs to...

5:39Sorry. Sorry, I'm in my new studio. I'm all fired up, and this is a bloody long one. But really, is it because we as a society do not want to look too closely at the powerful? Is it because we've handed our economy to men that get paid$79 million a year to do a job they can't seem to describe? And even that, they would sooner offload to a bunch of unreliable AI models than actually do the very small amounts of things they have to do. Look, we live in an era of the symbolic executive, when being good at stuff matters far less than the appearance of doing stuff, where what's useful is dictated not by outputs or metrics that one can measure, but rather the vibes passed between managers and executives that have worked their entire careers to escape the world of work.

6:25Our economy is run by people that don't participate in it, and our tech companies are directed by people that don't experience the problems they allege to solve for their customers, as the modern executive is no longer a person with demands or responsibilities beyond their allegiance to shareholder value, something I went through in the shareholder supremacy series you can go back to if you want in another extremely long series of episodes. They're bloody good, though, and they're free. Now, this three-part series examines the phenomenon of something I call the business idiot, looking at the root causes of the idiocy in our economy itself, how they're ruining our world, and how these idiots are enabled by an embarrassingly deferential media.

6:58It's too afraid to say that the emperor has his dick out. It's going to be long. I'll take you on tangents. They'll probably say fuck more than I usually do, which I admit is a lot. But business idiots are a problem, and they deserve our scrutiny and are disgust. I, however, believe the problem of the business idiot runs a little deeper than just the economy, where the things we see are merely a symptom of a bigger, more virulent, and treatment-resistant plague that has infected the minds of those currently twigging at the levels of power, and really the only levels that actually matter. The incentives behind everything we do have been broken by decades of neoliberal thinking, where the idea of a company, an entity created to do a thing in exchange for money has been drained of all meaning beyond the continued domination and extraction of everything around it, with their leaders now focusing heavily on short-term gains and growth at all costs.

7:48You know, I've been over that a little bit and I'll get back to it in a second, aren't I? In doing so, the definition of what a good business is has changed from one that makes good products at a fair price with a sustainable and loyal market to one that can display the most stock price growth from quarter to quarter. This is the rot economy, which is my useful description of how tech companies have voluntarily degraded their core products in order to placate shareholders, transforming useful and sometimes beloved services into a hollow shell of their former selves as a means of expressing growth to the markets.

8:18When a social network hides things that you want to see because they want to juice their metrics, that's the rot economy. But it's worth noting that this transformation isn't constrained to the tech industry, nor was it a phenomenon that occurred when the tech industry entered its current VC-fueled, publicly traded incarnation. We simply notice it more in tech because we use tech in our personal and professional lives, and thus it affects everyone in a way that's kind of impossible to ignore. In the shareholder supremacy, I drew a line from the early 20th century court ruling, which opened that Ford must put shareholder value ahead of the interests of its employees, though it was a beta dicta, meaning it was just literally said by the judge, but a lot of people ever since have taken it literally.

8:58And then I went to, of course, former GE CEO Jack Welch to the current tech industry, but there's one figure I didn't really pay that much attention to, and I regrettably now have to do so. Famed Chicago school economist and dweller of hell, Milton Friedman, once argued in his 1970 doctrine, no, literally, that's what it was called when it was published, of course, in the New York Times, which is an incredible act of hubris when you think about it, that those who didn't focus on shareholder value were unwitting puppets of the intellectual forces that have been undermining the basis of free society these past decades.

9:31Acting with social responsibility, say, treating workers well, doing anything other than focusing on shareholder value, is tantamount to an executive taxing his shareholders by, and I quote, spending their money on their own personal beliefs, said Friedman. Friedman was a fundamentalist when it came to unrestricted, unfettered capitalism, and this zealotry surpassed any sense of basic human morality, if he had any. For example, in his book Capitalism and Freedom, he argued that companies should be allowed to discriminate on racial grounds because the owner might suffer should they be required to hire an equally or better qualified black person.

10:05Bear in mind, this was written at the height of the civil rights movement, just six years before the assassination of Martin Luther King. And when America was rapidly waking up to the evils of racism and segregation, a process I add that's ongoing, sadly not complete, and people still don't seem super happy with. I'm not going to read the full quote because I've already got a lot of talking and not much time. And also there are some words that I really don't want to say, but you can see it in full and in its original context on the newsletter version of this episode that I'll share in the episode notes and as a special treat I'll actually update them.

