381. Musk, Bezos & The New East India Companies (Ep 1)

Are modern tech corporations the new East India Company? What is the dark history behind Silicon Valley? What do Elon Musk and Jeff Bezos have in common with Cecil Rhodes? In this episode, William and Anita explore the sinister origins of Silicon Valley and the striking parallels between today’s tech billionaires and historical imperialists. They discuss the rise of tech companies like PayPal, X and Amazon, and how they have followed the historical template set by the East India Company. Summer sale is here: get an annual Empire Club membership for an extra 20% off with code SUMMER26. That's ad-free listening, early access, every bonus episode, and full access to our exclusive members' series. Sale ends August 31st, so grab it before summer's over. For more Goalhanger Podcasts, head to www.goalhanger.com. Email: [email protected] Instagram: @empirepoduk Blue Sky: @empirepoduk X: @empirepoduk Assistant Producer: Imogen Marriott Editor: Bruno Di Castri Social Producer: Charlie Johnson Producer: Anouska Lewis Executive Producer: Dom Johnson Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 0:51Speaker 02

  So we've got some very exciting news for you. We've sold out our first show, but we've got a second show at The Rest Is Fest in September.

• 1:01Speaker 03

  And we have a brilliant lineup, incredibly topical one, too. We're calling it Three Ayatollahs: An Iranian Dynasty.

• 1:09Speaker 02

  Delighted to say we're going to be joined by a great friend of the show, Ali Ansari, one of Britain's foremost experts on Iranian history. He is an excellent storyteller. Ali, just tell us, what are we going to be chatting about?

• 1:21Speaker 04

  Well, we will be exploring big questions like how has the influence of the Ayatollahs shaped Iran since the 1979 revolution? Does the Islamic Republic's grip appear to be fracturing? And what role have other nations played in shaping Iran's fate?

• 1:35Speaker 03

  And we're going to unpack one of the most fascinating and urgent stories in the world right now. As the regime faces economic pressures, regional setbacks, and a disillusioned younger generation, but in many ways, a revitalized Revolutionary Guards Corps, what comes next for a great civilization that has outlasted many, many empires?

• 1:55Speaker 02

  Ali, we always, always love having you on this podcast. Cannot wait to have you join us on stage.

• 2:00Speaker 04

  And I can't wait to get into the discussion.

• 2:02Speaker 02

  You can expect sharp analysis, you can expect vivid storytelling, and of course, you can expect the usual chaos that comes about when we're on stage chatting to each other.

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  The Rest Is Fest runs from the 4th to the 6th of September at London's South Bank Centre.

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  General sale is on now. Just head to southbankcentre.co.uk to find out more.

• 2:36Speaker 02

  Hello and welcome to Empire with me, Anita Arnim.

• 2:39Speaker 03

  And me, William Durhample.

• 2:42Speaker 02

  Now, on this podcast, you know, we like to discuss the history of territorial expansion. We like to look at ruthless leaders looking to dominate their realm, unbelievable wealth generated by extraction. This week, it's sort of something different, but also the same on Empire. We're going to use this historical view to analyze the emperors of today. I mean, Elon Musk, Jeff Bezos, Sam Altman, you know, these modern corporations that dominate the world, just as the East India Company did 400 years ago. And, you know, there is a template that was set for this modern corporate dominance, and it was set in 1599 by exactly the East India Company. This is an interesting conversation, an ongoing conversation I've been having with William over the years.

• 3:26Speaker 02

  It was a private business that grew to control half the world's trade. It raised a 260,000-man private army. It was roughly that army, twice the size of the British Army. And you know, there's a, there's a quote, William, that kind of hangs in my head about the East India Company, which you could apply to some of these mega corporations today. The EIC was famously critiqued back in the 1700s by Baron Thurlow as having neither bodies to be punished nor souls to be condemned. They therefore do as they like, quote unquote. So it could sound like a statement made about the modern tech corporations of today, I would suggest.

• 4:08Speaker 03

  This is something I've been thinking about a lot lately. As you know, I've spent a lot of the last 25 years writing four books on the East India Company. And when I wrote that first book of that series, Google was still a type of bowling, Jeff Bezos was still in his garage, and the only sort of figure that we knew about who had made money out of computers, as we thought of it in those days, was Microsoft and Bill Gates. Four books on the East India Company's astonishing gathering of power later, the world seems to have come a full circle. And the same thing that you see in India of the 18th century, which is the corporation powerful enough to buy the world, the man who sold the world, you know, the idea that

• 4:53Speaker 03

  you could have so much power that one of the things you can do with it obviously is buy an army, which the East India Company did. And the East India Company did not conquer India through white men, you know, sailing in ships over from Britain. They went to India, they borrowed money from Indian bankers, and they bought brown mercenaries. And, and this extraordinary power, but also to have the power to corrupt the politicians of the table. We'll go talk more about this later on in this episode.

• 5:17Speaker 02

  Oh, we've got so, we've got so much to talk about.

• 5:19Speaker 03

  But there is so much here. And reading your work, pulling this all together, and, and reading your notes, Anita, it, it just teed off this incredible sensation.

• 5:30Speaker 02

  Did it get your juices running?

• 5:32Speaker 03

  It got my juices running.

• 5:33Speaker 02

  Good, I'm very pleased. Because you know what, what I wanted to do for this episode is, you know, before we get to the new imperialists, we like, whenever we look at an empire, to look at its origin and the roots, where did it start? And you kind of mentioned one of the myths that goes with the, the birth of this, this era of new emperors. And it is, you know, the man in the garage. And I think we're going to get into the fact that that is not actually, strictly speaking, true in many of the examples that we have.

• 6:02Speaker 03

  I've got a good parallel to it from the 1600s, though, for later.

• 6:05Speaker 02

  Save it, save it. Because I want to go back to the origins of Silicon Valley, because you know, that actually has a fairly dark history of its own. And it starts, Willie, with the marriage of corporate power and mass data collection. And believe it or not, it begins in the 1880s, so much earlier than you could possibly imagine, with a man called Herman Hollerith. Now Herman Hollerith realized that he could turn human beings into patterns of holes on a punch card. And he got this idea from watching a train conductor punch actual physical descriptions of passengers into their tickets. So, you know, you'd have a little hole saying, this is the hole for blonde, this is the hole for heavy, this is the hole for skinny, this is the hole for child, you know. It was such a brilliant system.

