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The socialization of capitalism

New York Magazine takes us on a tour of what lays beyond, after the capitalism runs out. That may sound hippie and/or conspiratorial, but facts is facts and the entire game has changed:

Making matters even weirder, contemporary capitalism’s dominant shareholders have no direct interest in the success or failure of the firms they own. All returns on their holdings get passed down the investment chain to their clients — households, governments, and corporations. Asset managers make their money off of their clients’ fees, not their firms’ returns. This diagram may make the hydraulics of the system more legible:

[cool graphic]

Of course, an asset manager that delivered consistently poor returns would attract few clients. And asset managers’ fees are calculated as a percentage of the current value of their clients’ assets. Nevertheless, add a fee-based business model to asset managers’ universal portfolios, and their interest in the performance of any individual firm they own becomes extraordinarily attenuated — even when they are the single largest shareholder of that firm (which is very often the case)!

This is not how capitalism is supposed to work in theory. And it isn’t how corporate governance has ever before worked in practice. To the political economist Benjamin Braun, the contemporary structure of corporate ownership is so novel and consequential as to mark a new era in economic history, the age of “asset-manager capitalism.”

Braun’s papers on this subject are fascinating, and nerds will want to read them in full. Mere dorks, however, may be content to consider the following four ways the rise of asset managers challenges conventional wisdom about how capitalism functions — and how it might be changed.

Cool graphic and the rest at the link. Removing market competition from the equation renders many of the other legacy levers moot. Even the ESG stratagem takes on a different tenor – what does promoting efficiency even mean when the owners of the means of production no longer prevail – when/if we default (curious wording) to a dirigiste model. They, ESG pressure campaigns may become more effective. Because frankly, christian soldiers, that’s what they’re talking about.

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From the Christian side

I’m preparing to tape an interview with a philosopher in a few days, and so have been doing some selected reading on a variety of related topics. Sure, some call it maze fun. And sometimes, there’s no better place than to be looking though unsure about for what. One of the things I happened across is this speech, Existentialism is Humanism, by Sartre from 1946. A sample:

Most of those who are making use of this word would be highly confused if required to explain its meaning. For since it has become fashionable, people cheerfully declare that this musician or that painter is “existentialist.” A columnist in Clartes signs himself “The Existentialist,” and, indeed, the word is now so loosely applied to so many things that it no longer means anything at all. It would appear that, for the lack of any novel doctrine such as that of surrealism, all those who are eager to join in the latest scandal or movement now seize upon this philosophy in which, however, they can find nothing to their purpose. For in truth this is of all teachings the least scandalous and the most austere: it is intended strictly for technicians and philosophers. All the same, it can easily be defined.

The question is only complicated because there are two kinds of existentialists. There are, on the one hand, the Christians, amongst whom I shall name Jaspers and Gabriel Marcel, both professed Catholics; and on the other the existential atheists, amongst whom we must place Heidegger as well as the French existentialists and myself. What they have in common is simply the fact that they believe that existence comes before essence – or, if you will, that we must begin from the subjective. What exactly do we mean by that?

If one considers an article of manufacture as, for example, a book or a paper-knife – one sees that it has been made by an artisan who had a conception of it; and he has paid attention, equally, to the conception of a paper-knife and to the pre-existent technique of production which is a part of that conception and is, at bottom, a formula. Thus the paper-knife is at the same time an article producible in a certain manner and one which, on the other hand, serves a definite purpose, for one cannot suppose that a man would produce a paper-knife without knowing what it was for. Let us say, then, of the paperknife that its essence – that is to say the sum of the formulae and the qualities which made its production and its definition possible – precedes its existence. The presence of such-and-such a paper-knife or book is thus determined before my eyes. Here, then, we are viewing the world from a technical standpoint, and we can say that production precedes existence.

When we think of God as the creator, we are thinking of him, most of the time, as a supernal artisan. Whatever doctrine we may be considering, whether it be a doctrine like that of Descartes, or of Leibnitz himself, we always imply that the will follows, more or less, from the understanding or at least accompanies it, so that when God creates he knows precisely what he is creating. Thus, the conception of man in the mind of God is comparable to that of the paper-knife in the mind of the artisan: God makes man according to a procedure and a conception, exactly as the artisan manufactures a paper-knife, following a definition and a formula. Thus each individual man is the realisation of a certain conception which dwells in the divine understanding. In the philosophic atheism of the eighteenth century, the notion of God is suppressed, but not, for all that, the idea that essence is prior to existence; something of that idea we still find everywhere, in Diderot, in Voltaire and even in Kant. Man possesses a human nature; that “human nature,” which is the conception of human being, is found in every man; which means that each man is a particular example of a universal conception, the conception of Man. In Kant, this universality goes so far that the wild man of the woods, man in the state of nature and the bourgeois are all contained in the same definition and have the same fundamental qualities. Here again, the essence of man precedes that historic existence which we confront in experience.

