WarbyPicus
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Newsletter for the Week of 1/12/24
🕑 Added 2024-01-13 17:16:40 +0000 UTCNews: End of book grind is very real. Symptoms are similar to burnout, but I’ve been here before. It’s a reinforcing cycle of bad habits triggering off anxiety. “I need to get this thing written, but the writing is slow. I don’t have time to exercise/make good food/read something new and meaningful. OH NO! NOW MY CONCENTRATION AND WRITING SPEED IS EVEN SLOWER!” Who could possibly have foreseen, etc.
Closing in on the end of Vol. 3, and by God I will take a vacation afterward. Finish, give it a read through and a prelim edit, then off to Podium with it. This will be a short newsletter for this exact reason- need to throw my ass out of the house, into the “lovely” winter rain and take a damn walk. Get that blood flowing.
Weird Philosophy Thing: Last week I said that this week would have grounds for cautious optimism. And I stand by that. But first, an additional dose of bleak, for context.
Let's say you and your friends all chip in and buy a dog. And it’s a great dog. Once you have it trained up, it looks after itself completely. Food, shelter, everything. Now, you want to play fetch with the dog, take it on walks, have it play tug-of-war, and fetch your slippers when you come home. Your friends disagree, though. There is a lot of back and forth but eventually the one thing everyone agrees on is the slipper fetching.
So this becomes your relationship with your dog. You don’t think about it, except when you call for your slippers. It turns up with the slippers every time. Looks pretty happy, pretty fit. It makes your life better- slippers every time! With no supervision on your part! It’s not even locked in a yard or anything, it is one hundred percent free roaming.
One day the dog eats a baby. Runs up on a stroller on the sidewalk and things go from “Air Bud” to “European Arthouse Cinema” real fast. Are you responsible?
Morally and legally, yes, of course you are responsible. You may share that responsibility with the other owners, but you are responsible. You created the situation that resulted in the baby being eaten. But for your negligence managing your dog, that baby would not have been eaten.
Alright, well, what if instead of a dog, it was a corporation, and instead of slippers it was money. Are you still responsible?
Generally no. Your liability is limited to the loss of your investment in the company. Obviously it is more complicated than that- consult with a lawyer in your jurisdiction, etc. Generally, the shareholders in a public company are nigh untouchable despite the activities of their chattel. Which is what a corporation is- chattel. (NB In modern usage, chattel almost always refers to a tangible personal good other than real estate, and corporations famously lack “A body to kick and a soul to damn.” However, I like the word, and the dictionary backs me up on this usage.)
Your “dog” can eat babies all day, every day, and your worst case scenario is that it gets put down and you are out the money you spent on it.
Alright, that was sufficiently bleak, so why optimism?
You may have seen people losing their damn minds over something called Environmental, Social and Governmental (ESG) investing, or “ESG initiatives” or demanding universities be barred by law from doing something called “Divestment.” What they are actually freaking out about is what used to be called Socially Responsible Investing (SRI) but has since been repeatedly rebranded into ESG or the completely anodyne Sustainable investing. For the truly bland, Impact Investing.
The short version (very short) is that you, as the owner, have responsibility to ensure your property behaves in a way that is responsible too. Responsible to the society you live in, to the world, responsible in a way that conforms with the ethics of the owners. It is the owner’s responsibility to ensure the dog does not, in fact, eat babies, and to pick up it’s poo when it does it’s business on the sidewalk.
A key tenant of this is “Actively hire and promote women and minorities, particularly executives, while being proactive in combating discrimination in all aspects of corporate activity.” You guess why it’s unpopular in certain loud segments.
The intensely controversial idea of SRI had its origins with religious institutions. There are disputes over when, exactly, it first started appearing. Some say the Quakers in the 1700’s, others say the Catholic Church before that. It’s a matter of definitions, but you can see why Quakers might not want to invest in a munitions plant, or Methodists in a distillery.
The modern iteration came out of the Vietnam War, when members of various Protestant denomination church pension plan managers (I am handwaving past A LOT here) got together and asked “Do we REALLY want our pensions owning shares in DuPont, what with the whole Agent Orange thing?”
The answer, it turned out, was no. No they did not. Unions also made fitful stabs towards investment choices based on the ethical choices of companies, but it was comparatively minor and not very widespread. Where things really took off was when shareholder activists started turning up at annual general meetings for corporations and demanding that those companies divest their holdings in South Africa. Everyone was well aware of Apartheid. General Motors was a major early focus.
