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Episode Summary

Just as the 2020 elections were fading into America’s rear view mirror, Elon Musk, the CEO of Tesla and SpaceX, cast the political and media worlds into chaos by taking ownership control over Twitter. Most people don’t use Twitter because they find it too weird and disjointed, but it is actually the place online where most of America’s political junkies: activists, politicians, and journalists come to talk.

It all seems to have started as a joke, however. Musk offered to buy Twitter at a price of $54.20 per share, 420 being the very, very old reference to marijuana. After his Tesla stock price went south dramatically, Musk tried to get out of the deal but was forced into it by a lawsuit from Twitter. Since then, Musk has brought the site into complete chaos, reinstating a number of accounts that had been banned for promoting hatred and violence and disinformation, including, most famously, Donald Trump.

While he appears to have had no real plan for Twitter beforehand, what has become very evident is that Elon Musk has become radicalized by the far right, a path that has become increasingly common in recent years for wealthy white libertarian men who just a few decades ago actually saw themselves on the political left, before the re-emergence of populists like Bernie Sanders and Elizabeth Warren.

There’s a lot to talk about Musk and Twitter and how he fits into the larger tradition of the libertarian right within Silicon Valley and the American political right as a whole. We’re pleased to feature two panelists to discuss this topic. Jacob Silverman is the co-author of the forthcoming book Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, which he’s co-writing with the actor, Ben McKenzie. We’re also joined by Chris Lehmann, who is the Washington Bureau Chief of The Nation magazine and the former editor of The New Republic.


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Transcript

MATTHEW SHEFFIELD: We’ll get started here first with you, Jacob. So you have kind of looked at more of the contemporary angle of some of this in your recent journalism, including a piece that you wrote for the New Republic. So tell us, I guess first of all, the context for Musk, and I mentioned a little bit in the intro, but who is he, and where’d he come from, and has he always been this sort of right wing troll, basically that he currently is [00:04:00] operating as.

JACOB SILVERMAN: Well, to answer the last question first, I’d say I think the, the right wing trollishness has definitely come more to the fore in recent years, most prominently with the recent acquisition of Twitter, where you can really see his social relationships playing out in real time, basically. But Elon Musk, a lot of folks know, he grew up in South Africa, came to the U.S.

There’s some dispute about what kind of college degree he has, because a constant thing about Musk is that he lies and/or has exaggerated, or just otherwise obfuscated throughout his whole career, really. So Musk got a degree. He used to say he had a degree in physics, I believe, but some recent reporting indicates it’s in economics.

He was an early executive at PayPal. He merged a company called X.com with basically with Peter Thiehl’s company and created PayPal. He is original member of the “PayPal Mafia,” as it’s called, which has become really influential in Silicon Valley. A lot of companies came out of that.

So he’s associated with folks like Peter Thiehl, or David Sachs, or Max Levchin, Reid Hoffman. All these folks are mostly on the political right in one form or another, who started at PayPal, made enormous amounts of money, and then made even more money investing in other companies. Famously, Musk then became part of Tesla. He often presents himself as a founder of Tesla. He is not. Similarly, he often presents himself as a founder of PayPal. He is not.

But actually a very interesting part of Musk’s exit agreement with PayPal was that they describe him as a founder. They kind of ret-conned him into the company lore as a founder, but he is not. And so this kind of exaggeration of credentials, and of his place in these companies is something that you see throughout his career.

I believe he is the founder of SpaceX, and so now technically, he’s the CEO of three companies– of SpaceX, Tesla, and Twitter. And Musk’s career has always been sort of a high wire act. He has borrowed a lot of money throughout his career. I mean, he’s a very rich man by some measures, the richest man in the world. For probably last couple decades, he’s often borrowed against either his holdings, [00:06:00] his stock holdings, or simply borrowed from friends. Earlier in his career, he was borrowing a lot of money to simply maintain his lifestyle.

I think what’s important to know about Musk is that one, he’s not the most reliable source, especially about his own sort of holdings and his own career and actions.

And that despite being enormously rich, and being rich for a long time, he’s often been on a very shaky financial foundation, which I think is certainly the case even today.

