Friday, August 17, 2018 ... Deutsch/Español/Related posts from blogosphere

In celebration of laziness

Last Tuesday, Elon Musk was feeling desperate when he realized that the shortsellers were surely right. So he published the fateful tweet about going private. He would find $72 billion in a trash can and buy the whole Tesla for $420 a piece (now he owns 20% of the company). The stock jumped by more than 10% because a huge number of the Tesla "investors" are incapable of figuring out that such a plan was clearly nonsensical.

In the following days, Musk admitted that he hadn't "secured the funding". He was just "seeking" it. Before the Tweet, the board hadn't heard about any proposed source of the funding, either – this is arguably enough to prove that Musk has committed securities fraud because a "secured funding" would have needed an approval by the board. And he wanted to rely on current investors' "staying" in the new "private" form in some strange, unspecified way. Musk also said that Saudis, Goldman Sachs, and Silver Lake were assisting him with the buyout plan. All of them later denied it. And do you think that Trump would applaud such a big Saudi investment in the U.S.? An investment from the same country that has funded the Islamic State and bought Hillary Clinton? Also, Musk has violated the law by having blocked some Twitter users because all of them had the right to get the vital Tesla news – e.g. about the buyout – from the official source, Twitter, at the same moment.

During the recent days, a majority has figured out that what he wrote was just an immature and criminal deceitful message driven by his hatred towards the shortsellers and there's no good reason to look for any substance behind the tweet – just like there is no substance behind almost any hype we hear from Tesla.

Today, Musk needed the stock price to drop by 9% to $305 or so, exactly 20% below the post-tweet price of the last Tuesday (yes, the current price is already well below the pre-tweet value), so he gave an interview to the New York Times. The most recent year was "excruciating" and the worse one, we were told. Well, it was an average one: it was worse than the previous years but much better than the following ones.

Maddoff got 150 years for his frauds – there's no reason for Musk not to match Maddoff. The SEC is investigating both Tesla's board and Musk personally because of many cases of wrongdoing, not just the tweet. Another line of investigation revolves around Musk's misleading information given to the investors about the production of Model 3.

In the interview, Musk says that he calculated the price $420 by adding a 20% premium to the pre-tweet price and rounding the resulting $419. No weed was used at that moment, he claims.

Meanwhile, Musk faces several former employees who became whistleblowers. Martin Tripp has posted lots of shocking pictures of the mess at the Tesla factory. Tripp's lawyer has advised Tripp to delete the Twitter account, @trippedover, but I've seen it before the account was deleted and the pictures were bad enough. Twisting tubes that should be straight, punctured batteries, lots of trash everywhere... Now, another whistleblower, former Tesla's investigator Karl Hansen, pointed out that the bosses of Tesla tolerated a Mexican drug trafficking ring working right inside the Gigafactory. Theft and spying of the employees is rampant there, Hansen added. Tesla frantically tries to deny the reports. Lawsuits have been filed in all these disputes.

Meanwhile, half-tearful, half-laughing Musk has described himself as a ruin in the New York Times. He sometimes doesn't leave the factory for 72-96 hours. He works for 120 hours a week. Just for your information: 120 is 5 times 24. So it means working 24 hours a day, 5 days a week, or 5/7 of the 24 hours, 7 days a week. He's not seeing kids, friends, of course.

He's not sleeping and when he needs to sleep, he takes Ambien. Ambien is very effective in making you sleep but it has lots of disturbing and serious side effects.

During its 15-year-long existence, Tesla has accumulated over $20 billion in total liabilities, including more than $10 billion in debt. And it's still not making a profit. Signs are getting stronger that the claim that this quarter would change everything were just another example of a wishful thinking. As Tesla is getting older, its chance to make a profit may actually be getting worse – e.g. because of the growing spectrum of competitors (most of them may afford to subsidize their Tesla killers because they actually produce other, profitable products, unlike Tesla).

Since my childhood, I was exposed to the observations how badly the prosperity of my nation was crippled by communism – relatively to nations shielded from communism that were equally or less rich around 1930. You know, communism works extremely badly as a system and it's a pure evil to impose it on whole nations. Bad systems lead to unhappy and poorer people, collapsing moral values, and worse.

The totalitarian system did a lot to obfuscate or deny its intrinsic inferiority but everyone who wasn't brain-dead could see it. All the protections of the workers may have sounded great but they were ultimately a part of the reason why communism sucked. In capitalism, companies sometimes go bust, people are sometimes fired, and those are bad things according to Marxist ideologues. But these examples of "creative destruction" are really positive events in the big picture and in the long run. They're positive because they gradually push individuals, companies, and nations towards better, more satisfying, and more fitting types of work and more effective ways to do the work.