• 6:47Speaker 02

  He thought, well, why can't I just use this and roll it out? And he is so successful that he uses that same technology that he has become an amateur with to count the 1890 American census. Now, before that, it took two years to count out the people for a census, and if not longer. But Hollerith thought, you know what, I can make a lot of money if I can do this quickly, but I can make extraordinary amounts of money if I rent out the machines instead of selling them, that will force the customers to buy the punch cards from me and buy the machines from me again and again and again and again forever, you know, that sort of closed loop of business.

• 7:28Speaker 02

  And so, you know, this idea of renting out tools and of using data to make you rich, you know, something that isn't real, it's, it's information, is something that goes right back to the 1880s.

• 7:40Speaker 03

  And that's just fascinating. I had no idea about this. But his punch card firm eventually became IBM, didn't it?

• 7:47Speaker 02

  Absolutely. So IBM stands for International Business Machines. And it's, you know, Hollerith's idea, very lucrative idea, is transformed into an empire, the first tech empire, I would suggest, by a man called Thomas Watson. Now, Thomas Watson is a rumble character, let me tell you, because he, he almost went to prison for being incredibly ruthless and, you know, employing illegal antitrust tactics at his previous company.

• 8:13Speaker 03

  Couldn't happen today.

• 8:14Speaker 02

  Never, never. But this is the man, he, he builds a new sort of cult-like culture at this new organization called International Business Machines. And let me tell you what I mean by a cult. So at nascent IBM, there were mandatory uniforms. Everybody gets issued with Think notebooks. This word Think is, is all over the place. More than that, there are corporate hymns that have to be sung by employees at the start of every day. So, you know, it really is like, it's when you walk in and you are in your uniform and think, think, think, think, think, think, everything called think, think, think, think, think. Watson never takes his jacket off, even on the hottest day, and that then inspires all his minions to do the same.

• 8:58Speaker 02

  There's no drinking allowed. And the company's songbook is one of the, those precious things that every new employee has, to the point where there is one song. I mean, tell me how this is different from any kind of cult leader, where all of the employees have to say, Mr. Watson is the new man we're working for, he's the leader of the CTR, he's the fairest, squarest man we know. You know, so it's like completely batshit, a sort of loyalty to, to a corporate entity.

• 9:27Speaker 03

  We often think of history as being about the story of nation-states. And since the Victorian period, history has been taught always as nation-state against nation-state. But we forget that there's another battle going on, which is the corporation against corporation, corporation against, there's many other ways you can look at this, and it's so fascinating to do that. Now, the, the corporation and the state collide horrifically, or specifically, the IBM and the state collide in 1933 in Nazi Germany. Tell me about that. How does this punch card technology get used almost immediately for the darkest of purposes?

• 10:05Speaker 02

  So this is a really thorny part of the history of IBM. And IBM has always insisted, we didn't know what they were going to do with our technology, they just used it. In 1933, IBM's German subsidiary won a contract to run the census for the Nazi regime. And they used exactly that Hollerith punch card technology. Once it would identify who was traveling on a train, this time, it was used to identify every Jewish person in Germany. And Watson, that man who I was describing a little while ago, who people sang hymns to, even accepted a medal from Hitler in 1937. And he only returned it after, you know, the war was turning in 1940, and it was clear, you know, this is not a good thing to have.

• 10:48Speaker 03

  Now, one of the most interesting things in your notes, Anita, was the origin story of Silicon Valley, which, again, I'd never read, completely new to me. Tell me about that.

• 10:56Speaker 02

  Well, it's kind of, you know, it's for a place that has so much sun in California, pretty shady. So 1947, there's a man called William Shockley, and he and his colleague, they invent the first transistor, which later become the microchip, which will later be used in every smartphone, used by 70% of the global population today. And this man Shockley sets up his company near Palo Alto in California, partly to be near his aging mother, which is sweet.

• 11:24Speaker 03

  I love that story. The whole of Silicon Valley is there because of an aging mom.

• 11:28Speaker 02

  Depends where your mum lives, you know. But also, you know, you've got a cheap workforce. You're able to do industrialisation because this is a place that used to have trees and fruit picking, you know. So you've got labour around you.

• 11:40Speaker 03

  This is the grapes of Roth territory, where all those, the labour moves from the Dust Bowl to California to pick oranges.

• 11:47Speaker 02

  Fruit oranges, right, exactly. And this is a huge story in Indian migration as well, because a lot of Punjabi farmers end up going to California because they know how to pick fruit. But that's an aside. Yeah, 100% true. So.

• 12:00Speaker 03

  How interesting.

• 12:01Speaker 02

  Yeah, I've got loads of interesting things. But the thing is that what used to be called the Santa Clara Valley gets renamed Silicon Valley because Shockley's dream just explodes. It's huge.

• 12:15Speaker 03

  But he's not very good at running people, is he?

• 12:17Speaker 02

  He's nuts. He's paranoid. He's domineering. He's impossible. There's like, you know, there are some wonderful stories. One famous episode, his secretary cuts her finger, and he demands to know whether somebody was trying to attack him and whether it was meant for him. And he makes the whole organisation take lie detector tests to find out who was responsible, if it was actually, in fact, an attack on his person. And his secretary just got it in the finger. So you know what? This is not good. And the people who are working for him, who by absolute definition are going to be very bright people, because you're working on cutting-edge technology, they start leaving. And you have this, you know, just as we're saying, you know, Eastern India

• 13:00Speaker 02

  Company, you've got a mutiny here as well, because there is a mutiny here in Silicon Valley, where some of the people who are like, Shockley, you cannot be treating us like shit anymore, they just walk out. They just go. Eight of the brightest young engineers leave, and Shockley, in his, you know, usual magnanimous way, calls them the traitorous eight.

