Elon Musk has now put together a $46.5 billion financial package to buy Twitter, two-thirds of which comes from his own assets and one-third from bank loans secured by Twitter’s assets. This is the largest acquisition financing ever offered for a person.
Twitter’s founder and top executives don’t want Musk to take over the company. They offered him a seat on the board, but he didn’t want it because he would have to be accountable to all the other shareholders. Now they are adopting a “poison pill” to stop him. But Musk plans to buy shares directly with a tender offer that shareholders cannot refuse. After all, it’s a free market.
Musk says no one should oppose what he wants to do with Twitter because he’s a “free speech absolutist,” and who can be against free speech? Additionally, he and his apologists say that if consumers don’t like what he’s doing with Twitter, they can go elsewhere. Freedom to choose.
Free market? Freedom of speech? Free choice?
When billionaires like Musk justify their motives using “freedom,” beware. What they are really looking for is the absence of responsibility. They want to use their immense fortune to do what they want, without being constrained by laws or regulations, shareholders or even consumers.
The “free market” increasingly reflects the demands of the big bucks. Hostile takeovers, like the ones Musk is mounting on Twitter, weren’t part of the “free market” until the late 1970s and early 1980s. Before that, laws and regulations constrained them. Then came corporate raiders like Carl Icahn and Michael Milken. Their MO was to find companies whose assets were worth more than their stock, to borrow against them, to acquire enough stock to force them to cut costs (like laying off workers, abandoning their communities, breaking up unions and incur crippling debts), and cash in.
But the raiders’ antics often imposed enormous social costs. They took America from stakeholder capitalism (where workers and communities had a say in what corporations did) to shareholder capitalism (where the sole purpose of business is to maximize shareholder value) . Inequality soared, insecurity soared, vast swaths of America were abandoned, and millions of good jobs disappeared.
The looters have modified the “free market” to allow them to do this. That’s what the super rich do. There is no “free market” in nature. The “free market” depends on laws and rules. If you have enough money, you can buy changes to these laws and rules that earn you even more money. (You can also ask the government to subsidize you — Musk has received $4.9 billion so far.)
“Free speech” is another freedom that depends on wealth. In practice, your ability to be heard depends on the size of megaphone you can buy. If you are extremely wealthy, you can buy the Washington Post or own Fox News. If you’re the richest person in the world, you can buy one of the biggest megaphones in the world called Twitter, and then decide who can use it, what its algorithms will be, and how it invites or filters big lies. .
Musk said last week that he doesn’t care about the economics of the deal and is pursuing it because it is “extremely important to the future of civilization.” Okay, but who anointed Musk to decide the future of civilization?
Which brings us to free choice. If consumers don’t like what Musk is doing with Twitter, they can not just switch to another Twitter-like platform. There are not any. The biggest social media platforms have become gigantic because anyone who wants to participate and influence the debate must join them. Once they reach a certain size, they are the only bullhorn in town. Where else but Twitter would consumers go to post short messages that could reach tens of millions of people?
With social media, the ordinary rules of competition do not apply. Once a platform is dominant, it becomes even more dominant. As Donald Trump discovered with his “Truth Social” fiasco, upstarts don’t have much luck.
Musk’s real goal has nothing to do with the freedom of others. His goal is his own unlimited freedom – the freedom to wield enormous power without being accountable to laws and regulations, shareholders or market competition – which is why he is determined to own Twitter.
Contrary to its ambitions to disrupt interstellar transportation and flight, this one is dangerous. This could well upset democracy.