You mentioned in the intro that Musk’s Tesla holdings have plummeted in value, and that’s why he tried to get out of the Twitter deal.

So, he’s always been sort of precarious in a way. Maybe precarity is the wrong word, but again, this sort of high wire act where, you know, there there’s a possibility to swing for the fences, or a possibility to lose it all. And that’s sort of the carnival barker type personality that Musk, I think, has.

SHEFFIELD: Yeah. And in that respect, he has some similarities with Donald Trump there for sure.

SILVERMAN: Sure. He’s a show boater. He very much curries favor with the public, and in recent years, it’s impossible to deny that he sort of turned into this right wing trollish type. It’s actually been somewhat revealing who he brought into Twitter, how he talks about dispelling the ‘scourge of wokeness’ from Twitter, and who he talks to on Twitter, which is almost exclusively his friends and right wing influencers and random sycophants.

So I don’t know if Musk has a concerted ideology of his own, but he talks about free speech, as a free speech fundamentalist of sort. But in practice he is right wing, I would say, and you can see it playing out in his relationships and his actions and his politics and all those sorts of things.

SHEFFIELD: Yeah. All right. Yeah. Well, and that’s, I think that’s true and, and we’ll get further into that. So, but there is kind of a historical aspect here, Chris, to Musk and his recent behavior. He fits into a tradition of libertarianism on the political right and actually within Silicon Valley itself from the very beginning.

You want to talk about any of those angles you prefer here? And then we’ll go from there.

CHRIS LEHMANN: Oh, sure thing. Yeah, it’s definitely the [00:08:00] case, the history of the American right, especially from the end of World War II, up to the present day is full of these kind of obscenely wealthy hobbyists. The one who leaps to mind is Robert Welch, who is the founder of the John Birch Society, and actually a candy mogul, created, appropriately enough, and gave the world the Sugar Daddy. So, yeah, because of the structure of the American social order, people who have immense wealth automatically command a great deal of public deference and respect.

They’re treated as these kind of culture heroes. Even though, as Jacob pointed out, Musk acquired Tesla and didn’t actually create the, the model for the electric car. He is nonetheless, has this vast following of, of kind of other tech bros who see him as, this person who is, doing all this benevolent work to advance progress and, and move humanity to a, a better future.

It’s same with the SpaceX Empire. What’s interesting is that both Tesla and SpaceX are immensely dependent on government contracts. So you have this additional paradox of a part of the economy that, which is also true of Silicon Valley, the whole internet revolution was rooted in government funded projects like DARPA. And yet there is this fierce hatred of government that’s embodied by Musk’s former colleague Peter Thiehl, who Jacob mentioned earlier

SHEFFIELD: Who is also dependent on the government heavily.

LEHMANN: Oh, absolutely. Yeah. His Palantir empire is both scary in terms of the advance of the surveillance state and almost completely dependent on government contracts.

So there is this paradox. It actually goes all the way back to the initial Cold War, where you had in the part of the country where you are, Matthew, this vast aerospace empire took root in Southern California. And it was a major driver of the post-war boom. It recruited a lot of educated engineers, [00:10:00] physicists, and the like, and they glommed on to this libertarian ideology. I think libertarianism both appeals to the, the kind of one quick fix kind of model of thinking of social problems and progress. And there’s not really a diplomatic way to put it, but it appeals to an arrested adolescent mindset.

People who are, who have been brought up, as Elon Musk definitely has, to see themselves as the golden child of Fortune, as people who are, the default, these are all white guys, and they are just understood–

SHEFFIELD: Most of them born wealthy as well.

LEHMANN: Yes. And they are understood as the sort of natural arbiters of progress and drivers of history.

So libertarianism is an attractive ideology to this social cohort, because it basically reflects back to them the ideal world in which they think they have legitimate power. So it’s not shocking– even though Musk took a while to evolve into the fully pure right libertarian figure he is– all of the social determinants were there at the outset.

And certainly the PayPal Mafia, which Jacob referenced. I think future historians will regard this as like a disastrous formation of a massive transfusion of capital to people who are kind of sociopaths who have contempt for other social groups and have this kind of immensely hubristic understanding of themselves as the spirit of market justice incarnate.

