Finally, a simplification. Reading through the reams of proposals, and looking at what actually happened in Sweden, the different sides are nearer than they appear. Everybody says that the vulnerable should be protected, and nobody thinks big gatherings are a great idea. The debate is along a continuum. The more we restrict the movements of the elderly and the others who are particularly at risk, the more the rest of society can behave as normal. The Swedish or Great Barrington approach involves encroaching more on the rights of the elderly, and in return impinging much less on the rights of those younger, particularly school children who have been particularly badly affected.
Deciding where we arrive on that continuum needs to be informed by science. It still appears to me that it’s ultimately a moral decision.
Feedback
Two readers made specific points against ESG investing and the concept of stakeholder capitalism, much featured in this newsletter this week, and I’d like to respond. The first (with expletives deleted) goes as follows:
Balloon punctured by one searing query
“ When a company needs capital who will come through — shareholders or stakeholders?”
End of story
This isn’t as good an argument as it appears. To continue with some other questions in the same vein:
• “When a company needs more revenue, who will come through — shareholders or customers?”
• “When a company needs more productivity, who will come through — shareholders or employees?”
• “When a company needs to secure its supply chain, who will come through — shareholders or suppliers?”
And so on. Shareholders are important, and capital is important. But a company has obligations to, and needs things from, a wide range of other stakeholders. I don’t think this is an argument against stakeholder capitalism.
Second, there is the separate but related issue of whether companies should give to charities. Milton Friedman in his famous article arguing that companies’ sole aim should be to make profits for shareholders also argued that charitable giving should be a decision left to the shareholders with the money paid to them by the company. That leads to the question:
Friedman’s article touched on another topic. How do you feel about the CEO of Disney using corporate funds NOT his own to send Black Lives Matter $5 million?
This isn’t the time to discuss the rights and wrongs of the Black Lives Matter campaign, or the specifics of Disney Co. Is a donation to a controversial political campaigning group something that a company should in principle be allowed to do with shareholders’ money? On balance, I think it is, but any shareholders who dislike this (of whom I imagine there are many) should certainly be able to bring motions condemning such a donation and stopping them in future.
Why should it be within bounds for companies to do this? Companies are legally people, and they have reputations, and they are often regarded as good or bad corporate citizens. They cannot avoid issues such as this. In the case of Disney, with an embarrassing history on race relations (they brought us The Song of the South after all), and with a critical need to appeal to the young, it is probably within their enlightened self-interest to make such a donation. It’s certainly controversial; but as a matter of principle it seems to me that they should have the right to use shareholders’ funds in this way.
Survival Tips
It’s been a long week. Here is more music for when you need to hit the panic button. Rachmaninov’s Vespers, an hour-long a capella piece, is among the most demanding works in the choral repertoire. It’s also sublime. It sounds great with only eight singers; perhaps particularly this movement, which Rachmaninov wanted played at his funeral, and involves a fiendish dive into the depths for the basses at the end. It also sounds great with a bigger choir, such as the Estonian Philharmonic Chamber Choir. (That’s four Estonian musical links in a row, for those counting). And it’s also tremendous with a massed choir. For moments of stress, it has few equals. Have a good weekend.
John Authers is a senior editor for markets at Bloomberg. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of The Fearful Rise of Markets and other books.