Blood money

Some years ago an investor I met at a TechCrunch event invited me out
for a coffee. This happens a lot; as a weekly columnist here I am deemed
an official Media Influencer, and people in turn want to influence me,
until they realize I’m just going to ignore them and write about
whatever weird idea comes into my head instead. I accepted this
invitation, though, because this guy’s job was unusually interesting, in
a bad way — he represented a venture fund affiliated with the Kremlin.

This was before Russia was the democracy-manipulating enemy it is today,
but just after Russia passed its “anti-gay law,” so angry anti-Russian
sentiment was exceptionally strong. It was fascinating to me watching
this man squirm around the topic: I’m a Bay Area guy, he told me, I’m
pro gay rights, pro gay marriage, but we have to accept that every
country becomes enlightened at its own speed and its own way, and the
best way for us to encourage that, to promote our values, is to engage
with them, to show them the right way of doing things.

Needless to say this is a column about Saudi Arabia.

It’s kind of amazing that it’s taken the murder of Jamal Khashoggi to
wake people up to that nation’s brutality. For three years now Saudi
Arabia has been slaughtering thousands of Yemenis in a needless conflict
wherein, to quote Bloomberg quoting the UN, “especially a Saudi
Arabian-led coalition and the Yemeni government it backs, have shown a
disregard for civilian life possibly amounting to war crimes.” It has
long been a totalitarian absolute monarchy allied with what was once a
radical interpretation of Islam, Wahhabism, which T.E. Lawrence
described a hundred years ago as an obscure “fanatical heresy” — and
which has since been mainstreamed with disastrous global consequences as
a result of this alliance.

And, of course, it has long been an intimate international ally and
partner of the United States. America’s financial / military /
consulting / industrial / oil complexes have been in bed with the Saudis
for a very, very long time, as have its politicians. Let’s not pretend
that Saudi money in the tech industry is in any way exceptionally bad or
different. Bad, yes, but as bad as, well, the rest of American society.
For a long time the US attitude towards Saudi Arabia seems to have
been: “sure, they’re an oppressive dictatorship, but they’re our
oppressive dictatorship, and their royal family is very nice and very
generous and they control so much oil.”

Now, though, at long last, that attitude seems to be changing. Not that
the US is going to stop buying oil from them. Not that the US is going
to stop selling weapons to them. But, despite occasional hesitant steps
into the twentieth (but definitely not the twenty-first) century, nobody
is going to pretend Saudi Arabia is anything other than a brutally
oppressive state from here on in. (Shout-out to my homeland for being
ahead of the curve on this one.) Which is progress, I guess, of a sort?

You can make a realpolitik case for continuing to engage with Saudi
Arabia. Just like my coffee companion five years ago did for continuing
to engage with Russia. See how well that turned out, how since then
Russia has become so much more enlightened, so progressive, such a
glorious contributor to the commonwealth of nations? …Oh. Saudi Arabia
is different, yes, but in a worse way; it’s so sensitive to criticism,
overreacts so wildly and violently, because it is fundamentally a
fragile state. Nassim Taleb, who predicted the collapse of Syria and its
civil war before it happened, has predicted a similar fate for Saudi

I don’t think the Trump administration is going to continue its support
for Saudi Arabia’s new and erratic leadership for fear of the human or
economic consequences if they do otherwise. “Trump’s razor:” the
stupidest reason is most likely to be correct. Here, that means the
administration doesn’t want to walk back their Saudi support because
they think that will make them look weak. Similarly, who are we kidding,
VCs who take money from Saudi LPs aren’t doing so in order to help prop
up the Pax Americana; it’s purely because they want the money, and
nobody else is prepared to throw around $45 billion in cash.

Right now, though, and for the foreseeable future, sovereign Saudi money
is tainted, poisoned, blood money. If you accept it you have to
consider the consequences of publicly contravening our new,
post-Khashoggi social morality, and the angry criticism which will
follow. Will that last? Who can say? Even if it doesn’t, though, you’ll
have to consider the consequences of privately contravening your own
ethics, if you have any. That was also true last year, and it will still
be true next year, no matter how much money we’re talking about.

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