When I was younger and more puckish (or perhaps less self-disciplined), I’d occasionally pose provocative thought experiments at cocktail parties or in other social settings. One of my favorites was to suggest that the voting system in the United States should be modified to weight voters’ ballots in proportion to their adjusted gross income (AGI) as calculated in their federal tax filings.

The ill-considered premise was that as tax obligations are derived from AGI, one’s “skin in the game” (or investment in the public goods delivered by government) rises with his level of income. Sound a bit unenlightened? Stakeholder capitalism, meet shareholder democracy!

I like to think that I’ve matured in the intervening decades. But I was reminded of this particular flight of fancy in reading a recent profile of Blackrock’s Larry Fink in The Economist.

In an otherwise standard feature about a prominent business figure, the piece portrayed Fink as a leading voice in the environmental, social, and governance (ESG) investing movement. While Fink has more recently backed away from the occasionally hectoring tone he took in his annual “Dear CEO” letters to leaders of firms in which Blackrock invests and taken pains to note that Blackrock is one of the world’s largest investors in fossil-fuel companies notwithstanding his commitment to “decarbonization,” he remains emblematic of twenty-first-century corporatism: the alloy of commerce, policy advocacy, and virtue-signaling that pervades contemporary economic activity.

Near the end of the Economist profile, the author notes that Fink is an easy target, given Blackrock’s size and influence, and is in some ways a throwback to the Gilded Age “robber barons” of the late nineteenth century. The author draws a contrast between the titans of that era and the leaders of today’s corporate giants; while the former were “purely exploitative,” modern corporate chiefs “live in a time of climate change” and are merely “trying to do the world a good turn” by wading into today’s political issues.

While I found this ahistoricism jarring, I was most alarmed by the throwaway notion that CEOs and other business leaders wielding their economic power to shape public policy are harmlessly well-intended, if occasionally clumsy. I have no doubt that the early-twentieth-century eugenicists, who commanded support from the elites of the day, were well-meaning. They, too, thought that the practices they espoused would address an existential threat and otherwise held “progressive” views firmly rooted in “the science.”

Moreover, if today’s superrich are the white hats, then who are the bad guys? Any consumer of mainstream news and information has been inundated with stories about exigent “threats to democracy” and the rise of illiberalism in the West. The Economist itself has made a particular hobbyhorse of Hungary’s leader, Viktor Orban, as an exemplar of “illiberal democracy,” a polity in which elected governments advance authoritarian policies behind a veneer of formal democratic institutions and practices. Similarly, the same publications cast Donald Trump as a modern-day caudillo flouting republican norms.

They have much less to say, however, about the unaccountable administrative state against which Trump so often warns. Democracy and accountability are sacrosanct when those whom elites regard as circumventing liberal norms hold positions of power; but democracy is much less threatened, on this view, when anti-democratic means are deployed to advance approved political objectives.

In fact, stakeholder capitalism, ESG, the diversity, equity and inclusion (DEI) movement, and other components of the larger corporatist assault on merit, equality, free speech, and market-based capitalism are all deeply illiberal and anti-democratic. Stakeholder capitalism and ESG principles seek to supersede shareholder primacy in the interest of advancing broader, amorphous, non-economic objectives. This violation of investment advisors’ and corporate managers’ fiduciary obligations without the affirmative assent of the direct beneficiaries to whom they owe a duty—investors and shareholders, respectively—is intrinsically unaccountable and undemocratic.

Similarly, DEI initiatives, however well-intended, conflict with the hard-won civil rights victories of the second half of the last century, not to mention the primacy of the individual, a cornerstone of liberalism. Advancing public-policy objectives through the private sector weakens trust and faith in both; “democracy” is hardly secured when the entrepreneurial and managerial class dictates its wish-list of policy outcomes through the commercial entities it controls, rather than trying to win them at the ballot box.

Arguably, the greatest threat to liberal democracy and the norms and institutions essential to its success is the tribalism that either excuses illiberalism or simply defines as “liberal” and “democratic” that which one favors. While many wealthy individuals are no doubt well-intended, they should seek to influence public policy through the democratic process, not through their command of levers of economic power, which, in some cases, they may have done little to produce. I shudder to imagine the kakistocracy that today’s superrich might produce if we were ever to hold that weighted AGI vote that I once thought so amusing.


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