Winners Take All
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Social change is not a project that one group of people carries out for the benefit of another. —LETTER TO BAHÁ’Í FROM THE UNIVERSAL HOUSE OF JUSTICE IN HAIFA, ISRAEL
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Among Americans born in 1940, those raised at the top of the upper middle class and the bottom of the lower middle class shared a roughly 90 percent chance of realizing the so-called American dream of ending up better off than their parents. Among Americans born in 1984 and maturing into adulthood today, the new reality is split-screen. Those raised near the top of the income ladder now have a 70 percent chance of realizing the dream. Meanwhile, those close to the bottom, more in need of elevation, have a 35 percent chance of climbing above their parents’ station. And it is not only progress and money that the fortunate monopolize: Rich American men, who tend to live longer than the average citizens of any other country, now live fifteen years longer than poor American men, who endure only as long as men in Sudan and Pakistan.
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Some elites faced with this kind of gathering anger have hidden behind walls and gates and on landed estates, emerging only to try to seize even greater political power to protect themselves against the mob. But in recent years a great many fortunate people have also tried something else, something both laudable and self-serving: They have tried to help by taking ownership of the problem.
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There is no question that the outpouring of elite-led social change in our era does great good and soothes pain and saves lives. But we should also recall Oscar Wilde’s words about such elite helpfulness being “not a solution” but “an aggravation of the difficulty.” More than a century ago, in an age of churn like our own, he wrote, “Just as the worst slave-owners were those who were kind to their slaves, and so prevented the horror of the system being realised by those who suffered from it, and understood by those who contemplated it, so, in the present state of things in England, the people who do most harm are the people who try to do most good.”
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In our era that harm is the concentration of money and power among a small few, who reap from that concentration a near monopoly on the benefits of change. And do-gooding pursued by elites tends not only to leave this concentration untouched, but actually to shore it up. For when elites assume leadership of social change, they are able to reshape what social change is—above all, to present it as something that should never threaten winners.
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Trump is the reductio ad absurdum of a culture that tasks elites with reforming the very systems that have made them and left others in the dust.
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One thing that unites those who voted for Trump and those who despaired at his being elected is a sense that the country requires transformational reform. The question we confront is whether moneyed elites, who already rule the roost in the economy and exert enormous influence in the corridors of political power, should be allowed to continue their conquest of social change and of the pursuit of greater equality. The only thing better than controlling money and power is to control the efforts to question the distribution of money and power. The only thing better than being a fox is being a fox asked to watch over hens.
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What is at stake is whether the reform of our common life is led by governments elected by and accountable to the people, or rather by wealthy elites claiming to know our best interests.
Chapter 1: But How Is the World Changed?
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One hundred seventeen million people had, in other words, been “completely shut off from economic growth since the 1970s,” Piketty, Emmanuel Saez, and Gabriel Zucman wrote. A generation’s worth of mind-bending innovation had delivered scant progress for half of Americans.
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Students have also been influenced by the business world’s commandment, disseminated through advertisements and TED talks and books by so-called thought leaders, to do whatever you do “at scale,” which is where the “millions of people” thing came from. It is an era, moreover, that has relentlessly told young people that they can “do well by doing good.” Thus when Cohen and her friends sought to make a difference, their approaches were less about what they wanted to take down or challenge and more about the ventures they wanted to start up, she said. Many of them believed there was more power in building up what was good than in challenging what was bad.
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Clinton’s evolution from embracing Johnson’s big-government activism in the 1960s to declaring the end of big government in the 1990s spoke of a turning in the culture whose effects were palpable in the Georgetown that Cohen discovered in the early 2010s. When she and her peers were stirred by a desire to change things, their own ideas and the resources available to them tended to steer them toward the market rather than government as the place where problems are best solved. The age-old youthful impulse to reimagine the world was now often molded and guided by one of the reigning ideas of the age: that if you really want to change the world, you must rely on the techniques, resources, and personnel of capitalism.
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Management consulting firms and Wall Street financial houses have persuaded many young people in recent years that they provide a superior version of what the liberal arts are said to offer: highly portable training for doing whatever you wish down the road. They also say, according to Cohen, “To be a leader in the world, you need this skill set.”
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For example, Jonathan Haidt, a professor of psychology at New York University’s business school and a popular TED speaker, was a left-wing student at Yale in the early 1980s, but he had since turned against the kind of power-busting world-changing he believed in then. He articulated the new belief well in an interview with the radio host Krista Tippett: People our age grew up expecting that the point of civic engagement is to be active, so we can make the government fix civil rights or something—we’ve got to make the government do something. And young people have grown up never seeing the government do anything except turn the lights off now and then. And so their activism is not going to be to get the government to do things. It’s going to be to invent some app, some way of solving problems separately. And that’s going to work.
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Chapter 2: Win-Win
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Justin Rosenstein seemed to agonize far more than Asher had about the best way to help people. Although he was largely unknown to the broader world, he was a star in Silicon Valley, instrumental in inventing several of its seminal technologies. A programming and product design phenom, he helped start Google Drive and was the coinventor of Gmail chat. Then he moved to Facebook, where he was the coinventor of Pages and the “like” button. More than a billion people were regularly using tools that Rosenstein crafted. He had been rewarded with stock said to be worth tens of millions of dollars. He wasn’t yet thirty.
