Why billionaires destroy jobs
The journalism world was shocked and appalled last Thursday, when billionaire Joe Ricketts abruptly shut down a slew of media properties he owned — DNAInfo, Gothamist, DCist, Chicagoist, and a few other sites — throwing 115 people out of work. Worse still, all the archives were immediately removed from the internet, with old links redirecting instead to a letter by Ricketts explaining his decision (though reportedly the archives will come back at some future point).
The move comes only one week after Gothamist and DNAInfo voted to unionize, and it is widely assumed that the sites were shuttered as punishment for the vote. It's a perfect example of the capital strike — how wealthy business owners will destroy jobs and production when it suits their politics.
Now, as The New York Times reports, DNAInfo was apparently not profitable, and it's probable that Ricketts was spending a bit of cash to keep the sites going. But the case that this was a move motivated by ideology and spite, not business considerations, is evidenced by three things.
First, Ricketts hates unions — as he wrote in a blog post in September, "I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed." He leveled ominous threats before the union vote, writing: "As long as it's my money that's paying for everything, I intend to be the one making the decisions about the direction of the business." And a DNAInfo spokesperson admitted the union vote played a role in the decision, telling the Times that it was a "competitive obstacle making it harder for the business to be financially successful."
Second is business factors. Ricketts only bought Gothamist seven months ago — hardly long enough to see whether it was going to be a long-term success. Indeed, the union drive might have actually helped in that department — the LA Times recently voted to hold a union election, and has been reaping a harvest of new solidarity subscribers as a result. And while his sites might have been losing money in the short term, Ricketts almost certainly could have sold them and recouped some or all of his investment, reported to be in the "low seven figures" for Gothamist alone. Destroying all these businesses means a personal loss of several million dollars.
Then there's Ricketts himself, whose $2.1 billion fortune comes from founding the brokerage firm TD Ameritrade. He is a right-winger whose major hobby is blowing massive sums of cash on conservative politics. He was a major Trump donor, has set up several political nonprofits, and spent heavily to influence Nebraska politics, including helping his son (who made his fortune in the family business) buy the state's governorship in 2014. In 2012 he bankrolled a slew of political attacks on President Obama, most notoriously a $10 million plan to find an "extremely literate conservative African-American," who could argue that Obama was a "metrosexual, black Abe Lincoln." (The planned attack never ran.)
It's always nice to see conservatives finding bigotry synergy, in this case mixing race-baiting with gay-baiting, but I digress. The point is Ricketts is not a guy who is particularly concerned with pinching every penny. He is a political ideologue who likes throwing his weight around by spending huge gobs of money. He seems to have gotten mad at the union vote and destroyed a half-dozen publications in a fit of pique.
So why do wealthy businessmen hate unions? At bottom, it's a matter of power and control. Corporations are hierarchical, authoritarian institutions. Despite the fact that owners often have little or nothing to do with the day-to-day operation of the business, they demand absolute obedience from their employees. No doubt many entrepreneurs start businesses because they have an idea for a great new product. But having power over others — being in charge — is an equal if not greater motivation.
This is why Republicans have been pursuing union-busting policy with a furious intensity since the 1930s. It might help profits here and there. But it's mainly about keeping labor politically quiescent — frightened of unemployment, and willing to quietly submit to whatever terms — or abuse — the boss feels like dishing out. As Michal Kalecki wrote about why businessmen always, always hate full employment policy, despite the fact that it generally means greater profits: "'[D]iscipline in the factories' and 'political stability' are more appreciated than profits by business leaders."
That holds doubly for someone like Ricketts, who already made his gigantic fortune. Taking a hit to the tune of a few million bucks to stick it to some workers who won't take dictation is well worth it for the fear it will instill. It's basically just another campaign contribution. But it also sets another example — why unions are needed, now more than ever.
Editor's note: A previous version of this article mischaracterized an LA Times vote. It's since been corrected. We regret the error.