Like communism, Tesla is an example of a totally flawed system that makes pretty much everything dysfunctional. Like communism, Tesla is a result of a mass movement building on profound lies. Lies about the dangerous man-made global warming. Lies about the electric cars' superiority. Lies about the advantages of every single change that Tesla does differently than others – while almost all of them are actually disadvantages. Lies about the expectations for the next quarters and untrue interpretations of the past. Lies about the ways how the value of a company may be estimated. Lies about shortsellers, their motivation, and their intelligence. Lies about the CEO's supernatural abilities. Lies about everything.

The most general defect of this Tesla movement is the same key thing that underlies the totalitarian regimes: the de facto ban on questioning of the dogmas. People who stop worshiping Tesla with all of its ludicrous self-praise are treated as apostates. If you're surrounded by these Pravdogs, you can't safely short the stock. You can't point out any inconvenient fact. You can't do many other things that are normal in all other companies – and that are the actual engines of capitalism.

I feel some compassion that the company is so fudged up despite the fact that Musk works for 120 hours a week – the normal time should really not be longer than 40 hours a week for a man of his status. But the compassion is limited because I think it's right for dysfunctional companies like that to go bust – and if some people can't live without building such dysfunctional models, it's right when the collapsing companies take these people with them.

Jeff Bezos' net worth is over $150 billion and he's surely working less than 120 hours a week. I don't really think he's a genius but he has simply created a system that works properly. It's not impossible – and it's not even too difficult – to create such a system. But because works and really makes many things more efficient, it's natural for this new corporate culture to expand and gradually replace the older solutions that hadn't worked too well. I still feel some nostalgia about this elimination of the old diversity but there's clearly a justification for the process.

But no such justification exists when a company just doesn't work well at all. And Tesla just doesn't work. Some people like the cars and they they could have afforded them. But those cars were partly funded by the investors and lenders who won't see their money again when the carnival stops. You wouldn't need any Tesla for that. You could buy a Lamborghini for 100,000 people and fund most of the price from gifts of similar, Tesla-like hapless "investors" who would be persuaded that the new Lamborghini CEO is the Iron Man who simply does miracles if he gets some money from you.

At the end, the absence of a commercial success proves that the whole Tesla system is just flawed. And it's really the system – the big-picture design how Tesla is supposed to be operate – that should be considered the founder's or CEO's brainchild. So the brainchild is no good. To compensate the innate defects, Musk works for 120 hours a week and devours boxes of Ambien. That's an attempt to solve a problem by brute force.

But the Tesla's problems are deeper than something that may be solved by brute force. The design and the vision are completely wrong. Even if Musk could work for 700 hours a week, he just couldn't fix these flaws. These flaws are more profound than the difference between a CEO's 40-hour-long and 120-hour-long workweek.

Ten months ago, I actually wrote a similar text about Andrej Babiš, the current prime minister of Czechia, a former communist rat, and a billionaire. Like Musk, he's also a hard-working billionaire. However, he deals with a much simpler, old-fashioned technology than Musk. Instead of producing electric cars, Babiš was moving šit from one place to another, aside from less profitable but analogous parts of his business.

The expected and actual degree of modernization and experimentation that Babiš gave to his companies – before he placed them to a trust – are clearly smaller than in Musk's case. Babiš – a would-be dictator of the richest country of the former communist bloc – has no idea how to use the computer. Do you know how to use a computer, Mr Babiš? I don't know whether I can: I haven't tried it yet. So there weren't too many places where he could screw things really badly. He just did what they did before, he just threatened many other smaller owners and concentrated all these šit-moving businesses in one big corporation that he conquered. The big-scale concentration of the capital – basically the same thing as the collectivization of agriculture after the 1948 communist coup – is his only general enough "modernization" idea.

But their method to deal with problems and their workaholic attitude really are analogous. Both of them are really similar to the Stakhanovite movement. Alexei Stakhanov was a Soviet coal miner who surpassed his expected personal plan by a factor of 14 during a 6-hour-long shift in 1935. So everyone was supposed to emulate it. Stakhanov was a role model, every great guy was supposed to be a Stakhanovite. But is it such a good algorithm? Is it good to push lots of people into this framework of work?