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Guided by MarketWorld’s win-win values, Rosenstein decided to improve the world by starting a company, Asana, which sold work collaboration software to companies like Uber, Airbnb, and Dropbox.
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There is no discounting the audacity of this MarketWorld idea. It rejects the notion that there are different social classes with different interests who must fight for their needs and rights. Instead, we get what we deserve through marketplace arrangements—whether fantasy football to help African orphans or office software to make everyone more productive or the sale of toothpaste to the poor in ways that increase shareholder value. This win-win doctrine took on a great deal more than Adam Smith ever had, in claiming that the winners were specially qualified to look after the losers. But what do they have to show for their efforts, given that the age of the win-win is also, across much of the West, the age of historic, gaping inequality?
Chapter 3: Rebel-Kings in Worrisome Berets
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Pishevar was in fact pushing those things down the pipe. He was part of a group of elites who had been very smart and very lucky with start-up investments, and who now got to make decisions of enormous social consequence about what to do about the human life span. This power gave them great responsibility and exposed them to the possibility of resentment—unless they convinced people that the future they were fighting for would unfold automatically, would be the fruit of forces rather than their choices, of providence rather than power. Hence the cleverness of Pishevar’s passive framing of his own goals: “The way things are structured today are not going to be relevant to what the reality is going to be.” Longer lives for rich people were just something that happened to be coming down the pipe. Not so much a better health care system for all.
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Pishevar was not only casting venture capitalists and billionaire company founders as rebels against the establishment, fighting the powers that be on behalf of ordinary people. He was also maligning the very institutions that are meant to care for ordinary people and promote equality. He referred to unions as “cartels.” He cast protests, which were a fairly standard feature of labor movements, as a “war zone.” He spoke of taxi drivers and their representatives in the language of the corrupt, mafioso Other: “those types of characters from that world.” Here was a leading investor in a company, Uber, that had sought to shatter democratically enacted regulations and evade the unions that have a record of actually, and not just rhetorically, fighting for the little guy, and he was proudly portraying himself as the one who was truly fighting for the people against the corrupt power structure. “In the era when political power corrupts, social and crowdsourced power cleanses,” Pishevar once wrote. “We must stir the hornet’s nest to build immunity to the sting of corruption.”
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He had the audacity to board an expensive, exclusive, invitation-only cruise-ship conference full of entrepreneurs, and yet claim it was taxi drivers who constituted the unjust cartel. He could profit from and defend a company doing everything in its power to smash the idea of a labor movement, while unabashedly speaking of this conference in the language of movements. He could, as a Silicon Valley venture capitalist, be the very picture of what was making the country less equal, while claiming to be fighting on behalf of the common man.
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Judge Chen, meanwhile, wondered whether Uber, despite a claim of impotence at the center of the network, exerted a kind of invisible power over drivers that might give them a case. In order to define this new power, he decided to turn where few judges do: the late French philosopher Michel Foucault. In a remarkable passage, Judge Chen compared Uber’s power to that of the guards at the center of the Panopticon, which Foucault famously analyzed in Discipline and Punish.
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It can be disturbing that the most influential emerging power center of our age is in the habit of denying its power, and therefore of promoting a vision of change that changes nothing meaningful while enriching itself.
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Ramo is arguing that the Ubers and Airbnbs and Facebooks and Googles of the world are at once radically democratic and dangerously oligarchic. Facebook emancipates people in Algerian basements to write whatever they want, for all the world to see. Airbnb allows anyone to rent out their home. Uber allows anyone going through financial hardship to download the app and, without much hassle, get started making money. These platforms are pushing power out to the edges—power once controlled by media companies, hotel chains, and taxi unions. But networks tend toward extreme concentration as well. It is no fun if half of your high school friends are on the other social network, so Facebook becomes a de facto monopoly. A core tenet of network theory is that the bigger the network, the more juice it will be able to squeeze from every new connection. Networks, then, are those rare beasts that get healthier, tougher, and faster the fatter they become.
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But a long line of thinkers has told us that the powerful tend to be the big winners from the creation of blank-slate, rules-free worlds. A famous statement of that finding came from the feminist writer Jo Freeman, who in her 1972 essay “The Tyranny of Structurelessness” observed that when groups operate on vague or anarchic terms, structurelessness “becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others.” Freeman’s idea could be traced back to the Enlightenment and Thomas Hobbes. Hobbes also believed that structurelessness wasn’t all it was cracked up to be, especially for the weak.
Chapter 4: The Critic and the Thought Leader
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She had written of how the sexism that women face is a strange amalgam of the envy men feel toward career women and the pity they feel for women who don’t work.
