Winner Take All: Book Review

Winner Take All: The Elite Charade of Changing the World (2018), Anand Giridharadas: the elites want market solution ("win-win"--cooperation rather than competition) to solve all problems, including the ones they make. The Acknowledgements (at the end) describe how the author got started on this project as a journalist hanging out with the rich folk at the Market World Conferences, beginning with the Aspen Institute: "I found something amiss about the Aspen Institute. Here were all these rich and powerful people coming together and speaking about giving back, and yet the people who seemed to reap most of the benefits of this coming together were the helpers, not the helped" (p. 265). Talks were at the Koch Building, lunches provided by Goldman Sachs, developing the "Aspen Consensus:" perhaps do good, but never tell them to do less harm. This he mentioned in his own talk, to some cheers and many icy stares.

While technology produces one amazing hit after another and billionaires proliferate in Silicon Valley and Wall Street, the middle class is being hollowed out, health care is expensive (and an area of corporate greed), poor with many uninsured, and education stagnant. Public policy is failing, partly because of plutocrat-sponsored tax cuts and regulations aimed to benefit global corporations; gains from innovation are organized to siphon upward. Many elites attempt social change, however: "The innovations mostly aren't democratic, nor do they reflect collective problem-solving or universal solutions. Rather, they favor the use of the private sector and its charitable spoils, the market way of looking at things, and the bypassing of government. They reflect a highly influential view that the winners of an unjust status quo--and the tools and mentalities and values that helped them win--are the secret to redressing the injustices" (p. 5). Elite networking grooms the rich to be self-appointed leaders of social change, something of an "enlightened corporate self-interest" toward public welfare. Are they doing the best they can? Well-meaning but inadequate? Or doing minor good but keep things as they are; that is, their concentrated power and wealth?

Giridharadas identifies Trump as: "an exposer, an exploiter, and an embodiment of the cult of elite-led social change. He tapped into a widespread intuition that elites were phonily claiming to be doing what was good for most Americans. He exploited that intuition by whipping it into frenzied anger and then directing most of that anger not at elites but at the most marginalized and vulnerable Americans. ... He became the rich, educated man who styles himself as the ablest protector of the poor and uneducated--and who insists, against all evidence, that his interests have nothing to do with the change he seeks" (p. 8-9). Governments are elected and accountable to the people; should reform come from wealthy elites claiming to know what's best?

A major focus of this group is "neoliberalism," defined as: "a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. Where the theory goes deregulation, privatization, and withdrawal of the state from many areas of social provision tend to follow" (p. 18). The rise of Ronald Reagan and Margaret Thatcher, claiming government was the problems, not the solution, proved attractive both to the capitalists as well as voters, resulting in lower taxes, weakened regulations, and reduced public spending on things like schools, job retraining, parks and so on. The neos claimed bettering the world but only in market-friendly ways.

Most of the book is about individual stories, often of individuals making a fortune and then having guilty feelings about their post-accumulation focus. A good place to start is Andrew Carnegie, but it is in Chapter 6, with an 1889 essay on "Wealth." Carnegie's point was that inequality was undesirable but inevitable for economic progress, including basic stratification. A business person had to operate aggressively to stay in business; he claimed talent for organization and management is rare [a position shared by today's high-priced CEOs]. He supported giving wealth away instead of passing it to the kids (which breeds feeble children). Government should leave the rich folk alone, because they will give back, the basic Market World position.

Hillary Cohen (Chapter 1), a potential do-gooder started at McKinsey, which recruited in part by stressing working with nonprofits and the public sector (although most clients were commercial): "change the world, improve lives, invent something new, solve a complex problem, extend your talents, and build enduring relationships" (p. 23). Basic training was to "structure, break down, and solve business problems. I can apply those same skills to any issue or challenge I choose. ... It didn't deserve its status as a cure-all across domains. Accountancy medicine, education, espionage, and seafaring all have their own tools and modes of analysis, but none of those approaches was widely promoted as the solution to virtually everything else. ... Very rarely did the step-by-step, perfectly linear process of here's how we're going to conduct this exploration actually surface the right answer. ... Often, it was used primarily for communicating the answer, rather than generating it. ... The answers were derived through intelligence and common sense, and then the team would make them look more like trademark McKinsey answers. We would backfill them into the template" (pp. 30-31). "Consultants had brought a productivity revolution to corporations. They had taught them how to optimize everything which made their supply chains leaner and their income statements less volatile. The optimization made the companies less hospitable to workers, who faced such things as layoffs, offshoring, dynamic scheduling, and automation as the downsides of corporate progress. This was part of why their wages stagnated while companies profits and productivity rose" (p. 32). "If you think of the world as an engineering problem you don't register the voices of people who see a different world" (p. 33).