It worked. GM eventually pulled out of SA, as did many others. It took YEARS. It was not a fast or smooth process. But it worked. The loss of foreign direct investment undercut the Apartheid regime and it directly contributed to its collapse. It wasn't the sole reason for the collapse or any nonsense like that, but it did help.
This naturally made some people very angry. Even the suggestion that corporations should care about something like black people being machine gunned in the streets was utterly immoral. No, really. Immoral.
September 13, 1970- Milton Friedman published what might well be the single most influential Op-Ed ever written. The conclusion has turned into something almost mythic, like a witches curse:
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.
Friedman goes on at incredible length, specifically citing the GM case without actually discussing WHY there was so much noise over at GM, making a case for why it is downright immoral and anti-freedom/pro-socialism/outright theft for business executives to consider anything other than maximizing shareholder returns. Any activities furthering assumed social responsibility should be undertaken, and funded, by individuals in their private capacities, exclusively.
To say that the op-ed is littered with questionable assumptions and breathtaking leaps of logic would be an understatement. And it has been treated like gospel. The world that Friedman complains about is almost unrecognizable to a modern reader. Friedman won. His doctrine is the functional law of the land, even when it isn’t literally written into the law.
But SRI is still here. Bigger than ever, in fact. Under attack, always. But it’s making a real impact. Greenwashing has become utterly pervasive, because people don’t want to work for, or invest in, companies that can’t even pretend to some degree of environmental responsibility. Frigging SHELL and other oil titans are in on the game.
Same thing with all the screaming about “diversity.” For all the noise, no company wants a reputation for discriminating against women, or people of color, or… anyone, really. This is driven in large part by the fact that their employees, particularly their youngest and frequently most valuable employees, are insisting on it. They raise hell about it. And they won’t work for companies that don’t align with their morals. Biz journals run hand wringing articles on this a few times a year. Each.
Slowly, the conversation is shifting. More and more people are looking at corporations and seeing the enemy, not bastions of “freedom.” It’s small in the scale of things. The green shoots rise through the concrete. There is more concrete every year, but there are more green shoots too.
On a different side of things, have you ever heard of something called Permaculture? It’s wild. It’s essentially a school of philosophy tied to land usage. Basically creating a self sustaining ecosystem that provides food and useful material to humans while also being good for nature itself. I strongly encourage you to hop on Youtube and check it out. These guys range from hard-case Agroscientists from rural university extensions with a string of PhD’s to people who look like they implanted the crystals directly into their prefrontal cortex to better commune with the energies from planet Epsilon.
The thing is that, as batshit “woo” as some of its promoters are, most of it makes complete sense. None of it is particularly revolutionary- it’s a bunch of things that we already knew worked, organized a bit differently. And these guys make food forests. Literal forests, where everything is either edible or contributes to the environment for growing the edible things. Trees that provide shade and trellising for shade loving crops, for example, and that drop leaves which can be used for mulch.
It’s magical. It’s like something out of a fairy tale. Your own self-sustaining forest, where whenever you are hungry, you can go out and eat anything you like. I doubt it will ever replace conventional agriculture, but you know what? Permaculture farms are really productive. Acre for acre, they compete in yields with conventional farms, with far less input costs. So it might not scale up to something the size of a Kansas wheat farm, but it can be part of the conversation. A greener agriculture.
Solar is taking off like a damn rocket. Oh, there are very real, very sensible, questions about the “green-ness” of using solar panels manufactured in, and shipped from, coal powered factories in China, but the trend is firmly away from fossil fuels towards renewables. Not nearly fast enough, but it’s there.
There has been some pull back on E-cars. Again, valid questions about how “green” they really are, and the consumer appetite for them was clearly overestimated. Still. The E-car market segment is growing. They aren’t weird or novel anymore. Everyone assumes that they are the future. It’s just a question of “how long” the IC engine sticks around for.
For all the moralizing about how “nobody wants to be accountable” or “nobody wants to work anymore,” the facts on the ground seem to be suggesting something else. People, particularly younger people, want to work. They are working bloody hard. And they want lots and lots of accountability. They are, in fact, insisting on accountability. Accountability from the people whose decisions affect them. They just don’t give a shit about making someone else rich.