SHEFFIELD: Yeah. And the other thing that’s kind of interesting though is that in the 2000s, slash 2010s, the people who had this ideology, except for Peter Thiehl, they weren’t identified with the Republican party explicitly. And in some regards, they actually seemed to have seen themselves as on the left.

LEHMANN: Right. They [00:12:00] were socially liberal values, tolerance, diversity. As we’re seeing at the exodus of Twitter illustrates, Silicon Valley is heavily dependent on underpaid immigrant labor. The remaining core of engineers at Twitter are people on H2B visas because they don’t have a choice really.

If they leave the company, they’ll, many of them may be forced to leave the country. So, yeah. And there was this, there was a famous article in the nineties called “The Californian Ideology,” which tried to set out the worldview of the emerging tech industry. And it did stress, there was this sort of residual Bay Area kind of lifestyle liberalism that survived the sixties, but I think this article was prescient in a lot of ways, because it did zero in on libertarianism as the kind of nexus of belief in this new socioeconomic formation.

SHEFFIELD: Yeah. Jacob, did you want to add anything on that point there?

SILVERMAN: Well, I think the “Californian Ideology” essay is great. I’m blanking on the names of the co-writers there too. But you see it being passed around still these days or on Twitter elsewhere, because it really did, as Chris was talking about, chart this path of how did these people start as hippies who were sort of counter-cultural or doing sort of experimental things, even in the context of like Xerox PARC, that research lab, and then within 10 to 20 years, they’re all working for Microsoft and big corporations. But still sort of consider technology as a driving force and even as a countercultural force. And so I think you see a lot of the kind of justifications also that people in tech use for their actions or for the power to themselves in the “Californian Ideology,” and in the new iterations of it.

They certainly do see themselves as the movers of history. And also I think the, the more recent change is that there’s a real exhaustion with politics as sort of standardly done. Politics as usual. And that I find very understandable, because, I mean, just look around. Of course,[00:14:00] there’s sort of a dissonance there because a lot of these companies are heavily involved in government contracts or dependent on even just political connections and lobbying.

But at the same time, they express a real disgust or even contempt for everyday people and politics. And so they think that technology and their own actions will be, will be kind of drivers of progress. And if other people have a problem with that too bad .

LEHMANN: Mm-hmm.

SHEFFIELD: Yeah. And just to go back in the history further, you look at the early Silicon Valley entrepreneurs, so whether that’s Andy Grove with Intel or Steve Case who was involved in a number of different things including AOL in the eighties, Scott McNealy with Sun Microsystems, basically all of these people just naturally kind of gravitated toward the Republican party in the eighties, nineties.

And Microsoft was kind of an aberration in that they tried not to be political. They just thought that government didn’t know what they were doing, and so they were just going to ignore it. And so they kind of opted out. And IBM was obviously a huge, huge player in the seventies, eighties, nineties. They were bipartisan givers.

And so this whole idea that Silicon Valley was just this incubator of left wing elitism, it’s just nonsense.

SILVERMAN: Mm-hmm.

SHEFFIELD: And as a historical matter, as things got going, there was kind of a bifurcation with the Christian Right. And some irritation with them.

Is that, is that anything that you’ve come across at all in your research, Jacob?

SILVERMAN: Well, certainly you don’t hear a lot of religion expressed in Silicon Valley. I mean, there is actually a contingent of Hindu nationalists, I would say, who are big [Narenda] Modi supporters, but that, that’s not necessarily something we need to dwell on.

But under the Obama administration, you had very close ties between Silicon Valley and the government, but I think what we’ve seen in the last couple decades is that there’s a certain malleability to tech politics. I mean, they’ll work with who’s in power and, by default, a lot of them do lean right, because they’re basically corporatists.

But you don’t really see much of the kind of religious [00:16:00] nationalism or ideology that you might see on sort of the mainstream right. Mitch McConnell types and people like that, they more represent the corporatist wing of the Republican party and have found a pretty comfortable home there.

