By Jesse Crall
Business Insider runs a weekly series of articles entitled “Better Capitalism,” with the presumed design of offering an improved way forward for our overall economy. In practice, the series reads less like a coherent collection of fixes than a desperate, sustained whitewashing offered by our economy’s prime elites. Article after article gives platform to hedge fund oligarchs and corporate titans bragging about charitable initiatives and pontificating about the future and “how we can do better.” Solutions that challenge the power of these individuals are, predictably, non-existent. Instead, we get repeated cries of how “inequality is a problem” with no reckoning of how these inequities developed. Narratives centered around people, communities and industries decimated by our economic system are limited. Instead, the pseudo-wisdom of hedge fund manager Ray Dalio makes repeated appearances to the enlightenment of no one.
Dalio operates Bridgewater, a fund that helped him amass a net worth approaching $20 billion by taking other people and entity’s money and investing it in companies and commodities for which he’s created absolutely nothing. Remember, when ownership of a company in the form of shares hits the open markets, it means people with disposable income can become shareholders while many of the workers actually producing value for said company cannot. The bottom 44% of American workers average about $18,000 a year in salary. For any one of them to achieve Dalio’s net worth, they’d have to work for one million years (!) without spending a dime. This group includes migrant farmers who work far harder than Dalio and produce a more valuable product to society.
Even the supposed “risk” of Dalio’s endeavors is non-existent; On the Jimmy Dore Show, economic commentator & businessman Dylan Ratigan noted that Dalio was one of the first Americans to receive a bailout at the onset of the COVID crash. The average middle-class investor who puts five grand into a mutual fund can, conceivably, get wiped out. Dalio’s clients assume the risk of his management decisions. His reputation in handling capital may be on the line but his position at the absolute forefront of the American financial elite is not.
So it annoys me when Ray Dalio gets space to endlessly bloviate on the state of the American economy with absolutely zero reflection of his position within it. He implores Americans not to “demonize” billionaires, which is rich considering he can extract vast volumes of wealth across the globe for his own expanded empowerment or that of his already-affluent customers but someone saying “Hey, this kinda sucks!” gets reprimanded for their rudeness. While demonizing the individual beneficiaries of much broader, predatory systems accomplishes little, Dalio lacks the will to critique those systems as well. While ostensibly lamenting inequality, he then pivots to the need to “share the pie” better while also growing it (he’s big on pie metaphors). Reading between the lines, he doesn’t want such abject poverty (sharing the pie) but he also doesn’t want his cartoonishly absurd net worth to deflate (growing the pie).
Dalio’s solutions for this improved scenario of dessert-management reveal the hollowness of his endeavor. He vaguely alludes to more taxes while insisting that he wants moderate leadership that can find bipartisan solutions. What he fails to mention is that we already have bipartisan leadership supposedly geared toward solving our nation’s problems. It’s called Congress. Dalio’s political contributions largely went to John McCain, a fiscal conservative who regularly supported the deregulation of the financial industry to Bridgewater’s benefit. And the U.S. economic status quo has become so Neoliberal and geared toward consolidating existing power that “moderate” solutions are in fact quite right-wing. A moderate in the 1950s would seem downright socialistic in many respects today (Dwight Eisenhower, a Republican, levied a 91% tax rate on high incomes and the corporate tax rate was almost double what Joe Biden’s proposing).
And allow me to step outside my somewhat stoic demeanor for a second to editorialize more forcefully: If you’ve achieved a net worth of $18 billion in a country where 15 million children live in poverty and you’re clamoring for “moderate” solutions, you need to get your head out of your ass.
At no point does Dalio mention the trade deals that hastened such inequality, not does he critique the financialization of the U.S. economy as blue-collar jobs withered and low-wage service industry gigs took their place. He doesn’t critique power nor does he offer any way men like him can have less influence in the political system that exists to serve oligarchs at the expense of the poor and working class. Business Insider notes how Dalio “desperately wants Americans to turn to moderate leadership and keep productivity as their North Star,” maintaining the Neoliberal ethos of seeing human beings as tools in a market system whose benefits bypass most of them. The problem isn’t that we aren’t productive enough; it’s that concentrated power means all this production only serves an ever-decreasing number of people. Dalio won’t give up his power so instead he wants Americans to come together and figure out how to make more wealth for themselves. He’s not lifting a finger.
God forbid we broke down the investment and private equity industries, restored capital back to those producing it and ended this extraction model. Consider Dalio’s whining about how FDR added to the national debt during the New Deal following the onset of COVID-19. It’s not just that he’s opposed to socialism; he’s opposed to New Deal capitalism. Ultimately, Dalio offers nothing of substance that differs from the exact same status quo guiding U.S. economic policy since the late 1970s, when a radical revolution of right-wing business leaders used think tanks, campaign finance reform and the post-Vietnam ouster of New Deal Democrats to take the American economy away from manufacturing and unions (there’s a word Ray never uses) in favor of board room supremacy and finance. His meek calls for elevated tax rates ignore how even restoring Obama-era fiscal policies would still fall well short of the levels common from Franklin Roosevelt until Jimmy Carter. And since he fails to even ruminate on corporate power, free trade and worker power, the collective musings of Dalio scattered through Business Insider, his LinkedIn page and banal interviews across television networks and economic forums fail to offer anything but a sneaky defense of oligarchy.