• 13:23Speaker 02

  And they go, these eight brilliant people, and they go and find a financial backer, and they start this new company, Fairchild Semiconductor. And two of those eight, Robert Neuss and Gordon Moore, will go on in 1968 to found a company that you may have heard of. It is called Intel.

• 13:44Speaker 03

  It goes back to 1968?

• 13:45Speaker 02

  It goes to, isn't it amazing? These stories are so gloriously older than you might think. So, you know, you could say, and I will say, that the whole of Silicon Valley grows out of people fleeing one terrible boss. You know, every great chip company in America can trace its line back to the traitorous eight, and that walkout, because this guy was tangibly a nutter.

• 14:08Speaker 03

  So that's the history of the technology, the location, that laid the foundations for the emperors of our age, if we want to use that terminology. But what about the people?

• 14:17Speaker 02

  Well, I mean, you mentioned this, didn't you, at the beginning, that when Google was a type of bowling action, or, you know, or a number, that Bill Gates was the only trick in town, and his rise to become the youngest billionaire in the world by the age of 31. It's often mythologised as this sort of bootstrapped, speckled young man, slaving away in a garage, self-made inventor. But actually, you know what? He was born into money. So, you know, the Gates family were well-connected. He went to an elite private school. It gave him really rare early access to a computer terminal. I mean, it's one of the only schools that had a computer terminal, and he's interested. He absolutely is brilliant, and is clever,

• 15:02Speaker 02

  and masters programming. In 1975, Gates and his mate, a man called Paul Allen.

• 15:08Speaker 03

  Paul Allen, yeah, another important founder of this whole world.

• 15:11Speaker 02

  They go to a computer manufacturer, and they say, you know what, we've got new software for your Altair computer. And before writing a single line of code, they tell them, we've got new software. They haven't written it. They've just, we've got new software. And it basically pays off. You could say it's a bluff that pays off, because they get a big contract, and then they scramble to create the programme, and they do it in just a few weeks. And upon this, Microsoft is launched. And, you know, this key cornerstone of Gates's business approach, you can see it replicated again and again and again by tech bro emperors, who say, you know what, I've got something that can do that. I can fix that. They don't

• 15:54Speaker 02

  at the time, but then they will, very, very quickly. But also, more important than that, this concept of software as paid intellectual property, that sort of starts around this.

• 16:04Speaker 03

  That's a new idea, is it?

• 16:05Speaker 02

  Absolutely a new idea, absolutely. So in 1976, after discovering that computer hobbyists are, you know, they're doing, they're doing what he did, which is sort of ferret around and look for software and repurpose it. They're copying his code, and they're sharing his basic software on paper tapes. And Gates writes this open letter to the community, and he says, you know, software is not a gift to be shared, it is a product to be licensed and continuously paid for. And this transforms the entire business into, you know, a toll booth model, much like those punch cards, that, you know, you're in a loop where you just keep paying. You don't just sell the physical product, but you own the infrastructure, and you own everything else that, you know, runs on it. So this whole idea of him being, you know,

• 16:50Speaker 02

  the plucky young kid in long socks with glasses and just making it, his mother, in 1980, she had connections with IBM's chairman. And she sort of has a chat with IBM's chairman, says, I've got this wonderful son called Bill Gates, and he's doing this wonderful stuff with, you know, Microsoft. It's a new company. And she gets in the meeting. Microsoft has the meeting with IBM. And through that meeting, Microsoft secures the contract to provide IBM's operating system, which eventually corners the entire personal computer market in the world. So, you know, we're talking about, forget riches of Croesus, this is, you know, on the cusp of everybody having computers.

• 17:34Speaker 03

  Yeah, amazing. And we've lived through this. We can remember a world where there were, there were no personal computers. I remember the first laptop I ever saw, the Toshiba, that my elder brother had. But in the 80s, 90s, Bill Gates was the tech billionaire at the top of the tree. But obviously, by 2000s, there was a new emperor in town, Jeff Bezos. And you say he wasn't self-made either.

• 17:59Speaker 02

  Yeah, let's talk about his garage. Everyone's got a bloody garage. Just have a look at it.

• 18:03Speaker 03

  It's California. There's not a rule, right?

• 18:04Speaker 02

  Yeah, okay. Well, look, Jeff Bezos is born in Albuquerque in New Mexico in January 1964. And actually, he has a beginning that is genuinely difficult, where some of the others are not.

• 18:18Speaker 03

  Yeah, his mother, Jacqueline, is 17 when he's born, still at school. And the marriage to his biological father, a guy called Ted Jorgensen, barely lasts a year. And Jorgensen drifts out of the picture completely, and in comes Bezos. Tell us about who Bezos is.

• 18:34Speaker 02

  Well, so Miguel Bezos is such an important figure, by the way, in Jeff Bezos's life.

• 18:39Speaker 03

  I love that he's Latin, in this world where everyone is slagging off Latin immigration, that it is actually a Latin man who saves the day for Abbotson.

• 18:49Speaker 02

  Well, look, you know, the second father is charismatic. He's everything kind of that Ted isn't. Ted's quite sort of straight and dry. And Miguel is a Cuban immigrant, you know, with big dreams. And he is one of those people who has that real Cuban success stories. He comes to America alone as a teenager, fleeing the revolution, worked his way through university, became an engineer at Exxon, marries Jacqueline, adopts her four-year-old son, and then gives him his name, Jeff Bezos. And I've seen interviews of Jeff Bezos, who says, as far as he's concerned, Mike is his real father, because Miguel takes the name Mike. Mike is his only father, his real father. And there's a really, actually, if you want to waste a couple of hours, there's

• 19:32Speaker 02

  a very fine news report, you can find it, where his actual birth father, who doesn't know Jeff Bezos is a multi-billionaire, somebody finds him and says, do you know that your son is Jeff Bezos? And he just sort of discovers it. And he's living quite a poverty-stricken life, you know, and doesn't know about it. But anyway, so Mike Bezos is his role model.

• 19:52Speaker 03

  And then he spends his summer on his grandfather's ranch in Texas. Again, that doesn't sound hard up, if you've got a grandad with a fancy ranch.

