How the world's billionaires are cashing in on Covid-19.
Image: Pixabay cc
This month Larry Fink, the Chairman and CEO of the asset management firm BlackRock, was heralded in the financial press as the highest paid boss in his industry. Already a billionaire, Fink’s annual remuneration rose to $25.3 million. That’s more than 500 times the median salary of workers in the United States.
This is the same Larry Fink who is one the most outspoken advocates of ‘corporate purpose’—the idea that corporations should create value for all ‘stakeholders’. In Fink’s own words it is the responsibility of the corporate world to ‘address pressing social and economic issues.’
Massive personal financial gain might on the surface seem at odds with an espoused social justice agenda. After all, inequality is the political problem of our age. Look a little deeper and there is no contradiction. This is all part of a new corporate political populism that appeals to progressive politics while benefiting from widening economic inequality.
Cashing in on Covid-19
Fink is not alone. Covid-19has been of a boon for the billionaire class. While workers are suffering job losses, employment insecurity and wage stagnation, the 1% are raking it in. Oxfam calls it ‘pandemic profiteering.’
There were some big winners, Amazon chief Jeff Bezos’ wealth grew by $48 billion between March and June this year. Other winners include Tesla’s Elon Musk who gained $7.2 billion, and former Microsoft boss’ Steve Ballmer’s $15.7 billion windfall.
The 634 people on the Forbes billionaire list increased their wealth by $685 billion between March and April. That’s up by around 25% to a staggering $3.7 trillion. Meanwhile across the world inequality is widening as working people take on more and more debt.
Corporate Social Purpose
The world’s financial elites’ taking the lion’s share of the value created by other people’s work is of little surprise. What is much more notable is that this is happening at a time that these very same people are on the front foot promoting ‘corporate social purpose.’
Larry Fink is a paradigm case. For years he has been hectoring other CEOs about how they need to take over from the failures of government when it comes to the provision of public goods. Back in 2018 he urged his fellow corporate chiefs to not just focus on their financial returns, but to care about “the prosperity and security of their fellow citizens.”
Under Covid-19, Fink is on record as saying that “stakeholder capitalism is only going to become more and more important,” with the successful companies being the ones that focus on “their clients, their employees, the society where they work and operate.”
CEO Socialism?
Corporate purpose warriors like Fink have been vilified in the conservative press for practicing ‘corporate socialism’ or ‘woke capitalism.’ The claim is that business people should stay focussed on the direct pursuit of commercial goals. Messing around with public purpose is simply none of their business.
Right-wing conspiracy theorists come out in full force. Some believe that the corporate world has been hijacked by a ‘leftist agenda.’ Others say that corporations are ‘succumbing to progressive ideologies.’
Corporations like BlackRock are portrayed by the reactionary right as having been infiltrated by latte-drinking snow-flake liberals hell-bent on undermining the future of capitalism.
Corporate Political Populism
The fact is that so-called woke capitalists like Fink are profiting handsomely while Covid-19 devastates the economic well-being and security of too many working people. Woke capitalists are not socialists in disguise, they represent a very real and dangerous side of contemporary capitalism.
By tipping their hats towards progressive causes billionaires are fast becoming corporate populists, trying appeal to what they see a shifting public sentiment. Whether it be climate change racial justice, LGBTI rights or mental health awareness, the CEOs of major corporations are increasingly wanting to position themselves as good hearted and socially responsible citizens.
This is the perfect distraction. As their personal wealth increases in a world beset by exacerbating inequality, the CEO billionaires stand proud as they profess deeply caring progressive values.
Don’t Be Fooled Again
Like other kinds of populism, corporate populism appeals to people’s anxieties. In this case it is the anxiety that selfish and greedy corporate elites will horde the world’s wealth for themselves, pillaging the planet along the way. The bitter irony is that this appeal is actually helping them get away with it.
This opinion piece was first published on Citizen Truth under a Creative Commons Attribution-Share Alike 3.0 License.
Carl Rhodes is Professor of Organization Studies at the University of Technology Sydney. His most recent books are Disturbing Business Ethics: Emmanuel Levinas and the Politics of Organization (Routeldge, 2020) and CEO Society: The Corporate Takeover of Everyday Life (Zed Books, 2018, with Peter Bloom).