Gambling Man by Lionel Barber: A Review
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Masayoshi Son finds his best possible biographer in Lionel Barber, the former editor of the FT. Barber (Dulwich School and St Edward’s Hall, Oxford ) has elegant establishment credentials, but he also has an entertainingly thuggish streak, like those upper-class SAS army officers who join special units because they rather enjoy the murder and mayhem.
You never get the feeling Barber is afraid to “put the boot in” when dealing with mendacious and powerful people, a priceless trait in a journalist.
Barber, a Londoner and cognoscenti of the most depraved elements of the “City”, is the perfect man to write this world-weary, cynical but oh-so-clever and stylish portrait of Japan’s Napoleon (complex), “Gambling Man: the wild ride of Japan’s Masayoshi Son”.
Lionel Barber - for an elite establishment journalist, he strikes me as honest as much as he is clever. Being honest if far more important for a journalist, in my humble opinion.
Like nailing a butterfly to the wall, Barber skewers the bathetic ambitions of a man who operates, essentially, like a colonial comprador - somebody who wiggles his way between the two sides of a deal, and takes a cut.
Short-term gain, big money, ego, luxury, vanity are Son’s trademark, irrespective of the puffery regarding long-term “Vision” regularly emitted from his investor presentations.
Barber’s narrative makes clear that Son is not a builder. He is a trader in others’ ideas, talent and drive.
His story encapsulates the fatal flaws of that class of men who deal purely in money - the financiers.
The Good Old Days, when J-phones were cutting edge
These flaws mean that Son, like others before and after him, are never remembered beyond the media headlines.
Like principle-less politicians, the financiers win - until the psychological dynamic of self-entitlement and desire for real respect (obstinately withheld by decent citizens and hence agonizingly attractive), leads to failure.
For financiers, the empty euphoria of a “deal” is what provides validation - a few weeks or months of hard work, followed by a huge pay-day and a long holiday.
Like addicts, they have to “score”, whatever dustbins they rootle in, or sombre alleys they venture down.
SoftBank bought Vodaphone Japan in 2006. Like many “gaishi”, it struggled to make an impact against powerful local incumbents.
Contrast this to real businesses, like those selling pasta or toothpaste. Margins are as thin as the light shining under the door of the Count of Monte Christo’s prison cell. These businesses are about grinding out the hard yards, day after day, year after year. Grey hairs, pot bellies and wrinkles appear more often than big bonuses and big breakthroughs.
Son preferred to “chase the dragon” of big deals. But based on his withdrawal from public life, and repeated pleas for understanding and approval, deep down he knows he made the wrong choice.
Still, perhaps we are being a little restrictive on the definition of business, rather like those manufacturing fetishists calling for a return to steel plants and factories.
Business can also mean reducing prices through a new pricing structure, or by breaking up a predatory monopoly, and Son somewhat managed both when he acquired Vodafone.
To their mutual advantage, the i-phone hit Japan and wiped out Japan’s mobile phone industry.
To gain market share, he made certain calls cheaper, and severed the link between carriers and their proprietary handsets, by introducing the i-phone.
He squeezed himself as a new player into the oligopoly, and in so doing annihilated the world-leading Japanese mobile phone industry, changing Japan from an “alpha” in mobile phone technology to a “delta”, to use the Oxford marking system. In return, consumers got cheaper plans, the i-phone, apps, more choice, etc.
Would Trump, for example, think this is a “good deal”, from a national GDP or industrial policy point of view? Probably not. But the “Zeitgeist” was all in favour of globalization, consumer choice, lower prices, all of which happened to favour - Masayoshi Son.
Dozens of other deals followed, some good, some bad.
These deals reflect a pattern:
Gambling addicts first bet and win, then bet and lose - everything. The exiguous early wins are mere stepping stones for the larger later losses.
At some point, continuing as usual is self-harm, since gambling addicts never win in the long term. So they cheat. And that’s what Son decided to do, rigging the market with the gigantic $100 billion “Vision Fund” to make Softbank a kind of vast Soviet-style vertically integrated monopoly.
Adam Neumann: possibly a conman, certainly a sales genius!
How does this work? The first step is to over-pay and raise the valuation (if not the actual value) to attract more funding. Softbank keeps investing in the same company at every stage, egging other investors to join in, to create an unstoppable “head of steam” of exaggerated valuations - ultimately to be released on ignorant retail investors and mediocre fund managers in a scalding blast of collapsing prices.
The over-valuation is justified by the grandioseness of the “Vision”. This is essential for exciting journalists, politicians and influencers to feed the “buzz”.
Grandiosity is integral to egomaniacs.
Hitler, for example, did not just want to reverse the Versailles treaty - he had to aim for the largest land empire since Genghis Khan, the “1000 Year Reich”, re-engineer industrial civilization, and butcher whole populations. Napoleon had similar ambitions, minus the genocide.
The enablers who are not taken in, in Son’s case, were the ice-cold Indian mafia he hired. They made tens if not hundreds of millions of dollars from the catastrophically loose corporate governance Son encouraged, and are one of the more unsavoury sets of characters Barber uncovers.
The woeful WeWork debacle shows Son at his worst. The transition from wunderkind to laughing stock is unsurprising: When megalomaniacs meet skepticism among their regular “fans”, they need to find others to believe in them - and to believe in. The jury is still out on whether Adam Neumann is a conman or delusional, but he seemed to believe in Son, and Son seemed to believe in him.
Reports are that Neumann has a very powerful and charismatic personality - but at this level of investing, this should have been a point against him, not in favour of him.
Sir Robert Hotung - one of his descendants was Bruce Lee, who ironically gained a huge following by beating up “imperialists” on film. Sir Robert, biracial, identified with his Chinese heritage, but happily supplied them with opium.
While it’s easy to sympathize with neo-liberals criticizing government waste, the private sector is easily as prone. Son’s seduction of the money men in Saudi Arabia and the United Arab Emirates makes you worry about the complete lack of common sense at the level of the global elites. Perhaps people at such a high altitude get “summit sickness”, a madness to get even richer, and fail to understand that inaction is the sensible move.
More likely, they think they can manufacturer their own reality by sheer force of “wanting”, and entitlement (See Hitler, above).
Masayoshi Son is obsessed with his legacy, as well as his Korean origins. He could have been the Japanese-Korean who broke a trail, a new type of global citizen rooted in Japanese commercial strengths and ethics.
Instead, he will be remembered as someone who merely made a lot of money by local standards; who contributed to an Americanization of Japanese business; and as another false prophet of technology.
Robert Hotung and Tang JingXing, top compradores who became wealthy by selling opium on behalf of the British elites in China, and now viewed with very mixed feelings in China, would surely recognize a kindred soul.
