June 7, 2022
Dear Friends and Family,
The last epilogue featured how Wall Street is pushing American corporations to adopt woke driven “stakeholder capitalism” which expands their objective from solely shareholder value (profit) to the pursuit of social endeavors such as climate change, racism, and critical race theory. Wall Street goes to the extent of setting Environmental, Social and Governance (ESG) goals and measures companies on how well they do. The author Vivek Ramaswamy warns that this puts corporations in a governing position which is a threat to our democracy.
This epilogue is a continuation of the last utilizing excerpts from the same author and book. My takeaways from this continuation includes:
Next: Epilogue 3 of the Globalization Epilogue Series focuses on the globalist World Economic Forum, who is a proponent of “stakeholder capitalism” and views it as a key part of the new economic theory of globalists. This theory also incorporates a modern monetary theory and a soft-authoritarian governance. The excerpts are primarily from The Great Reset by Glenn Beck (2022).
Happy Learning,
Harley
Dear Friends and Family,
The last epilogue featured how Wall Street is pushing American corporations to adopt woke driven “stakeholder capitalism” which expands their objective from solely shareholder value (profit) to the pursuit of social endeavors such as climate change, racism, and critical race theory. Wall Street goes to the extent of setting Environmental, Social and Governance (ESG) goals and measures companies on how well they do. The author Vivek Ramaswamy warns that this puts corporations in a governing position which is a threat to our democracy.
This epilogue is a continuation of the last utilizing excerpts from the same author and book. My takeaways from this continuation includes:
- This endeavor is no small deal as ESG-mandated assets now represent 33% of the $51.4 trillion US assets under professional management which is bound to rise. This is good for the Woke movement as most of the social goals are those supporting wokeness.
- This modern alliance between big government and big business can evoke significant power. For instance, it is alleged that Climate Czar John Kerry went successfully to many large banks to persuade them not to loan any money to America’s Oil and Gas companies in an effort to aid the administration in attaining their climate change goals.
- Ramaswamy warns that independent directors of corporation boards of large national and global corporations will amass significant power with “stakeholder capitalism.” This will enable them to exercise disproportionate influence in politics and society.
Next: Epilogue 3 of the Globalization Epilogue Series focuses on the globalist World Economic Forum, who is a proponent of “stakeholder capitalism” and views it as a key part of the new economic theory of globalists. This theory also incorporates a modern monetary theory and a soft-authoritarian governance. The excerpts are primarily from The Great Reset by Glenn Beck (2022).
Happy Learning,
Harley
GLOBALISM EPILOGUES – EPILOGUE 2
HOW THE GAME IS PLAYED – EXCERPTS
NOTE: All the excerpts in this segment are from Woke, Inc. by Vivek Ramaswamy (2021)
ESG INVESTING: ESG-mandated assets now represent a staggering 33% of the $51.4 trillion US assets under professional management. This composition is only expected to rise, ESG-mandated assets are projected to represent 50% of all assets in the US by 2025. The point: there is a lot of money piling into ESG and sustainable investing right now.
It’s that this new corporate practice of feigning wokeness indirectly wins favors in return from the government over the long run – favorable legislative treatment, lenient prosecutorial discretion, fiscal grants, and other forms of corporate welfare. Now corporations have simply come up with a new trick tailored for Democrats: they lend corporate power as a tool to implement radical agendas that Democrats could never pass in Congress. That’s exactly what we are seeing in the early days of President Biden’s tenure.
With the advent of the modern alliance between big government and big business, new laws may not be required at all: the Biden administration can simply use Wall Street’s ESG apparatus to do it instead. US climate envoy and former Secretary of State John Kerry “wants America’s banks on board with the administration’s climate goals” and that he was “leveraging his personal ties with Wall Street to persuade Citi, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, and JP Morgan Chase to create a U.S. net-zero banking alliance.” The effort was reportedly aimed at “drawing pledges that could be announced for the administration’s climate strategy rollout.”
