Welcome to BIG, a newsletter about the politics of monopoly. If you’d like to sign up, you can do so here. Or just read on…
One of the best parts of writing this newsletter/blog is hearing from you. And that’s what today’s issue is about, how you experience the sloth, misery, and instability driven by monopoly power.
My basic theory of about why we’re having problems in our political economy is that guys like this are in charge of the world.
These are the consultants, both named Bob, from the movie Office Space, which is a Mark Twain-esque comedy about the misery of office culture, in which financier-driven executives and their management consultants passive aggressively bully and disillusion everyone around them. Aside from Office Space, there’s actually another similar comedy made at roughly the same time all about the military bureaucracy and corruption called The Pentagon Wars. In the real world, there are different flavors of this horror show; I’ve profiled Adam Neumann at WeWork, what happened to Boeing, and private equity itself. But it’s pervasive.
Last week I asked you for stories on corruption/monopolization in your corner of the world. Today I’m publishing two letters. The first is from a young engineer who is trying to find interesting and hard engineering problems to work on. His story is about the real reason productivity growth is slowing, both in big businesses and in the start-up world of Silicon Valley. The second is from a person working at a French beauty products company dealing with work/life balance.
Both reflect the personal experience many of us have gone through or are going through in a world organized by a philosophy prioritizing short-term oriented financial goals instead of liberty and innovation.
Subject: Monopolization/Fraud in my corner of the world
I'm an early-career software engineer working at a "mobility services" startup, and your rigorous but entertaining analysis of monopoly power has been really validating. I don't really expect that you'll read this or find it particularly interesting, but after seeing your post today I felt compelled to share my personal experience of monopoly power with you.
I got my BS in Computer Science recently. I was a low-income first-generation student from the rural midwest and I saw the need-based full ride they offered as my ticket into the middle class. I got a software engineering internship at Procter and Gamble, but declined a cushy full-time return offer because I was interested in doing cutting-edge engineering work with big data and as far as I could tell, very few white-collar workers at P&G really did anything. All I saw was a lot of bureaucratic box-ticking and people patting themselves on the back for work that they hired consultants to do for them. P&G as a whole really just reminded me of the trust-funders I went to college with. There was zero exposure to actual risk or competition but everyone had to pretend to be innovating and competing in order to justify their success. I swear to God my manager actually took me aside at the beginning of my internship and said "at the end of the day, nothing you or I do is really going to impact P&G's bottom line, so I wouldn't stress too much about your projects." He meant this to be comforting, but as a kid who had grown up in a farming community (and spent summers working on farms) where a single wrong decision and a few days of slacking off might make the difference between a slight profit for the year and insolvency, it rubbed me the wrong way. [ed. The current P&G is a result of a merger with Gillette in 2005.]
So I decided I wanted to work in the tech industry. I figured that if I wanted exposure to risk and to actually be in an environment where innovation was the only way to be competitive, a small tech startup would be a great choice. I was wrong.
The company I now work for started as a parking app. They built a solid user base with their great customer service and user experience. They hired smart and ambitious people and gave them equity. When I joined, we prided ourselves on staying lean and delivering a great product and everyone had skin in the game. The integrations we had with access control systems and the great technology we offered to parking operators helped us win major deals. That technology and our relationship with those operators eventually gave us an economic moat. We were growing sustainably as the result of having a superior product based on a great understanding of consumer needs.
But sustainable growth isn't what VCs (or the execs that they install in the firms they have stakes in) are looking for. So we pivoted.
Without going into too much detail, we are now exclusively focused on getting acquired by a big tech firm. Meetings with low-level product managers at a few of the world's largest companies dictate every decision about which projects we pursue. We're no longer building a company. We're not even building a product. We're building a feature that we hope will end up getting included in an app owned by a mega-corporation.
When I talk to my friends and peers at other tech startups, they tell me that it's pretty much the same story at their companies. Everyone is building to the specifications set by Google or Amazon or Apple. This "competitive" industry, supposedly a shining example of the power of the free market, is really just a massive risk-free R&D department for the FAANG companies.
The whole thing is pretty demoralizing. It's made me realize that monopoly power has chilling effects that extend far beyond the offices of the P&Gs and Googles of the world.
Anyway, that's my rant. If you took the time to read it, thanks. I look forward to your next post.
Subject: kid and family management
As an introduction, I am French and only worked as an in-house consultant for a French luxury group. No need to restructure/fire people or anything, EBIT (earnings before interest and taxes) was super high and money was being thrown out the windows every day.
One day (I had already quit my job and was leaving a few weeks later), I was in a call on organization needs for a specific market. The problem for this market was that salespeople were very unhappy because they missed their families due to long hours and long commutes. The proposed answer was to increase the staff (again, remember, super high EBIT and growth prospects).
My bosses, instead of simply nodding and moving on (we weren't the deciders for the extra staffing anyway) insisted that the market director shouldn't hire more people but instead ask her employees to work on heir "kid and family management"... Seriously? Does that even mean something??
I was desperate to see how bullshit language had impregnated every cell of my bosses' corporate selves. Don't people ever stop and consider situations for only one moment??
Anyway, good luck on compiling all the stories - I am sure you must now have a very large database.
Greetings from Paris
ps: I had lent "Bullshit jobs" to a colleague from the luxury company, his boss forbade him to leave the book on his desk...
So there we go, two simple stories. There are many more. Feel free to send me yours, and make your subject line entertaining.
What are the lessons? Well this political economy problem is eminently solvable. There are reasons for hope, immense hope even. Imagine the brilliance and innovation if the tens of millions of people who today are forced to do useless nonsense are set free to tinker and explore. That is where we could go, and where I think we will soon head if we just make better public policy choices.
Thanks for reading. And if you liked this essay, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you want to really understand the secret history of monopoly power, buy my upcoming book, Goliath: The 100-Year War Between Monopoly Power and Democracy.
P.S. I also liked this email. The last line is tremendous.
I worked for a company that hired a consultant with a Harvard MBA, our CEO was way too enamored with the Ivy League. He wouldn't listen to his own people, but his Harvard consultant was from Harvard so she must know what she was doing. Anyway, the Harvard MBA lady was also lazy, so I wrote her analysis for her. (although her versions were prettier) This allowed my boss (COO) and I to get our ideas implemented, and gave us that fancy Harvard sheen. I am now at a new company, and we have a ton of BCG people here. They are mostly worthless, but their decks are so damn beautiful.