What Does it Mean?

Elon Musk made a bid to buy Twitter at a considerable premium to its market price. People went nuts. What does it mean? Is he really taking a stand for free speech? Is it just a ploy to make money? What’s his deal? Why is it so important to him?

Then the Twitter board, including the representatives of influential institutional investors like Blackrock and Vanguard, adopted a poison pill to make it harder for shareholders to accept Musk’s seemingly generous terms. What’s their story? What do they have against their shareholders? If they think the company has greater value under current management, why didn’t they just use some of their influence to persuade smaller shareholders to vote their way? Why didn’t they hustle up a better offer and start a bidding war?

The answers are not hard to fathom. All that they require is a bit of calm and a bit of common sense. Which places them far out of reach for most of today’s educated, affluent, professional elitists.

Start with the obvious: Censorship is bad for social networks. There’s a simple formula. The broader your reach, the more you can charge for advertising. Advertising drives social media revenues. It’s true for Twitter. It’s true for Facebook. It’s true for Google. It’s the basic business model keeping this hugely lucrative industry afloat. So censorship—limiting the discussion—reduces the attractiveness of your product to people interested in verboten topics or perspectives. Perhaps that’s why Twitter and Facebook have both had rough years in the stock market.

Musk knows that were he to buy Twitter and cut the censorship, he could then sell it at a healthy profit. That’s not a secret. Twitter’s Board also knows it. They could unlock tremendous shareholder value just by easing off on their selected censorship. They’ve made the conscious choice to keep that potential value locked up. Why?

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Shareholders vs. Stakeholders

Why? Perhaps because they value something more than maximizing return to shareholders. From their perspective, censorship is an investment in something worth more than money (or at the very least, their shareholders’ money). They—particularly their institutional investors—aren’t subtle about it, either. These are the folks who’ve been leading the drive towards “stakeholder capitalism.”

Klaus Schwab, of the world economic forum, coined that term decades ago. Schwab introduced stakeholder capitalism as the antithesis of shareholder capitalism—then championed by his bête noir, Milton Friedman. Whereas shareholder capitalism argues that the one and only role of corporate leadership is the maximization of shareholder value, stakeholder capitalism argues that corporations should balance profits against the interests of workers, communities, and the world at large (though oddly, rarely their home nations). Today, stakeholder capitalism is alive and well most prominently as ESG—Environmental, Social, and Governance criteria. Blackrock’s Larry Fink is one of its greatest advocates.

Now, you may be asking yourself, why should rich people be willing to forego profits in the name of ESG or stakeholder capitalism? The answer, once again, is not hard to fathom. That answer is “investment.” These very wealthy people are emphatically not foregoing profits. They’re simply spending their money on something they value: Power and control. Over us. Over you.

Western leftists love to decry the problem of extreme wealth inequality. While most of their prescriptions promise to make things worse rather than better, they do have a point. What should we make of people who have more than enough money to buy every good and service they might conceivably want? What do we think happens to them once they’ve crossed that threshold, then built themselves cushions to ensure that they will never lose that ability? What are they supposed to do? Stop making money and enjoy it? Keep running up the score?

Sure, those goals are fine for many of them. But what of the rest? What might they do? Well, the same thing so many others want to do: Tell the people around them how to behave. Smart, successful people are even more prone than average to think that if everyone just listened to them, followed their lead, and did the “right” thing, the world would be a much better place.

What’s more, if you pick a big enough goal, you can really burnish your ego. Sure, getting people to stop checking their phones while blocking traffic might be nice, but it pales in comparison to fixing the environment. Or making sure that the right candidate wins the next election. Or defeating a virus. Or ushering in an era of true justice. Now those are great investments!

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Woke Ethics vs. Liberal Ethics

In today’s America—and throughout the West—the overwhelming majority of our elites have embraced ethical wokeism. To them, the woke agenda defines terms like right, wrong, good, and evil. The superrich superelite among them are more than willing to invest a fraction of their wealth in promoting that agenda. In their world, social networks like Twitter should not serve the shareholders that own them. They should promote the “common good” of ethical wokeism. That’s their primary task. Given their need to continue operations, they are then free to maximize profitability consistent with that primary goal.

Elon Musk appears to be part of the superrich superelite minority less than fully enamored with the woke ethical code. While he may agree with parts of it, he also clings to some more traditional ethical values—like the merits of free speech and open debate. In the particular case of social network businesses, those more traditional values almost certainly correspond to increased profits.

Were Musk to take over Twitter, the policies that he has promised to put in place would thus benefit small shareholders and those adhering to the more traditional (i.e., pre-woke) moral view of free speech. They would operate against ethical wokeism.

But wait! It gets even worse—for the woke superelite.

Were any major social network to reopen itself to free speech, it would create demand for a new industry: Social media filtering. A social media filtering company would provide precisely the service the major social media companies insist is indispensable—but they would do so on a competitive, voluntary basis. Individual users could then subscribe to one or several of the filtering services on order—or none at all.

Users seeking to shield themselves from particular perspectives or images would remain able to do so. Users seeking the broadest range of perspectives could do that, too. Child-safe filtering services would likely prove quite popular—perhaps even mandatory in places like schools and public libraries. Filtering services that screen out particular categories of “hate speech” or recruitment towards violence could even have the beneficial side effect of isolating and highlighting precisely the postings they filter out and making them easier to fight.

Like nearly every other industry, competitive filtering would lead to filtering that is superior in quality and better targeted to user taste than the current monopolistic approaches the social networks themselves impose upon their users. Competitive filtering would be great for consumers and users of social media networks. It would also, however, mark the “end of the Internet as we know it” and the evolution of a new, better Internet. That formulation never makes incumbents happy.

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Take a Little Responsibility

A competitive filtering industry would undermine the entire basis for CDA 230—the exemption that lets social media companies apply editorial discretion to determine what their users see while remaining exempt from editorial liability. The basic argument—plausible when written in 1996—is that the only alternative to such an exemption is a free-for-all publishing graphic pornography for children (hence its inclusions in the Communications Decency Act). In today’s world, competitive filtering would provide a genuine alternative. That’s precisely why the Barons of Social Media cannot let such a business model emerge and thrive. A genuine free-speech Twitter would mark the beginning of the end of their cushy exemption. They might have to take responsibility for their actions and decisions.

Taken together, the stakes in Musk’s gambit are clear.

Institutional investors and social media incumbents are very happy investing a fraction of their profits in retaining control of discourse and public morality.

Musk would happily relinquish that control, increase shareholder profits, and promote his own ethical value favoring the freedom of speech.

The battle lines are drawn. The stakes are high. Even those who may not see all of the issues clearly understand them instinctively. The clash is not truly between two sets of obscenely wealthy investors. Musk’s move for Twitter opened a new front in the battle between two competing moral codes.

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For more information about Bruce D. Abramson & American Restorationism, visit: www.BruceDAbramson.com

To learn more about how America’s elites destroyed the republic, see: The New Civil War: Exposing Elites, Fighting Utopian Leftism, and Restoring America (RealClear Publishing, 2021).

To learn more about the ideology driving today’s anti-American leftism, see: American Restoration: Winning America’s Second Civil War (Kindle, 2019).

American Restoration by Bruce D. Abramson

The Musk Gambit and the Future of Morality