Saudi Arabia and the Common Knowledge Game
October 16, 2018·Politics
An historic night it was.
A pleasure to have a private dinner with the Crown Prince of Saudi Arabia, Mohammed bin Salman, his royal family and distinguished cadre.
A fun night and great to hear his deep rooted, yet modern views on the world and certainly the positive growth of his country.
Thank you my friend Rupert Murdoch for being such a great host, as well Bob Iger - my mentor who still wakes up 15mins before I do every morning at 4:15am. I'm still slacking.
- Dwayne "The Rock" Johnson's Instagram feed (pre-editing), April 5, 2018
At least Oprah had the good sense not to allow any photographs of her meeting with MBS to get out.
On Sunday evening, a spokesman for Mr. Dimon said the chief executive, who was scheduled to be one of the headline speakers at the Future Investment Initiative in Riyadh, would no longer attend.
He did not explain Mr. Dimon’s reasoning.
- "JPMorgan’s Dimon Backs Out of Saudi Conference Amid Khashoggi Furor", New York Times, October 14, 2018
Once again, and just like with Harvey Weinstein, we are seeing widespread private information turned into common knowledge, a transformation that changes everything about behaviors.
With Weinstein, the ubiquitous private information was that Weinstein is a serial rapist. Everyone in Hollywood knew it, but no one acted AS IF they knew it until a Missionary event - in this case Rose McGowan's and others' very public denunciations - turned that information into common knowledge, something that everyone knows that everyone knows. It's the celebrity of the Missionary that drives this transformation, because if the Missionary is famous enough, then everyone must believe that everyone else has heard the news.
And once that common knowledge was created, once all the private holders of all of Weinstein’s dirty secrets believed thateveryone else believed that he is a serial rapist, then everyone’s behavior changed on a dime. His publicists and lawyers and partners and colleagues and board of directors and wife were shocked … shocked! … to hear of his behavior, and certainly would no longer be representing him or working with him or associating with him ever again, even though NOTHING had changed in the information theyalready possessed.
With Saudi Arabia, the ubiquitous private information was that Saudi Arabia is a thug state and their Crown Prince MBS is a wannabe Bond villain. But no one acted AS IF they knew this until a Missionary event - in this case Turkey's very public denunciations of the Saudi government's murder of Jamal Khashoggi - turned that private information into common knowledge, something that now everyone knows that everyone knows.
And once that common knowledge was created, once all the private holders of Saudi Arabia's dirty secrets believed that everyone else believed that this is one of the most brutal regimes on Earth, then everyone’s behavior changed on a dime. All of these CEOs and Senators and Prime Ministers and movie stars are shocked … shocked! … to hear of this atrocious behavior, and certainly will no longer be attending this gala conference scheduled for next week, even though NOTHING had changed in the information they already possessed.
Sigh.
It's all a little much, frankly, and it reminds me of how ... disappointing ... human beings are, particularly in group dynamics. But I get it. The proper forms must be followed. Outrage must be displayed, no matter how inauthentic its "discovery", once everyone knows that everyone knows that outrages have occurred.
Rusty thinks that this all blows over quickly, that the complicity with the Saudi regime is so widespread and so deep among Politicians and Oligarchs that there's a brief boycott of a stupid conference, some degree of tsk-tsk'ing from Team Elite Missionaries, some effort to bring those darn rogue killers to justice, and then everything returns to "normal". He's probably right.
But I'll say this. Once common knowledge has been created, it's impossible to uncreate. It's impossible to go back to the plausible deniability and bribes and renditions of the ubiquitous private knowledge world. MBS will never again have a "reformer" cartoon. He is now a Bond villain. That's the common knowledge, and behaviors will change as a result. No more nights on the town with The Rock. No more warm meetings with Oprah. No more vacations with Jared. No more softball interviews with Tom.
Is that a lot? No. But it's something. It's a start.
Comments
“and then everything returns to ‘normal’”.