10:37Friedman was really grotesque though. I'm not religious but I really do hope that hell exists only for him and Margaret Thatcher and Ronald Reagan. Actually quite a few people. Anyway the broader point I'm trying to make is that neoliberalism is inherently selfish and it believes that the free market should reign supreme bereft of government intervention, regulation or interference thinking that somehow these terms will enable freedom rather than the kind of market dominated quasi-authoritarian dictatorship thing where our entire lives are dominated by the whims of the affluent and that there's no institution that could possibly push back against them.

11:08Of course, there's no example in current politics like that. Now, Friedman himself makes this kind of facile argument that economic freedom, which he says is synonymous with unfettered capitalism, is a necessary condition of unfettered political freedom. Obviously, that's bollocks, although it's an argument that's proven persuasive with a certain class of people that either intellectually or morally hollow or both or run the new york times op-ed page neoliberalism also represents a kind of modern day feudalism dividing society based on whether somebody is a shareholder or not with the former taking precedence and the latter seeming irrelevant at best or disposable at worst it's curious that freedmen saw economic freedom a state that is non-interventionist in economic matters as essential for political freedom while also failing to see equality is the same i realize all this is kind of clunky and big but i want you to understand how these incentives have fundamentally changed everything and why they're responsible for the rot we see in our society and our workplaces and our tech industry and a bunch of other shit.

12:11Tired of spills and stains on your sofa? Washablesofas.com has your back. Featuring the Anabay Collection, the only designer sofa that's machine washable inside and out, where designer quality meets budget-friendly prices. That's right, Sofas start at just$699. Enjoy a no-risk experience with pet-friendly, stain-resistant, and changeable slipcovers made with performance fabrics. Experience cloud-like comfort with high-resilience foam that's hypoallergenic and never needs fluffing. The sturdy steel frame ensures longevity, and the modular pieces can be rearranged anytime. time. Check out washablesofas.com and get up to 60 % off your Anabay sofa, backed by a 30-day satisfaction guarantee.

12:55If you're not absolutely in love, send it back for a full refund. No return shipping or restocking fees. Every penny back. Upgrade now at washablesofas.com. Offers are subject to change and certain restrictions may apply. So I've shopped with Quints before they were an advertiser and after they became one. And then again, before I had to record this ad, I really like them. My green over shirt in particular looks great. I use it like a jacket. It's breathable and comfortable and hangs on my body nicely. I get a lot of compliments. I liked it so much. I got it in all the different colors, along with one of their corduroy ones, which I think I pull off.

13:30And really, that's the only person that matters. I also really love their linen shirts, too. They're comfortable, they're breathable, and they look nice. Get a lot of compliments there, too. I have a few of them. Love their rust colored ones as well. And in general, I really like Quince. The shirts fit nicely and the rest of their clothes do too. They ship quickly, they look good, they're high quality, and they partner directly with ethical factories and skip the middleman. So you get top tier fabrics and craftsmanship at half the price of similar brands. And I'm probably going to buy more from them very, very soon.

13:58Keep it classic and cool this fall with long lasting staples from Quince. Go to quince.com slash better for free shipping on your order and 365 day returns that's q u i n c e.com slash better free shipping and 365 day returns quince.com slash better parking shouldn't slow you down park whiz gives every driver a shortcut book ahead save up to 50 and skip the hassle of circling the block park smarter park faster park whiz download the park whiz app today and save every time you park so today's show is brought to you with support from Square, who I really love. They offer quick payment processing, really easy to use terminals.

14:40Everything spins up really quickly. Every store I use them in, I don't really think about the experience, which is exactly what I want from any kind of tech. The loyalty programs work really easily. They're over at Court Street Grocers, S &P, Van Leeuwen Ice Cream. They're just a very easy to use and straightforward piece of tech. I can't recommend them enough. I've heard great things from businesses using them. And as a customer, never upset to see them in a store square keeps up so you don't have to slow down get everything you need to run and grow your business without any long-term commitments and why wait right now you can get up to 200 off square hardware at square.com slash go slash better offline that's s q u a r e dot com slash g o slash better offline run your business smart with square Get started today.