• 19:59Speaker 02

  Well, you know, Miguel opens the world to Jeff. You know, they have financial stability after having a really tricky start with his very young mother and absent father. And he spends his time on the ranch, and he, you know, learns to do work with his hands, but also in the shadow. Let's not forget, it's not your regular rancher, Regional Director of the American Atomic Energy Commission, by the way. Okay. It's like, you know, a man with a ranch on the side. So this is the man who teaches Jeff Bezos self-reliance, because he has to go and muck out the horses. But also, you know, he's inside the Cold War science and defence machine, even by osmosis. You know, he's got family members who are

• 20:43Speaker 02

  not just working for, Regional Director of the American Atomic Energy Commission. The boy is, though. I mean, there's no two ways about this, is. A genius, he's formidably clever. There is this great story about him as a toddler, he takes his cot apart with a screwdriver.

• 21:00Speaker 03

  I love it.

• 21:00Speaker 02

  Because he wants to see how it works. There is a garage in this, you'll be pleased, there actually is.

• 21:05Speaker 03

  This does, the toddler taking his cot apart with a screwdriver slightly sounds like Washington with the cherry tree.

• 21:13Speaker 02

  With the cherry tree.

• 21:14Speaker 03

  It sounds like already a myth made up about the child, but he's still alive.

• 21:20Speaker 02

  Well, I mean, you know what, it's possible, but it's one of those stories that's replicated in biographies, some of which are complimentary and some are not. He does do garage as laboratory, because, you know, he tinkers around with things in his garage, he has the space to do that. High school valedictorian, ends up going to Princeton. He wants to be a physicist, but he runs into people who are simply better at physics than he is. And he says, well, I'm not going to be a physicist. If I'm not going to be the best one, I'm not going to do that. So he switches to electrical engineering and computer science instead. And then, like so many of the clever, clever people at this time, you follow the money. And he goes to Wall Street and he becomes a senior vice president by his early 30s. So this is a

• 22:02Speaker 02

  path of wealth, security, safety, all of the things that Miguel has kind of shown him that you work for.

• 22:10Speaker 03

  But also brilliance and entrepreneurial and financial nous.

• 22:15Speaker 02

  Yeah. And it's a, you know what, it's a superhighway. Lots of people have gone on this highway. They've done it. But in 1994, he reads a single statistic that detonates his life plan. And it is that the use of the internet is growing at 2,300% a year. So just, I mean, let me say that again. In 1994, use of the internet was growing at 2,300% a year.

• 22:41Speaker 03

  So he quits and he and his now famous wife, Mackenzie, who writes the first business plan and keeps the first accounts, drives across the country all the way to Seattle. And he writes the plan the way he starts an online bookshop in a rented house and he runs it out of a, wait for it.

• 22:58Speaker 02

  Garage.

• 22:59Speaker 03

  The garage.

• 23:00Speaker 02

  This is a garage.

• 23:01Speaker 03

  This is where I have to tell my East India Company parallel, because Thomas Smythe, who's the man that founds the East India Company, for the first 10 years of the East India Company, runs it out of his attic. It's in his own house as well.

• 23:11Speaker 02

  Really?

• 23:12Speaker 03

  Literally.

• 23:13Speaker 02

  Oh, that's funny.

• 23:14Speaker 03

  The first 10 years of the East India Company, yeah.

• 23:15Speaker 02

  Oh, that's funny. Many different levels, same idea. I've often wondered why books, you know, the reason given is because there are more titles than any physical shop on planet earth could ever stock. But a computer can hold all of it. And he decides, well, that's what I'm going to do. He says, I'm going to, I'm going to call it Amazon after the biggest river in the world. Because he's not thinking about books, he's kind of thinking about everything. You know, this motto that he scrawls into the company's bones is get big fast, you know?

• 23:44Speaker 03

  I got a little insight here. Bizarrely, maybe rather than probably, I spent quite a bit of time in Seattle because we have a Jai Puja Festival satellite there, which funnily enough was brought there by Mimi Gates, who was Bill's stepmother. That's a different story. But one of the things that's famous about Seattle is it's got one of the very best independent bookshops in America. It's called the Elliot Bay Book Company. And the guy that runs that, Rick Samson, says that Bezos never came into the bookshop because he never, ever reads. But Mackenzie does. Mackenzie's a big reader, is in there every week.

• 24:15Speaker 02

  That's, but he recognizes that there is money to be made. But you know what, he doesn't make it immediately because for years, there's no profit in this business. He pours every penny bag and he drives prices down. And what, this is the model, you drive prices down, you widen the range and come on over here if you think you want to compete with a shop that is happy not to make money for a while and will have every title you could possibly want. It's a real disaster for many bookshops because how do they compete with that?

• 24:48Speaker 03

  Bezos works out that the vast bank of computers, Amazon built to run its shop, can be rented out by the hour to everyone else. And he goes from selling shops to owning the ground the digital world stands on. The toll booth again, the road belongs to him. And again, this East India Company parallel there because the East India Company makes itself established by force. It is a mercenary outfit. Very quickly after Battle of Plassey, it becomes this huge rental of mercenary services. And all the local rulers, first of all in the Carnatic and then in North India, use the East India Company's army as a mercenary outfit. So this is the idea that, again, that you can rent something out endlessly, whatever the key thing of the moment is.

• 25:31Speaker 02

  Yeah. Well, I mean, I don't know whether the parallel goes even further. Did the East India Company ever buy out newspapers or own newspapers?

• 25:38Speaker 03

  It banned newspapers.

• 25:39Speaker 02

  It banned newspapers and it set fire to printing presses. I know. But Bezos isn't doing that. I mean, you know, he ends up buying the Washington Post with private money. He ends up buying a rocket company, Blue Origin. And we'll discuss the space race in a little while when we bring on Mr. Musk.

• 25:54Speaker 03

  Elon Musk.

