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Archive for 2023|Yearly archive page

How Alabama Can Push Back Against the Great Reset

In Business, Economics on May 31, 2023 at 8:00 am

Allen Mendenhall and Greg Cook on “Success Stories”

In Law, Success Stories on May 24, 2023 at 7:00 am

Allen Mendenhall and Samuel Gregg on “Success Stories”

In Economics, Humane Economy, Success Stories on May 17, 2023 at 7:00 am

Allen Mendenhall: “ESG and Thee”

In Business, Economics on May 11, 2023 at 7:00 am

Allen Mendenhall and Donna Feazill Discuss ESG

In Business, Economics on May 10, 2023 at 7:00 am

Allen Mendenhall and Donna Feazell Discuss the 2024 Presidential Election

In Politics on May 9, 2023 at 9:23 am

ESG En Route to Etatism

In Austrian Economics, Business on April 19, 2023 at 6:30 am

Don’t change the purpose of corporations

In Business on April 12, 2023 at 6:00 am

This article originally appeared here in 1819 News.

The Business Roundtable is a national association of influential CEOs from numerous fields, industries, and publicly traded companies. It lobbies for policies that allegedly generate jobs and economic growth. In 2019, it issued a controversial statement purporting to redefine the purpose of corporations.

What, historically, was the purpose of corporations? The traditional understanding was that chiefly they maximized profits for shareholders. Profits, of course, are the total revenues of a corporation minus its expenses.

If they don’t earn profits, companies go out of business.

The Business Roundtable suggested that shareholder primacy was no longer optimal for corporations. Instead, stakeholders were at least as important as shareholders to companies’ long-term health.

What’s a stakeholder? It’s difficult to say. Some stakeholders are easy to identify — employees or customers, for instance. Others are vague: communities or society writ large.

The Business Roundtable predicated its announcement on two fallacies: first, that businesses don’t help communities or society when they prioritize profits and, second, that businesses pursuing profits don’t adequately account for the interests of customers, employees, or suppliers.  

In fact, businesses that satisfy customers, employees, and suppliers outperform competitors. Moreover, profits enable companies to contribute to communities and society. After all, companies need profits to hire employees, offer benefits packages, provide goods and services, reach new markets, and expand their operations.

Without profits, companies cannot satisfy financial obligations. Simply put, companies that aren’t profitable fail. And what can failed companies do for communities or society — other than provide useful data about their failure?

Consider what profits, directly or indirectly, make possible: cures for disease, ease of communication and transportation, renewable energy, and revolutionary technology. Because individuals and companies sought profits, we live longer and healthier than our ancestors did.

Even successful creatives who chased dreams or ideals rather than solely profits could not realize their ambitions without profits to support them.

Although The Business Roundtable intended its redefinition to make corporations look good, it inadvertently widened the latitude for executives to do harm. Profits are a clear measure of success and usually a straightforward matter of accounting. But how to assess ambiguous standards like “societal impact”?  

A company president might explain away declining profits by prevaricating, “The purpose of our corporation isn’t strictly the profit motive. We may have sold fewer units this year, but we met our benchmarks by integrating environmental and diversity quotas in our governance and practices.” This excuse illustrates how executives can characterize losses as wins, or failures as successes.

Moreover, stakeholder capitalism empowers bad actors to conceal mischief and mismanagement by diverting attention from the company’s bottom line and towards popular social trends. For example, corporations have misled consumers and regulators by “greenwashing” or “wokewashing.” (If you don’t know those terms, look them up!)

A perfect example is Silicon Valley Bank (SVB). Its 2022 Environmental, Social, and Governance (ESG) report is full of grand declarations about responsible governance and risk management. A few months after issuing this report, SVB failed, precipitating banking troubles all over the world.

Or consider the failed crypto exchange and hedge fund FTX Trading, which received high ESG ratings despite a governance structure that contributed to financial collapse and bankruptcy.

Businesses that follow the law, differentiate themselves with hospitality and customer service, engage in philanthropy, and operate honestly and ethically already improve the lives of stakeholders, multiply opportunities across society, and add value to communities. They need not reinvent themselves along the modern model propounded by The Business Roundtable.