Of course, I mean, neoliberal Democrats have been just as embracing, you had numerous Obama officials go to work for big tech companies, Amazon, Uber, other places. So in a lot of ways, there’s an evolving bipartisanship here. But if you ask a lot of these folks, they’ll say, oh, I am so socially liberal.

But when it comes down to it, they represent the kind of forces of concentrated power and wealth, that we do more often identify with the right.

SHEFFIELD: Yeah. Well, and Chris, I mean, what do you think is sort of responsible for this transition? To me, it seems like the Democratic party decided to start returning to its roots in terms of economic populism and that basically triggered the libertarians.

LEHMANN: A wing of the Democratic party expressed interest in economic populism. There’s still, I would argue, the dominant wing of the party is still very much aligned with corporate interests. Silicon Valley has been a major funding base of the party across the past 30 years. So yeah, I think what Jacob was saying is true that any sort of big corporate interest is going to be purely instrumental and certainly in terms of its giving patterns.

We saw this even with the collapse of the FTX empire under Sam Bankman-Fried, who had been the number two donor for the Democrats. But his partner whose name I’m blanking on now–

SILVERMAN: Ryan Salame.

LEHMANN: Yes, thank you. Also gave extravagantly to the the Republican party because they want to game the regulatory system in Washington, so whoever is in charge, they’re going to need influence.

But I do think it has been true, sort of going back to the “Californian Ideology” piece of it that the reigning worldview in Silicon Valley has always been anti-government. There is both this kind [00:18:00] of anxiety of influence, hatred that dates all the way back to the aerospace days in Southern California.

But there’s also the ideology of disruption, which is a profoundly conservative notion, even though it comes swabbed in this revolutionary market rhetoric. It was the brainchild of Clayton Christensen, who is a Mormon management theorist who wrote The Innovators Dilemma, which is a bible among Silicon Valley entrepreneurs.

And it’s like a lot of management tracts in general. It’s a very denuded social world, one in which all of the behavior that is determinative comes from heroic entrepreneurs, and they’re banging up against the gray walls of conformity, of regulation, of government. And it’s always and forever their job to disrupt.

And what’s interesting, I mean, this is a whole other podcast probably, but disruptors don’t actually create anything. And we see this most dramatically in the case of Sam Bankman-Fried, crypto is, just pure grift, top to bottom. There is no underlying economic productive activity.

And yet, it’s disruptive in this really superficial sense of allegedly challenging the state monopoly on currency and permitting people to have all kinds of anonymized financial transactions. It is the right wing Valhalla, you have maximum economic power and basically zeroed out government control.

It’s no wonder that libertarians, throng to something like crypto. It’s no wonder that also Democrats as, as we’ve been saying, all these major institutions were in love with Sam Bankman-Fried up until the moment that the wheels came off and it became clear that emperor had no clothes, to mix metaphors ,sorry.

And it’s an interesting moment, and again, tech bros can command this kind of cultural deference because there’s been, literally for a generation, like in my industry, the [00:20:00] media, there’s just been unbelievably fawning coverage of anything that any major tech company says or does.

You just have to go back to every release of the iPhone. It’s a dumb product that is tinkered around the edges, and yet every time one is trotted out, it’s on the front page of newspapers. It’s a ridiculous model for journalism, and it’s a ridiculous model to understand how business actually operates in public life.

SHEFFIELD: Yeah. Well, Jacob, you’re writing a book on cryptocurrency. This obviously is a subject of interest to you as well.

SILVERMAN: Yeah, I was, I was very glad to hear Chris’s assessment there. I mean, I, I think one thing about crypto that he said that deserves highlighting is there’s no real productive economic activity associated with it, which is actually why sometimes when I speak to people in finance or business who are definitely not on the left, they find they find crypto really frustrating because it’s a very poor allocation of capital.

There have been billions of dollars poured into it, and we’re getting very little for it. It’s mostly funneling money from, as I say, from information poor retail investors, everyday people up to the VC and tech capitalist class. One thing I think that crypto does highlight is that libertarian foundation or strain that runs through tech.