• 25:55Speaker 02

  Yeah. But before, just before we leave the Jeff Bezos story, I should say something about Mackenzie because I find her really fascinating. So they divorced in 2019 and it was the largest divorce settlement in human history. She received about a quarter of the couple's Amazon stock, which was worth $38 billion at the time. Instantly, bang, she's one of the, you know, she is the richest woman in the world. Bezos keeps voting control over the shares, but she has the money. And the next thing that she did, I think, makes her pretty extraordinary. She signs a giving pledge and starts giving all the money away at extraordinary speed, billions and billions of dollars in unrestricted grants to charities. And unrestricted grants are brilliant because what they do is they say, you know what, I'm

• 26:40Speaker 02

  not going to tell you what to do with this money. It's not, I want you to build a hospital or an orphanage. You do you. You know what you need to do on the ground. This is unrestricted. If you want to spend it on something as unfashionable as, you know, sanitation, go ahead and do it. If you want to do it on, you know, collecting data, go and do that. It's unrestricted. And it makes her sort of the queen of mega philanthropy and one of the most significant donors of all time.

• 27:06Speaker 03

  I've got another little East India Company, Amazon parallel before we move on onto this one. There is this moment in the 17, I think it's 1740s, when the East India Company has not paid its rental on the land for Madras, which it had rented from the Mughal governor of the Carnatic, the Nawab. And so he realizes at some point that he hasn't got his rental money. And so he rides with something extraordinary, like 50,000 cavalry and just surrounds the young city of Madras, which at that point is only a few thousand people and certainly hasn't got any military to match it. And he expects the company to send out some soldiers and fight him. Instead, it sends out one man,

• 27:51Speaker 03

  this very clever Italian, Nicolás Manucci, who tells the story in this book. He speaks perfect Persian and he goes up to the Nawab, he seeks an audience and he says, you know, you can massacre us all. We've got, we've got a handful of cannon here. There's no contest in military terms. But we will just go after this and we will move our business from the Carnatic up the coast to one of your rivals and they will become rich from our trade. It's their craftsmen whose goods we'll sell. It's the taxes that we pay to them which will finance their treasury. It's their ships that we use for moving things up and down the coast and you will be poorer as a result.

• 28:33Speaker 02

  Yeah.

• 28:34Speaker 03

  And it's this idea that a company can just choose where it's going to plonk itself and negotiate, use that as leverage to negotiate the best possible rates for itself, which is why everyone's ended up in Ireland at the moment.

• 28:47Speaker 02

  Right, exactly. And everyone will fall in line because they're too big. You know, there's another parallel. I thought I was all very, very clever by thinking, oh, you do this, this parallel with big tech companies and the old sort of founding members of huge empires that we have talked about. But we're not the first actually to do this Amazon, East India Company parallel. Because in 2020, when Bezos revealed that Amazon was going to invest $1 billion in India, local sellers protested against Amazon's monopoly and they all held up signs saying, second version of East India Company. So these are workers, you know, often subsistence workers and local sellers saying,

• 29:23Speaker 03

  Brilliant.

• 29:24Speaker 02

  This is happening all over again. Anyway, look, we're going to take a break. And after the break, we're going to be talking about our final tech emperor for today at least, Elon Musk. If you do like this, sort of toing and froing between the past and the present, let us know. We might do the same for others.

• 29:38Speaker 03

  I want more already. I'm so excited by this.

• 29:40Speaker 02

  I know, it's good as this. It was actually, it was very, very exciting to work on this and do all the reading for this. We will talk about Elon Musk. What does he have in common with Cecil Rhodes? Join us after the break.

• 30:00Speaker 01

  Everyone's got a hard question about AI. Your job, your kids, where it's going. Anthropic was built to surface those questions and share what it finds along the way. Because there's hope in hard questions. Ask yours at claud.ai/spotify and keep thinking. That's claud.ai/spotify.

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• 31:13Speaker 02

  Welcome back. So in this half, shall we talk about Elon of Musk?

• 31:18Speaker 03

  Let's do it.

• 31:19Speaker 02

  Let's do it. Okay. Born in Pretoria, South Africa, June 1971. And the first thing to say is, because he doesn't often say it, he wasn't a poor child. This isn't a poor background, okay? The family was wealthy.

• 31:32Speaker 03

  Has he claimed that he's poor?

• 31:34Speaker 02

  Well, I think it's the kind of, you know, if it's a direct quote, I don't know about it. But it is often the thing that's wound around these guys, that they were, you know, sort of penniless nerds who suddenly, you know, had the brilliant idea and became enormously wealthy. But the background of Elon Musk is that his father was an engineer and property developer. And he had a share in the output of Emerald Mines. So, you know, big house, planes, fast cars.

• 31:59Speaker 03

  Shares in Emerald Mines has good, we can all do with that, yeah.

• 32:03Speaker 02

  It's not eating gruel, is it? And coming up with brilliant ideas. And this is apartheid in South Africa, and they're growing up in a white suburb. So it's, you know, insulated and it is comfortable. That is not to say it's a happy childhood. I'm not saying that at all, because if you read any newspapers or profiles, you'll know that this is a complicated family. His parents divorced when he was about nine years old. And for a while, he chose to live with his father, a decision which he has openly said he regretted eventually. It wasn't a happy marriage. It just wasn't. And, you know, Musk and his younger brother Kimball, who's quite a character, actually. Look up Kimball Musk if you have a chance. He's always with, wearing a Stetson, as far as I can make out. They decide to live with their dad.

• 32:46Speaker 02

  And Elon is small, he's bookish.

• 32:49Speaker 03

  He likes Lord of the Rings, doesn't he?

• 32:50Speaker 02

  Obsessively likes Lord of the Rings and science fiction and his encyclopedia. And actually Elon was bullied quite badly. And at one point, he's beaten so severely that he's taken to hospital.

• 33:02Speaker 03

  And there's a detail here that the family still argues about. The father's account of why the beating happened is different from Elon's.

• 33:10Speaker 02

  Elon Musk, the way he tells it, or the way it has been told by those close to him, is that he was bullied because he was nerd and put into hospital. Errol has suggested that beating wasn't random and it followed some kind of incident in which one of the boys had lost his father to suicide. And Elon said something a bit shit to him and it kicked off from there. We don't know, we don't know. But we do know that Elon Musk was a brilliant child. And at just 10 years of age, he teaches himself to program from a manual. And at 12, he writes a little video game called Blaster. And he sells it to a magazine for a few hundred dollars. I mean, this is, you know, a little kid doing big ideas and also doing business at a very, very young age.