Stacey Asher (Chapter 2) runs Portfolios with Purpose, healthy competition with giving. Vulture Funds such as African Development Bank Group buy bad debts at a big discount and sue African countries for repayment (extracting some $1 billion). Alternative is social enterprises, social venture capital, benefit corporations, and so on. Justin Rosenstein of Silicon Valley created Asana to sell work collaborative software to Airbnb, Uber, etc., part of the problem of increasing productivity but seeing little impact on workers' pay. Google is another example of doing a lucrative business useful to the world (producing positive externalities). A big advantage is self-sustaining (profits) for corporations, while nonprofits are constantly fundraising ("philanthocapitalists"). Implied is that entrepreneurs are more capable than government for solving problems (which is zero sum or win-lose). The modern democratic visions is: "citizens are equal before the law, are understood to have divergent interests and compete on the basis of those interests for resources and power, with different organs of the state designed to represent different kinds of needs" (p. 48). Market World rejects different social classes with different interests in favor of the market place. Of course "unintelligent, poor, indigent unmotivated--they will be left behind." Emmett Carson make winners feel good: social justice as win-lose, giving to people who didn't earn something. Entrepreneurs will participate in ways that exonerate and celebrate them. Growing volatility of working-class incomes such as gig economy. Note problems with healthcare, transportation, wage and labor laws, food system, student debt crisis, great risk shift (Jacob Hacker) from corporations off-loaded to workers.

Chapter 3: Summit at Sea. VC Shervin Pishevar: sharing is caring, but Uber versus "taxi cartels," also unions as cartels. "A king presides over a multitude of truths. But a rebel, who takes no responsibility for the whole, is free to pursue his singular truth" (p. 66). Fantasy of living free of government--"anarchist cheerleading." "The world of these elites where rules receded and entrepreneurs reigned through the market, augered a return to private manors" (p. 80).

Psychologist Amy Cuddy (Chapter 4) focused on sexism that working women face from envy men feel toward career women. Culture roles predominate and differ across countries: US independent and self-oriented; South Korea interdependent and others-oriented. Foreign policy scholar Daniel Drezner: "It is the best of times for thought leaders. It is the worst of times for public intellectuals [critic and foe of power]" (p. 91). Thought leader congenial to plutocrats who sponsor intellectual production ("knows one big thing"--suggesting hedgehog) and promote winners' values. Note confirmation bias plus general loss of trust in authority. Thought leader three-step (p. 96): 1) focus on victim not perpetrator (increases empathy rather than anger; personalize the political (identifiable victim effect); 2)zoom out and see broad problem(s) such as lack of opportunity, poor system structure, poverty, etc.; 3) say critical things without giving solutions. Charles Duhigg investigated Apple on tax dodges, claiming patents, managing foreign plants (p.100), Fannie Mae investing in higher-risk mortgages. Plutocrat money as subsidy for ideas appealing to them. World Market talks as commodities with tiny usable takeaways (e.g., Duhigg on forming habits), turning a speaker into a product: Cuddy focusing on small-scale changes women can make to survive but leave issue (sexism) untouched. Simon Sinek: start with why, focus life around a single animating purpose (p. 111), then the how (to live out the purpose) and what (results measured in products and service). "The science may be dubious, but it did sound fancy" (113), it is your idea, the scholarly research is less important. "When a thought leader strips politics and perpetrators from a problem, she often gains access to a bigger platform to influence change-makers ... that change is win-win, and doesn't require sacrifice" (p. 120). Education: common funding pool versus Identify and compensate star teachers. Bruno Giussani curator of TED: lite facsimiles of change; business as engines of progress, poverty okay, but not inequality.

