Afghanistan’s Coming Economic Collapse — and What It Could Mean

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No government — particularly one with only a shaky claim to legitimacy, none of it democratic — will ever enjoy a sudden drop in its country’s standard of living. That is something the Taliban may shortly discover as they try to consolidate their hold over a society famously fragmented along ethnic lines. Terror reinforced by purloined American weaponry may work, at least for a while. And yes, the universalist pretensions of the Taliban’s Islamism will win over some hearts and minds, as will the order, however harsh, that their form of Sharia brings with it. Nevertheless, if the Taliban, a movement still strongest in its Pashtun heartland, come into too abrasive a conflict with the traditional loyalties of other Afghans to their kith, kin, and tribe, they may struggle.

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The Damage Won’t Be Contained to Afghanistan

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It’s obvious — if not necessarily to the Biden administration — that the success of a nation’s foreign policy depends, in part, on its ability to shape the way in which it is seen abroad. The U.S. was able to ensure the survival of West Berlin — a highly vulnerable exclave — throughout the Cold War in no small part because the Kremlin could never be certain how fiercely America would react if the Soviets attempted to take over the western half of that divided city by force. The Berlin Airlift was an early and remarkable display of support, but the dispatch at the same time of three B-29 bomber groups, which may or may not have been in a position to initiate a nuclear strike, to the U.K. may also have helped persuade Stalin to take things no further. To work, deterrence must be credible. The American, British, and French troops stationed in West Berlin for decades were no more than a tripwire, but Moscow could only speculate about what would follow from triggering it. It never took the risk.

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Private Sub-Orbital Spaceflight, Hell Yeah!

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So, first Richard Branson and now Jeff Bezos have made their quick joyrides into space (or its neighborhood: in Branson’s case, it depends on whom you ask) and, critically, back. The flights were a victory lap of sorts for science, human ingenuity, and immense entrepreneurial drive. Not everyone was pleased.

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Democracy Dies in Regulators’ Offices: The SEC, Regulatory Creep, ESG, and ‘Climate’

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This isn’t the first time that I have written about regulatory creep, and it won’t be the last. Lacking the legislative majorities required to push through much of his agenda, Joe Biden is turning to regulators for help. His won’t be the first White House to rely on unelected bureaucrats in this way, but one — how to put this — distinctive aspect of the Biden approach is the way that regulators are, with, presumably, the administration’s connivance, extending their mandates to places they were never intended to go. It’s not pretty, but as a device to bypass the democratic process it can be startlingly effective

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Stakeholder Capitalism: Corporatism by Another Name

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The, well, woke nature of “woke capitalism” — a phenomenon intertwined with “socially responsible” investment (SRI), with stakeholder capitalism at its base — has obscured that the way in which this combination works owes far more to fascism than to socialism. Nearly 90 years ago, the progressive writer Roger Shaw described the New Deal as “employing Fascist means to gain liberal ends.” Overwrought, perhaps, but not without some truth. He would recognize what is going on now for what it is.

Underpinning the notion of “stakeholder capitalism,” a concept that has taken the C-suites of some of America’s largest companies by storm, is the idea that a company should be run for the benefit of all its “stakeholders,” a conveniently hazy term that can be defined to include (among others) workers, customers, and “the community,” as well as the shareholders who, you know, own the business. It’s a form of expropriation based on the myth that a corporation that puts its shareholders first must necessarily put everyone else last. In reality, an enterprise that, to a greater or lesser extent, fails to consider the needs of various — to use that word — stakeholders in mind, customers, most obviously (but certainly not only) is unlikely to flourish, and nor, therefore, will its owners.

Stakeholder capitalism is not only a threat to private property, but also, by not much of a stretch of the imagination, to individual freedom. To understand why, take a step back.

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ProPublica, Billionaires, and You.

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However much some on the left might like to deny it, there is a legitimate distinction between capital appreciation and income. And however much some of them might understand it, ignoring the validity of that distinction is too good a propaganda opportunity to be passed up.