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Thought leaders tend, Drezner says, to “know one big thing and believe that their important idea will change the world”; they are not skeptics but “true believers”; they are optimists, telling uplifting stories; they reason inductively from their own experiences more than deductively from authority. They go easy on the powerful. Susan Sontag, William F. Buckley Jr., and Gore Vidal were public intellectuals; Thomas L. Friedman, Niall Ferguson, and Parag Khanna are thought leaders. Public intellectuals argue with each other in the pages of books and magazines; thought leaders give TED talks that leave little space for criticism or rebuttal, and emphasize hopeful solutions over systemic change. Public intellectuals pose a genuine threat to winners; thought leaders promote the winners’ values, talking up “disruption, self-empowerment, and entrepreneurial ability.”
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“As America’s elite has gotten richer and richer, they can afford to do anything they want,” he writes. “It turns out a surprising number of them want to go back to school—or, rather, make school go to them.” Thinkers are invited to become the elite’s teachers on the circuit of “Big Idea get-togethers”—“TED, South by Southwest, the Aspen Ideas Festival, the Milken Institute’s Global Conference, anything sponsored by The Atlantic.” These thinkers often find themselves having become thought leaders without realizing it, after “a slow accretion of opportunities that are hard to refuse.”
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They needed the idea of change itself to be redefined to emphasize “rolling with the waves, instead of trying to stop the ocean.” The thought leaders gave these winners what they needed.
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In our own time, the thought leaders have often been deployed to help us see problems in precisely the opposite way. They are taking on issues that can easily be regarded as political and systematic—injustice, layoffs, unaccountable leadership, inequality, the abdication of community, the engineered precariousness of ever more human lives—but using the power of their thoughts to cause us to zoom in and think smaller. The feminists wanted us to look at a vagina and zoom out to see Congress. The thought leaders want us to look at a laid-off employee and zoom in to see the beauty of his feeling his vulnerability because at least he is alive. They want us to focus on his vulnerability, not his wage.
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Several years later, Duhigg began to write books. He could have done so in the same vein, and one assumes that the books would have been important. But would they have sold? “An investigative series in the New York Times never makes a good book, because if an investigative series in the Times works, basically it tells you everything that’s wrong with the world or with a particular company or with a situation,” he told me. “But when you read a book—nobody really wants to read a book to just learn about how much things suck, right? I mean, those books do exist, and they’re very, very valuable. But they tend to have, you know, limited audiences.” People, especially the winners who shape tastes and patronize thought leaders, want things to be constructive, uplifting, and given to hope. “In addition to learning what’s wrong, they want to learn what’s right,” Duhigg said. And they like easy steps: “They want to learn what they can do and how they can make themselves or the world a better place.” Duhigg didn’t believe in this kind of solutions peddling when wearing his investigative reporting hat, but he found it useful in his emerging life as a thought leader. “Investigative reporting is trying to avoid speculation,” he said. “Whereas in a book, at least half of your effort should be speculating at solutions.” Yet if Duhigg was right about the preference for solutions, it left less and less space for the kinds of thinkers and critics who have been important to our society in the past. And it made ever more room for the kinds of books that Duhigg began to write.
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As Stephen Marche has written of the historian turned thought leader Niall Ferguson, who reportedly earns between $50,000 and $75,000 per speech: Nonfiction writers can and do make vastly more, and more easily, than they could ever make any other way, including by writing bestselling books or being a Harvard professor…. That number means that Ferguson doesn’t have to please his publishers; he doesn’t have to please his editors; he sure as hell doesn’t have to please scholars. He has to please corporations and high-net-worth individuals.
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There is tremendous pressure to turn thoughts into commodities—into tiny, usable takeaways, into Monday morning insights for the CEO, into ideas that are profitable rather than compelling for their own sake.
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When MarketWorld likes you, it wants you as a product.
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Not long ago, he was invited to an advice circle. It was ten or so people, and many in the group were big-name thought leaders like Sinek. “We’re supposed to be talking about how we can combine our efforts to advance the greater good,” he said. “That’s why I showed up. And every single one of them talked about how they can increase their mailing lists, how they can get an extra dollar for X, Y, Z, how they can sell more products.
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The world of ideas “is just another industry,” he said after a moment. “There’s good product, and there’s bad product.” The question is whether a republic can thrive when ideas are thought of as an industry, and the prevailing incentives so heavily favor bad product. Is this how we want ideas to be generated? And are the elites who embrace and sponsor such ideas the people we trust to arrange our future?
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MarketWorld finds certain ideas more acceptable and less threatening than others, he said, and it does its part to help them through its patronage of thought leaders. For example, Giussani observed, ideas framed as being about “poverty” are more acceptable than ideas framed as being about “inequality.” The two ideas are related. But poverty is a material fact of deprivation that does not point fingers, and inequality is something more worrying: It speaks of what some have and others lack; it flirts with the idea of injustice and wrongdoing; it is relational. “Poverty is essentially a question that you can address via charity,” he said. A person of means, seeing poverty, can write a check and reduce that poverty. “But inequality,” Giussani said, “you can’t, because inequality is not about giving back. Inequality is about how you make the money that you’re giving back in the first place.” Inequality, he said, is about the nature of the system. To fight inequality means to change the system. For a privileged person, it means to look into one’s own privilege. And, he said, “you cannot change it by yourself. You can change the system only together. With charity, essentially, if you have money, you can do a lot of things alone.”