Chapter 5: George Soros as a holdout to Market World. Sean Hinton learned in Mongolia by hanging back and observing; hired by McKinsey: stepping into an unknown company and reconstructing it so a McKinsey solution became obvious: chopping up problems, parsing data: "find the business needs or the basic problem, based on evaluating the company. ...framing the problem, defining the boundaries and breaking it down into component elements ... construct a logical answer. Best to speak in lists of three" (p. 136). Issue trees as visual maps; subcategories mutually exclusive and collectively exhaustive. Same approach used for social problems. TechnoServe as business solutions to poverty (p. 139), lining people to information, capital and markets. Definition of problem done by problem solver and crowds out other ways of seeing it.

Michael Porter, founder of modern corporate strategy. Making decisions that ignored the well being of their customers, the depletion of resources, viability of suppliers, economic distress of communities. Idea of shared values (p. 145), business goals and practices improving business relationships with communities. As people disconnected fro locations, business stopped reinvesting in that, instead globalizing. Problem of optimization, making it easier to mistreat employees and impact on larger system. [p. 147 quote on management consulting, leveraged buyouts, hostile takeovers.] Turning people into commodities. Neoliberalism to maximize shareholder value, financialization.

Chapter 6: Darren Walker, president of Ford Foundation: taboos: inspire rich to do more good, but never tell them to do less harm; tell them to give back, but never take less; join the solution, not accuse them of being the problem. Ford one of many for general welfare of humans, professionally managed, but undemocratic and unaccountable. A basic flaw of private equity is extracting value from their corporate portfolio, by increasing "productivity" (laying of people a big part) and profit.

The Sackler brothers were doctors and co-founders of Purdue Pharma, a non-public company. Arthur Sackler created many aggressive drug industry marketing tactics, dealing with doctors to promote their products. The most infamous was painkiller OxyContin (active ingredient oxycodone) beginning in 1996. They pursued general practitioners and a huge marketing blitz to $3 billion in sales in 2001. It became a widely abused street drug, including overdoses and deaths, which became the "opioid epidemic." Stopping efforts to limit OxyContin prescriptions became a Purdue top priority, including the use of third-party companies (pharmacy benefits managers); also making the false claim the drug was less addictive. They settled a 2007 lawsuit by paying fines and other penalties of $635 million. By 2015 the Sackler family had a net worth of $15 billion. The Sacklers were part of Market World do-gooders (generosity but not justice). [Perdue and the Sacklers again are making the headlines because of their encouragement of doctors to over-prescribe OxyContin].

Chapter 7: Bill Clinton Global Initiative as his own Market World conference, because much of the world celebrated Clinton. "Third Wave": pro-market progressivism. Champion of globalization, market supremacy, regulation-free finance, end of labor/capital conflict, open borders, technological progress, marketing of trade deals. Hillary ran against super win-losey guy. CGI another build the brand relationship. Maybe the problem is us. Niall Ferguson: surrendering any loyalty to place, but the world was still governed by place, so globalists pulled away from democracy. Consider "responsible nationalism" over "reflex internationalism." That is, the role of government to maximize welfare of citizens (not: what is good for us is good for everyone). Worst off of developing world: do what ever made foreign investors and international agencies feel at home. The right answer of public policy to make the place safe for foreign investment plus having a flexible labor market (easy to hire and fire).

The political process revolves around competing ideas and testing ideas against others, with citizens members of a political community (or several), something of the antithesis of globalism. Solving global problems gives elites some ethical cover for ignoring domestic problems. This could work on some issues like pandemics and global warming, but not others--e.g., intellectual property rights or trade issues. Unfortunately, they may disrupt democracy or crowd out the public sector. This includes bending issues in elites' favor, such as toll roads rather than gas taxes. More generally, talking about the parts of issues that are profitable to elites, the "market consensus." Clinton's CGI as luring private-sector money into public problem-solving and amp up business jargon (p. 233), but intolerant of other perspectives. Issue of tariffs on firms that move operations overseas; what about job training. Political problem of militant conservatives and libertarians, back by plutocrats. Republican contempt for government, Clinton centrist market-friendly approach, versus traditional Democrats--which values public goods and benefits.

Epilogue: World Economic Forum behind annual Davos meeting. B Corporation (benefit) that can actually focus on stakeholder capitalism), actually championed by Market World. Direct complicity such as campaigning against inheritance tax or low regulations. Civilizational infrastructure for common institutions. Why write the book: elites "giving back" but reaping more benefits and claiming to change the world.

Overall, this is a challenging read but sprinkled with insights throughout.