And so when ProPublica, “an independent, nonprofit newsroom that produces investigative journalism with moral force” “obtained” and then, in an article by Jesse Eisinger, Jeff Ernsthausen, and Paul Kiel, publicized some of the details of “a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing,” much of the secondhand reporting of their story, not to speak of the ProPublica article itself, followed an all too predictable script.

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Putting the Grift in ESG

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On the whole, I would prefer to live in a society run by cynics rather than saints—cynics tend to be less intrusive. However, when cynics pretend to be saints, they are playing a dangerous game, as many of those on Wall Street now peddling “socially responsible” investment (SRI) may soon discover. To be clear, I have no doubt that some of those pushing for more SRI (or the closely related concept of stakeholder capitalism) are true believers. Others, perhaps the smartest, are jockeying for positions of power — and the perks that come with it — under a corporatist regime (stakeholder capitalism is essentially an expression of corporatism). Still others are simply following the ancient Wall Street practice of repackaging nonsense and selling it at a profit…

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Woke Capitalism — The Next Generation

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The stakeholder capitalism advocated by the Business Roundtable, the World Economic Forum (“Davos”), and other groupings of oligarchs on the make, is, at heart, an expression of corporatism, an ideology based around the idea that society should be run in a way that recognizes the importance of interest groups rather than individuals. Thus, when it comes to determining what a company is for, shareholders are just one group of “stakeholders” who have to compete for management’s attention.

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As GameStop Stalls, Will Regulators Start?

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Bloomberg’s Matt Levine continues to be a tremendous source of insight into the GameStop saga, but one possible response to what has happened, which is set out in one of his must-read articles on this stock’s excellent adventure/bogus journey (take your pick) and buried within the following not-to-be-taken-literally passage, should be treated with caution:

We have discussed before the sort of creaky U.S. rules around who can buy what sorts of risky investments, and I have proposed a simple standard. I call it the “Certificate of Dumb Investment.” Under this standard, anyone can buy diversified low-fee mutual funds to their heart’s content, but to buy dumb stuff—private placements but sure let’s say also volatile meme stocks—you have to go down to the local office of the Securities and Exchange Commission and sign a form saying that you know that what you’re doing is dumb, you know you will probably lose all your money, and you forfeit forever any right to complain. Then you can do whatever dumb thing you want.

Click on the link embedded in Levine’s text to see where he expands (in an article written in 2018) on how his Certificate of Dumb Investment regime would work. Some of this, I reckon (I cannot imagine why) contains just a touch, well, perhaps more than a touch, of hyperbole: “Then you take the form to an SEC employee, who slaps you hard across the face and says ‘really???’ And if you reply ‘yes really’ then she gives you the certificate.”

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Counting the Shareholder Out: When the Ruling Class Changes the Rules

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It comes as no surprise that Bloomberg News, which includes a section called Bloomberg Green, also features another called Good Business — a venue dedicated to “sustainable finance and leadership for a changing world.” His presidential campaign aside, Mike Bloomberg tends to get what he pays for.

It’s also not a surprise that Bloomberg journalist, Saijel Kishan, has written a piece for Good Business headlined “How Wrong Was Milton Friedman? Harvard Team Quantifies the Ways.” In this context, the target of the Harvard correction squad is, above all, Friedman’s 1970 article for The New York Times Magazine on shareholder primacy, the one in which, Kishan relates:

Friedman . . . declared that a corporation choosing social responsibility over maximizing profits was practicing socialism — a “fundamentally subversive doctrine,” he called it in 1970. In a free society, Friedman said, “there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Kishan gives herself only a few lines to describe that piece, which may explain why it is unclear whether Friedman was labeling socialism or a “corporation choosing social responsibility” as “fundamentally subversive.” Friedman had no fondness for socialism (#understatement), but in this case, he was referring to “social responsibility,” a notion he thought had implications far beyond the corporate sphere, none of them good.

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