Real Leaders

Can Capitalists Save the World and Keep Their Toys?

Anand Giridharadas’ new book, Winners Take All: The Elite Charade of Changing the World, examines the mindset of an apparently liberal elite, whose attempts to help the underserved are deeply conservative, because it seems that these attempts do more to protect the status quo than to change it.

“Lying to ourselves is more deeply ingrained than lying to others.” – Fyodor Dostoevsky

The book skewers the world of Davos, the Aspen Institute and the Clinton Global Initiative, expertly drawing out the complex motives and fears of a powerful group of individuals in what he calls “MarketWorld.” The Austenian tone perfectly teases out their contradictions and humanity.

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The book includes story after story about highly capable, well-intentioned individuals caught in the web of limousines, private jets and fancy food. It chronicles people like Amy Cuddy, a serious academic who became a TED talk phenom with her “power poses” and Hilary Cohen, a successful student wanting to change the world, but drawn into a career path at Goldman Sachs and McKenzie & Co. The most nuanced portrait is of Darren Walker, leader of the Ford Foundation, and a genuinely good man who has valiantly tried to take on MarketWorld. The chapter details his rise from a different world, and his attempt to challenge the Aspen Consensus that “The winners of our age must be challenged to do more good, but never, ever tell them to do less harm.” The chapter ends with Walker joining the board of Pepsi, promising he will bring “social justice” into the boardroom, and assuring Giridharadas that his only compromise is switching his soda brand.

But those who have been reading Giridharadas carefully expect that there is no room for social and environmental justice in the Pepsi boardroom. Its directors have a single task in our current legal and capital markets environment: keep the stock price up because it’s the “market” that matters. If you can accomplish some “corporate social responsibility” at the same time—and maybe even use it for marketing purposes—that is dandy, but stock price is “Job No. 1.” If that means lay-offs, so be it. If it means peddling sugar water to children, well, if we don’t do it, someone else will.

The point of all this skewering is not to make the elite feel bad or the rest of us feel better; it is to highlight a systemic problem. Giridharadas believes that we have shifted the locus of addressing societal issues from the public and political arena to a combination of “market-based” solutions and an elite philanthropic and policy sector. This elite comprises hedge fund managers, retail heirs, Silicon Valley entrepreneurs and other market winners who have no interest in examining whether the market is the source of the problem rather than the answer for it.  

This means that in developing countries, organizations like the International Monetary Fund and the World Bank promote business friendliness before justice or equality, and in the United States, companies trumpet their parental leave policies for executives while lobbying against laws that would protect all working women. These companies then sponsor Aspen and similar gatherings.

All of these elite, Giridharadas proposes, have vested interests in preserving the system that has given them wealth and power, and the solutions they propose are just band-aids that preserve that system by relieving tension, rather than rooting out the fundamental causes. This is why we see McDonald’s commercials bragging about scholarships while it spends millions lobbying so that the minimum wage doesn’t rise.

Nor is it simply an issue of motivation. He worries that the tools that successful capitalists use are just more capitalism, and make the problem worse, by promoting market solutions over political ones. (Full disclosure: He seems to believe that the organization I work for, B Lab, is guilty of both sins, although I don’t think he fully understands our master plan for upending capitalism.)

The book describes a panel at Clinton Global Initiative that discusses women and sustainable development. The panel includes top executives from Procter & Gamble and Dermalogica, a skin-care products company. One participant talks about empowering women by getting them jobs selling skin-care products. “Excellent! Entrepreneurship!” shouts the moderator. What could be wrong with that— providing jobs for women, giving them more independence and the ability to help their kids up the socioeconomic ladder? But no one on the panel represented the view that the problem wasn’t women’s absence from the system, but the system itself:

Didn’t the beauty industry fuel the very commodification of women that sustained gender inequality? In a world of true gender inequality might not the beauty industry shrink?… Wouldn’t true equality for women be a win for women but a loss for Dermologica?

All of this resonates strongly. The rich have more power than they should for democracy to function, and the Aspen Consensus means that those on the circuit will never challenge this fundamental truth. And the circuit is pernicious, because it sucks in and infects many who have the best intentions and abilities (recall the Walker story).

But was it ever thus? In some spots, the book traces the Aspen Consensus to Andrew Carnegie and other robber barons who made as much as they could as ruthlessly as necessary, but then gave it all away (hence the Carnegie, Ford and Rockefeller Foundations). In other spots, it is traced to the late 20th century rise of neoliberalism and its elevation of the market as the default solution to any problem (and the author does a neat job tying this arc to the arc of Bill Clinton’s career). But  “noblese oblige” predates Andrew Carnegie, and there was plenty of union busting and wage slavery before Milton Friedman came on the scene.

I also wonder whether it is fair to lump all the individuals within MarketWorld together. The case of Darren Walker seems very different to me that the son of a former Coca-Cola CEO founding Even, a company that charges poor people $260 a year to use an app that smooths out lumpy income for members of the gig economy living paycheck-to-paycheck. Walker wants to help people for their sakes, and wants to use capitalism to do it. The latter wants to make money from people who are already broke.

Most importantly, it isn’t clear to me that we should write off MarketWorld schemes that actually help people. Even if they are not attacking the system they are improving lives. Giridharadas’ answer seems to be that by helping a little they are preserving the system. But this seems as cynical as  Lenin’s “the worse, the better.” For example, I would not reject Silicon Valley’s efforts to create cruelty free, environment-preserving clean meat, even if the accompanying self-congratulations grates and even if venture capitalists get rich doing it.

Another way to push the analysis is to ask whether it is true, as Giridharadas seems to claim,  that the tools of capitalism can never be used to address its excesses. Giridharadas quotes Audre Lorde in an epigraph: “The master’s tools will never dismantle the master’s house.” Sounds great, but, as one says in MarketWorld, where’s the evidence? (Indeed, an Allen wrench could be quite useful in breaking down an Ikea desk, even if a sledge hammer might be more satisfying.)

For example, what if we could show that when companies externalize costs to everyone else it actually lowers the long-term returns of the diversified institutional investors? Might they use their control of the stock market to limit the concomitant damage to the systems that support the rest of the companies in their portfolios? Perhaps if investors understood that the irresponsible techniques that individual companies use to “beat the market” actually drag the whole market down, investors would start telling companies to pull back from the neoliberal cliff. Maybe the world is messy, and some big solutions are market-based and others are political. And maybe sometimes it’s just hard to tell the difference.

We have a system that is rapidly degrading our natural environment, creating unjust and destabilizing inequality, and delivering an increasingly risky economy. But asking the powerful few to give up their power and to work to change the system seems, to this observer, an unlikely path to remedy the situation. Better perhaps to let the Davos set try it their way, while the rest of us head to the (metaphorical for now) barricades and create change from the bottom up. After all, the people elected Trump, no friend of Davos; maybe they will elect Elizabeth Warren next.

None of these questions are meant to take away from the importance of this book. It is a serious indictment of our dangerous tendency to cede leadership to a small group with enormous power. Even if they have some good ideas, they do not have the life experience or right motivations to take charge. The world needs changing, and that is not a task we can leave to the winners.

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