The casualness of high-tech bosses, long perceived as the hallmark of Silicon Valley, is backfiring on their companies’ stock prices, observes Arnaud Leparmentier, Le Monde correspondent in New York, in his column.
It is time to wear a tie again. Let’s face it, T-shirt capitalism is collapsing in the U.S. Facebook founder Mark Zuckerberg, 38, lost himself in the alternative world of the metaverse, where he sank more than $23 billion; Tesla’s developer and SpaceX creator, Elon Musk, 51, is drowning in tweets that are growing progressively more inappropriate, accelerating the collapse of Tesla’s share price, which has fallen by 60% since its peak in April. As for Sam Bankman-Fried, 30, who, unsatisfied with just a T-shirt, added shorts as well, he is languishing in jail, probably for a long time, for embezzling his clients’ cryptocurrencies at FTX.
One might be tempted to blame “the T-shirt, the T-shirt” as Toinette accused the lung in “The Imaginary Invalid” by Molière. The blame is less of a paradox than it seems if you read the essay written in The Wall Street Journal by Adam Kirsch on “the rise and fall of respectability.” The misfit behavior of these billionaire geeks contrasts with the austerity of 19th century captains of industry.
The point here is not to defend the behavior of the king of steel and father of modern philanthropy, Andrew Carnegie (1835-1919), who admittedly lived soberly and gave his fortune to build libraries. But his Protestant ethic cannot make us forget that he paid his workers miserable wages and that his second-in-command, Henry Frick, set the militia on strikers in Pittsburgh in 1892, 10 of whom were killed. But he inspired a behavior that was respected for decades and made the social order, if not acceptable, at least not humiliating.
Money as the Ultimate Safeguard
Nothing of the sort in the 21st century where, with the help of social networks, the 2.0 bosses believe that they can do anything: They display their yachts, their romantic conquests, their obnoxious whims. If they allow themselves to do so, it is because their venture capitalist backers accept it and are even seduced, convinced that social transgressions reveal an economic transgression that will allow creative genius to express itself. In The Wall Street Journal, Kirsch quotes Steve Jobs, founder of Apple, who claimed to be a vegetarian at a time when such a diet seemed incongruous: “At the time, it was enough to signal a rejection of the status quo, which is Silicon Valley’s main guiding principle.”
Let’s not be naive, in capitalism, you have to be somewhat of a genius and a little bit rogue to break the established order and make your first tens of millions of dollars with a founding crime, a dubious takeover, a license obtained with the help of connections, or a misuse of rules. This works as long as it works, but the more it works, the more we lower our guard: The safeguards provided by the boards of directors become ineffective. Thus, for now, Zuckerberg’s bet on the metaverse is ruining the shareholders of Facebook-Meta; if he wants to make such a choice, after all, he could launch a start-up; the Bankman-Fried scam was fueled by the greed of his backers, delighted to make a fortune on cryptocurrencies whose intrinsic value is known to be zero. Finally, Musk’s increasingly Trumpist outbursts are undermining the Tesla and Twitter brands.
Fortunately, there is still a safeguard: money. Zuckerberg had to change his tune after the stock market rout caused by his casual behavior during a conference with investors, and the worst may be over. As for Musk, let’s bet that Tesla’s board will wake up if the stock continues to fall.
However, to preserve the system, Wall Street needs a return to more dignity. “To align thousands or millions of people behind common goals, a leader must inspire confidence,” wrote Kirsch, who sees “qualities like sobriety, steadiness and restraint” as indicators of “respect for others” and “a gauge of trustworthiness.” “Their disappearance from public life is a sign of our troubled times, and things are unlikely to get better until we start demanding them of our public figures again.”
* Editor’s note: The original language version of this article is available through a paid subscription.