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Posts Tagged ‘disruption’

The Connection Between Fake ‘Innovation’ and Late Capitalism

December 10, 2020 16 comments

My previous post about the ongoing crapification of personal computing and series about how the computing ‚Äúrevolution” of past two decades has been a showy failure lead us to a seldom asked question. While it can be phrased in many ways, here is the simplest version- Why do so many who are rich, in power or aspire to either keep incessantly talking about “innovation”, “paradigm shifts” and “disruption” when we clearly live in an age of profound technological stagnation. Why do people pretend that Apple is an innovative company when the last time they did anything remotely innovative was 2007? Why do so many fanboys celebrate every fart emanating from Elon Musk? What is innovative about Uber, DoorDash or any other service which replicates the services already available in third-world countries full of poor and desperate people? What is innovative about the plantation-lite work environment of Amazon?

Now let us get back to the central question- why do so many people want to believe in fake “innovation”? What is the upside of celebrating fake “innovation” even when it is results in regression rather than progress? Consider user interfaces design for personal computers or software. What is the gain from producing and pimping increasingly shittier “redesigns” and “upgrades” which make the interface or program less useful, slower, buggier and resource intensive? Also, why did user interfaces remain fairly constant for over two decades (mid-1980s to mid-2000s before starting to become progressively shittier? Or take automobiles.. why hasn’t the reliability, safety and longevity not improves since late 1990s- even though their “complexity” has? Why are automobiles from non-Japanese manufacturers (and Nissan) full of progressively bad design choices in everything from layout of engine and powertrain components to increasingly gimmicky but dangerous design choices for driver control panels?

The same can be said for the increasingly shitty style of management of retail store chains which has caused many to go out of business in past decade or Boeing building progressively worse versions of their older airliners. Why do multi-million dollars homes in western countries look bland, formulaic and ugly. Are you seeing a common thread running through all of them and what does any of this have to with the strong connection between fake “innovation” and late capitalism aka neoliberalism aka financialism? To understand what I am going to talk about next, we have to first go into the pillars holding the unstable edifice of late capitalism. As I have mentioned in some previous posts, one of these pillars is credentialism. But how does it work in practice? Well.. the real function of credentialism is to cultivate incestuous insider networks with other “elites” by going to the same “elite” educational institutions. But how does this lead to fake “innovation” and actual regression of technological progress?

It comes down to its interaction with another pillar of late capitalism. Have you noticed that every corporation and rich person seems to have unusually high levels of investment in how they are allegedly perceived by the public? But who are they trying to impress? Do average people buy into the bullshit about “caring” and “socially responsible” corporations anymore than they believe that the HR person at work is on their side? If average people don’t give a fuck about the “social liberal” causes which are heavily supported by corporations, who are they trying to impress anyway? The simple answer is that all of these virtue displays, fake philanthropy and show of social liberalism by “elites” are about oneuping each other. But hasn’t this always been the case? Haven’t the “elites” of all societies throughout history spent too much time trying to oneup each other? So what is different now?

Well.. in previous eras, the “elites” of those societies did not pretend to have reached their positions because they were competent or actually good at whatever they were supposed to be doing. They were quite honest that being an “elite” was about being born to the right parents, married to the right person or being good at violence. Consequently, they left the actual work of getting things done to competent people employed by them. That is why, for example, the Medici family of Renaissance Italy stuck to the business of merchant banking and political influence while being great patrons of art rather than pretending to be great artists themselves. That is also why a lot of the industrial and banking dynasties of late 19th and 20th century Europe and USA stuck to their original vocations rather than seriously dabble in stuff which would make them look liberal, hip or “progressive”.

So what happens when incompetent but rich people try to do stuff at which they suck? Ask Nicholas II of Russia of the erstwhile Russian Empire who decided to personally take charge of military operations during the later stages of WW1 in Russia? Or what about Enver Pasha of the erstwhile Ottoman Empire who decided to cosplay as a military leader during WW1. The same hold true for thousands of generals and officers who gained their pre-WW1 positions in French Army through connections, bribery and kissing the right behinds. Long story short, when incompetent but powerful people enter roles they are not capable of fulfilling.. things go to shit. While this is especially obvious during acute crises such as large wars or economic meltdowns, it still occurs in times without obvious crises- albeit at a slower pace. The point I am trying to make is that “elites” who seriously dabble in real work almost always end up as massive and spectacular failures.

