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  • Mark 8:05 am on July 3, 2018 Permalink | Reply
    Tags: , , capital, , interest rates, tech stocks, , theranos,   

    The cultural consequences of start-ups remaining private 

    There’s an interesting anecdote on loc 3960-3972 of Bad Blood, John Carreyrou’s gripping account of the Theranos scandal, recounting a follow up meeting between Rupert Murdoch and Elizabeth Holmes which sealed the former’s investment in the latter’s company. I thought it was a vivid account of the distinctive corporate culture which had emerged within Theranos and how this ran contrary to the expectations that could be found within other sectors, even amongst international elites who could be expected to have seen a great deal in terms of the personal entourage of fellow elites and the business expectations they bring with them into potential collaborations:

    They met again a few weeks later at the media mogul’s Northern California ranch. Murdoch, who had only one bodyguard, was surprised by the size of the security detail Holmes arrived with. When he asked her why she needed it, she replied that her board insisted on it. Over a lunch served by the ranch’s staff, Holmes pitched Murdoch on an investment, emphasizing that she was looking for long-term investors. Don’t expect any quarterly reports for a while, she warned him, and certainly not an initial public offering. The investment packet that was later delivered to Murdoch’s Manhattan office reiterated that message. Its cover letter stated in the first paragraph that Theranos planned to remain private for the “long term” and went on to repeat those two words no fewer than fifteen times.

    There are financial consequences to start-ups remaining private for longer, in some cases seeking to avoid going public altogether. Furthermore, it is only a possibility because of the ready availability of capital driven by low interest rates and the (illusory) promise of exponential growth. But what are the cultural consequences of firms remaining private for longer? How were the cultural pathologies of Theranos facilitated by their status? How did this corporate culture shape how the firm was seen by outsiders? Was the corporate culture of Theranos exceptional or can we see extreme manifestations there of tendencies which can be identified in other firms?

     
  • Mark 9:10 am on August 5, 2017 Permalink | Reply
    Tags: , , , capital, , london, , , ,   

    How widespread is shadow mobilisation? 

    In the last few years, I’ve become interested in what I think of as shadow mobilisation: assembling people under false pretences and/or in a way intended to create a misleading impressions of the mobilisation. This is often framed in terms of astroturfing – fake grass roots – however it appears to me to extend beyond this. It would be a mistake to see it as a new thing but it might be out present conditions are making it easier and more likely.

    It implies a relationship between the instigators and those mobilised, either through manipulation or reimbursement, which is fundamentally asymmetrical. One group has the capacity to plan, enact and reflect on these mobilisations while the other is a mereaggregate, induced to action on an individual-by-individual basis, furthering an agenda which might cohere with their own individual concerns but has no basis in collective concerns. In this sense, shadow mobilisations are a facimale of collectivity. 

    If we accept the adequacy of this concept, it raises many questions. Foremost amongst them though is how widespread such shadow mobilisations are, as well as the conditions which facilitate this. I’ve come across examples in many sectors and I wish I’d been recording these systematically. The most recent comes in Anna Minton’s Big Capital, an illuminating study of how global capital is transforming London. From loc 1281-1297:

    In a House of Commons debate in 2013, Labour MP Thomas Docherty, a former lobbyist, shared with Parliament some of the techniques of his former colleagues, recounting stories of lobbyists being planted in public meetings to heckle people who opposed their clients’ schemes. His stories chime with a wealth of anecdotal evidence of dirty tricks, including fake letter-writing campaigns and even actors attending planning meetings. Martyn, a film maker from Brighton, described to me how he had been offered ‘cash in brown envelopes’ to attend a planning meeting and pose as a supporter of Frank Gehry’s controversial plans for an iconic new development of 750 luxury apartments on the seafront. He remembers how ‘at least five of us’ from the drama school where he was studying were approached by an events company and asked if they’d like to participate. ‘We were told to go there and shout down the local opposition to the development. A couple of people were pointed out to us –residents, leaders of the local opposition –and we were told to be louder than them and be positive about the development. We were paid on exit, cash in hand, I think it was £50 or £100. I was there and I’m not proud of it. It is something that horrifies me,’ he said. 36 In Parliament, Docherty described dirty tricks as ‘utterly unacceptable’, although ‘not a crime’.

    While each particular case of this manipulation of the planning process occurs on a small scale, it reflects an asymmetry we can see in other cases of shadow mobilisation. Residents who coordinate their action, potentially constituting an organised collective in the process, confront organisations which deploy their resources towards drowning this nascent collectivity through a shadow mobilisation. As Minton points out, such activity sometimes occurs alongside organised harassment, suggesting the ethical climate in which shadow mobilisation is seen as a viable strategy by those pursuing private profit.

     
    • Susan Marie Martin 9:30 am on August 5, 2017 Permalink

      I think the term ‘shadow mobilization’ works best for the reasons you give. Reminiscent of how Medovi’s ‘future-tense narrative’ of capitalism works (Globalization as Narrative and Its Three Critiques). Historically, events such as the Gold Rush or the World’s Fair (any location, any epoch) could be examples of shadow mobilization?

    • Mark 8:47 pm on August 6, 2017 Permalink

      That’s a really interesting suggestion, thanks.

