No Mercy / No Malice: The Line

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• 0:01Scott Galloway?

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• 0:48Speaker 01

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• 1:08Scott Galloway?

  I'm Scott Galloway, and this is No Mercy, No Malice: The Line.

• 1:17Scott Galloway?

  OpenAI Summary of Events. The board fucked up and fired CEO Sam Altman. But over the next several hours, days, the situation was unfucked. As of this writing, the state of play is Altman is back as CEO, and a majority of the board has resigned. Whether or not that status survives a long weekend, the ultimate outcome has been clear since Sunday night. Altman reinstated at OpenAI.

• 1:48Scott Galloway?

  The board's last stand was Daryl Hannah in a tree, refusing to come down and protest, illusory relevance with the half-life of a Planet Fitness seven-day pass.

• 1:59Scott Galloway?

  Microsoft hiring the entire OpenAI workforce was never realistic, despite the made-for-TV moment of 500 people boarding a plane for Seattle. Some of the problems: broken employee and partnership agreements with OpenAI, and infringement of its IP rights, Microsoft's assimilation of 500 different comp and equity agreements, the response of OpenAI investors, for example, A16, Cosla Ventures, Sequoia, Thrive and Tiger, to their multi-billion-dollar stakes getting effectively transferred to Microsoft, and antitrust concerns over even greater concentration of AI power.

• 2:41Scott Galloway?

  Satya knew this and was careful to say he welcomed the opportunity to work with OpenAI again should Altman return, which was the better, more viable outcome for both of them all along. The near collapse of the Valley's most important and successful startup is a $90 billion lesson that profit and mission don't mix. OpenAI was founded as a nonprofit, then birthed a for-profit subsidiary, serving "all of humanity", was adorable until $90 billion distractions showed up and the management team and investors began avoiding eye contact with the original mission. Altman and the board were supposed to straddle that divide, but it proved impossible.

• 3:26Scott Galloway?

  If this was a battle between capital and concern for humanity, capital smothered humanity in its sleep. We should abandon the mythology that the market alone can produce the great taste of capitalism, shareholder returns, without the calories—pick your poison: climate change, labor exploitation, autocracy. Nothing drives innovation and value creation like the profit motive, but it can't be trusted to do anything but make money. That's why we need stronger government regulation and greater enforcement. The best ESG investment of 2023 was taxpayers' investment in the SEC and DOJ, which are

• 4:10Scott Galloway?

  sending the CEOs of FTX and Binance to jail.

• 4:18Scott Galloway?

  The fiduciary obligation to humanity belongs with democratic institutions. It can't be dependent on the greater angels of billionaires. However, the pursuit of profit has limits. And that brings us to the other major news of the week, which I believe is more serious and consequential. Last Wednesday, what Elon Musk had previously cloaked in dog-whistling retweets and bluster broke into the open with an explicit public endorsement. "You have said the actual truth," he wrote in response to the claim that Jews are pushing hatred against whites and flooding their country with minorities.

• 4:59Scott Galloway?

  This follows months of warnings from outside groups that anti-Semitic and other hateful content has surged on X. Mr. Free Speech has sued several of these groups and blamed the Anti-Defamation League for undermining X's advertising business. What has ensued is apologists contextualizing the statements of their friend, idol, and potential client. These same leaders were quick to judge the idiocy of a 19-year-old at a campus rally, but they've decided there's nuance when it comes to one of their own. "It's fucking gross. You don't need to be able to see into his ketamine heart.

• 5:39Scott Galloway?

  You are your actions, you are your words, and Elon Musk is an anti-Semite." Whether you agree this is what the man is, or believe he's cosplaying a Nazi for business reasons, or believe he's just a misunderstood genius, the question remains. What is to be done when the richest man on the planet, who controls the world's most valuable car company and a global satellite communications network, uses his wholly-owned social media platform to increasingly and unapologetically aid and abet bigotry and anti-Semitism?

• 6:18Scott Galloway?

  This is just the latest incarnation of an old problem. I wrote about this a year ago, when another well-known figure was promoting the same dangerous feculence. The post wasn't about him, Kanye, but the appropriate response to his statements.

• 6:33Speaker 02

  The fallout continues for Ye, formerly known as Kanye West, whose recent antisemitic comments have caused public outrage. This morning Adidas, which helped make the rapper's Yeezy shoe and clothing lineup multi-billion dollar business, severed ties with him.

• 6:51Scott Galloway?

  We're reading it again because our response to Elon is more important. Not only because of his power and reach, but because the situation has grown more dire. Hate crimes in the US have been rising for a decade and were up another 7% in 2022, while antisemitic incidents were up 36%. In 2021, there were eight bomb threats against Jewish institutions. In 2022, there were 91. That was before October 7 and the war in Gaza. This October registered a nearly 400% increase in antisemitic incidents, and violence begets violence.