The reason this is a far bigger problem today than in past is that nobody expected “elites” or aspirational elites to do anything beyond being idle or playing insider games of the type seen in royal courts of yore. However the ideology of late capitalism aka neoliberalism is built around the concept of “meritocracy” which require participants to act as if they are involved in doing important work. It is even worse for aspirational elites, who in previous eras just had to play long with these insider court games or marry the right person. This results in people with power and money but no intellectual ability or competence pretending they are geniuses- with predictable results. It is even worse for aspirational elites, who now have to pretend even harder to be competent and brilliant people than the greedy power grabbers they really are.

The only way to succeed in institutions (including corporations) dominated by “elites” who subscribe to the ideology of neoliberalism is to fake the appearance of progress even if it destroys all of the real progress made in the past. That is why people who push bad ideas like Windoze 8 and 10 will be promoted over those who wanted to improve Windows 7. It is also why developing more fragile phones and computers protected by increasing amounts of hardware DRM is now the business model of Apple. Now you know why the UI of Gmail, Google Maps and MS Office, to name a few, has become worse with each iteration. This is also why people celebrate frauds such as Elon Musk who are pretending that technological capabilities which were refined 50 years ago are the result of recent “innovation”. And guess what.. you don’t even have to possess any actual technology to fake “disruption”- just ask that Theranos woman. It is all about appearance and style, not substance.

To summarize. the rise of fake “innovation” under late capitalism has much to with a toxic combination of financial incentives, “elites” and aspirational “elites” being out of their depth in a culture which very strongly favors the appearance of work as measured by “metrics” rather than anything close to the real thing. Might write more about this topic in future, based on comments and responses.

What do you think? Comments?

The Business Model of SpaceX is a Quintessentially American Fraud

June 6, 2017 35 comments

I have been meaning to write this particular post for a few months now, but was not sure how to compress into something that can be comfortably read in one sitting. On the other hand, aiming for too much optimization and perfection is probably not helpful for getting things done and posted. So here it is..

The main point of this post, stripped down to its absolute minimum, is that the business model of SpaceX is a uniquely american-style fraud. Note, I am not saying that corporations like SpaceX are incapable of making a profit someday in the future. My issues with their business model concern the many claims made by them about their future prospects, especially about their advertised potential for future growth, profit and services.

To be fair, the business model of SpaceX is Elon Musk‘s second largest fraud- after Tesla Inc. FYI- My criticism of the business model of Tesla Inc is not based on whether electric cars are practical or viable (they are both). It has to do with the claims made by Musk about how electric cars will displace internal combustion because the former will become somehow cheaper or more functional than the later. But that issue is best left for another day.

It is an open secret that Tesla Inc market capitalization has no link to the number of cars it can sell. How else can you explain a corporation selling less than 80 thousand automobiles a year being considered more valuable than one that sells 10 million a year. As you will soon see, the public image of SpaceX’s future potential is also largely based on a combination of extremely wishful (ok.. highly delusional) thinking and silly valley-style optimism. Along the way you will also see why I say that it is a quintessentially american fraud.

So let me list the many ways that SpaceX’s business model is based on a public relations-led fraud.

1] Everything SpaceX has achieved to date is based on half-century old research funded by the american government. Yes, you heard that right! SpaceX’s launchers are based on technology and fundamental research done by the public sector decades ago. Furthermore, unlike the older corporations comprising United Launch Alliance (Boeing, Lockheed etc), it has not really invented or discovered anything more innovative than making the lower stages of their rockets land vertically and streaming HD videos from them.

