4 min read

That cold and lonely place

Elon Musk is trying to plug Twitter's middle management black hole; but middle management might actually prevent quiet quitting; cash is king; and is there a future for crypto?
That cold and lonely place

1—That cold and lonely place

Since his $44 billion acquisition of Twitter, Elon Musk has wasted no time in transforming the organisation's structure:

"Minutes after closing his purchase of the company, he started a process that reduced the workforce from 7,500 to 2,500 in 10 days.

Media pundits immediately slammed him, arguing that his slash-and-burn strategy would destroy one of the world's most important social-media platforms—already in danger under the burden of $14 billion in debt.
By eliminating layers of management and proactively asking executives who prefer the warm womb of corporate indecision to leave and bringing in tested and trusted engineers and executives loyal to him, Mr. Musk will be able to move fast, get things done, and eliminate corporate waste.

Like it or not, he is establishing a new corporate culture at Twitter. It's a culture that is little known to the generation brought up on Zoom. The days of nap pods, emotional-support dogs, corporate pronoun guides, personal wellness days and email blackouts after 5 p.m. are quickly vanishing."

That's from Rob Wiesenthal, who takes aim at "the members of Twitter's black hole of middle management, that cold and lonely place where great ideas go to die at big companies".

Time will tell whether Musk can pull it off. He doesn't have much choice but to undertake a radical transformation; according to Bloomberg, the margin loans he took on as part of the buyout are costing the firm $1.2 billion annually in interest payments, "more than a measure of Twitter's earnings for the whole of 2021".

Do check out Wiesenthal's full opinion piece here (~3 minute read).

2—Explaining quiet quitting

Companies such as Gore, Morning Star, Valve, and Haier "have famously flat structures", and if Elon Musk has his way, perhaps Twitter will soon join them. But according to Nicolai Foss and Peter Klein, that structure isn't for everyone:

"Greater worker autonomy, empowerment, and responsibility as a cure for quiet quitting may be worse than the disease.

The conventional wisdom about quiet quitting has been influenced by a genre of business books promoting the idea that 'everyone should be a boss.' For more than a decade we have been told by legions of consultants, professors, and gurus that flattening the hierarchy, getting rid of middle managers (or even all managers!), and empowering workers to make their own decisions or form self-organising teams will unleash creativity and productivity.
From this perspective, quiet quitting happens because companies aren't meeting the expectations of millennial and Gen Z professionals concerning autonomy, influence on their jobs, and self-development. But quiet quitting may also be a protest against overinvolvement, a reaction to jobs that consume too much time because they call for constant initiative, engagement, and development—problems aggravated by a lack of attention and guidance from managers."

Surveys show that people want "compensation and work-life balance, not empowerment and fulfillment". One size rarely fits all and a hierarchy – which "doesn't mean command and control" – can be important for its role in "designing systems and processes, solving disputes, and helping people coordinate and cooperate".

You can read Foss and Klein's full blog post here (~3 minute read).

3—Christmas giving

Spoiler: the economist's answer is always cash.

4—Is there a future for crypto?

Sam Bankman-Fried and the FTX collapse scam have done irreparable damage to crypto. But Scott Alexander thinks it still has its uses:

"Do Vietnamese people love trading monkey gifs? Are Ukrainians especially susceptible to Ponzi schemes? Is Venezuela laden with techbros?

Vietnam uses crypto because it's terrible at banks. 69% of Vietnamese have no bank access, the second highest in the world. I'm not sure why; articles play up rural poverty, but many nations have more rural poor than Vietnam. There's a history of the government forcing banks to make terrible loans, and then those banks collapsing; maybe this destroyed public trust? In any case, between banklessness and remittances (eg from Vietnamese-Americans), Vietnam leads the world in crypto use."

A lot of the world remains unbanked or poorly banked. Is crypto as good as a well functioning financial sector? No, but that's not the choice set available to a Vietnamese farmer, or the average Egyptian who is currently "hoarding as much gold as they can, trying to protect their savings, as their national currency continues to lose value". Alexander continues:

"I think a lot of Westerners want to think of developing-world uses as a boring sideshow, and highlight Westerners trading monkey gifs as the only part of crypto worth talking about. But about 66% of crypto users live in the developing world. More people own cryptocurrency in Africa than in North America. Of course a technology centred around avoiding governance and banking failures will be centred in the countries with the most governance and banking failures!"

You can read Alexander's full article here (~10 minute read), in which he remarks that "crypto is still a set of interesting technological solutions to regulatory problems. They're already solving some problems, and maybe later they'll solve more."

5—Further reading...

🚽 Close the lid. Every time you flush, it "generates a strong upward jet of air with velocities exceeding 2 metres per second, rapidly carrying these particles up to 1.5 metres above the bowl within eight seconds."

🍎 "Apple Inc. has scaled back ambitious self-driving plans for its future electric vehicle and postponed the car’s target launch date by about a year to 2026, according to people with knowledge of the matter."

⚔️ "The boys have left but the men have stayed." That's from a new propaganda video circulating on Russian media, cringeworthy through its entire 45 seconds.

📈 These revisions happened with the USSR every year until the wall came down. "China GDP to surpass US around 2035, [10] years later than previously expected, Goldman Sachs predicts."

💸 From a new study on Chinese industrial policy: "We find little evidence that the Chinese government picks winners—if anything, the evidence suggests that direct subsidies tend to flow to less productive firms rather than more productive firms."