Do we really want to live in a democracy where top government officials “leverage their personal ties” with the CEOs of big banks to accomplish what they can’t get done in Congress? Banks are not charitable institutions. When they do favors for government officials, they expect something in return. The real question is this: What did America’s banks get in return for agreeing to Kerry’s climate-related demands? Reducing carbon emissions, implementing racial diversity goals, and waxing eloquent about social justice don’t inherently make them more profitable. That’s just the dowry they pay in return for the protection of big government, consummating the marriage of America’s newest power couple. To be clear, it’s not that I think furthering social causes is meritless. Some are definitely worthwhile. But there are better ways to further those same social causes. One way is through targeted and meaningful nonprofit endeavors. Another is through sound government policy with proper democratic accountability, including open public debate and the ability to be elected out of office if you do a poor job. Here’s another good way to advance a social cause: make a great product that happens to help the cause you care about. Don’t just throw money at ESG funds; make an exceptional product that advances your goals.
THE HENCHMEN OF THE WOKE – INDUSTRIAL COMPLEX: The 2008 Financial Crisis: After the financial crisis, the Obama DOJ-slammed big banks with massive fines so it could trumpet that it was sending tons of relief to consumers. The it told banks they could pay less than half that much if they donated the money to Obama’s favorite nonprofits instead. And being fond of money, the banks took the DOJ up on the offer. Now that’s a great quid pro quo – the DOJ gets to look good; the banks get to keep most of their money; and the liberal nonprofits get lots of funding. There’s an obvious PR win for the bank if it gets to pay its settlement money as “donations” to liberal darlings instead of having to call it fines. Also, if they’re charitable donations, they become tax deductible – even more money saved for the bank and even less going to the federal government and US citizens.
If they’re fines, they naturally go to the US Treasury, and the Constitution says, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.” That means that Congress decides what happens to that bank money. But if it turns into donations instead of fines, the money never goes to the Treasury, and the executive branch gets to decide where it goes. This is the woke-industrial complex at its finest. Three separate pillars of American society working in concert to scratch each other’s backs. The American people end up with far less money than they should, and they lost the ability to have their elected representatives decide what to do with it. This DOJ tactic of changing fines to donations to bypass the Treasury was part of the shadow war waged between the Obama administration and the Republican-controlled Congress. There was nothing unconstitutional about it. But it violates the spirit and letter for the Constitution for a frustrated executive branch to use its administrative powers to enact unofficial, undemocratic laws that it couldn’t get through Congress.
In 2016, the pharma industry created an unofficial social contract to limit drug price increases to 10% per year. A price increase of 10% per year compounding each year adds up quickly – but slowly enough to escape the public’s notice. Then the companies could condition the public to accept price increases as normal while also somehow making themselves seem socially responsible by “only” raising them 10%, If government regulators stepped in, drug prices would be restricted far more.
Stakeholder capitalism has created a world in which ordinary people not only expect but also assume that companies pursue not just their own interests but societal interests too. Pharma companies know this. That’s exactly what they have in mind when they make hollow declarations to help stave off climate change or make public commitments to cap the magnitude of annual price increases that they take. By acting like the good guys, as Wokenomics demands they do, pharma companies are actually able to get away with behavior that leaves society worse off in the end.
THE MANAGERIAL CLASS: Similar to the three branches of government, there are three legs to the stool of any company: founders, investors, and employees work for companies. It’s supposed to be simple. But as in government, especially at America’s largest corporations, there’s now an invisible fourth leg to the stool; the managerial class. They’re high-paid bureaucrats charged with balancing the interests of founders, investors, and employees. These managers often make handsome salaries.
Independent directors get paid a lot of money to provide oversight of CEOs at public companies. Yet those CEOs are effectively the main ones who select and influence the people who will oversee them. The consequences aren’t just bad for corporate shareholders. They’re bad for America. Michael Lind correctly observed, “the most important managers are private and public bureaucrats who run large national and global corporations and exercise disproportionate influence in politics and society. In 1946, George Orwell summarized,
Capitalism is disappearing, but Socialism is not replacing it. What is now arising is a new kind of planned, centralized society which will be neither capitalist, nor, in any accepted sense of the world, democratic. The rulers of this new society will be … business executives, technicians, bureaucrats, and soldiers, lumped together under the name of “managers.” These people will eliminate the old capitalist class, crush the working class, and so organize society that all power and economic privilege remain in their hands.