15:58you have is to promote further exploitation and dominance, not to have happy customers, not to make your company a good place to work, not to make a good product, and not to make a difference or contribute anything to the world other than further growth. While this is, to anyone with a vapor of an intellectual moral dimension, absolutely fucking stupid, it's an idea that's proven depressingly endemic among the managerial elite, in part because it's entered the culture and because it is hammered again and again across in MBA classes and corporate training seminars. In simpler terms, modern business theory trains executives not to be good at something or to make a company based on their particular skills, but to find a market opportunity and exploit it.

16:36The chief executive, who makes over 300 times more than their average worker, is no longer a leadership position, but the kind of figurehead measured on their ability to continually grow the market capitalization of their company or the theoretical valuation before they flog it to a public company or they take it public themselves. It's a position inherently defined by its lack of labor, the amorphousness of its purpose, and the lack of any clear responsibility other than making sure the money goes up to them. While CEOs do get fired when things go badly, it's often after a prolonged period of decline and stagnancy, and almost always comes with some kind of payoff.

17:10And when I say badly, I mean that growth is slow to the point that even firing masses of people doesn't seem to make things better. We have, as a society, reframed all business leadership, which is increasingly broad, consisting of all management from the C-suite down, to the equivalent of Paul Blart Mall Cop, a person that exists to make sure people are working without having any real accountability for the work themselves, or to even understand the work itself. And I must apologize to Mr. Blart. He worked hard. He stopped some criminals in that movie. Really should respect his service. But when the leader of a company doesn't participate in or respect the production of the goods that enrich them, it creates a culture that enables similarly vacuous leaders on all levels.

17:49Management as a concept no longer means doing work, or even managing work. So the output of that work is better, you know, management. No, it's become about establishing cultures of dominance and value extraction. A CEO isn't measured on happy customers or even how good the revenue is today, but how good revenue might be tomorrow and whether those customers are paying them more. A manager, much like a CEO, is no longer a position with any real responsibility. They're there to make sure that you're working, to know enough about your work that they can sort of tell you what to do, but somehow the job of telling you what to do doesn't come with any actual work of their own and instructions don't need to be useful or meaningful or impart any great wisdom.

18:27Now, if you're a manager hearing this, you're really not going to like these episodes. These episodes are really going to dig at your heart. Now, I've heard from a few managers when I've had a dalliance with this in the past and usually 50, 50, 50 % of people saying like, Hey, I get it. I'm a manager too. And like, I think you're right about management. Great managers move stuff out the way they get people, the resources they need. They understand and respect the labor that they're working with, and they help them do their work. They make sure they're on task. They get business idiots out of their way.

18:58Then the other 50 % get real butthurt. If you're butthurt hearing this, go cry, but go cry outside. Nobody likes you. Now, decades of direct erosion of the very concept of leadership means that the people running companies have been selected not based on their actual efficacy, especially as the position became defined by a lack of actual production, but on whether they resemble what a manager or executive is meant to look like based on the work that somebody else did once. That's how somebody like David Zaslav, a lawyer by trade and arguably the worst CEO in the entertainment industry, managed to become the head of Warner Brothers.

19:30That and he kissed up to Jack Welch of GE, who he called a big brother that picked him up like a friend. Jack Welch fired like over 100 ,000 people over his tenure. Real piece of fucking shit. Talking to pieces of shit, it's how Carly Fiorina, an MBA by trade, went on to become the head of HP, only to drive the company into a ditch where it stopped innovating and largely missed the biggest opportunities of the early internet era. The three CEOs that followed her at HP, Mark Hurd, who was ousted after fudging expense reports to send money to a love interest and still got tens of millions of dollars in severance, Leo Apotheker, who in the New York Times suggests may have been worse than Fiorina, and Meg Whitman, famous for being both a terrible CEO of HP and co-founding the doomed video star-up Quibi.

20:15Well, they all similarly came from a non-tech background and similarly did a shitty fucking job, in part because they didn't understand the company or the products or the customers or really give a shit about anything other than getting paid. Hey, you know where Meg Whitman now is? She's on the board of fucking CoreWeave. I swear to God, history's driving me insane. Management has, over the course of the past few decades, eroded the very fabric of corporate America. And I'd argue it's done much the same to multiple other Western economies too. I'd also argue that this kind of dumb management thinking also infected the highest echelons of politics across the world, and especially in the UK, my country of birth and where I lived until 2008, delivering the same kind of disastrous effects, but at a macro level, as they impacted not a single corporate entity, but the very institutions of the state.