• 33:54Speaker 03

  At 17, Elon leaves South Africa. He does not want to be conscripted into the army of the apartheid state. And he comes out against apartheid at this point, doesn't he?

• 34:05Speaker 02

  He does.

• 34:05Speaker 03

  Whenever we think about some of his other racial ideas in his tweets, we lead us to believe that he believes he's firmly against apartheid at this point. And he has a Canadian mother, so he can claim a Canadian passport. And he does. He moves to Queen's University in Canada and then makes a transfer across to the University of Pennsylvania, where he takes a degree in physics and economics. So he's an immigrant to America. This is the important point.

• 34:32Speaker 02

  And then, you know, there's this famous two days, the two day story of Elon Musk. It's extraordinary. In 1995, he's accepted to do a doctorate at Stanford in California, right in the heart of the valley, right? You know, that sort of Silicon Valley cauldron that is bubbling around him. And he lasts on his doctorate for two days. And then he walks out because he thinks, actually, you know what? This is kind of beneath me. The internet is about to change the world and I'm not going to be watching this from a lecture hall. So he leaves.

• 35:05Speaker 03

  So with his Stetson-wearing brother Kimball, who's also around at this point, he builds a company called Zip2. It's all about city guides and maps for newspapers, putting themselves online. It's not particularly glamorous and it's quite hard. He sleeps in the office, he showers at the gym, all that sort of stuff, codes through the night. And there's one very nice detail to impress investors. He builds a big plastic shell around a very ordinary computer to make it look bigger. Because he wants to impress his potential investors with the idea that Zip2 is powered by some huge massive computer. So the showman is there from the start, along with the engineer.

• 35:44Speaker 02

  Yeah, and you know, sort of as the showman, you can understand why it's important and exciting for this story to be woven around these characters, you know, that garage, bootstraps, gruel, you know.

• 35:58Speaker 03

  More.

• 36:00Speaker 02

  Seed money for, you know, his first company. Because Elon says, you know, he raised it himself from outside investors. His dad, it has to be said, not entirely helpful to Elon throughout his life. It says, you know, he put money into, and he says, yes, okay, maybe he did. The point is that, you know, this is the same thing as Bill Gates, I suppose, that you've got this two-track of reality. You've got the one where the brilliant nerd charms, you know, the angel investor. And the other one is, you know, actually they were born into money and understood the language of money and had contacts with money. So I'll just, I'll just leave it there. What happened to Zip2 though, Willie?

• 36:39Speaker 03

  Zip2 is the first big sort of moment when Elon cashes in. He sells it in 1999 to Compaq Computers for around $300 million. And his share is a cool $22 million. And he does the thing that defines him. He doesn't stop, he takes almost all of it and pours it into the next bet, which is an online bank called, wait for it, X.com.

• 37:05Speaker 02

  X.com. And in 2000, X.com merges with a rival run by a young man you may have heard of, Peter Thiel. And their merged company becomes PayPal. And out of that, you know, you've got this group of people, the so-called PayPal mafia, who go on to build or fund what feels like half of Silicon Valley.

• 37:27Speaker 03

  And Musk is actually pushed out, isn't he?

• 37:29Speaker 02

  He is. They fall out big style. He's pushed out as chief executive in a bordering coup.

• 37:34Speaker 03

  While he's on the plane on his way to his honeymoon. Very nice strategic detail. That's how you do it.

• 37:38Speaker 02

  I mean, it's such an ouch, okay? But, you know, he keeps his stake. And when eBay buys PayPal in 2002, he makes major money. Seriously, seriously rich from that. So after that PayPal marriage breaks up, hits the dirt, Musk goes his own way. And he does this unthinkable thing. He takes this massive payout and bets the lot. Again, this is a thing that Musk does. And, you know, you know this stuff. He creates rockets, he creates cars, he establishes SpaceX, you know, buys Twitter. You know, all of this kind of stuff then comes later. And again, this resonates with you, doesn't it, Willie? Because you're seeing parallels with another time and another person.

• 38:23Speaker 03

  So what I'm thinking of is that picture from Trump's inauguration, when you've got all these guys all lined up in the front row. And again, this is another East India Company thing that's very, very strong. Because when we think of East India Company, if we think about it at all, it's very much toppling governments in India. So they topple the Mughals and the Marathas and the Sikhs and so on. What we don't understand so much is how they're undermining or certainly influencing the body politic at home.

• 38:52Speaker 02

  Yeah.

• 38:53Speaker 03

  Within a century of East India Company being founded, in I think 1670, about 70 years in, they are having to renew their contract. And the governor of the East India Company goes to the Tower of London because he's caught handing brown paper envelopes full of cash to MPs, like Mohamed Al-Fayed. And the East India Company realizes at this point that it's got to play its cards more carefully. And it kind of invents corporate lobbying. It is the first corporation to realize that to run a corporation successfully, you've got to have control in parliament. And to, in order to control a parliament, what do you do? You pay for the election of MPs and you give donations. And so in a sense, East India Company's most toxic legacy is this idea that...

• 39:36Speaker 02

  Big money buys politics.

• 39:38Speaker 03

  And it buys politics. And just to give you the scale of it. These company also puts its own people into politics. So they come back, these guys go out at sixteen, they make a fortune in India, looting India. They come back at thirty, they go straight in and buy a rotten borough and a large house in Yorkshire or Shropshire or wherever it is. And by seventeen eighty, one third of the MPs in Parliament are ex East India Company men. Four fifths of the MPs in Parliament have East India Company shares. And this mysterious alchemy begins to take place, which we still today, and which we saw effectively in that front row in in Trump's inauguration, whereby the interests of corporation become mysteriously the interests of the state.

• 40:24Speaker 02

  Yeah.

