Socially Responsible Investing Strike One: Kindness That Kills
During the 20th century’s progressive rock era, the Canadian power trio Rush released their album titled 2112. It was 1976, and its lyrics belong to Neal Peart, whose spirit left us on January 7, 2020. The album’s theme is a dystopian future in which the individual had become enslaved to the forces of totalitarianism.
The album’s liner notes conclude, “With acknowledgment to the genius of Ayn Rand.” © 1976 Mercury Records © 1976 Anthem Entertainment.” While Ayn Rand is a world-renowned author and philosopher, the name of Anthem Entertainment is less obvious. Anthem is the title of a novella published in 1937 by Rand.
Not only was it released 12 years prior to George Orwell’s 1984, its ideas are more relevant and useful than 1984 for explaining the trends that dominate Western culture today — conformity and tribalism. Like today’s groupthink, “I” had been banned in Anthem and replaced with “We.” In contrast to Orwell’s novel, in which economic activity continued in the absence of free will, machine production had ceased. However, Anthem was optimistic. It heralded the triumph of the individual over the impotence of collectivism.
Known to his bandmates as The Professor, Peart’s writing and musicianship prove that literature can be a great teacher. Great authors inspire us to expand our own horizons and the thinking reader’s depth of soul. Accordingly, 2112 was also a protest album of sorts — Neal Peart and his bandmates were offering the pro-reason solution toward a civilizing a society, as these song lyrics testify,
“I know it’s most unusual. To come before you so. But I’ve found an ancient miracle. I thought that you should know. Listen to my music. And hear what it can do. There’s something here as strong as life. I know that it will reach you.”
Like the discovery illustrated in Rand’s Anthem, the “strong as life” reference in Rush’s 2112 was an invention from their society’s civilized past. In both stories, the old inventions were treated as miracles in their new, dystopian context. As radical ideas are the product of independent minds, these strange devices were dangerous to political authorities whose standard of value is “equality.”
The musical invention featured in the song was the effect; its cause was the mind that created it. In Neal Peart’s mind, his principles were to become the best drummer he could be. Not just for Rush, but in all of contemporary music, “What is a master but a master student? And if that’s true, then there’s a responsibility on you to keep getting better and to explore avenues of your profession.”
FREE WILL or DETERMINISM
The human mind is unique among sentient life on earth, and its primary attribute is volitional consciousness. Each of us is defined by the ideas, values, and actions we choose. Furthermore, the decision to think takes effort and leads to rational, long-term planning. The default option is to let one’s subconscious mind react and lead to emotionalism. True to form, volitional consciousness, aka free will, is also the title of the 1980 hit song from Rush,
“You can choose a ready guide. In some celestial voice. If you choose not to decide. You still have made a choice. You can choose from phantom fears. And kindness that can kill. I will choose a path that’s clear. I will choose free will.”
What is Peart’s advice for those who choose not to decide? “Do yourself a favor. Don’t ever say to me, ‘Everything happens for a reason’.” Peart was disinterested in people who believe that events are preordained by forces we do not control, and his comment is directed at the determinists out there — the ones leading us down the Road to Serfdom.
Ironically, determinists freely choose to be bound by nature, manacled by nurture, or governed by some supernatural deity from medieval times. It’s God’s will, right? No, it is the denial of one’s humanity. Peart chose to live.
In contrast, the primary goal of objective investors is to choose a “path that’s clear” — the values and aspirations that give life its meaning and purpose. Disinterested in the market forecasters as “ready guides,” we also disregard government gods as “celestial voices” and dismiss the risks we cannot control as “phantom fears.”
KINDNESS THAT KILLS
The “kindness that kills” is disguised by investment banks as ESG (Environment, Social, Governance) protocols. Formerly known as socially responsible investing, ESG is an insidious attack on property rights. Through capital infusions and compliance costs, it panders to an investor’s unearned guilt for the purpose of transferring wealth to politically connected “diversity” and “green” special interests.
Not only does our groupthink society hold the Enlightenment values of equal rights, prices, producers, and profit in contempt, ‘I’ is the word to be censured and replaced with identity group tribalism. The latest manifestation of that is the movement known as “stakeholder capitalism.” Its goal is brazened — to divert earned profits to those who have no skin in the game by proclaiming some fictional equity interest.
