Comment by underlipton
2 days ago
The people running these companies have a perverse incentive to keep the ball rolling as long as possible so that they can extricate as much personal wealth and influence as possible. Maybe AGI makes all the problems go away. But, failing that, they get out relatively scot-free when it all collapses. And they don't owe anything to the public. And no one is going to bring them up on fraud charges or any other kind of criminal charges. So, while the world is burning around them (including their former companies), they have the money and connections to acquire property and businesses that are actually productive. It's the Russian oligarch playbook. They're the kings of a struggling society on the brink of failure, but they heard "kings" and said, "Let's go."
"so that they can extricate as much personal wealth and influence as possible"
I've always thought this. If you're running something like OpenAI, it really doesn't matter to you if the company fails because you're already comfortably wealthy. But, it sure would be nice to be worth another 10x billion - though I'm not totally sure why.
So these individuals perceive a large upside and no downside. It's more of a hobby than a job. Like learning to play piano. It would be amazing to be a badass pianist...but not a big deal if that never happens.
I generally agree with the sentiment, but it's not the russian oligarch playbook. The playbook is some kind of a variation of buying out a productive asset in a legacy industry under it's market price (because everything is on fire already), then using political or monopoly power to funnel (tax) money through it and into your pockets (the asset has to function, but doesn't have to provide a good quality of service due to not allocating proper maintenance). Sovereign AI fund and Microsoft are very close to that setup. If NYC subway would be sold to certain Elon and he will then jack up the prices and have the city hall to subsidize it still, but keep the quality of service the same, that would be more or less it.
The other variation goes in reverse -- using the legacy asset and it's capture labor force to output some kind of a commodity that is sold below market price to a controlled company in a different jurisdiction, where it's resold at small discount of a market price. The company still has to function here too.
Bonus points for not even owning the asset in question, but having effective control over it through the corrupt management, this way the government still pays the bills to keep it running at loss.
What you are describing is actually very western thing, because it assumes you can exchange the asset into cash directly and then buy something with that liquidity, which assumes solid property rights. I'm not even talking about OpenAI being an actual tech company that just wasn't there before. It's not how oligarchy works in the places.
Since the US is slowly moving in a direction of oligarchy, I think the actual reference will be helpful.
Please read Sarah Kendzior. What's happening under Trump is different from what's happened under other admins precisely because he's drawing from the Russian quasi-state/mob playbook, and not from the normal "socially-caustic Capitalism" one. The difference is that one seeks to maintain a state, and one seeks to dismantle it and replace it with a quasi-state, which exists mainly to interface with other the entities that are still playing in the nation-state system, but which internally functions almost completely as a projection of the power of the elites.
You're conflating the assets the elites own before the state collapse with the ones they seek to acquire afterwards. The don't care if the ones from before function, because their only purpose is to be maximally extractive. Afterwards, there's no need to funnel tax money through the functional businesses they acquire; they are the company and state and the company is the service or product, so anyone interfacing with the product or service within the state is handing them their money. No laundering games necessary.
>replace it with a quasi-state, which exists mainly to interface with other the entities
I don't exactly disagree with that assessment and I think you should stay vigilant for that indeed. What I'm saying, that selling a hot potato to get cash is the opposite of what oligarchs are known to do. I could be that it's but a step to buy something else with oligarchic intentions in mind, but alternatively it could a normal westerner money-handling behavior.
>they are the company and state and the company is the service or product, so anyone interfacing with the product or service within the state is handing them their money.
That doesn't contradict what I wrote or at least meant. The asset in question is not the means of laundering, but a pretext for extracting money from everyone unfortunate enough to live in the forsaken place.
The laundering part usually comes when the oligarch wants to safeguard their own money from political risks, which they do by keeping the funds in a place that is outside of their (and their potential rivals) political influence. Otherwise, once the political balance shifts, the money is just gone, because no laws exist to guard it anymore. I'm not sure what this "outside" place could be for Americans, but could guess (with no confidence in the answer at all), it's either Swiss or Gulf banks. Maybe UK or whatnot. Some structures that have a combination of impartiality to their disputes, strong enough property and privacy regimes, but with zero to none ethical constrains to walk away from it.