• 40:24Speaker 03

  And just one final thought, the ExxonMobil, the old Bush administration, this is not new with Trump and Silicon Valley. If you look at the reasons for the invasion of Iraq and the relationship between big oil and the Bush family, there is the interests of ExxonMobil, which donates the campaign money for half of the Republican Party, which is deeply embroiled in the whole business of Iraq. We would not have gone to Iraq war without without that.

• 40:50Speaker 02

  Well, and just again, talking about Musk and political influence and where those those lines have been so completely blurred. He doesn't just own his own companies, he's got a rocket programme that the American government uses for, you know, space research. He owns a satellite network, Starlink, that has an impact on the course of the war in Ukraine, certainly when he decides to turn it on and off.

• 41:11Speaker 03

  Yeah.

• 41:12Speaker 02

  Twitter I mentioned, which is now X, you know, the public square. So you've got sort of discourse as well.

• 41:17Speaker 03

  And the whole question of the algorithms promoting some views and suppressing others.

• 41:22Speaker 02

  All of that. And so, and you know, then the culmination of that is all the, you know, the tech bears in in that picture. And one person also, maybe we should do a little parallel, whether Cecil Rhodes, not just, you know, this sort of African links, but their approach to the world. I mean, just remind us first of all, Willie, who Cecil Rhodes was.

• 41:41Speaker 03

  So Cecil Rhodes is someone that it's really astonishing, we haven't done a whole series on yet, because he's a crucial figure.

• 41:47Speaker 02

  Fascinating.

• 41:48Speaker 03

  And again, we are taught to think of most of history, and particularly the business of imperial expansion, as being about the nation state, you know, Britain sends off a fleet to such and such place and conquers it. In reality, a lot of it is corporate. As we've seen in some of our recent episodes, you have not just the East India Company, but you have the the Africa Company, which does slaving. You have the Hudson Bay Company, the Rhode Island Company, the Virginia Company, which are the first corporate colonizers of much of the American coast. And Rhodes is later than that. Rhodes is nineteenth century. But he is someone who puts the same idea of corporate money into expansion in Africa.

• 42:32Speaker 03

  And he's escaping a tyrannical father, emigrates to South Africa at the age of seventeen, he enters the diamond trade as a teenager, and he eventually founds the De Beers Diamond Company in eighteen eighty eight.

• 42:44Speaker 02

  So these are these young, sort of prodigious little talents who are, you know, again, maybe sort of chased around by tyrannical fathers, but they have, you know, they have a great deal of nous and the connections.

• 42:54Speaker 03

  They certainly do.

• 42:54Speaker 02

  To suddenly fly off on their own.

• 42:57Speaker 03

  Anyway, he eventually, of course, he's he's he becomes the most powerful agent of British imperialism in Africa. And he uses his fortune to help the state grab land, resources and labour. He becomes member from our Kipling series. He's a great friend of Kipling. Kipling doesn't go back to India for a while because he's got his own house given to him by Rhodes in South Africa. And eventually, he becomes the Prime Minister of the Cape Colony and founds Rhodesia. And he plans to build a rail and telegraph line from Cape Town to Cairo to connect all the British African colonies. And of course, there's still one legacy of that, is the Rhodes scholarships, which continue, which include people like Bill Clinton, who's a Rhodes scholar.

• 43:39Speaker 02

  Yeah.

• 43:40Speaker 03

  He has these very these very racist ideas, that there is a white race who've got to be encouraged to take over the world and to guide it through the next. He believes that imperialism is something benign, which will save the world. But again, you know, these are ideas. So what are you, what are you thinking of with the parallel with Musk?

• 43:56Speaker 02

  I'll tell you. So I mean, you know, Rhodes's telegraph line, to me, is a bit like Starlink. Okay. So you know, you own communications, you own lines of communications, and heavily funded by and heavily relied upon by a state, by a defence apparatus. And you can see why the British would really rely on Rhodes's lines.

• 44:14Speaker 03

  Yeah.

• 44:14Speaker 02

  And why Starlink is so important to others. Also, you know, Rhodes believed that extending British rule across the entire globe was in the best interests of humanity. And that kind of largesse speaking, that's Musk all over, you know.

• 44:27Speaker 03

  Does Musk want to save humanity?

• 44:28Speaker 02

  He wants to save humanity because he wants to colonize Mars, saving humanity from lethargy and destruction. Okay, that's, you know, so that's where he's coming from. You know, that's what we're gonna do. Rhodes famously declared that pure philanthropy is all well in its own way, but philanthropy plus five percent is a good deal better.

• 44:47Speaker 03

  Great quote.

• 44:48Speaker 02

  Isn't it? Let me say it again, pure philanthropy is all well and good, but philanthropy plus five percent is a good deal better. And, you know, some may say Musk follows a similar blueprint. You know, this this obsession with space exploration to save humanity is also, by the way, enriching him billions of dollars in taxpayers, you know, funding for SpaceX and government contracts. And I suppose, I mean, look at their ultimate desires. So there is this story that's attributed to Rhodes, that once he was looking up at the night sky, and Willie, he was in tatters of despair. Why?

• 45:27Speaker 03

  Because he couldn't colonize them.

• 45:28Speaker 02

  Couldn't colonize them. And he lamented, these vast worlds that will forever be out of reach, if I could, I would annex them. Now, you know, for a century later, Musk is going up there as fast as he could. So, you know, there is, there is something, I think.

• 45:43Speaker 03

  And was that quote definitely by Rhodes?

• 45:46Speaker 02

  Well, I mean, the quote was given to journalist W T Steed, who we think a lot of, who wrote the book, The Last Will and Testament of Cecil Rhodes in nineteen oh two. I mean, he died on the Titanic, so we can't ask or interrogate that any further. But, you know, W T Steed, let's say yes, let's say yes. So, you know, this this idea of colonizing space, you know, these are the new colonial projects, if you like.

• 46:10Speaker 03

  Is it feasible? Are we are we heading towards that world of the Avatar, where you've got mining companies landing in?

