The Musk of Isaacson
It has been a clear, warm day in Santa Fe, New Mexico, where strangers are kind and beauty is overflowing.
“This is how civilizations decline. They quit taking risks. And when they quit taking risks, their arteries harden. Every year there are more referees and fewer doers.” — Elon Musk.
First, America stayed ahead of referees by innovating westwards. Once the frontier lands had been conquered and saturated by referees, innovators leaned into the nebulous frontier of tech and software. This reorientation has bought time, but referees have once again caught up. Where next?
It takes courage bordering on recklessness to go back to the heavily regulated Wild West of the material world in search of a future. It takes vision and common sense to recognise that the future of humanity cannot be divorced from the physical world(s). Isaacson’s book is a story of a man with such courage and vision.
Musk is reportedly abrasive towards millionaires. However, these millionaires — his employees — have presumably chosen the high-stress jobs that their millions compensate them for. They have chosen the game. They can always quit playing. Many do. While there is no shame in desiring a work–life balance after a decade or so of devoting oneself fully to work, there is also no shame in a CEO’s ambition to staff his firm with the employees who are at the stage of their lives when they seek to give their all to work.
There exist all kinds of jobs for all kinds of temperaments. Some people thrive in the fight and under stress. It is exactly because such people are scarce that they command million-dollar sign-up bonuses. It is exactly because such people are scarce that it may be hard for the rest of us to comprehend how someone could cherish working for Musk and how Musk’s way of running a business may be optimal.
Musk’s firing decisions are sometimes portrayed as mercurial. But they are merely optimal. Suppose that Alice never delivers a product when she does not exert effort and sometimes (but not always) delivers when she does. If Musk were to commit to never firing Alice, then she would never exert effort. If, instead, Musk committed to firing Alice should she fail to deliver but not otherwise, then she would exert effort. Even in this case, however, in spite of exerting effort, Alice would sometimes be unlucky and get fired. And Musk would know that — know that she exerted effort — but would fire her regardless. The promise of firing is the only way to motivate Alice to exert effort.
Optimal contracts are paradoxical in that they call for an occasional punishment of the employee who everybody knows has committed nothing wrong; his only transgression has been to be unlucky.
X is replete with one-liners without context. Real life is all context, with one-liners few and far in between. If one is curious to inhabit, for the briefest of moments, real life, then one would do well by refraining from executing real-life people for their one-liners. Or better, one should refrain from executing at all, and go and live a little.
Thank you kindly.