Not surprisingly, the ESG and stakeholder nonsense have been adopted by commercial and investment banks as a pragmatic response to intrusive regulation. This is not wise, or necessary. For example, Neal Peart once told an interviewer, “The person I write for is Howard Roark” (the architect in Ayn Rand’s 1943 novel The Fountainhead), who told his client, “A house can have integrity, just like a person, and just as seldom.” Exercising his will, Peart oriented his reasoning mind to the benevolent universe; one where there is no conflict of interest among rational men.
Take notice that Peart did not say that he writes for his band’s record buyers or concert goers. He knew that his personal integrity was more considerate of them!
BE YOUR OWN ZERO
Speaking of conflicted, a large RIA (Registered Investment Advisory) firm hosts a trademarked service model titled “Bench of Life.” Its centerpiece is a slide show highlighting transitional experiences in middle-class American life and supplemented with a comprehensive menu of services. Incuding a a Forrest Gump style movie poster image, it begins with young adulthood, then marriage, middle aged career, and senior citizenry.
In other words, the circle of life; the focal point being people seated on a bench as events present themselves in a newspaper.
Its marketing message implies that investors are spectators; they have little control over their futures and need the guidance of experts. Ironically, the presentation is similar to the “Life of Julia” propaganda created by the Obama administration in 2012. Both portray middle-class Americans as Forrest Gumps; good natured simpletons leading ostensibly noble lives with no objectively defined purpose. Destiny, floating on a breeze, or both?
What the advisory firm caricature denies is the purposeful action behind the investor’s own wealth creation they hope to manage. Exercising their will, the firm is selling determinism.
But there’s something else— the false premise that human life is a circle. For plants and animals, that may be true — they are programmed with automated responses and lack volitional consciousness. However, human beings are born tabula rasa — with a clean slate. Their minds must work, by choice, to acquire knowledge and take action.
As rational beings, lives of meaning and purpose are better stipulated as persistent, forward motion. In Ayn Rand’s 1957 novel Atlas Shrugged, heroine Dagny Taggart discovers this through introspection,
“A circle, she thought, is the movement proper to physical nature, they say there’s nothing but circular motion in the inanimate universe around us, but the straight line is the badge of a man. It is not proper for man’s life to be a circle, she thought, or a string of circles dropping off like zeros behind him.”
For human beings, life is not the avoidance of death, yet the zero symbolizes that. Unfortunately, to treat people as instinctive, tribal animals seems to be the goal of the behavioral psychologists and demand-side economists that dominate American universities and investment firm culture today. To them, free will is an illusion and our Keynesian “animal spirits” must be offset by planned economies.
Be that as it may, their house of cards will eventually collapse when a plurality of middle-class Americans withholds moral recognition from these purveyors of progressive propaganda.
VIRTUE SIGNALS
To be sure, the challenge is formidable. Registered representatives working under this regime either endorse a cycle of dependency or look the other way. In either case, to welcome their firm’s “Bench of Life” messaging is to sanction its appeal for socialism, which depends on passive acceptance.
That is the effect, the cause is egalitarianism (moral equivalence) — the annulment of justice. In his book, Where Have All the Capitalists Gone, political economics professor Richard Salsman summarizes this collectivist pathology,
“Capitalism is deeply distrusted, by liberals and conservatives alike, precisely because it is secular, materialist and individualistic. Capitalism embodies the life-enhancing, wealth-creating ethic of rational self-interest, which is perhaps most blatantly manifested in the profit motive.”
Concretely, “Bench of Life” may sit passively on its marketing shelf, its deterministic themes do not. The longest list of hyperlinks under the “About” tab on this broker-dealers’ internet home page is captioned “Social Responsibility.” It comprises the standard virtue signals of Sustainability, Diversity, Inclusion, Community, and Environment. Not only do they imply we are born with a duty to serve the needs of strangers, our ethical and legal standing is predicated on that which we do not control — genetic heritage.
Essentially, it means that only ‘nature’ that is not human nature is good-natured. By extension, this politically correct love for mankind is predicated on some kind of hatred of man.
Obviously, none of it is free. Paying the freight for the HR Department’s social and climate justice bandwagon are investment management fees and administrative costs charged to investors. In turn, government regulators skim corporate income taxes, compliance costs, and legal settlements from Treasury Department investigations. Those are used to expand regulatory agencies and refund certain “non-profit” political donors.
Some circle of life — kindness that kills — financially and spiritually.