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Giussani had heard rich men do this kind of thing so often that he had invented a verb for the act: They were “Pinkering”—using the long-run direction of human history to minimize, to delegitimize the concerns of those without power. There was also economic Pinkering, which “is to tell people the global economy has been great because five hundred million Chinese have gone from poverty to the middle class. And, of course, that’s true,” Giussani said. “But if you tell that to the guy who has been fired from a factory in Manchester because his job was taken to China, he may have a different reaction. But we don’t care about the guy in Manchester. So there are many facets to this kind of ideology that have been used to justify the current situation.”
Chapter 5: Arsonists Make the Best Firefighters
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The master’s tools will never dismantle the master’s house. —AUDRE LORDE
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They offered a powerful way of stepping into a world you didn’t know and reconstituting its reality so that the solution became more obvious to you than it was to the client’s native executives. The protocols allowed for a strange kind of earned presumptuousness. Equipped with a special way of chopping up problems, parsing data, and arriving at answers, the consultant constructed authority.
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The protocols that allowed for this certitude were, as Latin once was, a mother language that had birthed many vernaculars. These vernaculars shared a common purpose: Having arisen not so much within industry as among the insider-outsiders of the business world—consultants, financiers, management scholars—they offered a way to get smart on other people’s situations. The banker trying to come up with the initial share price of a soon-to-be-listed chemical company wasn’t necessarily an expert in fertilizer. The hired-gun corporate strategist for a pharmaceutical company wasn’t necessarily an expert on drug delivery vehicles. The protocols—some specific to domains like finance or consulting, some more cross-cutting—allowed such figures to sweep in and break down a problem in a way that surfaced new realities, produced insight, sidelined other solvers, and made themselves essential.
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In other words, Hinton’s initiation into McKinsey and the protocols more generally was being urged to spit out a preternaturally confident answer to something he knew nothing about. As he adjusted to McKinsey’s ways, Hinton picked up the little rules and figures of speech that have become punch lines for many consulting skeptics and yet remain incredibly influential tools in business and beyond. For example, he learned that it was best to speak in lists of three, based on research about how people absorb information. If you have two important points to make, you add a third; if you have four, you combine two or just lose one.
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And so in 2011, when Porter and a coauthor named Mark Kramer published the essay “Creating Shared Value” in Harvard Business Review, it got the business world’s attention.
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“As people got disconnected from locations, business stopped really reinvesting in that. They thought their job was globalizing.” This disconnection of which Porter spoke was abetted by the decontextualizing, disaggregating, ocean-boiling-avoiding approach of the protocols—by their tendency to atomize.
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Porter’s second area of criticism regarded “optimization.” Thanks in part to the emergent protocols, a new culture of business had developed in which each microscopic element of a company’s activities had to be perfectly optimized, and this, Porter said, had made it easier to mistreat workers and ignore questions about one’s effects on the larger system.
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He brought up Starbucks. It had, like so many companies, begun to schedule workers using newfangled “dynamic scheduling” tools, which allowed employers to change schedules more often, so as to constantly optimize. It helped a company pay the smallest wage bill it could to service a given amount of demand. This kind of thing made a company more profitable, but it could bring chaos into workers’ lives. They no longer knew how many hours they would get in a given period of time, which complicated paying bills and making purchases. They had to arrange child care on the fly. Porter said, “Somehow in being efficient and being clever and being productive, people thought they had the license to just stop thinking about the human beings and the well-being of everybody else in the system.” The same shortsightedness, Porter said, could be seen in highly profitable companies’ insistence on low wages: “We turn many of these people into commodities and we just kind of optimized it on us rather than optimize it in any way on them.
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Finally, Porter spoke of how the spread of the financial vernacular of the protocols had caused companies to be run more and more for the sake of shareholders rather than for workers or customers or anybody else.
Chapter 6: Generosity and Justice
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His limo was heading to the New York office of KKR, the private equity firm immortalized in Barbarians at the Gate—a firm that had led the charge of the great rationalizing, one protocol-guided buyout at a time.
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Walker had broken what in his circles were important taboos: Inspire the rich to do more good, but never, ever tell them to do less harm; inspire them to give back, but never, ever tell them to take less; inspire them to join the solution, but never, ever accuse them of being part of the problem. —The headline above Walker’s letter on the Ford website read “Toward a New Gospel of Wealth.” He was attempting to revise and update—or perhaps overturn—an old gospel that dates back to an era much like ours, a gospel that had itself transformed earlier American ideas of helping other people.
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In the 1830s, when Alexis de Tocqueville made his pilgrimage from Europe to America, he observed that Americans didn’t wait for kings and popes to help people. They made “associations”—a phrase he helped make famous—“to hold fêtes, found seminaries, build inns, construct churches, distribute books, dispatch missionaries to the antipodes.”