• 7:35Scott Galloway?

  Islamophobic incidents nearly doubled in the same period. As we argued when we ran the following post last year, these trends have tragic historical echoes. The price of doing business with those who traffic in hate is not measured in dollars, but in lives. What this post is ultimately about is the difference between opinions and principles. Opinions are easy to hold and cheap to change, and their value commensurate. Principles, on the other hand, are things for which you are willing to sacrifice, willing to draw a line. The following post was originally published in October of 2022.

• 8:24Speaker 03

  There was controversy this month involving Kanye West. I won't reiterate it. I believe Kanye is ill, and I'll return to ignoring him soon after this post. This post is about Adidas, Gap, CAA, and his other corporate partners. It is about the moral obligation we have to draw a line. Authoritarian power, fascism especially, often rests on the persecution of a group. Fascists ascribe the problems of society to the influence of a minority and argue that controlling or eliminating that group will solve a social ill.

• 9:04Speaker 03

  The most popular target for this form of social weaponization for hundreds of years has been the Jews. Making up 2% of the US population and only 0.2% of the world's population, Jews are year after year the target of more anti-religious hate crimes than any other group. In the two-year period 2001 to 2002, bookending 9/11, when Islamic terrorists killed 3,000 people, the FBI identified 636 anti-Islam hate crimes in the US, up from just 61 in the two prior years.

• 9:45Speaker 03

  Over the same period, the FBI identified 1,974 anti-Jewish hate crimes, three times as many as directed at Muslims, more than half the religious hate crimes committed during the period. The anti-Islam number was the anomaly. Year after year, more hate crimes are committed against Jewish Americans than against any other group except Black Americans. There are six times as many Black Americans, and in total, they suffer twice as many hate crimes. The situation is similar abroad and over time. Persecution of the Jews is so common, there's a Yiddish word for being massacred: pogrom.

• 10:32Speaker 03

  QAnon is strange and vile, but likely ends up only a stain on this American era. However, antisemitism is history's most enduring and deadly conspiracy theory. That's why special attention should be paid to tropes like "the Jewish media." The real demon, of course, is demonization of any target. The history of discrimination and violence against out-groups is extensive, from the Armenian genocide, to the mass killings of Christians by ISIS, to China's detainment of Uighurs, and much, much more. In fact, the Nazis did not limit their attacks to Jews alone.

• 11:15Speaker 03

  They targeted Romani people, black people, homosexuals, and the handicapped. Whoever the target, identifying a group, blaming them for society's problems, and encouraging persecution, including violence, against them is the fascist playbook. We cannot ignore these tactics in the rantings of billionaire celebrities, regardless of what we think of their music, their shoe designs, or their mental health. A companion tactic is the assertion of victimhood by the fascists themselves. Replacement theory is the noxious combination of both, asserting that the persecuted minority will somehow supplant the majority.

• 11:58Speaker 03

  The rhetoric of fascism is like a battery drawing energy from contradiction. A self-proclaimed billionaire, for example, wailing about how oppressed he is. We have incorrectly conflated the liberal tradition of free speech with neutrality, with protecting the dark shoots of fascism in the name of tolerance. By the time speech has flowered into actions that cannot be ascribed to a lone wolf or the mentally ill, it has ripened into a movement. Movements are harder to stop, and the cost of resistance becomes so high that good people stop doing and saying the right thing

• 12:42Speaker 03

  as the understandable instinct for self-preservation kicks in. Later, we find eloquence and grace only in our regret.

• 12:54Speaker 03

  A quote from Eleanor Roosevelt. "I have the feeling that we let our consciences realize too late the need of standing up against something that we knew was wrong. We have therefore had to avenge it, but we did nothing to prevent it. I hope that in the future, we are going to remember that there can be no compromise at any point with the things that we know are wrong." Standing up against the rhetoric of hatred has nothing to do with censorship. There is no law forbidding people from employing the rhetoric of oppression, nor should there be. But no principle obligates us to accept them in media or business relationships.

• 13:38Speaker 03

  A pillar of state-sponsored horror is the steady normalization of stereotyping and blaming. One person ranting about the Jews or anyone else is readily identified as an outlier and ignored. But as these claims multiply, as they have recently, they seem less outrageous. Political scientist Joseph Overton postulated that at any time there is a range of policies the population deems acceptable, but this "window of discourse" is not constant. It's become a strategic objective of extremist groups to shift the Overton window over time toward their position by using rhetoric and advancing policies

• 14:23Speaker 03

  just outside the current scope of societal acceptance.