• 46:17Speaker 02

  They think so. I mean, like Musk said in a two thousand and fourteen interview, you know, that my my rough guess is that for half a million dollars, there are enough people that could afford to go and would want to go, but it's not going to be, you know, a vacation jaunt, it's going to be saving up all your money, selling all your stuff, like when people move to the American colonies. I mean, he's he's he said it, word for word, this is the new project. By the way, we've got in our second episode, the Empire of A I, which is a different kind of colonialism that we're going to be talking about, not, you know, of the stars that Rhodes couldn't quite reach, or of lands, but of thoughts, ideas and influence. So, I mean, do join us, we've got an excellent, excellent

• 46:59Speaker 02

  guest for that. Can we talk about one other thing, which I really want your take on? Because I started it, I started off the podcast with it, you know, that fabulous quote of not having a body, not having a soul, and not having accountability.

• 47:12Speaker 03

  This is the Lord Chancellor, and what you didn't say, which is very nice, is that it's Westminster Hall, at the beginning of the impeachment of Warren Hastings. And he stands up at the bar, and Warren Hastings is standing there about to be impeached. And he says, corporations have neither bodies to be punished, nor souls to be condemned. They therefore do as they like.

• 47:32Speaker 02

  You do that very well.

• 47:33Speaker 03

  Seventeen eighty six, that, nineteen eighty eight, yeah.

• 47:37Speaker 02

  So how does it all come crushing down for the East India Company? Do you see any parallels between what, you know, what we're seeing today and what happened back then?

• 47:46Speaker 03

  So obviously, there are a million parallels. But the crucial point, as you say, is how did the East India Company end up being taken over by the state, rather than the other way around? Because at this point, when you've got a third of the MPs as East India Company ex-employees, and four fifths of Parliament possessing East India Company shares and promoting its interests, it's the tail wagging the dog, that what the East India Company wants, the East India Company can get in Parliament, and it can push through legislation decided by the directors, and it can become law. Now, how does that move to a situation where, in the end, in eighteen fifty eight, the East India Company is wound up, and the Times says, with less fuss than a regional railway bankruptcy?

• 48:32Speaker 03

  And the answer is extraordinary greed and the mistakes that this generates. And in this particular case, there is a famine in India in seventeen seventeen. Now, this is not unusual because India in the pre-modern age has numerous famines because monsoons occasionally fail. Every this year, in fact, it looks like a year that the monsoon is going to be inadequate in India. And this will lead to hardship, but it won't lead to starvation because people have put grain aside for exactly this occasion. And this has always been the Indian way, that you have responsible kings who build granaries and then they put the grain in in fat years and then you take it out and give it to people or sell it in lean years.

• 49:16Speaker 03

  The East India Company doesn't do this and there's a massive death, there are half a million people die, but they still send their sepoys out to gather the full tax revenue that they will need to make their profits. And they report at the annual general meeting that that full taxes have been gathered by force despite the famine and the shareholders at the AGM vote themselves an increased dividend from ten to twelve and a half percent. The next year, of course, there's nothing. And so when the tax collectors go out, they can hang as many people as they like, but there's no more, there's no more money because they've just drained it all. And the East India Company goes, cannot pay its bills. And in a few months, one bank after another collapses like dominators.

• 50:01Speaker 03

  First of all, it's the Air Bank in Scotland, sixteen other banks go down. And in the end, the East India Company is too big to fail because it is the biggest employer in Britain and they cannot let it fail. So what happens is that the government, after a lot of shilling and shaling, buys a fifty one percent share. In seventeen eighty-four, there's something called the Regulating Act and it becomes fifty one percent owned by the British government. Therefore, from that point, it becomes a state interest. And when the state wants to finally kill it dead, which it decides to do in eighteen fifty-eight after the Great Uprising, eighteen fifty-seven Indian mutiny that we did a whole series on, they can do it with simply because they've got the votes in Parliament. But whether this lot will be so easily crushed is another story altogether.

• 50:45Speaker 02

  I mean, you use the R word and, you know, at the time of recording, I mean, I won't give you the figure of how much Elon Musk is worth because it fluctuates wildly, you know, he was a trillionaire when his company went public, but we, you know, we'll keep an eye on it, but then I think it went sort of down quite a lot. I don't know where it will be when you're listening to this. So I think, you know, I think regulation might be the thing that makes the difference even here, you know, you, you had something that was sort of, you know, hugely inflated, colossal and then collapsing. And then, you know, you have a state come in and say, actually, too many people are involved, too many people are employed, we rely on it too much, so we will take it and regulate it. And that is an argument that's been made even now and they sort of, you know, the

• 51:32Speaker 02

  the aristocrats, you know, of technology.

• 51:35Speaker 03

  Look at the EU doing its arm wrestling with with the tech bros today about, you know, the whole, the whole question of whether they're going to let X operate the way it is at the moment and so on, the safety measures for children and with Meta and all this stuff.

• 51:49Speaker 02

  Yeah.

• 51:50Speaker 03

  So that wrestling is, is beginning, but it's tending to happen in Europe rather than in America, you could argue, because they're all sitting in the front row with the Trump on speed dial.

• 51:59Speaker 02

  Well, look, it's been such a fun conversation. Thank you so much for, for listening and watching and letting us do these little sort of flights of fancy from time to time.

• 52:06Speaker 03

  Well, thank you, Anita, for, for digging all these gems up.

• 52:09Speaker 02

  Delicious. If you like, if you want more, we can do more. Honestly, I was absolutely doing backstroke in the most extraordinary stories. We're really interested to hear what you think about the subject. If you're a member, you can join in the conversation in our chat community on Discord. Sign up today. Following the link in the description and our next episode, oh, it's a corker, it's about the empire of AI with Karen How. Early access for club members. It is really a brilliant episode. Till the next time we meet, it's goodbye from me, Anita Arndt.

• 52:39Speaker 03

  And goodbye from me, William Durumpur.

• 52:49Speaker 01

  Everyone's got a hard question about AI, your job, your kids, where it's going. Anthropic was built to surface those questions and share what it finds along the way because there's hope in hard questions. Ask yours at claud.ai/spotify and keep thinking. That's claud.ai/spotify.

• 53:13Speaker 05

  Where some see heroes and others see egos. Bloomberg sees the era of billionaire athletes. While others follow the noise, we follow the money. Learn more at Bloomberg.com.

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