On money and power
"Citibank does not use your checking account to rent a revolution in Panama."
I was recently confronted with a live and healthy example of a belief system I thought was dead: the idea that money has power.
Money has no power. Also, in the paywalled part of the post (sorry! I gotta eat!), we will have some thoughts about how money could have power. But this will only show us how differently that money would be behaving.
The question of BlackRock
The core idea is that the fact that BlackRock [Mecca connection? Ask new intern—CY] has literally 10 trillion dollars under management must imply that BlackRock has a lot of power—like you or I would, if we were 10-trillionaires. (Which still may be not so much power as one might think!)
How should one respond to such a belief? While not myself a prince of finance or anything, I can tell you that this is not BlackRock’s money. It belongs to their clients. Sleeping dollars can be put to many uses—but Citibank does not use the money in your checking account to rent a revolution in Panama. Or something. It is not 1922.
Inside or around BlackRock, the idea that it or any of its many multifarious tentacles had any motivation in the world, other than to make a buck for itself and its johns or LPs or whatever, must seem as likely as a parking meter talking to you. Politically, BlackRock is an inert object—devoid of consciousness or opinion—a black rock. I mean, they may want stonks propped up… who doesn’t want stonks propped up?
But they do diversity and inclusion! ESG! They do. And if the same people were in the same business, but in the Reich—they would be heiling up a storm. The “German cat” we have always with us.
ESG is no measure of BlackRock’s power, but its weakness. BlackRock, like any weak thing, does not impose its opinions on the world. The world imposes its opinions on BlackRock. It is the paper that is written on, not the pen and not the hand that holds the pen. It is passive and not active political matter.
If you want to know how power flows between BlackRock and another important investment firm, Harvard, use the (purely hypothetical) Nazi test. Ask yourself: if BlackRock became Nazi, would Harvard become Nazi? If Harvard became Nazi (just in its doctrines, still called “progressive”) would BlackRock become Nazi?
You will see that it is fairly easy to imagine BlackRock incorporating a certain strain (perhaps a Louis Farrakhan clade) of anti-Semitism into its ESG checklists—once this strain had become the conventional wisdom at Harvard (however that happens). It is very hard to imagine professors at Harvard, as it is, being like: hurr durr, finance bros who manage our slush fund hate Jews, maybe Jews are bad after all? Ideas naturally flow downhill from Harvard to BlackRock, not uphill from BlackRock to Harvard.
There is a simple reason why otherwise sensible people point to “power” structures like these. Their red pills did not completely take. At some level they are still Marxists. For anyone still struggling with these kinds of beliefs—just take more of the tablets. Some people say they work better if you grind them up.
In those days there were giants in the earth
More broadly, people who believe money has power are larping the ancien regime—the real reality that, a century ago, our present power structures replaced.
America’s ancien regime—the Gilded Age regime that built so much cool stuff in DC and New York, and was displaced by the New Deal and the early Progressives—did work this way. Power, in many ways, did flow outward from the Gilded Age tycoons. The popularity of stale propaganda is explained when we learn that it was once fresh.
In fact, Carnegie and Rockefeller money played a huge part in guiding the transition from the ancien regime—from tycoons and party bosses to the administrative-educational complex. Morgan money and the Great War had a lot to do with each other. Et cetera.
But these individuals could not retain any control over the demons they created. Just because you let the barbarians into the city, doesn’t make them your barbarians. Later it became clear that large pools of philanthropic money with personal intentions that diverged from the administrative-educational complex were simply wasted—sterile at best. At worst they were captured and turned against the intent of the donor—as with the Ford, MacArthur, and Pew fortunes. They could sometimes make a few temporary political waves. They could not create or sustain alternative relevant institutions.
They were, in short, a bridge from the ancien regime to the old regime. Which is to say, the current regime. Which is getting a little long in the tooth—America always has some kind of a revolution, by whatever name, about every 75 years.
Which is a segue to an interesting question: is there a right thing to do with money? We know that BlackRock will not do it. But someone could, comrade—someone could.
The conventional path
When you, a person of rich, try to turn money into power, you are trying to do one of two things.
Either you are trying to gain some amount of power within the current regime, or you are trying to gain some amount of power within the next regime. We will refer to these as the conventional and alternate paths. Let us first consider the conventional.
Of course the most conventional thing is to simply support the current thing. You can pour an infinite amount of money into conventional philanthropy, and look good doing it. Is this power? Or has it lost its savor? Power is only the power to deviate.
Deviant power in the current regime can be momentary (like getting some outcome on some “issue”) or durable (like getting /ourguy/ on the Supreme Court). There is not a lot of free power in the current regime—and both its scope and its durability are limited.
The market for momentary power is the market for lobbying/activism in Congress. With some exceptions indirectly accessible to democracy, like the Supreme Court, there is no market for durable power in the current regime. No one can buy an agency. No one can even buy a newspaper. (Jeff Bezos thinks he owns one. He just sponsors it. Hell would freeze over before the Post’s news desk would let him deviate coverage.)
You can also pay to help get politicians elected, which is somewhere between durable and momentary power. With time and tenure, the momentary becomes durable. This takes a lot of patience, and a lot of money—and until enormous amounts of both are invested, all you have done is entered the space to learn how it works. This is valuable—but the same information can probably be obtained in faster, cheaper ways.
There is also a market for potential durable, deviant power. This is the market for think tanks—which do raise a fair bit of money from persons of rich.
The idea of a think tank is that it develops the personnel and/or policy for a possible path of governance. If this path of governance can be decided on at the political level, the think tank will have paved the way—in personnel and policy—for its execution. A political decision can make its durable power a reality.