“If it ain’t broke, don’t fix it.” The Business Roundtable’s definition is unnecessary and damaging. Although outlier businesses have been guilty of scandal or fraud, and not every executive is honest or upright, most businesses most of the time act with decency and integrity when the laws they follow are just and the appropriate incentives are in place.

Just because some famous CEOs claim they’re changing corporations for the better doesn’t make it so. They may have ulterior motives.


Advice for millennials

In Economics on April 5, 2023 at 6:00 am

This piece originally appeared here in Alabama Political Reporter.

Millennials are hurting. Recently The Wall Street Journal ran an article titled “Americans in their 30s are piling on debt.” The author, Gina Heeb, claimed that Americans “in their 30s have racked up debt at a historic clip since the pandemic.” “Their balances,” she wrote, “hit more than $3.8 trillion in the fourth quarter.”

Heeb warned that “the debt buildup could worsen a generational wealth gap that was already on the rise for millennials.” She factored inflation, interest rates, childcare, home prices, cost of living, and student loan debt as causes.

There’s more to the story: millennials, the largest demographic in our workforce, began their careers during the Great Recession, a period of low wages and high unemployment. Their struggle to find good jobs and build careers made it difficult for them to pay off loans and debt. Businesses during the recession froze hiring and cut staff, salaries, and benefits. Millennials fell behind. As of 2020, over half of adults between 18 and 29 still lived with their parents.

Student loans, university administrative staff, the race to improve and expand facilities—these magnified the costs of higher education. As a result, millennials took on substantial debt to pay for college.

Those whose parents could afford the price of college began careers ahead of students from low-income families who depended on loans and worked through college, sacrificing study time to earn rent money through odd jobs and menial labor.

Some millennials believe they can’t find jobs as easily as their parents did. They don’t want to work for an employer for decades until they earn a company watch or their names on a plaque. Many of them work freelance jobs or part-time gigs lacking health insurance benefits or retirement contributions. Some may enjoy the flexibility that contract work provides, but others would prefer more stability.

What’s to be done?

Mass student-loan forgiveness isn’t the answer, although anyone with student loan debt should research whether they’re eligible for income-based repayment plans or loan forgiveness under current rules.

Families should continue supporting their adult children or relatives. Maybe it’s good that so many young adults still live with their parents. After all, aren’t families supposed to be close and nurturing? For centuries extended families cohabitated, if not in the same house, then at least on the same land. If parents aid their children well into adulthood, might the children one day reciprocate, taking care of their parents who reach old age? Is it so bad to see hearth and home return to the center of community?

Regardless, millennials must learn to budget, save, and invest, ensuring that expenses don’t exceed incomes. They must put away for retirement even if retirement seems far off.

Rather than ordering new credit cards, millennials should avoid debt by living within their means. If they receive tax refunds, they should save or invest them, or use them to pay off debt, but they shouldn’t spend them on luxury goods or exotic vacations. They should build an emergency fund for unforeseeable exigencies such as home or vehicle repairs.

Millennials are sometimes accused of embracing socialism, but that does not appear to be so. A 2019 Gallup poll suggested that half of young adults viewed socialism favorably. Yet the same poll indicated that 83 percent viewed “free enterprise” favorably.

That’s promising. Free enterprise will help millennials as older generations age out of the workforce. Free enterprise yields competition, which, in turn, incentivizes companies to innovate, produce goods more efficiently, and allocate resources more effectively. The net result is to boost production, increase demand for labor, and multiply opportunities.  

Millennials should embrace entrepreneurship and challenge barriers to entry that stifle innovation. People should be free to discover and create, find needed fixes to difficult problems, improve existing technologies, invent new products, and cultivate partnerships in different markets.

But before millennials, or other younger generations for that matter, can change society, let alone the world, they must change themselves. They must work hard, improve their credit scores, pay bills on time, avoid bank overdrafts and excessive borrowing, consolidate debt into lower interest loans, establish sound financial goals, and invest (if possible) in diversified funds or assets that appreciate in value.

Millennials, heed the words of Benjamin Franklin: “Beware of little expenses; a small leak will sink a great ship.” And hang in there! I’m a millennial too, and I can feel it: Spring is just around the corner.