That managerial dominance subverts the will of the American people. It renders our actual democracy impotent. Together, these bureaucrats crush the will of the shareholders they’re supposed to represent, substituting democratic judgments with their own judgments – which are of course informed by their interest in preserving their own personal interests and reputations.
The power of the managerial class is now spreading like a plague to other spheres of our society. It afflicts governments, nonprofits, universities, and even hospitals. It’s a cultural cancer that threatens to erode American identity in each of these institutions from within. Stakeholder capitalism is only part of a broader phenomenon I call stakeholderism, in which institutions beyond for-profit corporations invoke amorphous “stakeholders” to justify expanding their original missions to suit their manager’s personal desires.
The number-one rule of the game for any CEO to consolidate power is this: the more people you are accountable to, the more powerful you become. In any industry, that’s why nearly every hired CEO wants to take their company public if given the choice. Why? As a private company, you’re accountable to a small group of shareholders, often venture capitalists and private equity firms who are looking over your shoulder at every step of the way. But as a public company, you get to be accountable to thousands of shareholders, most of whom you’ll never meet and most of whom will never meet each other. That means that even if one shareholder isn’t happy with what you do, you can always claim that another one was. That’s nearly impossible to do at a closely held private company.
If it’s true that CEOs become less accountable by becoming accountable to more people, then stakeholder capitalism empowers the corporate managerial class to consummate their coup. By becoming accountable to literally everyone, they become accountable to no one. That’s the heart of the problem of stakeholder capitalism: it’s not about serving “stakeholders” rather than shareholders. It’s about serving the managerial class itself.
America’s identity was always about the power of the people overcoming the managerial class – in our democracy and also culturally, in our universities, companies, and government. The rise of the managerial class is a disease afflicting the soul of our most important institutions. History teaches that what begins as an accountability crisis for individual companies, if left unchecked, becomes a crisis for the system as a whole.
BUSINESS JUDGMENT RULE: How do we end the tyranny of the corporate managerial class? Here’s a thought: limit the scope of the business judgment rule (BJR). BJR is a corporate privilege that is designed to protect CEOs and corporate directors from being sued for bad business decisions that they make. But the BJR was never intended to protect executives from liability for corporate actions that weren’t motivated by maximizing profits for shareholders in the first place. Legal scholars almost universally agree that the only reason for the BJR is that executives and directors are supposed to be the stewards from protecting shareholder value. That’s why it’s called the business judgment rule, not the “social judgment rule.” The BJR makes little sense if it protects executives who act on their own whims and interests instead of maximizing shareholder value.
CRITICAL DIVERSITY THEORY: I propose a new movement to resist the enforcement of race-and gender-based diversity metrics across institutions. Here are five key principles that can serve as the foundation of this new critical diversity theory movement across our institutions. These principles are simple, not complicated; implementing them will be hard, not easy.
The unabbreviated version of the above can be found in the pdf document below.
HOW THE GAME IS PLAYED – EXCERPTS
NOTE: All the excerpts in this segment are from Woke, Inc. by Vivek Ramaswamy (2021)
ESG INVESTING: ESG-mandated assets now represent a staggering 33% of the $51.4 trillion US assets under professional management. This composition is only expected to rise, ESG-mandated assets are projected to represent 50% of all assets in the US by 2025. The point: there is a lot of money piling into ESG and sustainable investing right now.
It’s that this new corporate practice of feigning wokeness indirectly wins favors in return from the government over the long run – favorable legislative treatment, lenient prosecutorial discretion, fiscal grants, and other forms of corporate welfare. Now corporations have simply come up with a new trick tailored for Democrats: they lend corporate power as a tool to implement radical agendas that Democrats could never pass in Congress. That’s exactly what we are seeing in the early days of President Biden’s tenure.
With the advent of the modern alliance between big government and big business, new laws may not be required at all: the Biden administration can simply use Wall Street’s ESG apparatus to do it instead. US climate envoy and former Secretary of State John Kerry “wants America’s banks on board with the administration’s climate goals” and that he was “leveraging his personal ties with Wall Street to persuade Citi, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, and JP Morgan Chase to create a U.S. net-zero banking alliance.” The effort was reportedly aimed at “drawing pledges that could be announced for the administration’s climate strategy rollout.”