  • Mark 4:19 pm on August 26, 2015 Permalink
    Tags: capital, , , , ,   

    the threats of financial elites  

    From Liar’s Poker by Michael Lewis, pg 302-303

    One of the managing directors from London, who happened to be in New York, actually took me aside to practise an argument he planned to put to the Bank of England. He had calculated the sum of the losses of the banks underwriting BP to be 700 million dollars. He said that the world financial system might not withstand this drain of capital from the system. Another panic could ensue. Right? Amazing. He was so desperate to avoid the loss that I think he actually believed his lie. Sure, why not? I said; it’s worth a try. Basically, it was an old ploy. My boss wanted to threaten the British Government with another stock market crash if they didn’t take back their oil company. * (Note to members of all governments: be wary of Wall Streeters threatening crashes. They are tempted to do this whenever you encroach on their turf. But they can’t cause a crash any more than they can prevent one.)

     
  • Mark 4:19 pm on August 26, 2015 Permalink
    Tags: capital, , , , ,   

    the threats of financial elites  

    From Liar’s Poker by Michael Lewis, pg 302-303

    One of the managing directors from London, who happened to be in New York, actually took me aside to practise an argument he planned to put to the Bank of England. He had calculated the sum of the losses of the banks underwriting BP to be 700 million dollars. He said that the world financial system might not withstand this drain of capital from the system. Another panic could ensue. Right? Amazing. He was so desperate to avoid the loss that I think he actually believed his lie. Sure, why not? I said; it’s worth a try. Basically, it was an old ploy. My boss wanted to threaten the British Government with another stock market crash if they didn’t take back their oil company. * (Note to members of all governments: be wary of Wall Streeters threatening crashes. They are tempted to do this whenever you encroach on their turf. But they can’t cause a crash any more than they can prevent one.)

     
  • Mark 6:47 pm on May 24, 2014 Permalink | Reply
    Tags: capital, , , , , ,   

    The breaking of intellectual superstars 

    I’ve blogged a few times recently about Thomas Piketty and the making of intellectual superstars. I find his elevation to “rock star” status fascinating, not least of all the deeply performative nature of this silly epithet, revealing as it does many interesting trends about the status of intellectuals in contemporary circumstances. The case has become even more fascinating with the alleged takedown of his data in the FT last night:

    Now, in a move that has delighted his manifold critics on the right, who view Piketty’s tome as a dangerous, modern-day successor to Karl Marx’s Das Kapital, the 43-year-old French economist has found himself attracting a less welcome form of attention. The Financial Times has suggested that Piketty’s work contains a series of errors that appear to fatally undermine large parts of his thesis. The normally restrained paper claims that some of the data Piketty uses to support his arguments about yawning inequality in Britain and Europe are dubious or inexplicable. Some of this, the paper suggests, may be down to straightforward transcription errors. More damningly, the FT claims, “some numbers appear simply to be constructed out of thin air”.

    The paper goes as far as to suggest its findings are similar to those last year that undermined the work of the Harvard economists, Carmen Reinhart and Kenneth Rogoff, which analysed the relationship between growth and debt and was subsequently found to have been based on a flawed spreadsheet.

    Bloomberg described the claims as a bombshell and there has been no shortage of commentators suggesting the story is huge. Some on the right have also been gleeful, suggesting the FT‘s story will scupper Piketty’s chances of landing a Nobel prize. But, as the dust settles, even many of his critics have been reluctant to claim that Piketty has been left badly wounded by an impenetrable row over the selection and interpretation of data, nor do they accept that the FT‘s claims have done much to damage his over-arching thesis.

    http://www.theguardian.com/business/2014/may/24/thomas-picketty-economics-data-errors

    Much as I expected, I got 50 pages into the book before getting distracted by other things and haven’t been back to it since. I’m deeply aware of not having read the book when reading the coverage of the FT’s attack. I’m also wondering how many other people commenting upon it have actually read the book in depth. I find myself nodding approvingly at Krugman’s critique of the critique, vaguely aware of feeling ‘my side’ is under attack, despite this being a book I only bought because I was intrigued by all the hype surrounding it. I find the whole Piketty affair fascinatingly strange. It all seems so obviously overblown and yet the issues at stake are clearly consequential. Nonetheless, there’s a subtle theatricality pervading the endless stream of verbiage being generated in response to this book, as if the book could in reality consist of 600 blank pages without making a difference to the sentiments underlying the detailed arguments.

    I’m really not very clear about what I do think is going on here, perhaps explaining why I’m so gripped by it, but I’m certain I’ll be rehearsing this in my mind for years to come as a case study for considering the causal power of ideas within social life. I think it illustrates an acceleration of the process by which ideas can find material sponsors, concerned to promulgate a way of understanding a contested phenomena and promote it socially. There’s also something interesting going on about the way in which the meditation of this process by the blogosphere contributes to its rapidity, amplifying certain voices through a dynamic which is superficially democratic (bringing lots of people into the process) but basically exclusionary, given pervasive tendencies (e.g. not having read the actual book for quite understandable reasons) which leaves opinion formation in the hands of Krugman and comparable ‘thought leaders’.

     
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