The Power of Woke

In Communication, Humanities, liberal arts, Liberalism, Philosophy on March 29, 2023 at 6:00 am

The article originally appeared here at

“It’s an important part of society whether you like it or not,” lexicologist Tony Thorne, referring to “wokeness,” told The New Yorker’s David Remnick in January. That’s an understatement.

Wokeness is poisoning the Western workplace and constraining small and family businesses, midsized banks, and entrepreneurs while enriching powerful corporations and billionaires. It’s eating away at the capitalist ethos and killing the bottom-up modes of economic ordering and exchange that propelled the United States of America to prosperity during the nineteenth and twentieth centuries. It’s infecting Gen Z and millennials, who, suffering high depression rates and prone to “quiet quitting,” are not as well off as their parents and grandparents, and who feel isolated and alone even as they enjoy a technological connectivity that’s unprecedented in human history.

What, exactly, is wokeness, and how does it impact business and the wider society?

The term as it’s widely used today differs from earlier significations. “Woke,” which plays on African American vernacular, once meant “awake to” or “aware of” social and racial injustices. The term expanded to encompass a wider array of causes from climate change, gun control, and LGTBQ rights to domestic violence, sexual harassment, and abortion.

Now, wielded by its opponents, it’s chiefly a pejorative dismissing the person or party it modifies. It’s the successor to “political correctness,” a catchall idiom that ridicules a broad range of leftist hobbyhorses. Carl Rhodes submits, in Woke Capitalism, that “woke transmuted from being a political call for self-awareness through solidarity in the face of massive racial injustice, to being an identity marker for self-righteousness.”

John McWhorter’s Woke Racism argues that wokeness is religious in character, unintentionally and intrinsically racist, and deleterious to black people. McWhorter, a black linguist, asserts that “white people calling themselves our saviors make black people look like the dumbest, weakest, most self-indulgent human beings in the history of our species.” Books like Stephen R. Soukup’s The Dictatorship of Woke Capital and Vivek Ramaswamy’s Woke, Inc. highlight the nefarious side of the wokeism adopted by large companies, in particular in the field of asset management, investment, and financial services.

Wokeism, in both the affirming and derogatory sense, is predicated on a belief in systemic or structural forces that condition culture and behavior. The phrases “structural racism” or “systemic racism” suggest that rational agents are nevertheless embedded in a network of interacting and interconnected rules, norms, and values that perpetuate white supremacy or marginalize people of color and groups without privilege.

Breaking entirely free from these inherited constraints is not possible, according to the woke, because we cannot operate outside the discursive frames established by long use and entrenched power. Nevertheless, the argument runs, we can decenter the power relations bolstering this system and subvert the techniques employed, wittingly or unwittingly, to preserve extant hierarchies. That requires, however, new structures and power relations.

Corporate executives and boards of directors are unsuspectingly and inadvertently—though sometimes deliberately—caught up in these ideas. They’re immersed in an ideological paradigm arising principally from Western universities. It’s difficult to identify the causative origin of this complex, disparate movement to undo the self-extending power structures that supposedly enable hegemony. Yet businesses, which, of course, are made up of people, including disaffected Gen Zs and millennials, develop alongside this sustained effort to dismantle structures and introduce novel organizing principles for society.

The problem is, rather than neutralizing power, the “woke” pursue and claim power for their own ends. Criticizing systems and structures, they erect systems and structures in which they occupy the center, seeking to dominate and subjugate the people or groups they allege to have subjugated or dominated throughout history. They replace one hegemony with another. 

The old systems had problems, of course. They were imperfect. But they retained elements of classical liberalism that protected hard-won principles like private property, due process of law, rule of law, free speech, and equality under the law. Wokeism dispenses with these. It’s about strength and control. And it has produced a corporate-government nexus that rigidifies power in the hands of an elite few.

Consider the extravagant spectacle in Davos, the beautiful resort town that combined luxury and activism at the recent meeting of the World Economic Forum, perhaps the largest gathering of self-selected, influential lobbyists and “c suiters” across countries and cultures. This annual event occasions cartoonish portrayals of evil, conspiratorial overlords—the soi-disant saviors paternalistically preaching about planetary improvement, glorifying their chosen burden to shape global affairs. The World Economic Forum has become a symbol of sanctimony and lavish inauthenticity, silly in its ostentation.

