12 Jun Chaos and Old Night
ANNOUNCEMENT: SCHEDULE
This schedule announcement comes in two parts, an easy part and a not-so-easy part.
Obviously, there is a note appended to this announcement. There will definitely be another note tomorrow. There will likely be a note on Wednesday, but I make no promises, as I am traveling Wednesday and Thursday. No note on Thursday.
Now, as the Fates would have it, this Thursday, June 15, also happens to mark the end of The Political Forum Institute’s fiscal sponsorship agreement with The National Center for Public Policy Research. And while I continue to work diligently to secure another fiscal sponsorship (and funding for the project), I have not done so yet. What this means is that as of Friday, The Political Forum Institute (a registered non-profit organization but without 501(C)3 status) will no longer be able to accept tax-deductible donations either from individuals or foundations. And while The Political Forum (the for-profit side of the business) still exists in name, all operations (publications, etc.) have been transferred to The Political Forum Institute, which is to say that there’s no profit on the for-“profit” side, by design.
In short, unless other arrangements are made between now and Friday, this operation and work product will (at least temporarily) become a hobby rather than a business. And that, in turn, means that said “work product” will be curtailed substantially, by necessity. If you have thoughts, comments, questions, suggestions, etc., please feel free to share them with me.
In the meantime, I will continue to look for opportunities to keep this now 20+-year operation operational. As for me, I will indeed be able (in the words of George W. Bush) to put food on my family. An announcement about that will be forthcoming.
Onward…
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As you may recall, we’ve spent some time over the past few weeks and months discussing the differences between various “stakeholder” models (see here, for example). In brief, the first two iterations of stakeholder theory – the “descriptive” and the “instrumental” models – were objective and practical, designed to be “an analytical tool, the means by which the managers of organizations could better understand their organization’s position in its environment and, thus, better understand how to solidify and improve that position.”
The third version of the stakeholder model, by contrast, was/is subjective, judgmental, and values-based. This “normative” stakeholder model purposefully undid the millennia-old moral foundations of capitalism, free markets, etc., replacing them with new, purportedly more “relevant” moral calculations: i.e., Who are the real, relevant stakeholders? What should these stakeholders want? How should we ensure that they get what they need, regardless of what they say they want? How do we arbitrate between the conflicting needs and wants of various stakeholder groups?
Edward Freeman, the intellectual godfather of the normative stakeholder model, was not exactly agnostic about the moral system that should replace the shareholder-centric system (personally favoring an approach grounded in Rorty-an neo-pragmatism), but he did suggest that the new model would be compatible with virtually unlimited moral philosophies, from critical theory to feminist theory to…Gaia knows what else.
The key point here is that modern Stakeholder Theory is inarguably, unquestionably, and by design, a MORAL doctrine for the practice of business. It was purposefully designed to alter the moral calculations of the practice of capitalism. And about this, there is no argument.
Nearly four years ago, the Business Roundtable issued a new statement of the definition of the purpose of a corporation. And while the new statement was, more than anything, a PR document designed to placate populists on the Left and the Right, it nevertheless adopted, in whole, this normative stakeholder approach to capitalism, “Mov[ing] Away from Shareholder Primacy, Include[ing] [a] Commitment to All Stakeholders.” At the time, the Chairman of the BRT noted the following:
The American dream is alive but fraying…Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.
The Chairman in question here is, of course, Jamie Dimon, who also moonlights as the CEO of JP Morgan Chase. A year after the BRT declaration, Dimon famously knelt before Black Lives Matter mobs and then pledged $30 billion in shareholder funds to be used to “advance racial equity.”
More recently, Dimon’s company has been questioned by state financial officers for such moral judgments as debanking the National Committee for Religious Freedom, having its subsidiary WePay deny ticket processing services for an event hosted by a conservative non-profit that featured Donald Trump, Jr. as a speaker, and for threatening business relationships with companies in the fossil fuel industry.
All of which is to say that Jamie Dimon appears to be willing to put his shareholders’ money where his mouth is and to practice the moral judgmentalism of the normative stakeholder model.
Now, we mention all of this today for a specific reason, which you may have guessed:
JPMorgan Chase has agreed to pay up to $290mn to settle one of two bombshell lawsuits over its 15-year relationship with Jeffrey Epstein, which accused the bank of profiting from human trafficking by ignoring multiple internal warnings about their former client’s sex crimes.
The agreement came just hours after a federal judge ruled that the case, originally brought by a single Epstein accuser under the pseudonym Jane Doe, would be widened to include dozens of women who claim to also have been abused by the disgraced financier. The total size of the group who will share the payout exceeds 150 victims, a lawyer for Doe said.
JPMorgan has not admitted any liability. It declined to comment on the size of the payout, which was confirmed by Doe’s lawyers. The settlement has yet to be approved by a federal court in New York….
The pre-trial process led to troves of internal communications at JPMorgan being made public, including an email in which a compliance official said there was “Lots of smoke. Lots of questions” about Epstein, and one in which the financier was referred to as a “Sugar Daddy!” for young women.
Court filings also revealed that the employees at JPMorgan, which began banking Epstein in 1998, were aware by July 2006 that Epstein had been arrested in Florida, and had discussed his 2008 guilty plea to a state charge of soliciting a minor, as well as the requirement that he register as a sex offender.
Ah. So…these are our moral arbiters.
Alasdair MacIntyre famously noted that the result of the Enlightenment’s destruction of the pre-existing moral code governing society at large was NOT the emergence of a Utopia governed by reason and science, as predicted by its greatest thinkers, but the rapid and (at least heretofore) permanent civilizational descent into moral chaos. The destruction of the pre-existing moral code governing corporate behavior was an extension of the Enlightenment Project and, unsurprisingly, has produced much the same result. There is no stakeholder-centric Utopia toward which corporations are moving, only moral chaos, chaos in which the biggest bank in the world can debank oil and gas companies while doing long-term business with billionaire sex traffickers and doing its best to cover up that relationship.
Stakeholder Capitalism, ESG, and “Woke Capital” are all fundamentally subjective moral enterprises, and as such, they are all dependent on the moral beliefs of their practitioners. If these practitioners see widespread and longstanding sex trafficking as less a moral evil than providing oil and gas to power the economy, then they can pursue those ends with a clean conscience. Likewise, if they see modern-day slavery and cultural genocide as lesser evils than the accidental death of a man in police custody, then are enabled to act accordingly.
None of this was intended by the early normative stakeholder theorists, but all of it was nevertheless inevitable. Moral chaos reigns and will for as long as we allow it to.