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As the nineteenth century drew down, major changes in American life helped to develop these early tendencies into what is today called organized philanthropy. “Acts of human kindness are as old as humankind,” the scholars Lucy Bernholz, Chiara Cordelli, and Rob Reich write in a recent book they edited, Philanthropy in Democratic Societies. “The modern practice of organized philanthropy, on the other hand, has a much more recent provenance.” Around the turn of the century, a new industrial capitalism flourished. Incredible fortunes were made in railroads, steel, oil, and other factors of a booming nation’s growth. Much as is the case today, inequality widened as some seized on the new possibilities and others were displaced. Anger bubbled, and populist impulses surged. The money that was being made in this earlier gilded age was, in the view of many, unseemly in its quantities, unjust in its provenance, untenable in the power it conferred over a republic breaking out in new populist sentiments.
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These foundations were, in other words, allowing a small handful of wealthy people like Carnegie and Rockefeller to commit monumental sums of money to the public good and thus gain a say in the nation’s affairs that rivaled that of many public officials. Vast new foundations concerned themselves not with niche causes so much as with the general welfare of mankind, much like states. The new philanthropy was professionally managed by an entity analogous to a corporation, and, like governments, it was advised by experts, unlike the more willy-nilly voluntary associations. It
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Despite the scale of the new generosity, there were criticisms. One had to do with how the money being given had been made. The new foundations were troubling, as Reich puts it, “because they represented the wealth, potentially ill-gotten, of Gilded Age robber barons.” When Rockefeller proposed to establish his benevolent foundation to deal with his avalanche of money, powerful voices resisted, railing that the money was tainted by its origins. “No amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them,” said President Theodore Roosevelt.
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As Reich points out, it is rare to hear such criticisms today. “We have come a long way in one hundred years,” he writes. “Philanthropists are today widely admired, and the creation of foundations by the wealthy meets not with public or political skepticism but with civic gratitude.” It is hard to imagine an American president or very many influential journalists condemning rich people for giving their money away.
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Carnegie’s essay, titled “Wealth” and more widely known as his “gospel of wealth,” helped to found a new vision of philanthropy that not only rebutted the kinds of criticisms that he and others had faced, but effectively delegitimized critics and questioned their right to question.
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Carnegie’s gospel, published in the North American Review, deftly began by naming the problems on the critics’ minds. He argued that inequality was the undesirable but inevitable cost of genuine progress. The “conditions of human life have not only been changed, but revolutionized,” he wrote. Inequality is a better thing than it may seem, Carnegie explained: “The contrast between the palace of the millionaire and the cottage of the laborer with us to-day measures the change which has come with civilization. This change, however, is not to be deplored, but welcomed as highly beneficial.” Stratification was the price of the onward chugging of progress.
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This is the first step of Carnegie’s intellectual two-step: If you want progress, you have to let rich people make their money however they can, even if it widens inequality. Businesspersons deserve this permission, he said, because “this talent for organization and management is rare among men.” Its methods aren’t to be questioned. Carnegie wrote: We accept and welcome therefore, as conditions to which we must accommodate ourselves, great inequality of environment, the concentration of business, industrial and commercial, in the hands of a few. Lest there be doubt that these industrial stewards know best, Carnegie said their talent is “proved by the fact that it invariably secures for its possessor enormous rewards.” In other words, rich people must be freed to make money however they can, because when they are, they tend to make a lot of money, which in turn brings progress for all. In this way, Carnegie effectively declared the economic system that generates wealth off-limits for the discussion. It was now time to turn to the giving half of the gospel: The question then arises,—and, if the foregoing be correct, it is the only question with which we have to deal,—What is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few? Considering various ways to give away wealth, Carnegie derided the two most common approaches: giving to descendants and giving after death. The former approach bred feeble children. The latter wasted many years of potential helping while a benefactor waited to die. Carnegie, in fact, unlike many rich people then and now, believed in a punitive estate tax that would encourage philanthropy: “Of all forms of taxation, this seems the wisest.” If the rich knew that much of the money would vanish upon their deaths, they might be persuaded to donate it to good causes during their lifetimes. Actively giving one’s own wealth away was the only approach Carnegie supported, because wealth, in his view, belonged to the community. Keeping was hoarding. A rich man should practice “modest, unostentatious living, shunning display or extravagance.” Of what wealth remained, he was “the mere agent and trustee for his poorer brethren.” Hoarding was thus akin to thieving the public: Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. Here the justifier of extreme taking had laid out a doctrine of extreme giving. It isn’t just good to give to the public. Money that you don’t need and that the public could employ isn’t really your money. Carnegie was proposing an extreme idea of the right to make money in any which way, and an extreme idea of the obligation to give back. “It is a strange, seemingly contradictory picture,” writes Levy, the historian. “Carnegie at his desk, writing one letter to his lieutenants at the Carnegie Steel Company, imploring them to slash wages, then writing another to one of his philanthropic lieutenants, giving his wealth (the profits earned by slashing those wages) away at his own discretion.”