The primary danger of the Better Capitalism series lies in how it takes predatory systems and softens them with tales of billionaires’ charitable initiatives and “responsible” investing. By turning an entire economic system into a matter of individual ethics, readers may think a few more charities and green funds can solve everything. And to the relatively affluent base of readers who consume Business Insider, this sort of narrative probably proves quite appealing. But to the 90+ million Americans living in or near poverty, whether a hedge fund billionaire sees 7% annual growth in fracking investments or 5% growth in “sustainable” holdings doesn’t mean anything. These kinds of superficial changes offer moral laundering to elites without any material improvements to everyone else. Since so much of our anti-union, pro-outsourcing policies derive from the lobbying efforts of these very same elites, their self-satisfied PR campaigns ring just a touch hollow.
Consider Better Capitalism’s latest piece, one focusing on investor Jeff Ubben’s new endeavor. Recently in control of a $16 billion hedge fund, Ubben left to start a fund called “Inclusive Capital Partners” with Lynn Forester de Rothschild, CEO of Inclusive Capitalism, a weaselly initiative that partners with major corporations to produce 120-page long reports on how to get people to trust companies again. One of her partners, Larry Fink and BlackRock, are prime investors in Amazon deforestation and weapons contractors, helping increase global tensions and environmental destruction to better guarantee the profits BlackRock must produce to remain competitive in financial markets. The 2018 report put out by Inclusive Capitalism predictably fails to mention unions or collective bargaining at all. It mentions workers once, but only in the context of how healthier employees show up to work more often, which is better for the bottom line.
Like Dalio, Inclusive Capital offers no deviation from the predatory corporate state of affairs, helping to explain why companies like BlackRock, Nestle and Aetna are so willing to work with them on these bogus studies. And we shouldn’t be surprised. de Rothschild married into THE, yes THE Rothschilds, once the richest family in Europe and still the namesake for many leaders in business throughout the world (there are also anti-Semitic conspiracies revolving around the Rothschilds; ignore them). de Rothschild, who’s made sizable donations to John McCain and operates one of the Rothschild’s private investment funds, is not interested in “inclusive capitalism” in the sense that it empowers 330 million Americans or, gasp, people in developing countries. Because to do that would require the transfer of power from Lynn and her corporate buddies to a broader base of workers as well as the public sector. At which point it’s no longer capitalism.
Words like “inclusive” are deployed to distract Americans from the rigged systems at work. The elevated corporate-speak serves to keep influence in limited hands to do as they see fit. A few dollars to Black Lives Matter to seem race-friendly, a few dollars to a college so they get their name on a building, a few tedious letters and reports about “responsibility” to keep the pitchforks at bay…The titans of industry stopped saying “Greed is good!” years ago and switched instead to “We need to do something about inequailty.” And despite possessing all the business and political power through which to push for meaningful change, inequality and corporate power continue to increase. Because these people are frauds.
Ubben uses some of the “right” words to separate himself from the bad guys. His new fund will focus “on environmental and social impact investments.” Sounds great, right? He cares about the planet and society! But in reality, a fund like Ubben’s only exists to extract value from companies and enrich shareholders. You could argue that he allows these companies to grow via investments but that just points to flaws in our economic system. Hedge funds didn’t become prominent until the late 1980s and unless I’m mistaken, businesses existed before then. But we no longer live in an economy governed more by smaller businesses or ones that began small with low-interest bank loans and grew over time. Instead, we’re driven by global firms propped up by massive infusions of capital from funds or private equity that end up lining the pockets of investors with no other contribution to company value. Budden can lighten up the room at his next dinner party with tales of some solar panel manufacturer offering 16% annual returns but the money driving his fund isn’t going into the pockets of people actually contributing to that company in a material way.
Neoliberalism is now so ingrained in our economy and culture that we take much of it for granted. It’s why people like de Rothschild and Dalio can generate positive press with the most basic platitudes about “stakeholders.” Most of us don’t question why our economy is so driven by finance, anyways. How come someone sitting in an office in Manhattan or Palo Alto can make millions moving numbers around but child laborers creating products in which they’re investing earn a few dollars a day? Why do teachers need to invest their pensions with hedge funds in the first place? Why can’t their existing salaries and pensions guarantee a comfortable life? Why do the people cultivating much of our food around the country live near the poverty line while a handful of the people eating it own more wealth individually than tens of millions of Americans combined? The answer doesn’t lie in a few cosmetic fixes. A tax hike here, some money for schools there…It will only come from a comprehensive shift in how we see the entire economic system. Because it’s irrational. Unfair & violent, yes. But irrational as well. Dalio, de Rothschild and their hype men at Business Insider are selling us on a velvet clown painting as if it’s a Renoir. Until we recognize them as charlatans and the system empowering them as ethically and ideologically bankrupt, change in this country will prove limited no matter what the pages of Business Insider promise us.
A Los Angeles native, Jesse Crall graduated from UCLA’s English Department before working as a copywriter, script reader and project manager for an engineering firm.