Headline: Capitalists can play a vital part in saving US democracy
Sub-headline: Asset owners such as pension funds and university endowments must speak out against voter suppression
The reader can hardly be surprised by The Financial Times publishing Katherine Venice moralizing polemic. Nor that Ms. Venice is the founder of The Ethical Capitalism Group. Or had the assistance of ‘James Leitner of Falcon Management and Paul Rissman, co-founder of Rights CoLab.’ A Capitalist and a ‘Human Rights activist’ who is just another Think Tank ‘co-founder’:
Rights CoLab advances human rights by fostering collaboration among experts across the fields of civil society, technology, business, and finance. Together we build new ways of organizing civic engagement and leveraging markets to improve the impact, resilience, and sustainability of human rights initiatives.
Perhaps I’m being cynical? The Capitalism Ms. Venice describes is limited to ‘ pension funds and university endowments‘? Or is she offering two examples of less fraught forms of profit making?
Here is what this trio of Capitalist Reformers offer in the first three paragraphs of their essay framed by a question:
Can capitalism be made into a force to serve the greater good and solve society’s most urgent systemic problems? As former institutional investors, we believe it is time for capitalists, especially asset owners such as pension funds, university endowments, foundations and sovereign wealth funds, to stand up for democracy.
There are clear indicators that declining democratic rights are correlated with poorer investment returns, lower growth and economic instability. This issue should be front and centre for investors. Capitalism without democracy is oligarchy, with winners and losers determined by autocrats.
Asset owners and their investment managers can learn not only from 20th-century history, but from the warnings of academics that US democracy is in peril. Such capitalists should be better informed than the general public about investment risks, and given their responsibility for allocating capital, they must not ignore the dangers to their investments and the economy as a whole posed by the decline of American democracy.
Who does The Trio offer as one of the central thinkers, that must be paid attention, but notorious Anti-Russian hysteric, not forgetting his role in the Ukrainian Coup of 2014, nor his status as New Cold Warrior, Timothy Snyder.
As Snyder explained in a recent interview: “The thing about these transitions is that you have to start acting right away.” By the time autocracy appears clearly, he added, “it’s already all over and you’re already in trouble; you have to start acting right away, even though you’re not exactly sure what’s going to happen”.
Snyder argued that now is our last chance to stop “system meltdown” in the 2024 presidential election, and warned of the urgency in convincing corporations to stop funding racially-targeted voter suppression through their support of political parties.
Next to enter stage right ‘Holocaust survivor Batsheva Dagan’ :
… last year asked at a memorial at Auschwitz: “Where was the world, who could see everything and yet did nothing?” A similar question will be asked by stakeholders and the public of the university endowments, foundations and pension funds that are some of the nation’s largest, most influential asset owners, if they do nothing to address the erosion of US democratic rights.
The Trio then offers this :
But corporations will not stop funding the legislators who are behind the voter suppression measures unless Wall Street investment managers ask them to, and investment managers will not take action unless asset owners ask them to. Politicians will not be able to save our democracy alone: asset holders can and must do their part.
To return to Dagan’s question, why do people fail to act? Part of the answer is that addressing the decline of democracy forces us to go beyond our normal patterns of activity at work and in our leisure hours. For a long time, we enjoyed the luxury of taking our freedoms for granted. But this must change. Those who spoke out in the past took far greater risks than asset holders must take now.
The Trio then offers this:
If we do not save our democracy, it will be much harder to solve other existential problems, such as climate change and economic inequality. In response to a US Supreme Court ruling that upheld discriminatory voting laws in Arizona, Stanley commented that it was “hard to see how even the semblance of democracy will survive”. And in that case all ESG will be off the table.
Its ‘as if’ The Trio has missed the fact that the Supreme Court, in Shelby County v. Holder, begat the Voting Law Crisis, with the evisceration of the ‘preclearance mandate’ in the Voting Rights Act!
Undaunted The Trio offers another Capitalist Actor, who enters stage right:
In his book Citizens DisUnited, pioneering shareholder activist Robert Monks wrote that “our foundational democratic system [is] being wilfully shredded by far more than a handful of leading American corporations”. Of “the Great and Good of investing — there are not and cannot be any innocents . . . [To] have known vast harm was being done and to have had the power, standing and resources to intervene, and yet to have failed to act. That is a shame not easily overcome . . . The time is right; the need, great. This is the moment to decide.”
As the clear evidence of the self-serving mendacity of Capital, the reader need only look to the Financial Crisis of 2008, as the predictor of how ‘Capital’ will comport itself, regarding the set of imperatives that The Trio offers!