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Carnegie seemed to anticipate the objection that the poor might not need so much help had they been better paid. Dripping with paternalism, he defended the necessity of temporary inequality. “Wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if it had been distributed in small sums to the people themselves,” he wrote. By “small sums,” he makes clear in the ensuing sentences, he is referring to wages. Citing the case of Peter Cooper—industrialist turned philanthropist and the founder and namesake of Cooper Union in Manhattan—Carnegie wrote: Much of this sum if distributed in small quantities among the people, would have been wasted in the indulgence of appetite, some of it in excess, and it may be doubted whether even the part put to the best use, that of adding to the comforts of the home, would have yielded results for the race, as a race, at all comparable to those which are flowing and are to flow from the Cooper Institute from generation to generation. Carnegie believed that he could not pay workers well, could not be sentimental about how many hours of work were too many, for that would hurt the public interest. But he could give back to the workers. He financed libraries, museums, and other public amenities for the eventual pleasure and edification of his underpaid workers. He wrote: Thus is the problem of Rich and Poor to be solved. The laws of accumulation will be left free; the laws of distribution free. Individualism will continue, but the millionaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself. This is the compromise, the truce, distilled: Leave us alone in the competitive marketplace, and we will tend to you after the winnings are won. The money will be spent more wisely on you than it would be by you. You will have your chance to enjoy our wealth, in the way we think you should enjoy it.
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Here lay the almost constitutional principles that one day would govern MarketWorld giving: the idea that after-the-fact benevolence justifies anything-goes capitalism; that callousness and injustice in the cutthroat souk are excused by later philanthropy; that giving should not only help the underdogs but also, and more important, serve to keep them out of the top dogs’ hair—and, above all, that generosity is a substitute for and a means of avoiding the necessity of a more just and equitable system and a fairer distribution of power.
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One day, a woman showed up at the home asking if she could register Darren for something called Head Start. His mother agreed, not knowing much about it.
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Would he or anyone else, however principled, renounce the tax break? Of course not. That’s why he had begun to feel a need to talk about systems. “Why do we live in a society where that can happen?” he asked. “And what do we need to fix that? And we who are privileged ought to be engaged in that, because we can’t say, on the one hand, ‘Isn’t it horrible, this affordable-housing crisis we have in New York?,’ and then, by the same token, accept a system that is essentially corrupt.” He mused, “I really wonder about my own privilege, and am I too comfortable in it?” He said his guilt “definitely nags at me on a daily basis.” Social scientists speak of “idiosyncrasy credits,” a kind of resource that a leader earns, which allows him or her from time to time to innovate on, or even defy, group norms.
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Walker’s new gospel began where he had to begin, with Carnegie. That text was, Walker said, “the intellectual charter of modern philanthropy, and its basic precepts remain the underpinning of U.S. giving and, in turn, have greatly influenced an era of burgeoning philanthropic enterprise around the world.” At the heart of Carnegie’s essay, as Walker read it, was the idea of extreme inequality as “an unavoidable condition of the free market system” and of philanthropy as an effective remedy. You can picture an executive at KKR reading this and nodding. Yeah, exactly, unavoidable. But then Walker began to go off script. The giving world, he wrote, needed “to openly acknowledge and confront the tension inherent in a system that perpetuates vast differences in privilege and then tasks the privileged with improving the system.” Here Walker was already breaking the Carnegie pact. He was questioning the idea of the rich as the best and rightful administrators of the surplus of the society. He was refusing to confine his analysis to what happens after fortunes are made in the marketplace. He was interested in how those fortunes are made and what choices have occasioned them. “What underlying forces drive the very inequality whose manifestations we seek to ameliorate?” he asked. Walker suggested that “we are crashing into the limits of what we can do with a nineteenth-century interpretation of philanthropy’s founding doctrine.” And he said Martin Luther King Jr. might offer a useful complement to Carnegie’s encrusted ideas, with his call to laud philanthropy while not ignoring “the circumstances of economic injustice which make philanthropy necessary.”
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The privileged, Walker went on, now benefit from the further advantage of having their language and mentality dominate other domains, including the giving world. They no longer just enjoy the privilege of nice homes and cars; they also now have a say over how so many public problems are solved. “When we talk about economic inequality,” he said, “we might acknowledge an underlying, unspoken hierarchy, in which we relate everything back to capital. In most areas of life, we have raised market-based, monetized thinking over all other disciplines and conceptions of value.” Walker was presenting the power of the big giver as dangerous. Foundations like his were hobbled by “inherited, assumed, paternalist instincts.” Western givers tended to treat recipients in poor countries as subjects to be ordered around, as implementers rather than partners. Big philanthropy needed to get better at “modeling the kind of equality we hope to achieve by listening, and learning, and lifting others up.” Walker wrote that foundations—built, like Ford, on the fortunes of powerful people, often wielding enormous power themselves—needed to ask hard questions about their own authority and remove from reality: “How does our privilege insulate us from engaging with the most difficult root causes of inequality and the poverty in which it ensnares people?”
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The Sacklers were Carnegie’s old gospel incarnate: Give and give, honorably, thoughtfully, abundantly, and expect in return that questions will not be asked about the money’s origins and the system that let it be made. The Sackler brothers—Elizabeth’s father, Arthur; Raymond; and Mortimer—were doctors and cofounders of a pharmaceutical company that would come to be called Purdue Pharma.