• 14:28Speaker 03

  And as the volume of hateful rhetoric rises, as research has shown, so too does hate crime. The rise of fascism, the normalization of hatred, is concomitant with the accommodations of powerful people who register political and financial gain by looking the other way. Appeasement is historically associated with Neville Chamberlain, the UK Prime Minister who caved to Hitler's territorial demands rather than risk war with Germany, only to make the eventual war more costly. Chamberlain is unfairly singled out. Much of the British ruling class supported his position, and the US Congress passed law after law barring aid

• 15:13Speaker 03

  to those threatened by the Nazis until Pearl Harbor made such a position untenable. Accommodation inside Germany began years earlier with Hitler's rise to power via an election in 1932. Although Chamberlain is the poster child for appeasement, often the key enablers of fascism are not politicians, but corporations. Large companies benefit from stability, the expansion of their nation's sphere of influence, and the centralization of power at the expense of the individual. Many of the central themes of fascism, it's no surprise that corporate power is often the handmaiden to authoritarian rule.

• 15:56Speaker 03

  I write that not as an indictment of corporations. Corporations are essential. They are how we organize human effort to accomplish extraordinary things, from electric cars to vaccines. But as corporations become more powerful, their rejection or enablement of hate speech takes on additional importance. Corporate accommodation of and support for the Nazis is well documented, from Adidas to Volkswagen to Krupp to IG Farben. Multinationals flooded into Pinochet's Chile as he murdered his political opponents by the thousands. Vladimir Putin's Russia has made oligarch,

• 16:39Speaker 03

  once simply a term for a member of a ruling clique, into a synonym for business leader. The risk is even greater today, considering the role corporations play in modulating our national discourse. The pure pursuit of profit can lead to dark places. There has to be a line, a moral consideration, in place.

• 17:01Speaker 03

  Drawing that line can be hard because the leaders of large companies are culturally inclined toward, if not political neutrality, avoiding political adventurism. Corporations take political positions for business reasons, and 99% of the time, the best position is none: donate to both sides, lobby for regulatory capture, and then stand on the sidelines. But neutrality in the face of evil is not neutrality. Amorality is too easily hijacked by the immoral. Hannah Arendt was fascinated by Adolf Eichmann, the architect of Hitler's death camp system.

• 17:45Speaker 03

  He evidently had no ideology of his own, just a "manifest shallowness," she wrote, "which made it impossible to trace the incontestable evil of his deeds to any deeper level of roots or motives." If Meta were to change its name again, "manifest shallowness" strikes me as a decent fit. This quote from Desmond Tutu: "If you are neutral in situations of injustice, you have chosen the side of the oppressor." Which brings us back to Kanye and to the corporations that did business with him. Their decision to sever ties is important, not because they need to cancel Kanye, it's

• 18:30Speaker 03

  not about Kanye, but drawing a line, arresting the normalization of the demonization of a minority. In the case of Adidas, the ink for this line will cost shareholders hundreds of millions, if not billions, in shareholder value. The shoemaker has been criticized for waiting 10 days to cut ties. 10 days is an eye blink in history, and even if management made the decision in 10 minutes, the logistics and legalities of responsibly disentangling a multi-billion dollar relationship take time. The company should be commended for its actions. As expensive as it was, Kanye did Adidas, the corporate world, and maybe America, a favor.

• 19:15Speaker 03

  As John Oliver put it, "The answer to where you draw the line is literally always 'somewhere.'" End quote.

• 19:26Speaker 03

  If you never draw one, you forget how. So when someone goes to "DeathCon 3", society's writing hand rediscovers penmanship. It helps to practice our cursive so we know we can do it. Drawing a line is a chance to remind yourself, your employees, your shareholders, and your customers, that you'd rather take a stand now, when the cost is only profits versus something much worse. In writing and presentations, I often point out that much of my success is due to my circumstances: being born in America, getting a state-sponsored education, etc. But the real roots of my good fortune run even deeper. During the Blitz,

• 20:10Speaker 03

  my mom was a four-year-old Jew sleeping in the London Tube. Had the British not drawn a line, and then the Americans and Russians? It's likely that a 21-mile-wide strip of water would have been breached, and my mother's life would have ended with a train ride, and someone else would be writing this newsletter. It should be noted: The Allies drew a line against fascism and potential invasion, not anti-Semitism.

• 20:39Speaker 03

  The costs would have been less dear had we drawn those lines earlier. The line on Kanye should have been drawn sooner. Every elected leader, citizen, and CEO must ask themselves, "Where is my line?" To answer the question, we must first decide there is one.

• 21:03Speaker 03

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• 21:14Speaker 04

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• 21:43Speaker 05

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