🏢 Corporate Brutalitarianism

15 Dec, 2024

All obstacles to profit must be eliminated in order for the investors in a company to maximize their return. This is a simple proposition with obvious implications. What is slightly less obvious is the resulting second order games of representational cruelty that congeal in corporate structures as a result of this relationship. Although as we'll come to later, the disjuncted nature of this abstracted psychological violence is the point.¹

If investors require signals to make decisions on where to invest, it follows that those seeking investment must become well-versed in signalling to succeed. For example, a seed round investor expects to lose money or see a big return on investment, so they are fairly risky and tend to scrutinise spending less. Founders thus boistrously offer big visions for the future with little regard for short-term returns. This game is mathematical, if you're spending a million dollars and cut costs, your maximum return is a diminishing percentage of a million dollars. Instead, you want early-stage founders to spend every penny you give them to grow to maximize your upside.

Where this gets weird is at the late-stages of investment - 100 million dollar buy-ins, 1 billion dollar valuations. At a certain size, these new investors with more to lose seek safer returns and demand marginal gains in the short term over the potential for massive returns in the long term. I have experienced multiple times in my corporate life the perverse phenomenon of receiving millions and millions of dollars of investment, essentially a blank cheque at the scale we're operating, and the immediate cutting of costs as if we're on the verge of bankruptcy the very next day.

Founders appear on company-wide video calls, faces tired, grim and gray - hundreds lose jobs, software licences get cut, belts tighten. Yet the company is sitting on more runway than ever before. Why does this happen? With greater investment comes greater signalling cost. Shareholders must be sure that those leading their investments would kill their own baby to keep the profits coming, because our economic structure demands they eventually must. They must perform unnecessary cruelty in order to prove they have the capacity for it, like the apocryphal story of Nazi soldiers-in-training bonding with their dogs before being forced to execute them.

And so we begin with a singular relationship at the top of a hierarchy trickling down to permeate the corporate structure. In order to enact cruelty, you must have lieutenants that will not balk either, and so on down the chain of management to the foot soldiers - sometimes the last in line, more often themselves tasked with enacting cruelty on the consumers of the product and suppliers of raw materials to create it.

It was after several hundred million dollars of investment I first began to see powerpoint slides titled "Increasing friction for the customer", and multi-day battles over a 17 dollar discount for a 50000 dollar contract. It's not about the money, it's about the principle: Corporate Brutalitarianism. No one can really explain what they're doing when you challenge them, many are operating on a kind of disassociated autopilot, as if they were a combatant yet to reach the 'post' of traumatic stress disorder. Here Fischer offers a compelling description:

the mortifying cocoon of corporate structure - which deadens as it protects, which hollows out, absents, the manager, ensures that their attention is always displaced, ensures that they cannot listen... watch someone step up into management and it's usually not long before the grey petrification of power starts to subsume them. It is here that structure is palpable - you can practically see it taking people over, hear its deadened/ deadening judgements speaking through them.²

And yet, as someone with direct experience living and operating and managing in these corporate structures, perhaps more than the academics best known for writing about them, I find some fault here. What Fischer describes as a petrification, a deadening, a displacement of personhood by structure, I perceive as a replacement of personhood by person. Once you live in a corporate structure for years, you learn to recognise voices. You begin to become familiar with the process of skinwalking, and if you're going to be effective, you have to learn to trace the incentive.

When a colleague does something stupid or cruel, I begin the process of determining which flavour of demonic possession they're operating under. What faction are they having to signal towards today? What incentive? Are legal breathing down their necks? Finance? Is it a second-order possession as they are puppeted by a chief executive who is themselves puppeted by the board? The distinction between deadening and possession is critical here, where in the former personhood is pushed into the structural soup, in the latter personhood moves amongst people in the structure. Each entity a miserable little pile of incentives, thrusting a hand to manipulate and puppeteer another through political maneuvering, subterfuge and coercion.

The diffusion then, is not of responsibility, but of personhood - it is not an annihilation but a shuffling. Each human in the corporate structure is many, with greater responsibility involving more frequent and flagrant posession by others. This does imply, then, that with the exact right combination of people, you can create a corporate structure that is, at least temporarily, empowering. We have to admit that this has happened, if only by evolutionary fluke or by the overwhelming tight-grip of a benevolent dictator. I think I've personally been in entities that perhaps came close, but quickly faltered in the face of growth. What is most important to recognise is that these states are impossible to maintain with public ownership, where who dictates the incentive structure is no longer dictated by an incentive other than profit.

Ultimately this demand for future growth creates a demand for the signals of future growth. At a certain size all corporations must enact great cruelty to continue to grow, and any corporation that reaches the threshold of potential to get there must be run by those who can signal their capacity for that future cruelty. This ultimately does short term damage to a company's growth prospects - the people who made it successful burn out and leave, the surplus spending cuts result in the unexplainable loss of surplus value to exploit (connections never clear enough to make an argument more powerful than the urge to perform cruelty) and panic sets in as growth stalls.

Perhaps deeper still there is a feeling that in a meritocratic system great success requires great sacrifice. A founder who stumbles upon a great idea, builds a great team and creates a great company without overcoming great trials is anathema to liberal mythology. It's too easy, and if it was that easy anyone could do it in a meritocratic system, and if they can't then it's...luck. Too frightening a prospect, so instead great sacrifices must be made, the more unnecessary the more valuable, in order to appease the great god - the invisible hand of the market.