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Brownlee brought charges against Purdue, which in 2007 agreed to settle. It acknowledged that it had marketed OxyContin “with the intent to defraud or mislead,” and it agreed to pay $635 million in fines and other outlays. It was one of the largest fines ever paid in such a case, but only an inconvenience when compared to how lucrative OxyContin was becoming. In 2015 Forbes declared the Sackler family the “richest newcomer” to its annual list of wealthy families, with a net worth of $14 billion. Noting that the family had edged out “storied families like the Busches, Mellons and Rockefellers,” it asked, “How did the Sacklers build the 16th-largest fortune in the country? The short answer: making the most popular and controversial opioid of the 21st century—OxyContin.”
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One had to wonder if Walker had the stamina and the ability to make the Sacklers and Coles and Tisches and KKRs of the world think more like him. Almost a year after his new gospel came out, it was announced that he had joined the board of PepsiCo. The move attracted some criticism, in part because this warrior against inequality would now be earning more than a million dollars a year from the Ford presidency and this new, very occasional role, and in part because he now bore formal responsibility for what Pepsi did, including the company’s continuing choice to sell its harmful sugary drinks. The critics could console, or depress, themselves with the thought that he was far from alone: Several of his counterparts at the major foundations served on the boards of firms like Citigroup and Facebook. The fear was that, yet again, MarketWorld would infiltrate and win. “The best tactic is to bring your critics into the fold,” a former Ford Foundation executive told the New York Times. But Walker promised and seemed to believe that he would change them, not the other way around. “I will bring my perspective as the leader of a social justice organization,” he told the Times. “I will bring my perspective as someone who is deeply concerned about the welfare of people in poor and vulnerable communities.” His only compromise so far had been to switch his habit from Diet Coke to Diet Pepsi.
Chapter 7: All That Works in the Modern World
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Then, in 2005, attuned to the currents of his time, Clinton decided that if you wanted truly to change the world now, you needed the help of companies and plutocrats, and thus you needed your own conference on the MarketWorld circuit.
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If you owned a plane and had a lot more money where that charitable commitment came from, as the Canadian mining magnate Frank Giustra did, you could soon find yourself trotting the planet with Bill Clinton as your door-opener and bro. You would help him with his foundation, and he might let you into his inner circle, and being in his inner circle might benefit you the next time you bid on a mining project.
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By Clinton’s count, the twelve CGI meetings had inspired some 3,600 commitments. The organization claimed that these commitments had improved more than 435 million lives in 180 countries—a figure that was as impressive as it was hard to verify, since this new mode of world-saving was private, voluntary, and accountable to no one.
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As a result, self-service flirted dangerously with altruism at CGI, in Walker’s view. Why were all these CEOs flying in? “They fly here because they see investment opportunities; they see branding opportunities,” Walker said. Clinton’s brilliance had been in using his gathering “as a way to give people a profile” if they agreed to help people.
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Dalberg disseminated a list of the side events at UN Week (or main events, depending on your view). On its calendar, the right-hand column noted whether and how one might join each event. Eight events had free registration, eight sold paid registration, and forty-eight were invitation-only. The ratio told a truth about the new, MarketWorld-led UN Week: When private actors move into the solution of public problems, it becomes less and less of the public’s business.
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For Ferguson, he and his fellow MarketWorld elites had been drafted into a new class war. It was no longer rich versus poor but rather people who claimed to belong to everywhere versus people stuck somewhere—echoing his colleague Michael Porter’s notion of somewhere people and everywhere companies. In Ferguson’s telling, from the same essay as earlier, what went wrong was that the Somewheres were simply no longer fooled by the Everywheres’ performance of concern and charity, and the numbers finally caught up with the Everywheres: “No prizes for guessing which group is more numerous. No matter how many donations the global elite made, philanthropic and political, we could never quite compensate for that disparity.”
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In Haidt’s analysis, globalism and antiglobalism are both cogent worldviews with valid concerns and data behind them. There are advantages to a world of free and rampant human mingling and motion, and there are different advantages to stable, tightly bound communities. But according to Haidt, the globalists had so convinced themselves of the moral superiority of openness, freedom, and One World that they were unable to process the genuine fear these things aroused in millions of people.
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Clinton piled on to this idea of false consciousness. “All these English counties voted to give up economic aid from the EU,” he said. “And they needed it, but they had no idea what they were doing. They just wanted to come inside and close the door. There is a kind of a visceral us-and-them mentality developing.” This was the diagnosis of the former president of the United States a few months after Brexit’s unexpected success, and two months before his wife’s unexpected defeat to a populist demagogue who allied himself with the Brexit campaign. The people setting themselves the task of understanding the anger around them were precommitted to the idea that the anger had no possible basis in reason or conscious choice. They could not process people who saw the world fundamentally differently than MarketWorlders did and, misguided or not, wanted to be heard.
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The idea that what was good for a prosperous, globally networked megalopolis full of bankers and other well-educated professionals who could afford to live there, and overrun by Saudi, Russian, and Nigerian absentee princelings who pushed up rents without contributing much to the economy or tax base or the communities they lived in—the idea that whatever was good for such a metropolis was automatically good for all of Britain was part of the conceit that some voters understandably rejected when the Brexit choice came before them.