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1961

With all the highways and Zimmerman’s birthday coming up and all, seems like a good time for some Fanon. This time through the  [translated] words of J.P. Sartre. If you haven’t read Franz Fanon’s The Wretched of the Earth (Les Damnes de le Terre, 1961), you should. This is from Sartre’s preface:

NOT so very long ago, the earth numbered two thousand million inhabitants: five hundred million men, and one thousand five hundred million natives. The former had the Word; the others had the use of it. Between the two there were hired kinglets, overlords and a bourgeoisie, sham from beginning to end, which served as go-betweens. In the colonies the truth stood naked, but the citizens of the mother country preferred it with clothes on: the native had to love them, something in the way mothers are loved. The European élite undertook to manufacture a native élite. They picked out promising adolescents; they branded them, as with a red-hot iron, with the principles of western culture, they stuffed their mouths full with high-sounding phrases, grand glutinous words that stuck to the teeth. After a short stay in the mother country they were sent home, whitewashed. These walking lies had nothing left to say to their brothers; they only echoed. From Paris, from London, from Amsterdam we would utter the words ‘Parthenon! Brotherhood!’ and somewhere in Africa or Asia lips would open … thenon! … therhood!’ It was the golden age.

It came to an end; the mouths opened by themselves; the yellow and black voices still spoke of our humanism but only to reproach us with our inhumanity. We listened without displeasure to these polite statements of resentment, at first with proud amazement. What? They are able to talk by themselves? Just look at what we have made of them! We did not doubt but that they would accept our ideals, since they accused us of not being faithful to them. Then, indeed, Europe could believe in her mission; she had hellenized the Asians; she had created a new breed, the Graeco-Latin Negroes. We might add, quite between ourselves, as men of the world: ‘After all, let them bawl their heads off, it relieves their feelings; dogs that bark don’t bite.’

A new generation came on the scene, which changed the issue. With unbelievable patience, its writers and poets tried to explain to us that our values and the true facts of their lives did not hang together, and that they could neither reject them completely nor yet assimilate them. By and large, what they were saying was this: ‘You are making us into monstrosities; your humanism claims we are at one with the rest of humanity but your racist methods set us apart.’ Very much at our ease, we listened to them all; colonial administrators are not paid to read Hegel, and for that matter they do not read much of him, but they do not need a philosopher to tell them that uneasy consciences are caught up in their own contradictions. They will not get anywhere; so, let us perpetuate their discomfort; nothing will come of it but talk. If they were, the experts told us, asking for anything at all precise in their wailing, it would be integration. Of course, there is no question of granting that; the system, which depends on over-exploitation, as you know, would be ruined. But it’s enough to hold the carrot in front of their noses, they’ll gallop all right. As to a revolt, we need not worry at all; what native in his senses would go off to massacre the fair sons of Europe simply to become European as they are? In short, we encouraged these disconsolate spirits and thought it not a bad idea for once to award the Prix Goncourt to a Negro. That was before ’39.

1961. Listen: ‘Let us waste no time in sterile litanies and nauseating mimicry. Leave this Europe where they are never done talking of Man, yet murder men everywhere they find them, at the corner of every one of their own streets, in all the corners of the globe. For centuries they have stifled almost the whole of humanity in the name of a so-called spiritual experience.’ The tone is new. Who dares to speak thus? It is an African, a man from the Third World, an ex-‘native’. He adds: ‘Europe now lives at such a mad, reckless pace that she is running headlong into the abyss; we would do well to keep away from it.’ In other words, she’s done for. A truth which is not pleasant to state but of which we are all convinced, are we not, fellow-Europeans, in the marrow of our bones?

We must however make one reservation. When a Frenchman, for example, says to other Frenchmen ‘The country is done for’ — which has happened, I should think, almost every day since 1930 — it is emotional talk; burning with love and fury, the speaker includes himself with his fellow-countrymen. And then, usually, he adds ‘Unless …’ His meaning is clear; no more mistakes must be made; if his instructions are not carried out to the letter, then and only then will the country go to pieces. In short, it is a threat followed by a piece of advice and these remarks are so much the less shocking in that they spring from a national intersubjectivity. But on the contrary when Fanon says of Europe that she is rushing to her doom, far from sounding the alarm he is merely setting out a diagnosis. This doctor neither claims that she is a hopeless case — miracles have been known to exist — nor does he give her the means to cure herself. He certifies that she is dying, on external evidence, founded on symptoms that he can observe. As to curing her, no; he has other things to think about; he does not give a damn whether she lives or dies. Because of this, his book is scandalous. And if you murmur, jokingly embarrassed, ‘He has it in for us!’ the true nature of the scandal escapes you; for Fanon has nothing in for you at all; his work — red-hot for some — in what concerns you is as cold as ice; he speaks of you often, never to you. The black Goncourts and the yellow Nobels are finished; the days of colonized laureats are over. An ex-native French-speaking, bends that language to new requirements, makes use of it, and speaks to the colonized only: ‘Natives of an under-developed countries, unite!’ What a downfall! For the fathers, we alone were the speakers; the sons no longer even consider us as valid intermediaries: we are the objects of their speeches. Of course, Fanon mentions in passing our well-known crimes: Sétif, Hanoi, Madagascar: but he does not waste his time in condemning them; he uses them. If he demonstrates the tactics of colonialism, the complex play of relations which unite and oppose the colonists to the people of the mother country, it is for his brothers; his aim is to teach them to beat us at our own game.