Do we really want to live in a democracy where top government officials “leverage their personal ties” with the CEOs of big banks to accomplish what they can’t get done in Congress? Banks are not charitable institutions. When they do favors for government officials, they expect something in return. The real question is this: What did America’s banks get in return for agreeing to Kerry’s climate-related demands? Reducing carbon emissions, implementing racial diversity goals, and waxing eloquent about social justice don’t inherently make them more profitable. That’s just the dowry they pay in return for the protection of big government, consummating the marriage of America’s newest power couple. To be clear, it’s not that I think furthering social causes is meritless. Some are definitely worthwhile. But there are better ways to further those same social causes. One way is through targeted and meaningful nonprofit endeavors. Another is through sound government policy with proper democratic accountability, including open public debate and the ability to be elected out of office if you do a poor job. Here’s another good way to advance a social cause: make a great product that happens to help the cause you care about. Don’t just throw money at ESG funds; make an exceptional product that advances your goals.
THE HENCHMEN OF THE WOKE – INDUSTRIAL COMPLEX: The 2008 Financial Crisis: After the financial crisis, the Obama DOJ-slammed big banks with massive fines so it could trumpet that it was sending tons of relief to consumers. The it told banks they could pay less than half that much if they donated the money to Obama’s favorite nonprofits instead. And being fond of money, the banks took the DOJ up on the offer. Now that’s a great quid pro quo – the DOJ gets to look good; the banks get to keep most of their money; and the liberal nonprofits get lots of funding. There’s an obvious PR win for the bank if it gets to pay its settlement money as “donations” to liberal darlings instead of having to call it fines. Also, if they’re charitable donations, they become tax deductible – even more money saved for the bank and even less going to the federal government and US citizens.
If they’re fines, they naturally go to the US Treasury, and the Constitution says, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.” That means that Congress decides what happens to that bank money. But if it turns into donations instead of fines, the money never goes to the Treasury, and the executive branch gets to decide where it goes. This is the woke-industrial complex at its finest. Three separate pillars of American society working in concert to scratch each other’s backs. The American people end up with far less money than they should, and they lost the ability to have their elected representatives decide what to do with it. This DOJ tactic of changing fines to donations to bypass the Treasury was part of the shadow war waged between the Obama administration and the Republican-controlled Congress. There was nothing unconstitutional about it. But it violates the spirit and letter for the Constitution for a frustrated executive branch to use its administrative powers to enact unofficial, undemocratic laws that it couldn’t get through Congress.
In 2016, the pharma industry created an unofficial social contract to limit drug price increases to 10% per year. A price increase of 10% per year compounding each year adds up quickly – but slowly enough to escape the public’s notice. Then the companies could condition the public to accept price increases as normal while also somehow making themselves seem socially responsible by “only” raising them 10%, If government regulators stepped in, drug prices would be restricted far more.
Stakeholder capitalism has created a world in which ordinary people not only expect but also assume that companies pursue not just their own interests but societal interests too. Pharma companies know this. That’s exactly what they have in mind when they make hollow declarations to help stave off climate change or make public commitments to cap the magnitude of annual price increases that they take. By acting like the good guys, as Wokenomics demands they do, pharma companies are actually able to get away with behavior that leaves society worse off in the end.
THE MANAGERIAL CLASS: Similar to the three branches of government, there are three legs to the stool of any company: founders, investors, and employees work for companies. It’s supposed to be simple. But as in government, especially at America’s largest corporations, there’s now an invisible fourth leg to the stool; the managerial class. They’re high-paid bureaucrats charged with balancing the interests of founders, investors, and employees. These managers often make handsome salaries.