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C. Z. Nnaemeka wrote a prescient essay about this distancing in the MIT Entrepreneurship Review a few years ago. It criticized elite twenty-and thirtysomethings’ neglect of what she called “the unexotic underclass”—people neither rich enough to be global elites themselves nor poor enough to get the global elites’ attention. “Chances are there are more people addressing the Big Problems of slum dwellers in Calcutta, Kibera or Rio, than are tackling the big problems of hardpressed folks in say, West Virginia, Mississippi or Louisiana,” she wrote. This preference for distant needs and transnational problem-solving can deepen the feeling that all those globalists are in cahoots with one another and not attentive to their compatriots. This feeling is puffed up by a vast and cynical complex that produces conspiracy theories and fraudulent news to this effect.
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The problem with the globalists’ vision of world citizens changing the world through partnerships, Rodrik said, is that “you’re not accountable to anybody, because it is just a bunch of other global citizens like you as your audience.” He added, “The whole idea about having a polity, having a demos, is that there’s accountability within that demos.
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In hindsight, Clinton said, he and his fellow globalists could have done more to help ordinary people absorb the shocks of change. He could have insisted, when signing the North American Free Trade Agreement as president, on more restrictions on that freedom. He wondered if he should have imposed a tariff on firms that moved their factories overseas, leading to job losses, and then sought to export products to American consumers—and whether he should have linked his support for NAFTA to such a tariff.
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He added that when President Obama had brokered the global climate accord, he, similarly, could have offered more of a plan to coal miners and others who would be displaced by change. Clinton took a measure of responsibility for failing to do these things, but he noted, reasonably, that he had been opposed by his Republican opposition on virtually everything. So these regrets might have been moot.
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Yes, he reportedly lunched before some of these speeches with smaller groups of plutocrats who paid, say, $10,000 a head to eat with him and hear his take on the world. But, Clinton argued, “When you can’t make decisions which benefit them anymore, it’s less of a concern.” He said this as though it were impossible to imagine how the opportunity to earn tens of millions of dollars after a presidency might affect a president’s fight-picking decisions while in office.
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Clinton, believing in the power of politics to improve lives, having shown the possibilities of politics with his own life, had accepted the shift. He had accepted that businesses must make their returns, and that children must at times have their interests balanced against the imperative of those returns. He had in his post-presidency done more real good and saved more lives than perhaps any of his predecessors; and at the same time he had accepted certain limitations on how good is done nowadays. MarketWorld had so triumphed that even a man who once led the most powerful machinery of state in the history of civilization could now say of private, plutocratic social change, “This is all that does work in the modern world.”
Epilogue: “Other People Are Not Your Children”
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In ten years, they had converted hundreds of companies to B Corps. But now, sitting in his living room, Kassoy said that B Lab was in the midst of a rethinking process, which was guided by his conviction that “what got us here is not going to get us where we’re going.” And where was it, exactly, they wanted to go? Toward that system change they had neglected. Kassoy said they knew they had done a better job of proving a model than changing how business itself works, and they wanted to switch gears.
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Take, for instance, the view that MarketWorld has a duty, and right, to address public problems—and, indeed, to take a lead in developing private solutions to them. This, for Cordelli, was like putting the accused in charge of the court system. The question that elites refuse to ask, she said, is: “Why are there in the world so many people that you need to help in the first place? You should ask yourself: Have your actions contributed at all to that? Have you caused, through your actions, any harm? And, if yes, the fact that now you are helping some people, however effectively, doesn’t seem to be enough to compensate.” Cordelli was speaking of both the active committers of harm and the passive permitters of it. The committers are what she calls “the easy cases.” She said, “If you have campaigned against inheritance tax, if you have directly tried to avoid paying taxes, if you supported and directly, voluntarily benefited from a system where there were low labor regulations and increased precarity,” then, she argues, “you have directly contributed to a structure that foreseeably and avoidably harmed people.” That is “direct complicity.”
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These elites were, she said, like the owner of a painting who later finds out it had been stolen. Even if the theft was before the purchase, Cordelli said, “still, it seems that, if you know the person the painting has been stolen from, you have an obligation to return it to them. Maybe even to apologize, acknowledging that you have an object that is not your own, acknowledging that you have something that has been the fruit of that injustice.”
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To do a modest bit of good while doing nothing about the larger system is to keep the painting. You are chewing on the fruit of an injustice. You may be working on a prison education program, but you are choosing not to prioritize the pursuit of wage and labor laws that would make people’s lives more stable and perhaps keep some of them out of jail. You may be sponsoring a loan forgiveness initiative for law school students, but you are choosing not to prioritize seeking a tax code that would take more from you and cut their debts. Your management consulting firm may be writing reports about unlocking trillions of dollars’ worth of women’s potential, but it is choosing not to advise its clients to stop lobbying against the social programs that have been shown in other societies to help women achieve the equality fantasized about in consultants’ reports. Economistic reasoning dominates our age, and we may be tempted to focus on the first half of each of the above sentences—a marginal contribution you can see and touch—and to ignore the second half, involving a vaguer thing called complicity.
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The winners bear responsibility for the state of those institutions, and for the effects they have on others’ lives, for two reasons, Cordelli said: “because you’re worth nothing without society, and also because we would all be dominated by others without political institutions that protect our rights.”