SpaceX’s business model is based on PR promoting themselves as innovative while being dependent on decades old research as well as direct and indirect government largess. It certainly helps that there are enough idiots in the world who will buys flashy hype. In other words, the business model of SpaceX is very similar to Tesla Motors and pretty much every single corporation (startup or otherwise) in Silly Valley. As I will show you in the next couple of paragraphs, their claim of being the cheapest space launch system is based on a gross misrepresentation- on many levels.

2] Elon Musk’s is trying to sell the dream that it is possible to build a few dozen launchers and then simply refuel and fly them over and over again for say 10-20 times before building new ones. To put it another way, he wants you to believe that it is possible to make space launch systems that are more like commercial airliners than conventional space launch systems. There is just one problem with that idea.. it is based on what can be best described as optimistic bullshit.

Rocket engines, you see, are rather different from most other types of engines in that they work under conditions of extreme heat and pressure and with a very tiny margin of mechanical safety. They have to so because of the conditions necessary for their operations and the need to keep their weight down. While it has been possible to build potentially reusable Kerosene-LOX engines of the type used by SpaceX for decades now, there haven’t been any takers. Even the ex-USSR, and Russia, preferred to use new engines rather than reuse engines even when they knew that the later would OK after refurbishment and testing.

But why? Why did countries like the ex-USSR which made them in tens of thousands prefer to use new engines than use ones they knew could be reused. Well.. it comes down to a cost and risk calculation. Rocket engines, even the most simplified and robust ones, are always one tiny defect away from blowing up. It is easier to be certain about the lack of tiny but fatal defects in a newly built engine than a refurbished one. Moreover the cost of a refurbished engine blowing up once in a while exceeds the cost of using freshly built engines. Also refurbishing and testing used engines can get almost as expensive as building new ones from scratch.

3] The launch cost of a spacecraft, especially a satellite or space probe, is often the smallest part of the program budget. Yes.. you heard that right, launch cost for satellites is often significant lower than the costs of designing, building and testing them- not to mention ground support for the next 10-15 years. My point is that launch costs for a satellite or any spacecraft (which is not a disposable transport vessel) is usually less than 20% of the “Total Cost of Ownership” for that particular spacecraft program. In other words, launch cost is not a particularly big concern to organisations whose primary operations require reliable and long-lived spacecraft. And this brings us the next point..

4] Even if we assume that SpaceX is actually cost competitive, who will use their launch services? Here is a hint- almost nobody outside the USA or in their political orbit. Here is why.. Countries such as Russia, China, India and Japan are going to use their own launch systems for a number of reasons from ensuring national security, keeping their own scientists and engineers employed and national pride. Also, vertical integration of spacecraft and launcher programs create far more cost savings than using somebody else to launch your spacecraft using slightly cheaper launchers.Even many European countries are unlikely to use SpaceX over their own ESA launch systems over the long term- even doing so is a bit more expensive because it is about preserving technology and job security for their own citizens. Furthermore, countries other than those listed above are also unlikely to have a strong preference for SpaceX since countries like China already offer very competitive packages covering everything from satellite design and launch to post-launch support aka vertical integration.

5] Even in USA, the launch business for commercial and military satellites is an oligopoly- one long dominated by well-known players such as Boeing, Lockheed-Martin and Thiokol. Did I mention that those corporations have much more money, and many paid lobbyists, than SpaceX? To make a long story short, Space X is unlikely to become the dominant player in the area of launching american spacecraft (in dollar terms) unless the other larger players screw up very badly. This is not to say that SpaceX cannot make a decent profit on launching some spacecraft for the american governments and USA-based corporations. In fact, SpaceX will run just fine and make a decent profit as long as it is run as a conventional launch business.

To summarize, SpaceX is bluffing and lying when it claims the ability to “disrupt” the space launch business or become the dominant global player in that sector. What is especially sad to see is the number of otherwise intelligent people who are willing to treat the press releases of that company as holy gospel. Then again the USA is full of self-delusional types who are confident of becoming multi-millionaires within the next decade. To summarize, the long-term (and even medium-term) business model of SpaceX is a confidence scam based on rosy and polished presentations combined with exhortations to positive thinking. And that is why I called it a quintessentially american fraud.

What do you think? Comments?