11.3.26
Dear Partners in Thought,
As we are flooded with news about the highly questionable Iran war and its many impacts, I thought that it would be healthy to give us a break and focus on something else, even if not always endearing. We live in times when values-flexible Big Tech mega-billionaires are changing our societies while increasing their huge wealth to unprecedented levels and supporting the likes of President Trump to secure a less-regulated environment for their business. This era made me want to read “Backlash Billionaires – The age of corporate scandal and how it could save democracy”, a great book that covers many business scandals over the ages while reviewing their impact on society. This book was written by two academics who have known each other for some years: Pepper Culpepper, who teaches government and public policy at Oxford’s Nuffield College and is a Vice-Dean of the Blavatnik School of Government and Taeku Lee, who is the Bae Professor and Faculty Dean of Dunster House at Harvard and former President of the American Political Science Association. In a differentiated flavour, they make the point that they are “an academic odd couple, prone to disagree on matters both trivial and significant” while, as I read, showing excellence in their joint findings. On a personal note, I once met the great Pepper in Prague as he was visiting my close friend Trev, who is the man dealing with all tech issues of this blog while ensuring all commas are where they should be (On a personal note, I am neither a techie nor a billionaire).
As an introduction, the book goes back to the early 20th century and the first well-known corporate scandal dealing with the unhealthy dealings of the meat industry leading to a book that led to steep declines in meat sales and then drastic regulations for the “Beef Trust” (setting the stage for the US Food and Drug Administration, even if Upton Sinclair, the then early socialist author was focused on the poor working conditions of the sector and not its products). We then read about names we almost forgot like Nelson Rockefeller (the first world billionaire in 1916, richer than Elon Musk today), Cornelius Vanderbilt, Leland Stanford (now we know the origin of the great university) and J.P. Morgan and their business empires while we discover the high level of corruption among American elected officials, who became wealthy by protecting them at a time when mainstream news media in their infancies were not providing any guardrails. Those few who exposed the business titans’ bad practices, likely at great risks for their lives and careers, were then known as the “muckrackers” and eventually led to political change. The authors stressed that they were the ones who helped save democracy in the early days. We then go into many corporate scandals in the 20th century and later that, while being quite bad for the markets and its consumers, led to healthy reactions that helped change things for the better.
Activists matter when changes are badly needed and so are scandals to motivate them. The authors stress the impact of a few individuals, like a forgotten Ralph Nader, who in his 1960s campaigned so carmakers would finally introduce seat belts. They rightly point to the impact today of the digital revolution on business and political power while stressing the huge profits of the mega-banks, the lack of appetite of the oil industry for net zero and the domination of tech companies in our daily lives – all while governments seem unable to always correct any adverse societal developments (note that the EU is known to be keen on regulating Big Tech even if one could argue as it is also American).
Without going into too many details so the book can be fully enjoyed, the authors bring us many examples of corporate scandals that led to change at many levels while others did not lead to much. While starting with the well-known Enron and WorldCom scandals, the latter many of us have forgotten but the former that was probably the most publicised scandal of the 21st century, also leading to the demise of then leading Big6 accounting firm Arthur Andersen in 2002, “Billionaire Backlash” offers very detailed accounts of top corporate scandals involving Goldman Sachs pre-2008 financial crisis, Facebook and its users’ privacy, Cambridge Analytica (the then-famous Oxford Analytica may have disliked), Exxon, Sam Bankman-Fried’s crypto FTX and Samsung among other incredible stories. Future likely scandals and reactions to them may be linked to Big Tech and now Artificial Intelligence and its adverse impacts on junior jobs and society, at large (starting with schoolwork at home or mere job applications) also heavily tainted by the amazing personalities involved and their eagerness to amass centi-billions.
The authors finally stress that governments, that are de facto controlled by interest groups, also via their lobbyists, are now unable to deliver, this leading to current extremist populism and easy solutions to complex issues that now resonate well within the electorates of democracies. However, they stress that corporate scandals reveal an undervalued resource via latent opinion for good politics. They then offer an interesting and unusual approach to dealing with corporate greed and its societal harm by way of “Good Populism” which is almost funny at a time when populism is also known as a tool for largely incompetent extremist parties, usually of the hard right kind, to win elections regardless of what would really happen afterwards. However, the additional “Good” says clearly what they really mean and they broadly see as “a programme that makes politics more responsive without undermining the capacity of government to deliver on the things that are vital” while “attacking issues associated with corporate domination of democracy so as to respond to the populist impulses of today”. The innovative case they make, which is not an easy one, is worth thinking about. “Billionaire Backlash” is a great book, requiring some focus given its many details reflecting the strong academic credentials of its authors. It stresses both key historical facts and potential plans for a better future in making sure corporate greed is fully controlled while consumer and indeed citizen needs are nicely met. A very fine book especially in our times of society-harming centi-billionaire Big Tech bros when Upton Sinclair would find a great opportunity to both leading needed regulations in a key sector for sound societal development and hopefully improving our naturally imperfect economic system.
Warmest regards,
Serge
Desperate Measures 