This definition divides policy institutions into two kinds: those that feel some reasonable hope of being chosen, and those that feel no hope at all of being chosen. Thus the Heritage Foundation is in one class and the Mises Institute in another.
Neither of these outcomes is entirely satisfactory. However good your policy ideas are, the range of motion by which the great oil tanker Columbia can deviate is tiny. If you and your work is not within this range—which is constantly narrowing—you are in the make-believe space of the Mises Institute. Which proceeds manfully as if its work mattered—but this is only pretend. And it is hard to feel real when only pretending.
When we look at the most effective—or most impactful—work within the range of the possible, we see that the most impactful things are the biggest. For example, the Gates Foundation created Common Core, more or less standardizing the American educational system as if Bill Gates was the Minister of Education in France.
Was this only pretend? It was not. Okay—Common Core sucks. “But at least it’s an ethos.” We cannot say it was not a deviation at all… Politics is the art of the possible.
And the possible turns out to sometimes, to a limited extent, involve rebooting things—replacing or at least supplanting them with new things not derived from themselves. It also seems that bigger reboots can be easier than smaller reboots. We will let these clues inspire us as we head down the alternative path.
The alternative path
The alternative path is, of course, one big reboot. Of everything. How can le person of rich support such a reboot?
For any reboot, two things must exist and coincide: the decision to reboot, and the mechanism of reboot. The mechanism is inert without the decision; the decision is inert without the mechanism.
The decision is advanced by convincing citizens that a reboot is prudent and proper. This project of shifting public opinion may be a difficult one, but is greatly aided by the construction of the mechanism, whose concreteness and potential will sell itself. Ideally, it will sell itself so well that the necessity of the change will be obvious to the dogs in the street—and the old regime will simply drop, a ripe fruit in a soft breeze, into the ready and capable hands of the new regime.
Therefore, the right investment is in the mechanism. Without the mechanism, the decision is impossible. With it, the decision joins the realm of the possible. While the decision may not happen by itself, propaganda and governance are separate projects.
Moreover, under any sensible interpretation of the rule of law, building a reboot mechanism—which is no more than a shadow government, or political party; which would not dream of acting in any way, legal or illegal, unless legitimately infused with state authority—is a harmless and safe project, worthy of the full protection of the rule of law. Since the project is safe, its donors are safe as well.
However, this “shadow government” has no need to publicize or evangelize itself. Just the opposite—its goal is not to affect the current regime, but just to develop without antagonizing the current regime.
Its plan is just to be there when the current regime wants to fall. Everything is tired in the end, and wants to fall into someone’s arms. Regimes are not overthrown, except by outside force. They commit suicide from self-loathing and sheer fatigue.
The frozen embryo
The alternative path involves creating the embryo of a next regime. The embryo is a kind of regime in a box, completely inactive and needing little if any outside funding, which can be quickly activated as an alternative government.
In the American context, the best structure for the transition is to elect a President whose role is to be not America’s CEO, but America’s chairman. Selecting this embryo to thaw, the President works with the embryo’s permanent staff to choose a CEO—a veteran with serious experience in scaling up large organizations.
Once this choice is made, and the new regime is firmly in place, the President serves his term like the Queen of England, focusing entirely on ceremony and publicity. Meanwhile, the CEO drops into the embryo and hits the ground running.
The embryo has expanded in anticipation during the election, but still has to consider the possibility that it will lose and have to return to dormancy. Once it wins, even once it is likely to prevail, it enters a period of hypergrowth that should be financially unconstrained.
By inauguration day, it is ready to take command of the government. Any slowness or hesitation in a coup is fatal. The embryo is a machine to help the people recapture the state and replace it with a new regime that will faithfully serve their interests, not to walk around the Washington Monument taking pictures like a Chinese tourist.
Building the embryo
The plan starts as a vision. A vision of regime change looks something like this:
Shut down the US government (federal, state, local and tribal), and replace it with a new regime. By default, this new regime will involve different people, in different buildings, with different jobs and titles, doing different things. Anything that stays must be some kind of an exception. (Security forces are the most common exception.) The purpose of the new regime: to serve the public good in the long term. “The health of the people is the supreme law.”
To turn this vision (the broadest possible vision of unconditional regime change) into a plan is a lot of work. Unless it is good work, it is worse than useless. For it to be good, it must be (a) properly funded (this means you, person of rich), and (b) written with a clue.
This plan naturally divides itself into two plans: the transition plan and the regime plan.
The regime plan is the ideal steady state of a completely new America. It should have no reference to how the place is governed at present. And a regime plan is a total plan—it does not in any way respect the “public/private” distinction of the old regime.
All persons, property and activities within the country are within its scope. To assume that any right can be enforced against the new regime assumes some enforcement structure outside it which by definition cannot exist. This, in a word, is sovereignty.
The sovereign is responsible for everything in the state—from the health of its forests to the quality of its footwear. Perhaps the free market can keep the people well-shod, the trees happy and green. Perhaps not. If not, that responsibility is not on the free market—it is on the sovereign.
Were I the king of California, I might ask: hey, Napa, why can’t I get a dry California cabernet these days? Also, Hollywood, why so many Marvel movies? And dollars to donuts, these systemic errors in quality—or at least in taste—would be the result of some strange, arbitrary coincidence—often involving a weird tax break or incentive.
If you are writing a plan for a regime, and you want it to be a good regime, it should be a regime that makes good wine and good movies. Otherwise, isn’t something wrong—by definition? Maybe your plan of doing it by the free market, the invisible hand, is good enough.
And the transition plan is how we get from here to there. Naturally, the transition plan is more concrete—but the regime plan has to be written first. And neither plan can be either written, or executed, without people. Who are these people? What will their plans look like?