There’s a good book by David Columbia about Bitcoin and about its kind of right wing ideological foundations. And now of course crypto has grown, well now it’s shrinking, but it, it grew to be sort of more consumer product and, and involve more companies, more countries, people all over the world.

But that original anti-state ‘I want to do what I want,’ hardcore libertarian foundation, even Sovereign Citizen type attitude, which you do see in crypto, that’s been there from the beginning. And I would argue that the people who really run crypto. Because it’s not the decentralized free market it’s portrayed as, but rather it is kind of a closed group of men who basically run this industry.

We know a lot of their names. Until recently, Sam Bankman-Fried was one of them. They really just want the freedom to [00:22:00] do what they want, and I think a lot of them are very ideologically motivated. And you can hear it in some of them. Sam himself, I think, was more of an operator, glad to play any side he could, but people like Jesse Powell, the CEO of Kraken, which is under investigation for violating sanctions. He’s highly ideological.

Anyone involved with Bitcoin and El Salvador, or just what are called “Bitcoin maxies,” Bitcoin maximalists, you hear all the hardcore libertarianism. The state can only be a tyrant and I deserve to transact freely, however I want, in whatever manner I want. That’s really an underlying ethos and political foundation here.

I think the larger grift of crypto is that it’s brought a lot of people in with the traditional tech mantra of progress, of creative disruption– as Chris was talking about– that it could be a liberatory, even utopian force. And one reason why I glommed onto crypto as a critic was because I was seeing the same stuff 10 years ago with social media.

And I wrote a book critical of tech power and social media and the growing tech surveillance state that came out in 2015. And, at the time, Mark Zuckerberg was saying that Facebook would lead to world peace. He actually said that. There was a section on Facebook’s website where they highlighted people from warring countries who talk to each other, like Israelis and Palestinians and folks like that, or people from India and Pakistan.

So there was the same kind of, it, it differed in some of the particulars, but the same kind of utopian rhetoric around social media. And of course after 2016 especially, that’s when some tech journalists finally woke up and, and started seeing that there are huge negative externalities, and this is nothing like what we were promised.

And I think that’s the stage we’re starting to enter into crypto right now. There’s a lot of denialism. It’s going to be very messy to clean up. There’s a lot of problems to still play out. So we’re not necessarily near the end game, but we’re, we’re kind of going through that cycle, I think of, of disillusionment and maybe the public’s starting to realize what is actually being pushed on them here.

SHEFFIELD: Yeah. Well, and I think what you were saying about the idea of [00:24:00] this ideology of I should be able to trade whatever I want or say whatever I want, it kind of fits to, to your point, Chris, about libertarianism as kind of this juvenile reactionary philosophy. And all of this kind of goes, you could argue, goes back to Ayn Rand, much even further than Silicon Valley or management consultants.

SILVERMAN: Everyone in tech’s favorite book is Atlas Shrugged or some other Ayn Rand book.

LEHMANN: Yeah, it’s it, it is kind of weird that the, the market for libertarian thinking has not been disrupted, right? (laughter) A 70-year-old doorstop of a terribly written novel that is the go-to source of the gospel.

I did, speaking of the gospel, wanted to pick up the thread you mentioned earlier Matt, about the libertarian-r eligious right alliance and what’s unstable about it. But I think it’s also true that you see a lot of crypto fans who are evangelical right wingers.

There’s actually someone in my extended family who is a pastor who cashed in on crypto and bought a house in Idaho so he could live apart from the raving Democrats in Washington state where he was living previously. And David Columbia has also written on this element too. Crypto has become a kind of object of worship.

SILVERMAN: Prosperity Gospel in its own way.

LEHMANN: It is, yeah. This goes back to my book, which was published in 2016. The evangelical political vision has become so fiercely individualist in a lot of ways, even though, at the policy level, there’s a lot of conflict between libertarianism and evangelicalism. Libertarians generally don’t like to see drug laws enforced. They’re pro-abortion, they’re pro-gay marriage. All of these signal culture war issues obviously have made across time the evangelical-libertarian alliance pretty dicey. But it is interesting in the realm of political economy, there isn’t a lot of breathing room between the two movements that I can see at least.

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