People see the game is rigged against them. They know damn well they will never find the lady, and the house always wins. It’s only just starting to trickle through that they, in fact, own the house. It’s their dog. They have gotten zero slippers from this MF’er, so they don’t really give a damn about the opinions of the slipper-getters. They are done watching babies getting eaten. They are fighting like hell to get a leash on Cujo.
It’s not an equal fight, nor a fast one. They may yet lose. But there is reason to be optimistic. They are still in the fight, and there are more of them every day.
Next week- Star Trek and Have Gun Will Travel.
Comments
Brett Peterson
Necroposting on a 2 month old thread, but I think the blowback against ESG right now is on two fronts: ESG disregarding the balance of rights that exist in pluralistic societies, and ESG as vehicle for consolidating monopoly power. The first is exemplified in the most extreme manner around the debate around trans children: one side sees parents threatening a vulnerable community of children, and the other side sees non-parents threatening a vulnerable community of children. The children are legally minors, in both cases, and the positions are mutually incompatible. I'm strongly on the parental side of this debate, but even if you disagree with me, surely it's possible to imagine a principled opposition to ESG funding and sponsoring political positions that one group opposes. For example, Planned Parenthood pension funds would probably not be expected to fund, say, small firearm manufacturing companies. Similarly, religious people (Christians, Muslims, Hindus, Buddhists, Jews, etc.) can reasonably be expected to oppose their investments being used in causes they disagree with. I think the strong, uni-directional bent of ESG programs currently (the narrative, true or not, is that they only fund progressive-left causes) is the target of ire, not necessarily that causes are funded. (There probably is some ire around that too, now that I think of it, because some of the ideological investments were justified in terms of "it's just good business" a la Friedman. So I think there's anger at the bait-and-switch. Probably on both sides; companies have been investing politically while hiding under Friedman's umbrella for a while.) In short: if it's ok for companies to campaign for morals some people value, it's ok for other people to campaign for (opposing) morals they value. On the second front, ESG standards were used as a bully stick; "if you don't meet these (arbitrary? exclusively progressive?) ESG criteria, then we will boycott you / refuse to do business with you / pull our investments from you / sabotage you in the market, etc." This is totally fine when it's a group of people; when it's done by a group of companies, there's a case to be made that it crosses the line into illegal / anti-competitive collusion - partly because corporations are not people, the people in them are not currently accountable, and the actions seemed unified in one political direction. I.e. - nothing to do with accountability, and everything to do with consolidation of political power. It also is a bait and switch for shareholders who thought they were investing in companies that were non-political, a la Friedman, but who then discover that their resources are being used in unexpected / unappreciated ways. That's not necessarily bad - it will cause seismic shifts in the investment landscape, as investors of all stripes move money around to companies and causes that they do support. But it also hurts us as consumers: I can no longer buy politically neutral lettuce; I now have to buy politically responsible lettuce. That's exhausting for each of the thousand daily decisions we make, so most people outsource that to "Tribe Approved" decision-making... which just makes partisanship deeper, more acrimonious, and further removed from the actual content of disagreement. (Suddenly, we're fighting because someone bought iceberg vs. arugula, instead of over substantive policy or philosophy positions - because one type of lettuce is for my "team" and the other lettuce is for the other side.) At some fundamental level, yes - every decision is a political decision. But it's not healthy when every decision is made into a political conflict. That shrinks the room for empathy, civil disagreement, and mutually beneficial compromise. I am all for ending corporate "personhood", and I certainly think corporate - and government! - officers should be legally, criminally, and personally accountable for their bad behavior on the job. But I don't think ESG is the only, best, or even necessarily good, way to do it.
ioajfidsnmfomds77
I’ll piggyback off of the dog analogy. Using corporations for ESG is like sending the dog to teach algebra. The dog doesn’t get it or why it’s important. The dog is literally not built for this and lacks the means to effectively teach math. Calling this out as the absurdity it is just gets you labeled as a bad person. No one in favor of dog-math ever deals with the actual critique that it’s ineffective they just focus on the ad hominems.
Liam L
Things might not be moving in the right direction all the time. Though i wager that in the grand scheme of things the world is moving in a more positive direction. As in away from a somewhat anarcho-capitalistic-modern-yet-feudal fusion society like you are showing us with your work. I see more people talking about labor reform, importance of unions, good strikes getting shit done etc. etc.. Thanks for the great work Warby and I hope the best for you.