21:00Now, the UK has never been an egalitarian society, as demonstrated by the fact that one fee-paying school produced 20 of our 55 prime ministers, and that 20 % of the current MPs went to either Cambridge or Oxford University. And yet things have changed markedly in the past few decades, and you can kind of use the Thatcher years as the epoch when that political culture shifted. I was born in the midst of the Thatcher government. My formative years were spent as British society tried to recover after her reforms, which is itself a comfortable euphemism for the reckless shedding of the state and a push towards an American-style individualism.

21:32Thatcher, who fucking loved Friedman's thinking, once famously quipped that there was no such thing as a society. Jesus Christ, it's like sub-Jokerian thinking. She didn't understand how things work, but was nonetheless completely convinced of the power of the market to handle what was the functions of the state, from housing to energy to water. And if you know how things are going with Thames Water, what do you think? The end result of this political and cultural shift was in the long run pretty bad. The UK has the smallest houses in the OECD, the smallest housing stock of any developed country, and some of the worst affordability.

22:08The privatization of the UK's water infrastructure meant that money that would previously go towards infrastructure upgrades was instead funneled to shareholders in the form of dividends. As a result, Britain is literally unable to process human waste and is actively dumping millions of litres of human sewerage into its waterways and coastline. when britain privatized its energy companies the new management sold or closed the vast majority of its gas storage infrastructure as a result when ukraine the ukraine war sparked and natural gas prices surged britain had some of the smallest reserves of any country in europe and was forced to buy gas at market prices which were several times higher than their pre-war levels thus sending household and energy bills through the fucking roof

23:01Let's be real. Life happens. Kids spill. Pets shed. And accidents are inevitable. Find a sofa that can keep up at washablesofas.com. Starting at just$699, our sofas are fully machine washable inside and out. So you can say goodbye to stains and hello to worry-free living. Made with liquid and stain-resistant fabric. They're kid-proof, pet-friendly, and built for everyday life. Plus, changeable fabric covers let you refresh your sofa whenever you want. Need flexibility? Our modular design lets you rearrange your sofa anytime to fit your space, whether it's a growing family room or a cozy apartment.

23:42Plus, they're earth-friendly and trusted by over 200 ,000 happy customers. It's time to upgrade to a stress-free, mess-proof sofa. Visit washablesofas.com today and save. That's washablesofas.com Offers are subject to change and certain restrictions may apply Parking shouldn't slow you down ParkWiz gives every driver a shortcut Book ahead, save up to 50 % and skip the hassle of circling the block Park smarter, park faster ParkWiz Download the ParkWiz app today and save every time you park So today's show is brought to you with support from Square who I really love They offer quick payment processing really easy to use terminals everything spins up really quickly every store I use them in, I don't really think about the experience, which is exactly what I want from any kind of tech.

24:29The loyalty programs work really easily. They're over at Court Street Grocers, S &P, Van Leeuwen Ice Cream. They're just a very easy to use and straightforward piece of tech. I can't recommend them enough. I've heard great things from businesses using them. And as a customer, never upset to see them in a store. Square keeps up so you don't have to slow down. Get everything you need to run and grow your business without any long-term commitments. And why wait? Right now, you can get up to$200 off Square hardware at square.com slash go slash better offline. That's S-Q-U-A-R-E dot com slash G-O slash better offline.

25:08Run your business smart with Square. Get started today. Stop settling for weak sound. It's time to level up your game and bring the boom. Hit the town with the ultra-durable LG XBoom portable speaker and enjoy vibrant sound wherever you go. Elevate your listening experience to new heights, because let's be real, your music deserves it. The future of sound is now with LG XBoom. And for a limited time, save 25 % at LG.com with code FALL25. Bring the boom! XBoom.

25:46I'm no fan of Thatcher, and like Friedman, I hope she fucking burns and it hurts. The reason I brought her up was to stress the consequences of this kind of clueless managerial thinking on a macro level, where the impacts aren't just declining tech products or white-collar layoffs, but rather the emergence of generational crises of housing and energy in the environment. These crises were obvious consequences of decisions made by someone whose belief in the free market was almost absolute, and whose fundamentalist beliefs surpass the actual informed understanding of those working in energy, housing, or water.