It’s been 14 years since Goldman Sachs was vilified as a “vampire squid” by Matt Taibbi in Rolling Stone. “Organized greed always defeats disorganized democracy,” he concluded then.
Goldman has since experienced some hard times, tarred by scandal (the looting of a Malaysian sovereign wealth fund) and forced to bail out of consumer banking. Big companies like Walt Disney are under attack not so much from the socialist left, but by conservatives for being too “woke.” Yet organized greed lives on, a seemingly intractable aspect of human nature, as three new business books make clear.
The age-old swing of the pendulum between greed, excess and regulation is the subject of TAMING THE OCTOPUS: The Long Battle for the Soul of the Corporation (Norton, 290 pp., $29.99), by Kyle Edward Williams, a history of efforts to temper capitalist excess through social responsibility, whether self-directed by corporations or imposed by regulators. Inevitably, greed and scandal breed regulation, which in turn provokes proponents of the free market to decry government overreach. Consider the Glass-Steagall Act, which separated commercial banking from more speculative investment banking during the Great Depression only to be relaxed by the Clinton administration more than six decades later. The cycle then begins anew.
In Williams’s telling, the free-marketers may engage in tactical retreats but always re-emerge, perhaps because they can fall back on the rigorous logic of economics, divorced from the messiness of the real world. Though nowhere near as widely known as Milton Friedman and George Stigler, his fellow free-market apostles, Henry G. Manne, a co-founder of the law and economics movement centered at the University of Chicago, emerges as an important figure in this swing of the pendulum. (Manne may be best remembered for his belief that insider trading should be legal, on the ground that it helps create a more efficient market — a purist’s view rejected by the courts, which continue to uphold convictions for the practice.) Manne died in 2015, but his protégés are many and influential, ready to pounce at the next sign of reform.
Williams, a historian and editor, offers a brisk and evenhanded overview of corporate regulation, tipping his hand only at the end, when he comes down on the Rolling Stone side of the divide. He isn’t the first — and surely won’t be the last — to conclude that “the corporate octopus is an institution incapable of being tamed.”
Like “Taming the Octopus,” BEHIND THE STARTUP: How Venture Capital Shapes Work, Innovation, and Inequality (University of California Press, 311 pp., paperback, $29.95), by Benjamin Shestakofsky, began life as a Ph.D. thesis, this one in sociology, with the premise that its author would go to work at a San Francisco start-up and then write about it, on condition that he not name the company or its employees. The start-up, which he calls AllDone, aims to be the Amazon of service providers, matching customers with mostly small, local businesses. (Pseudonym notwithstanding, it took me only a few minutes on Google to identify the company.)
Readers willing to wade through the book’s sometimes academic prose will find a real-life “The Office,” Silicon Valley version, alternately comical and poignant, with satellite operations in the Philippines and Las Vegas.
The San Francisco location is AllDone’s nerve center, filled with software engineers and highly educated tech bros (they are mostly men) who earn high pay and stock options and experiment at a head-spinning pace. Their “first guiding principle,” according to the company’s introductory email: “Play to win: We’re a professional sports team, not a family.”
That intensely competitive environment is in stark contrast to the nurturing “family” culture in the fast-growing Philippines hub, where human labor is cheaper than using artificial intelligence (even though it’s clear that A.I. will eventually render the local workers’ jobs — mainly devoted to information processing and customer support — obsolete).
To judge from the obsequious emails that Shestakofsky quotes, the mostly college-educated Asian employees — many toiling for $2.50 an hour in the middle of the night, owing to the time zone — are thrilled with their jobs, their co-workers and the kindness shown them by their San Francisco bosses. As one employee writes, “AllDone is such a blessing. I always thank God for it every morning. (Praying hands emoji.) AllDone is (heart emoji).”
Las Vegas was the base for the company’s call center, where contractors (nearly all women) fielded customer questions and complaints and, as in the Philippines, worked for low pay with no benefits. It appeared to be a tough job. As one supervisor commented, callers were “pissed off and they want someone to yell at.” She advised a rattled employee: “Deep breath in, deep breath out! Go to your happy place!”
Despite efforts to foster the same warm familial feelings and gratitude as in the Philippines (and the AllDone president’s rather callous observation that “Las Vegas is the Philippines of America”), the Las Vegas workers “failed to meet performance objectives, violated managerial directives, squabbled with each other and openly expressed dissatisfaction with managers in San Francisco,” Shestakofsky observes. The Las Vegas operation was eventually shut down, its functions moved to Salt Lake City.
AllDone has emerged as a “unicorn”: a successful start-up now valued at more than $1 billion. Its founders and the company’s venture capitalist investors are enormously rich, at least on paper — unlike its work force. Many readers will no doubt find these discrepancies troubling, as does the sociologist in Shestakofsky. “Among the most glaring social problems associated with venture capitalism is its role in reproducing vast disparities in wealth,” he writes. “Venture capitalism is designed to further enrich the wealthiest among us.”
At the same time, AllDone does supply a useful service for millions of customers. And what about all those heartfelt messages from workers in the Philippines? Would they be better off had AllDone never existed?
THE WOLVES OF K STREET: The Secret History of How Big Money Took Over Big Government (Simon & Schuster, 612 pp., $34.99), by the journalists and brothers Brody and Luke Mullins, is less about how lobbying — now a $4 billion industry — shapes policy than about the machinations of its often colorful practitioners.
Perhaps it should come as no surprise that an industry based on access, personal connections, influence and money would attract a rogues’ gallery of strivers and opportunists for whom conflicts of interest are cultivated rather than shunned.
These include Thomas Hale Boggs Jr. (a lobbying pioneer nicknamed “King of the Hill”); Tony Podesta (investigated but never charged as part of the inquiry by the special counsel Robert S. Mueller III into Donald Trump’s ties to Russia); Paul Manafort (convicted of multiple felonies connected to his lobbying for Ukraine before being pardoned by Trump); and Roger Stone (also convicted of felonies related to the Mueller investigation before Trump commuted his prison sentence), as well as lesser-known names like Evan Morris and Jim Courtovich.
The Mullins brothers cleverly set up their story as a mystery: the 2015 death of Morris by gunshot near the 18th green at the exclusive Robert Trent Jones Golf Club, outside Washington, D.C., a $1,500 bottle of Bordeaux at his side. (The death was eventually ruled a suicide.)
Many of the tales they recount received extensive news coverage, but the authors bring them to life with considerable narrative skill and novelistic detail. Podesta, for example, was so obsessed with collecting expensive art that he stayed in Turin, Italy, for an art fair even as his once powerful lobbying firm imploded.
After reading about these lobbyists’ lavish spending, self-indulgence and outright frauds, their ensuing downfalls (in most cases) come as a not-so-guilty pleasure.
The Mullins brothers sought comment from Courtovich, who is still plying his trade on Capitol Hill despite brushes with scandal and repeated run-ins with the police at his South Carolina beach retreat. His written response consisted of profanities unprintable here.
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