INVESTMENT RADICALS

INVESTMENT RADICALS

Last night, at the gracious invitation of my publisher, Roger Kimball, I spoke at the semi-annual board of directors meeting/dinner of The New Criterion, the monthly magazine of “arts and intellectual life,” which Roger also publishes.  As a general rule, I like to pretend that wherever I am, I am the smartest person in the room.  But I couldn’t even pretend as much last night.  Not only is the board comprised of incredibly smart and accomplished people, the various editors, publicists, marketers, and other employees of Encounter and The New Criterion are all very lovely, very smart, very accomplished people.  It was inarguably MY pleasure to be have been invited and to participate in the event.

What follows is the speech I wrote for and kinda-sorta delivered last night.  I didn’t deliver it exactly as written because phones are terrible teleprompters and, more to the point, I can’t see terribly well anyway, so trying to read the thing would have been a disaster.

Most of what follows will come as a surprise to none of you.  Still, pacing The Dictatorship in personal, professional and cultural context is, I think important.  And so, without further ado:

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Thank you very much for your warm reception and thank you as well for allowing me to join you here tonight.  I am grateful to everyone at The New Criterion for making me a part of your evening.

Obviously, I am here at Roger’s behest to speak to you about my book, The Dictatorship of Woke Capital, which Roger, wearing his other professional hat, was kind and prescient enough to publish this past February.

Before getting into the book, however, I’d like to take just a minute or two to tell you a little bit about myself and about how a goofy political hack-refugee from Wall Street came to write a book for the premier conservative intellectual book publisher in the nation, if not the world.

I started working in the financial services industry in 1996 in the Washington Research office of Prudential Securities.  Fresh from graduate school, and studies in American government and public policy, I assumed I’d be doing more of the same – crunching numbers, creating models, trying to predict who would vote for whom or what legislation would stand the best chance of passage, etc..  Interesting but not exactly mind-stretching stuff.

Fortunately for me, the man I went to work for, Mark Melcher, wasn’t that kind of analyst.  Rather, he was a deep-thinker, an ideas man, someone who tried to explain to the world’s money managers not merely what was going to happen, but why it would and what intellectual theories bolstered his expectations.  He was beloved on the Street, a unique and fascinating analyst unlike any other. Institutional Investor magazine, which produces the premier Wall Street research analyst-ratings scorecard every year, created a new category for Washington research, just to accommodate Mark’s popularity.  And he and the team he assembled won that category eight straight years.

But then a funny thing happened.  Not more than a month after winning his eighth straight title, Mark was fired – and with him, his junior analyst, yours truly.  You see, we had spent the previous few years warning about excessive political influence on capital markets.  Like everyone else, we saw the corruption endemic in the Clinton administration, and we understood that Clinton was closer to Wall Street – largely through his connections to Goldman Sachs alumni like Robert Rubin and Jon Corzine – than probably any president since Woodrow Wilson.  In combination, the corruption and the coziness concerned us greatly, not just because of the damage it could do to political institutions but also because of the effect it could have on capital markets.

Unfortunately for us, the CEO of our parent company was a “Friend of Bill,” which is to say that it wasn’t long until we were no longer on the Street, but rather on the streets.

As a team, Mark and I spent the next couple of years at Lehman Brothers, where our immediate supervisor – later an Obama administration Treasury official – did his best to keep the firm’s bankers from flipping out every time we called out a potential client, a politician they considered friendly, or an indispensable regulator.  In the end, he was unsuccessful in convincing us that we couldn’t call the butchers of Beijing the “butchers of Beijing” without really ticking off the bankers in China, who had the final say over whether our research was published or trashed.

By mutual consent, then, we parted ways with Lehman and launched our own independent research provider, free from bankers, compliance analysts, and other assorted pains in the backside.

I can’t say when or how it happened, but somewhere in the early years of our operation, The Political Forum, your own Bill XXXXX, himself a financial services veteran, joined our mailing list.  Being brilliant and perceptive, Bill naturally found our work interesting and, occasionally, insightful.  And as a result, he would frequently forward our essays/analyses to like-minded friends, one of whom was Roger Kimball.

Just under three years ago, when I decided that I had to tell the story of what was happening in the capital markets world and how it could forever change American business and the American investors, I approached Roger about the idea of writing a book.  And he, very graciously, agreed that he would be happy to look at any proposal I submitted.  Not knowing what a book proposal was supposed to look like, I begged and pleaded with my friend Bill McMorris, a brilliant young(ish) journalist at The Washington Free Beacon to help, which he generously did.  And before I knew it, between Bill’s advice and “Book Proposals for Dummies,” I has something ready to submit.

Much to my surprise, when I heard back from Roger, his two comments were: 1.) Yes, I think we can sell this. I’ll send you a contract; and 2.) One thing you absolutely HAVE to do is to get rid of all the long block-quotes you use.  They bother me, and readers find them annoying after a while.  Those quotes, I explained, are a convenience for my very busy, money management clients, who don’t want me to explain, in four paragraphs, what Nietzsche meant and wrote in one.  They also didn’t have the time click all the links to read the other news stories to which we’re referring.

Fine, he replied, but not in the book.

When I finished the manuscript, just four months after signing my contract, I sent it off to the Encounter folks, fingers crossed that they wouldn’t laugh at it and that Roger wouldn’t mind that nestled in among the 57,000 or so words were a small handful of block-quotes.  I figured I’d covered my bases petty well by ensuring that the only author I block-quoted more than once was an art and culture critic named…Roger Kimball!

