21 Feb Speaking Fink, Redux
As you may recall, last week, we wrote a short and (admittedly) snide piece about Larry Fink and his apparent affection for totalitarian governments. That figures, we said, since BlackRock’s business plan going forward depends heavily on partnership – if not outright collusion – with governments in the United States and the People’s Republic of China (among others).
In response to that piece, we received a friendly note from a reader – a reader whom we admire greatly and who has forgotten far more about markets and finance than we’ll ever know – questioning the validity of the video clip we cited in pillorying Fink. Mostly, our correspondent questioned the fact that the audio and the video in the clip don’t align, that it looks as if fake audio could have been spliced into a video of Fink, specifically to make him look ignorant and cynical.
Interestingly, we too had questions about the video clip. We’ve seen it before and may even have commented on it before, yet we recall it appearing less hokey, less like it had been altered. So, we pulled up the ol’ Google Machine and looked for a different version of the clip. And we found it. This clip is much better and, we think, is pretty conclusive. The video of Larry Fink saying that markets like “certainty” and, by extension, “totalitarian governments” is almost certainly real and almost certainly not doctored.
So why, then, do we bring it back up today?
We do so for three reasons.
First, there’s that pesky modifier, “almost certainly.” We simply cannot verify the video incontrovertibly. There are no major mainstream news stories citing it, while all of the right-leaning media stories about it point back to the same two video clips for confirmation. There are some financial and political blogs comments about it, written when Fink made the statement, but then, that brings us to…
Second, it turns out (upon further investigation) that these comments were made (or were alleged to have been made or…whatever) almost twelve years ago, in March 2011. And while this doesn’t change what we think about the comments and what we think they say about Fink, it does provide some context. Fink is NOT talking about ESG. He is NOT talking about sustainability. He is NOT talking about of the issues that have made him a figure of derision among those of us who detest “woke capital.” His statement was made several years before he became the poster boy for ESG.
To be sure, this doesn’t absolve Fink of dreadfully mistaken thinking about “totalitarians” and horrible misinterpretation of what markets are and what they do. Moreover, it confirms that he has long been a foolish Sino-file. Recall, we quit our jobs at Lehman in large part because of the firm’s obsession with China in 2003. The problems in that country and its risk to global markets have been obvious for years to anyone who is paying attention. Fink had not yet learned the lesson that we understood a full two decades ago.
Nevertheless, in the interest of fairness and accuracy, we think it’s important to note that the video that we criticized is more than a decade old.
Finally, and relatedly, we want to use the questions about this video clip to remind everyone – ourselves included – that this is a battle fraught with danger. Indeed, simply using the term “battle” is, we think, somewhat dodgy and makes us a bit uneasy.
On the one hand, we think it’s imperative to note that people like Larry Fink are wildly mistaken, aggressively cynical, dangerously destructive, and hopelessly self-absorbed. They represent a threat to capital markets – and thus to capitalism itself – that is largely unrivaled in Western history. We would argue that the risk they pose is even more serious than the risk that was posed last century by Marxism, largely because, in this case, the “call is coming from inside the house!” Fink, et al. are insiders. They are market participants. Heck, they are the biggest and the most important players in the capitalization of business, which is the heart of modern capitalism. Their efforts to “tweak” the system can have a far greater impact on the future of our country, our civilization, and our economic systems than anything the hapless Communists and socialists did.
On the other hand, we want to be careful – we have to be careful – that we don’t allow our disagreements with the likes of Fink and Ronald O’Hanley (State Street) and Brian Moynihan (Bank of America) and all the rest to become part of the political spiral that enables the “total state” and precipitates “total war” in the total state. As I noted in the conclusion of The Dictatorship of Woke Capital:
[T]he divisions in the modern, total state are delineated by the nebulous notion of “values.” Values are not the same as traditional moral beliefs, which are rooted in religious teachings. Instead, values depend on self-defined self-interest. And that means that man identifies friends as those who share the same self-interest, and enemies as those who do not.
Schmitt goes on to argue that war among the total states is much different and much more likely to be truly devastating than previous wars. “Such a war,” he writes, “is necessarily unusually intense and inhuman because, by transcending the limits of the political framework, it simultaneously degrades the enemy into moral and other categories and is forced to make of him a monster that must not only be defeated but also utterly destroyed.” War among men in the total state is total war, one that transcends all shared humanity and all otherwise common characteristics and therefore demands total victory.
One needn’t be a German legal theorist to see that this concept of total war in the total state applies beyond the realm of actual, literal war and can be applied to just about any conflict in the total state. “The political” is omnipresent. It dominates every aspect of our lives, just as Schmitt observed and predicted, and it therefore ensures that any disagreement becomes an occasion for total war and the division of all people into combatant groups, friends or enemies.
Consequently, our end goal HAS to be to discredit Fink and his ilk on the realism and practicality of their arguments and reforms. We must demonstrate that what they are doing is dangerous to capital markets, is damaging to capitalism, and is based on a fantastical and Millenarian misinterpretation of history and current conditions. And while their political views certainly shape their beliefs and actions, we have to rise above the purely political and push back on the soberness of their claims, not the political differences they embody.
Needless to say, this is an exceptionally difficult task and an exceptionally fine line to toe. In some cases, we’re not even sure we know how to distinguish between practical and political pushback, much less how to accomplish one while not engaging the other. The fact of the matter is that politics is an integral part of the whole ESG/woke capital mission, which is why it’s so deleterious. Some pushback must, therefore, touch on politics, even if we must find a way to move beyond politics as well.
Putting this into practice is also extremely difficult, and we know that, often, the pushback has fallen waaaaay short of the ideal. At the same time, though, we also know that the best thing we can do is to be completely transparent. If, for example, there’s a question about the validity of a video clip that we cited, we need to acknowledge it, even if we don’t agree with those questions and even if the whole matter is, in the bigger picture, irrelevant. We still have to do our best to be as fair and as accurate and as honest as we can be in our pushback.
Even if we’re not entirely sure how to make that matter.