Stakhanov himself had to retire prematurely and there were lots of health-related and financial problems and hidden expenses that resulted from the Stakhanovite movement. So whether it has helped anybody is disputable. But more generally, the solution of problems by brute force is simply not the solution that makes the people happiest in average. Sane people just don't want to be overworked. It's wrong to brainwash the workers and tell them that they actually love to cripple themselves – which is what Musk tells himself as well as his employees who are under immense pressure now, too.

You know, Tesla workers, all these things are just additional Tesla lies. If you get overworked or dedicate your health to Tesla, you will be sorry about it in the future if you survive. A proper CEO would actually try to make his employees happy and healthy, too. (Well, we could claim that Jeff Bezos isn't a saint in this respect at all, either.) That's one of the reasons why Czechs often love to lionize Thomas Baťa, the founder of the big Czech shoemaking company. The employees were treated really nicely.

A better way (than too much forced hard work) is to invent a better, more efficient system. Like capitalism instead of communism. Or Amazon instead of some smaller bookstores with lots of unnecessary expenses and work that is done several times although it could be concentrated. And so on. Ford has invented the assembly line, Bezos has arguably invented something remotely comparable. But Musk hasn't invented any result that could be considered analogous. He's constantly described as the originator of some good new ideas but there aren't any. There are only obvious yet lousy ideas whose lousiness is being constantly obfuscated by the pseudo-religious movement of the stupid Tesla fans.

I think it's obvious that Musk's, Babiš's, or Stakhanov's method to deal with problems by brute force, by working for 120 hours a week, is associated with their despair, with their inability to do better, with their being average people. Almost by definition, a person who approaches problems in this way isn't a genius. He's an assiduous, diligent... he's like Mr Hujer or Eurohujer from a well-known Czech comedy. A guy who wasn't really good at anything but who worked hard and really wanted to make a big career, so he was also flattering the right people all the time, and so on.

Compare it with Albert Einstein. He didn't understand why quantum mechanics was needed as a new foundation of physics but it's still correct to say he was a genius. He could also work hard. He worked hard for weeks when he was completing general relativity, and he worked hard for the 6 amazing weeks during his miraculous year, 1905. He completed the (Nobel-prize-winning) paper on the photoelectric effect, an explanation of the Brownian motion, and two fundamental papers on special relativity within these six weeks. But what about the rest of his life? Well, not so much.

The National Geographic TV series, "Genius", made it rather clear that he enjoyed (sex with many sometimes random women and) a comfortable enough occupation. His father hadn't believed that a theoretical physicist could have been a viable occupation – before 1900, it just wasn't that normal to be a professional theoretical physicist. Albert Einstein has proven him wrong – well, the proof was spectacular. In some sense, young Einstein was able to see that he could be able to make 2 really groundbreaking discoveries in his life, and perhaps a few others, and that's enough for him not to work for the rest of the time.

Einstein's contributions were so groundbreaking that almost no one dares to question that they were more than enough for "one life worth of salaries". But the special theory of relativity was really completed within weeks. And general relativity took 10 long years but it's partly because Einstein has worked for much, much less than 120 (or even 40) hours a week in average. If someone like Einstein has a reasonable chance to complete something like general relativity in the next decade and he wants to work for 20 hours a week to do it right, you should still offer him what he needs. He could still have known that it would have been enough to make him an indisputably legitimate theoretical physicist. And he was right.

Much of the technological and related progress is driven by laziness and the desire for comfort. Laziness and comfort are often presented as negative traits because we're thinking of the people who really abuse them. But they play quite some role in the achievements of the geniuses, too. A good manager of a car company simply does invent some way how to do the same work without being in the factory for 120 hours a week. Most of the things may be done by someone else – and a sane CEO with a realistic perspective on himself and other people knows that he is replaceable in most things. Sometimes these replacements need to be paid a lot but it's fine. If the plan isn't sufficiently financially sound to pay an adequate wage to an adequate number of people who simply do a reasonable amount of work without the need to devour Ambien, it's simply a very bad plan. And that's the case of Tesla.

So I feel some compassion with Elon Musk and everyone who has been caught into this giant mess. But I also wish them that this crazy carnival stops as soon as possible. The earlier Tesla stops its operations, the better for everybody including Elon Musk (and especially the shortsellers who badly deserve the profit).

By the way, I think that Musk's cult is so essential for the highly non-standard Tesla theater that as soon as he would be replaced with a professional CEO in the standard sense, the religious folks would start to escape, the stock price would plummet, and the debt would become unsustainable according to almost everyone (it's already rated junk by the rating agencies). A necessary condition for Tesla to keep on running for these years was the clown at the top!

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