The near-ubiquitous celebration of lofty Environmental, Social, and Governance (ESG) strategies at the World Economic Forum reveals a seemingly uniform commitment among prominent leaders to harness government to pull companies—and, alas, everyone else—to the left.

ESG is, of course, an acronym for the nonfinancial standards and metrics that asset managers, bankers, and investors factor while allocating capital or assessing risk. A growing consortium of governments, central banks, nongovernmental organizations (NGOs), asset management firms, finance ministries, financial institutions, and institutional investors advocates ESG as the top-down, long-term solution to purported social and climate risks. Even if these risks are real, is ESG the proper remedy?

Attendees of the World Economic Forum would not champion ESG if they did not benefit from doing so. That plain fact doesn’t alone discredit ESG, but it raises questions about ulterior motives: What’s really going on? How will these titans of finance and government benefit from ESG?

One obvious answer involves the institutional investors that prioritize activism over purely financial objectives or returns on investment (for legal reasons, activist investors would not characterize their priorities as such). It has only been a century since buying and selling shares in publicly traded companies became commonplace among workers and households. The U.S. Securities and Exchange Commission (SEC), created in response to the Great Depression, isn’t even 100 years old.

Until recently, most investors divested if they owned stock in a company that behaved contrary to their beliefs. They rarely voted their shares or voted only on major issues like mergers and acquisitions. In 2023, however, institutional investors such as hedge funds and asset management firms engage boards of directors, exercise proxy voting, and issue shareholder reports with the primary goal of politicizing companies. As intermediaries, they invest pension funds, mutual funds, endowments, sovereign wealth funds, 401(k)s and more on behalf of beneficiaries who may or may not know what political causes their invested assets support.

If a publicly traded company “goes woke,” consider which entities hold how much of its shares and whether unwanted shareholder pressure is to blame. Consider, too, the role of third-party proxy advisors in the company’s policies and practices.

Big companies go woke to eliminate competition. After all, they can afford the costs to comply with woke regulations whereas small companies cannot. Institutional investors warn of prospective risks of government regulation while lobbying for such regulation. In the United States, under the Biden Administration, woke federal regulations are, unsurprisingly, emerging. Perhaps publicly traded companies will privatize to avoid proposed SEC mandates regarding ESG disclosures, but regulation in other forms and through other agencies will come for private companies too.

The woke should question why they’re collaborating with their erstwhile corporate enemies. Have they abandoned concerns about poverty for the more lucrative industry of identity politics and environmentalism? Have they sold out, happily exploiting the uncouth masses, oppressing the already oppressed, and trading socioeconomic class struggle for the proliferating dogma of race, sexuality, and climate change? As wokeness becomes inextricably tied to ESG, we can no longer say, “Go woke, go broke.” Presently, wokeness is a vehicle to affluence, a status marker, the ticket to the center of the superstructure.

ESG helps the wealthiest to feel better about themselves while widening the gap between the rich and poor and disproportionately burdening economies in developing countries. It’s supplanting the classical liberal rules and institutions that leveled playing fields, engendered equality of opportunity, expanded the franchise, reduced undue discrimination, eliminated barriers to entry, facilitated entrepreneurship and innovation, and empowered individuals to realize their dreams and rise above their station at birth.

When politics is ubiquitous, wokeness breeds antiwokeness. The right caught on to institutional investing; counteroffensives are underway. The totalizing politicization of corporations is a zero-sum arms race in which the right captures some companies while the left captures others.

Soon there’ll be no escaping politics, no tranquil zones, and little space for emotional detachment, contemplative privacy, or principled neutrality; parallel economies will emerge for different political affiliations; noise, fighting, anger, distraction, and division will multiply; every quotidian act will signal a grand ideology. For the woke, “silence is violence”; there’s no middle ground; you must speak up; and increasingly for their opponents as well, you must choose sides.

Which will you choose in this corporatized dystopia? If the factions continue to concentrate and centralize power, classical liberals will have no good options. Coercion and compulsion will prevail over freedom and cooperation. And commerce and command will go hand in hand.

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