Now, before you assume that I am merely an extraordinary kiss-up, let me tell you how a cultural critic and publisher ends up being quoted twice in a book ostensibly about business and investing. The Dictatorship of Woke Capital traces the development of what is called, variously: ESG – Environmental, Social, and Governance – investing, Stakeholder Capitalism, or simply, as I call it, “woke” capital.  Woke capital is an existential risk to American big business, to free and fair capital markets, and, as such, to our entire way of life in the West.  This phenomenon – in existence in recognizable form for about 15 or 16 years but a hot investment strategy for only the last three or four – did not simply “emerge,” springing forth fully formed from some leftist investor’s brain like Athena from Zeus’s forehead.  As with most such radical practices, woke capital has a history – a long and sordid history.  And I use the first half of the book to tell that history.

As I note in my introduction, the history of woke capital is, like almost all similarly malignant trends in American culture, ultimately traceable to the Enlightenment.  But, having only 50-60,000 words to work with, I started the tale about a century later, in 1878, at the newly formed Johns Hopkins University in Baltimore, with a political economy professor named Richard Ely and his Ph.D. student, Woodrow Wilson.  Of course, both the teacher and the student became founding fathers of the American Progressive movement and of American Public Administration, two trends that would work, over the next several decades to convince the American ruling class that it had an obligation to create and participate in an officially different and more politically powerful caste, a class of Guardians whose only job would be to protect the American people from their own stupidity, ignorance, and selfishness.  When I describe “woke capital” as an anti-democratic, top-down effort by American business to alter the bond between corporations, their investors, and their customers and to change forever the relationship between the citizen and the state, Ely and Wilson are the intellectual progenitors of the “anti-democratic, top-down” bit.

A second historical school of thought that helped foment woke capital, however, was the better known and much more prominently studied phenomenon of “cultural Marxism” that had its roots in post-World War I Germany, Italy, and Hungary.  Between Gramsci, Lukacs, and, in time, the Frankfurt School, the endeavor that Rudi Deutschke later called “the long march through the institutions” was driven by a robust contingent of brilliant but twisted minds, all of who were determined to undermine the Christian-European cultural hegemony and to take-over the institutions of cultural transmission in preparation for the revolution they had, up to then, been denied.

In 1951, when William Buckley wrote God and Man at Yale, he described the undisguised and unapologetic effort on the part of America’s premier universities to turn their students into good little Marxists.  What he described, however, with its rote declaration of atheism and embrace of Keynesian economics was traditional Marxism, the usual allegedly “scientific” twaddle that had been the Left’s sad schtick for several decades.  He described a Marxism, in other words, that was already feeble and dying thirty years earlier and would, ultimately, present no real threat to convert Americans.

In 1990, a scant 39 years later, a new book was published, documenting a similar and yet radically different attempt by American universities to convert and confuse their students.  This new effort was the cultural Marxism dreamed up in Gramsci’s damp and dingy jail cell, Gyorgy Lukacs’s damp and dingy government office, and Herbert Marcuse’s damp and dingy mind.  While this Marxist variant had only been introduced to the institution of American higher education in the 1970s, its march through that institution was not long, as expected, but swift and unrelenting.

As you may have guessed by now, the book that documented cultural Marxism’s short but vicious march through higher education was titled Tenured Radicals and was, of course, written by Roger Kimball.  Although preceded by three years by Allan Bloom’s The Closing of the American Mind, which tackled the march as well, Roger’s book was a tour de force, a scathing critique of American higher education that described in great detail the totality of the cultural Left’s takeover. Tenured Radicals was the first effort to take the seemingly anodyne term “political correctness” and explain what it really meant in practice, with is anything but bland and harmless.

In many ways, then, my book – as strange as it might sound – is a sequel of sorts to Roger’s book, a tome intended to raise the alarm about the cultural Left’s final push in its long march through the institutions, its attempt to take the last remaining institution and the last remaining bulwark against cultural collapse, American Business.  Just as Roger detailed the cultural Leftism of the academy, so I have tried to document the cultural Leftism of business, capital markets, central banks, and a whole host of other financial players.

Like all of the newly converted culturally leftist institutions, woke capital has replaced the traditional morality that once governed business and finance with a new morality, one based not on shareholder and property rights but on poorly constructed appeals to false empathy and philosophical pragmatism, the original, home-grown, American anti-realist philosophy.  Woke capital has traded Milton Friedman’s explanation for shareholder primacy – which can be traced almost directly back to the Parable of the Talents – for the thoughtlessness and insubstantial faux morality of Richard Rorty and John Rawls.

If this takeover of American business and its moral underpinnings is not halted – and then reversed –  the results will be incalculably destructive.  Coupled with the collapse of higher education, mainline Christianity (including the Peronista Catholicism of the current Pope), media, entertainment, and the rest, the collapse of business – and especially capital markets – would signal the end of the West as we know it.  It would mark the descent of democratic-capitalism into the new “end of history,” one in which American markets, economy, government, and social relationships would look much less like the vision the Founders laid out and much more like that of the woke capitalists primary ally and investment partner,  the People’s Republic of China.

American business and free and fair capital markets must be preserved.  And if my little contribution advances this project in any way, then I am glad to have helped and grateful for the opportunity.

Thanks very much.

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