And so it may. Of course, normal for Saudi Arabia means old school Wahabi fundamentalism which leaves little room for Mssrs. Iger & Rock and other purveyors of infidel corruption. MBS has more enemies than your average tyrant and you may be sure that all of them are looking for ways to exploit this situation.
Ben, I think both you and Rusty are right. This will go back to normal on the surface, but below the surface, no one will forget. It will also likely have a reaction function in SA. In order to bolster their “rouge” hypothesis, or whatever other face saving story allows the world to paper over this act, they are going to be on their best behavior. That might end up including some actual reforms.
After spending fifteen or so hours on my high horse after reading your piece (about a third of them asleep) - “how can we go back to supporting SA after this! / how did we partner with them before this! -” the realpoltik of the MidEast broke in to my comfortable moral cocoon - “there are no good choices.”
As a liberal democracy that supports individual and minority rights through genuine rule of law - with all the flaws every even-good country has - I understand our support for Israel, but after that, the choices in the MidEast get slim.
So do we just abandon the MidEast? Give up any influence and leave it to its own devices / or to Russia’s / or to an aborning China’s? Would that be better or worse for its people / its future / our present / our future? Or do we continue to partner with what we think is the least-bad strategic country and try to do our best working from within the belly of the beast?
Is having some influence to “nudge” (doesn’t that word echo ominously in ET terms in this case) the MidEast in a better direction worth the moral tradeoffs? Or is a bigger-picture view of staying above it morally and practically a better approach - i.e., do the right thing morally where the rewards are that we get to do the right thing morally until a better opportunity to help and improve the MidEast arises?
Will it go back to “normal” or will “normal” be redefined? Masayoshi Son got $45B of his $100B Vision Fund from Saudi. PE gets a significant proportion of their funds from the Saudis. Maybe the new normal is just a bit more abstraction? If Masayoshi Son raises $100B every 2 years or so, how much of that will be Saudi money?
You may have already hi-lited this in an earlier writing but I am struck by the parallels between the common knowledge game and Malcolm Gladwell’ s Tipping Point.
It’s different because common knowledge is something “everyone knows” whereas a Tipping Point is where a new idea gains credence, but the acceptance by the main stream is the same concept.
More important is how to use this information to affect change.
As the nattering nabobs of the Nejd are wont to say: there are old royals and there are bold royals, but there are no old, bold royals. If Ladbrokes starts making book on the Crown Prince’s longevity, I’ll take the under.
How do “real assets” line up in a world where The Narrative is shifting to Axis vs Allies? We’re seeing the unprecedented cohesiveness of world governments for the past 10 years starting to disintegrate into Axis v Allies. If we’re moving into that polarization or even beggar thy neighbor, that isn’t the same dynamic as the old “rising tide” of the past. That’s going to make winners and losers out of each asset on a country by country (or more likely an Alliance vs Axis) basis as opposed to a “commodity boom”. Right?
For instance oil. The US, despite it’s current virtue signaling tsk’s at MBS’s behavior, is making it very clear that it is staying staunchly in the Saudi camp (the Alliance). That (along with a healthy dose of US sanctions) forces Iran into the camp of those that refuse to follow the sanctions (the Axis). Same with timber, steel, or uranium. In that scenario the global price of the asset is relevant, it’s the price asset relative to its alliance that matters. Finding those imbalances in the asset ledger of each alliance would be interesting.
Oil is probably a hard one to arbitrage in advance as that’s the easiest one to place importance on. The non-sexy and currently easy/cheap to obtain thanks to global cohesion and super long supply lines but oh so fundamental assets are probably where it’s at in that scenario. Thoughts?
Is it wrong to want desperately to make money off human nature being human nature? It’s a bit of a cathartic process if done right. I wrestle with this from time to time.
Making money off human nature being human nature in order to finance our own human nature…
Reminds me of the circular snake eating itself. Sure does taste good all the same.
In a month or so we should expect a fresh announcement of some additional philanthropic giving from SA. Reminds me of similar mishaps like United Airlines smashing the front teeth of that Vietnamese-American doctor. UA is still flying and so too will SA.
Continue the discussion at the Epsilon Theory Forum...