Category Archives: parasitism (entrepreneurial)

WeWork’s guru-led business model

Dalrymple writes that Adam Neumann, with his long hair, T-shirt, and microphone, indulged, like any guru worthy of the name, in

malversation of funds, morally if not legally, on a large scale.

Neumann claimed — without being laughed down — that his business was worth $47bn, yet it was

nothing but renting out office space to people who could not afford permanent offices. This is a good idea, no doubt, though it was not his, but to have parlayed it into a business allegedly worth many billions while making heavy losses takes genius of a kind.

WeWork, Dalrymple notes,

had a private jet while losing more money than it turned over ($1.9bn against $1.8bn). I don’t know whether this is a first in history.

The company could survive

only by finding someone to throw good money after bad. As Macbeth might have said if he had lent money to it, ‘I am in loan stepp’d in so far that, should I lend no more, returning were as tedious as go o’er‘ — indeed more tedious, in so far as it would imply that the original loans were not performing and might give rise to awkward questions about the wisdom and competence of those who made them. Meanwhile, my bank tells me every month that it is prepared to lend my tiny company up to 4% of the amount of money I already have in the bank. Thanks very much. Such is the wisdom of bankers.

Dalrymple says he finds it difficult to think of the WeWork story without recourse to metaphors of parasitism. He notes that in the modern world, the path to fantastic personal success is not that of inventing something that people want and that can be developed and sold at a profit, but of persuading investors to part with their — or more often, other people’s — money to finance a bubble. For that you need the skills and confidence of gurus, who

fleece by promising new meaning to the gullible. Their eyes shine, they gesture, they are alternately passionate and calm. They don’t believe, they know. If you are lucky, you have never met such a person, for we are all, to varying degrees, susceptible to him. One might have thought, though, that bankers of all people would not fall easily for their wiles.

The most successful gurus, Dalrymple observes,

are not straightforward crooks, at least not to begin with. If they deceive, they are also to a large extent self-deceived. But with repetition and success comes more straightforward skulduggery, swindling, misappropriation of funds, sexual predation, and so forth, all because they believe themselves to have been granted impunity, as with a diplomatic passport.

Many gurus

mark themselves out by their dress — in this case, T-shirt — despite immense wealth. How can such a man not have seen through the triviality of mere appearance to a deeper reality?

Dalrymple asks how

companies that have never made a profit, however long they have been in existence, can be valued so much more highly than those that make profits almost without fail.

No doubt the companies in question

promise at some time in the future to make eye-watering profits once they have cornered the market and can charge monopoly prices, having driven everyone else from the field. But this glorious future (glorious for holders of the stock, not for the average or below-average customer) seems rarely to arrive. Meanwhile, financiers finance, at least until, like socialists, they run out of other people’s money. Then they can ask the government to create more money, so that they never run out of other people’s money.

On Feigned and Factitious Diseases

England, land of malingerers

Dalrymple enjoys Hector Gavin’s 1843 work, which, he notes,

says something that has resonance in a land such as ours in which the numbers of sick people have so overtaken the numbers of the unemployed, to the delight of government statisticians, doctors, and the unemployed themselves.

Gavin writes:

Medical certificates must not be compared as a practice (as they have been) to that of alms-giving; in the best hands they are liable to great abuse; and however pure and disinterested the motives, much evil not infrequently results from them—none more than the inevitable depreciation of the medical character, which cannot fail to follow from their being given in a careless or lax manner.

Dalrymple comments:

This is enough to make one blush.

How many of the English are pretending to be ill in order to be able to live on handouts? In Britain, Dalrymple points out,

we have the remarkable situation where we have more invalids than after the First World War: 3m, of whom 2m could probably work.

It is, he says,

a fraud on a large scale: deeply corrupting of the recipients, who wrongly believe they are sick; the government, which shifts people out of the unemployment statistics; and the medical profession.

The entrepreneurial parasitism of benefit recipients is, he explains,

not recognised by naïve bureaucrats. The recipients know how to manipulate things to get the maximum benefit; they are reacting to incentives.

Rotten, skiving Britain

img_3044Dalrymple answers your questions on the land of scroungers

How many of the English are pretending to be ill in order to be able to live on handouts?

In Britain we have the remarkable situation where we have more invalids than after the First World War: 3m, of whom 2m could probably work.

Rewards for, to put it most kindly, the workshy. Is that not a scandal?

It is a fraud on a large scale: deeply corrupting of the recipients, who wrongly believe they are sick; the government, which shifts people out of the unemployment statistics; and the medical profession.

Aren’t the UK Tories capping working-age welfare payments at £500 per family regardless of the number of children?

It won’t work. A little bit of drug-trafficking here and illegal activity there will make up for the cuts.

Incentives to be a cheat and a slob

Why is nothing done about it? Is this wilful blindness?

The entrepreneurial parasitism of benefit recipients is not recognised by naïve bureaucrats. The recipients know how to manipulate things to get the maximum benefit; they are reacting to incentives.

Why are there so few White Britons in basic service jobs?

Culture, the welfare system and rigidities in the housing market are to blame.

Employers greatly prefer, for example, Poles, do they not?

Poles are better than the English in a work ethic sense, and they often speak better English.

Drug addicts

Do you have any time for libertarian arguments on drug legalisation?

John Stuart Mill (who ­argued that individuals should be free to harm themselves but not others) thought that fathers who abandoned their children should be put to forced labour. You don’t hear that bit quoted much by legalisation advocates.

Fifth-rate intellectuals

Who is responsible for the British mess?

Most of the blame for the social dysfunction lies with our intellectual class, who revel in this behaviour.

Familial disintegration 

To what extent do women bear some of the blame for domestic violence?

Men who commit violence against women should, of course, be put in prison, but the idea that women are playing no part in this is wrong.