By HERMAN MORRIS
As of October 2022, Twitter is now owned by Elon Musk. In purchasing the company, Musk has claimed that he will bring an end to censorship on the platform, pointing specifically to algorithmic promotions of certain topics and citing the need for a “digital town square.” The price Musk paid for this acquisition is $44 billion, putting in $33 billion of his own equity, and the remaining being financed by a debt package whose holders include Bank of America and Morgan Stanley. This makes it the fourth largest leveraged buy-out in history, and now has Twitter saddled with a $13 billion debt package, which will bring with it a $1.2 billion annual interest payment.
Twitter’s net profits have already been in the negative the past two years. This raises a question that is far more important than Musk’s designs: how will profitability be restored? If the company can’t meet its financial obligations, then there’s not much point in buying a company that instantly goes bankrupt.
The first thing we know is that in a closed door meeting Musk has floated laying off 75 percent of the workforce. This is a threat that seems real given that Musk laid off roughly half the staff one week after the purchase. This is exactly the kind of action that will be considered and necessarily undertaken by the man if he wants to restore profitability, a pre-requisite for overseeing any company under private control of industry. What will come after these layoffs is difficult to know, but it’s doubtful it will improve the state of free speech on the platform. It’s likely to include more cost cutting and pivots meant to raise money, if it doesn’t mean a flat-out end to the platform itself.
A critical look at liberal ideals in practice
But what about Elon’s criticism of Twitter and its moderation of free speech? If we look at Twitter’s record, the company has done very little to regulate speech on its platform outside of what is demanded by the state institutions that allow it to function inside that country’s internet service. This means that Twitter was a major vehicle for mass mobilizations during the Arab Spring, the George Floyd uprisings, and various other popular street movements. It also means that groups like the Taliban and white supremacists like Richard Spencer are allowed on the platform with little to no restrictions on their reactionary politics. For most cases, Twitter has only taken independent action and suspended or deleted posts when they have been explicit calls for violence, harassment, or suppression of people.
The company is more than happy to comply with government repression though, suspending farm strike supporter accounts at the request of the Modi government in India, hiding tweets viewed as “blasphemous” by the Government of Pakistan, and blocking accounts critical of the Turkish government. Why would Twitter carry out these requests? Well, historically when Twitter has opposed governments seeking to repress independent free expression, it’s been outright banned from operating in the country. This is exactly what happened during the Arab Spring when the Egyptian State Security Services ordered Twitter to be blocked.
While Twitter’s leadership has expressed high-minded values about free speech, it is also a company that relies on a wide user base to sell ads and maintain profitability. To that end, Twitter has shown a great willingness to work with governments to help carry out political repression to preserve the mass audience that keeps its profit margins in check.
As for Musk himself and his views on free speech, he thankfully is already in charge of multiple enterprises where he can see his free speech views in action. At SpaceX there have been long running accusations of a culture of sexual harassment, going all the way up to Musk, who in 2016 was alleged to have exposed himself to a flight attendant in the company, then paid her $250,000 for her silence. When employees at the company published an open letter asking for the company to define and enforce its zero-tolerance policies around harassment in the wake of this incident, they were summarily fired.
A wholistic summary of Musk’s approach to free speech at Tesla would constitute an article by itself, but one standout example bears mentioning. In 2018, Tesla employee Martin Tripp blew the whistle at the company’s Nevada Gigafactory for wasting about 40 percent of its raw battery materials, an estimated 150 million dollars’ worth of battery materials. For his trouble, Martin was fired, falsely accused by Tesla of planning a mass shooting, had police sent after him under this false accusation, and had Tesla investigators attempt to hack his phone.
Old financial tactics in a new industry
So, Musk likely has no real interest in preserving free speech on Twitter. Why acquire it in the first place? What use would the company have to a man who already owns five major tech companies? Besides the inherent worth of owning a major organ of tech media, it’s worth understanding Musk’s takeover in the larger context of leveraged buyouts, particularly those used by the Wall Street corporate raiders of the 1980s.
In conducting a leveraged buy-out, the buyer usually in addition to putting up their own money, also collateralizes some of their own assets (in Musk’s case, over $6 billion in Tesla stock), and then also takes out loans against the company itself being purchased (for Twitter, the $13 billion debt package mentioned previously). The argument put forward by the purchaser is that the debt in the company will be much like the debt from a mortgage for a homebuyer. The company being purchased will be made more profitable by a responsible capitalist, making regular payments to the banks while pocketing the remaining profits, leaving everyone happy.
In practice, most leveraged buyouts by the corporate raiders of the ’80s achieved that profitability through impossible demands on the workforces, mass layoffs, and asset stripping whatever high value capital the company had. This was how TWA and RJR Nabisco were both reduced and sold off for a fraction of their previous value. In the era of finance capital, socialists should view these types of actions as destruction of socially productive labor and capital to reap short-term profits for future investment.
So far, what Musk has done to Twitter, with mass layoffs of half the staff and impossible demands such as non-stop weekend work for new features, fits perfectly within the model of how leveraged buyouts are handled by the capitalist who carries them out. The unilateral declaration of socially un-productive labor by anyone with enough money and buy-in from the finance bureaucracy that governs the big banks is a problem unique to capitalism and is why as socialists we should fight for a world and a system where we have a digital democratic commons that isn’t subjected to these issues.
Tech workers should also note, in the wake of larger layoffs happening throughout the industry, that while they have typically enjoyed a higher standard of living than most others in the American labor sector, they are subjected to the same types of disciplining by capital as any other worker if profitability falls low enough. These types of ruthless actions will become more commonplace throughout the industry as the American tech sector continues to contract. Just as the capitalists turn to the old methods of managing labor, workers in the industry would do well to copy the model of the labor movement around them and look to the old methods of labor organizing and unionizing in the history of the working class.
Looking at Twitter’s history, Musk’s history, and the massive amount of debt the company has been loaded with, there is little reason to believe that the company will even exist in its current form in a year’s time, let alone become a bastion of free speech. The need to be profitable, to be accountable to bourgeois state apparatuses, and to be privately held are all limits on just how useful these platforms can be to true free speech. The need for a digital democratic commons is something that socialists should absolutely fight for, as these platforms, even in their highly compromised form, are still occasionally usable to progressive ends. While technology can and should be liberatory, and Twitter has shown us glimpses of this, it can never be truly realized under a capitalist regime, as the profit motive and need to repress actual social movements will always eclipse whatever true social use sites like Twitter provide.
Photo: Dado Ruvic / Illustration / Reuters