Independent directors get paid a lot of money to provide oversight of CEOs at public companies. Yet those CEOs are effectively the main ones who select and influence the people who will oversee them. The consequences aren’t just bad for corporate shareholders. They’re bad for America. Michael Lind correctly observed, “the most important managers are private and public bureaucrats who run large national and global corporations and exercise disproportionate influence in politics and society. In 1946, George Orwell summarized,
Capitalism is disappearing, but Socialism is not replacing it. What is now arising is a new kind of planned, centralized society which will be neither capitalist, nor, in any accepted sense of the world, democratic. The rulers of this new society will be … business executives, technicians, bureaucrats, and soldiers, lumped together under the name of “managers.” These people will eliminate the old capitalist class, crush the working class, and so organize society that all power and economic privilege remain in their hands.
That managerial dominance subverts the will of the American people. It renders our actual democracy impotent. Together, these bureaucrats crush the will of the shareholders they’re supposed to represent, substituting democratic judgments with their own judgments – which are of course informed by their interest in preserving their own personal interests and reputations.
The power of the managerial class is now spreading like a plague to other spheres of our society. It afflicts governments, nonprofits, universities, and even hospitals. It’s a cultural cancer that threatens to erode American identity in each of these institutions from within. Stakeholder capitalism is only part of a broader phenomenon I call stakeholderism, in which institutions beyond for-profit corporations invoke amorphous “stakeholders” to justify expanding their original missions to suit their manager’s personal desires.
The number-one rule of the game for any CEO to consolidate power is this: the more people you are accountable to, the more powerful you become. In any industry, that’s why nearly every hired CEO wants to take their company public if given the choice. Why? As a private company, you’re accountable to a small group of shareholders, often venture capitalists and private equity firms who are looking over your shoulder at every step of the way. But as a public company, you get to be accountable to thousands of shareholders, most of whom you’ll never meet and most of whom will never meet each other. That means that even if one shareholder isn’t happy with what you do, you can always claim that another one was. That’s nearly impossible to do at a closely held private company.
If it’s true that CEOs become less accountable by becoming accountable to more people, then stakeholder capitalism empowers the corporate managerial class to consummate their coup. By becoming accountable to literally everyone, they become accountable to no one. That’s the heart of the problem of stakeholder capitalism: it’s not about serving “stakeholders” rather than shareholders. It’s about serving the managerial class itself.
America’s identity was always about the power of the people overcoming the managerial class – in our democracy and also culturally, in our universities, companies, and government. The rise of the managerial class is a disease afflicting the soul of our most important institutions. History teaches that what begins as an accountability crisis for individual companies, if left unchecked, becomes a crisis for the system as a whole.
BUSINESS JUDGMENT RULE: How do we end the tyranny of the corporate managerial class? Here’s a thought: limit the scope of the business judgment rule (BJR). BJR is a corporate privilege that is designed to protect CEOs and corporate directors from being sued for bad business decisions that they make. But the BJR was never intended to protect executives from liability for corporate actions that weren’t motivated by maximizing profits for shareholders in the first place. Legal scholars almost universally agree that the only reason for the BJR is that executives and directors are supposed to be the stewards from protecting shareholder value. That’s why it’s called the business judgment rule, not the “social judgment rule.” The BJR makes little sense if it protects executives who act on their own whims and interests instead of maximizing shareholder value.
CRITICAL DIVERSITY THEORY: I propose a new movement to resist the enforcement of race-and gender-based diversity metrics across institutions. Here are five key principles that can serve as the foundation of this new critical diversity theory movement across our institutions. These principles are simple, not complicated; implementing them will be hard, not easy.
- Excellence First. Diversity is not an end in itself, but a means toward achieving excellence.
- Institutional Purpose. Institutions should define their own unique purpose and define what kinds of diversity they seek – and do not seek – in order to pursue their purpose.
- Institutional Pluralism. Nonprofit institutions may have conflicting perspectives on important social questions. That’s a good thing: institutional pluralism is part of American pluralism.
- Separation of Corporation and State. For-profit companies should focus exclusively on making products and providing services for profit, not on advancing social or political agendas.
- End Discrimination. The best way to stop discrimination on the basis of race is to stop discriminating on the basis of race. Same goes for gender and other inherited attributes.
The unabbreviated version of the above can be found in the pdf document below.
| glo2_e2l_how_the_game_is_played_--_epilogue_2.pdf |