Larry Fink and the Wrong Kind of Capitalism

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It’s the time of year when Larry Fink, the chairman and CEO of BlackRock, comes out with his annual letter to CEOs, a letter in which he tells CEOs what he expects of them. As BlackRock marked the end of 2021 by passing the benchmark of $10 trillion under management, an impressive figure however you look at it, many CEOs will treat Fink’s thoughts with rather more respect than their shareholders or our democracy deserve — $10 trillion will do that.

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Boris Johnson’s Party Problem

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There are quite a few underlying reasons — political, personal, and ideological — why British prime minister Boris Johnson may now be forced out of office, but that the trigger for his potential downfall has been a series of “parties” (what constitutes a party is now a contentious topic) appears to have surprised some on this side of the Atlantic. To them, it seems, well, a touch weird that a prime minister with a healthy majority could lose his job because his staffers occasionally enjoyed drinks at their workplace (or in the garden outside) — and that he had attended, albeit briefly, one of these get-togethers — even if it was at a time when tough Covid lockdown controls had heavily restricted social gatherings. That Johnson might not have been entirely accurate in his evolving statements about what had occurred, what he knew, and so on, well . . . #ShouldersShrugged.

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European Central Bank Official Admits the Obvious about Greenflation

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The only surprise in this story (to me) is that someone at the European Central Bank, Isabel Schnabel, the member of the ECB’s Executive Board responsible for market operations, has been talking frankly about greenflation. Her motive for doing so may (I’m guessing) come in part from her well-publicized worries about the ECB’s, uh, aggressive use of its balance sheet, but her speech is focused elsewhere than on the quantitative-easing debate.

Schnabel highlights how much energy prices have risen in Europe (a development, it must be said, that’s hard to miss). To be fair, it’s a phenomenon that doesn’t owe a great deal to climate policies (except in the U.K. and, arguably, Germany). However, Schnabel’s key point is that, sooner or later, such policies are going to have a more persistent impact on the cost of energy…

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A Victim of the Climate Wars: A Warning from the U.K.

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Shell’s decision to pull out of the Cambo North Sea oilfield-development project in early December — which could have also provided enough natural gas for 1.5 million homes for a year — may not seem like something that should concern Americans. Check a little more closely, though, and this grim tale begins to look a lot like an example of how our own oil and gas production is going to be — or is already starting to be — constrained, not necessarily by legislation but by a combination of regulatory overreach, activist agitation, and the increasingly malevolent influence of financial institutions. Many of those in the last group on that list are major institutional investors out to advance a socio-political agenda unconnected, whatever they may claim, to the generation of financial return for their clients. This agenda is often sold under the guise of “socially responsible investing” (SRI), and particularly these days, as “ESG,” a peculiarly virulent variant of SRI under which actual or prospective investments are not only assessed for the money they might make but also for how they score against certain environmental, social, and, much more reasonably, governance benchmarks.

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Charles the Climate Prince

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At a time when the monarch, James I, “the wisest fool in Christendom,” believed in the divine right of kings, it was perhaps tactless of the English jurist John Selden (1584–1654) to write:

A king is a thing men have made for their own sakes, for quietness’ sake. Just as in a family one man is appointed to buy the meat . . .

Commentary such as this meant that Selden spent a short time in the Tower of London. Nevertheless, he lived long enough to see James’s son, Charles, being found surplus to requirements.

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Climate, Democracy, and Other People’s Money

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Reconciling the climate warriors’ agenda with either free markets or basic democratic accountability is not — how to put this — straightforward. Those attending the COP-26 conference now under way in Scotland are not trying that hard to conceal this unpleasant reality. Of course, so far as the d-word is concerned, current circumstances mean that such an exercise would be even more difficult than usual. As the Wall Street Journal’s Joseph Sternberg observed…

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Ida’s Reminder That Climate Policy Should Be Built on Resilience, Not Delusion

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I was infinitely more fortunate than many, many people, but my Wednesday evening still did not go entirely as planned. I emerged from a cinema to find a downpour, the subway down, and that cabs were nowhere to be seen. Passing on the chance to join a sodden group sheltering in an ATM zone, I trudged the 25 or so blocks home, thinking about . . . infrastructure.

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‘Stakeholder Capitalism’ a Sham? Unfortunately Not

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A week or so ago, Lucian A. Bebchuk and Roberto Tallarita wrote an article for the Wall Street Journal in which they complained that the notorious (my description, not theirs) redefinition of the purpose of a corporation contained in a statement by the Business Roundtable (BRT) in August 2019 was something of a sham. By introducing the new definition, the BRT abandoned its earlier support for shareholder primacy — the idea that a company should be run, above all, for the benefit, shockingly, of the shareholders who own it — in favor of the assertion that a company should be managed in a way that takes proper account of the interests of various “stakeholders” of which shareholders were only one category.

Despite this, Bebchuk and Tallarita maintained that very little had really changed…

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Afghanistan’s Coming Economic Collapse — and What It Could Mean

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No government — particularly one with only a shaky claim to legitimacy, none of it democratic — will ever enjoy a sudden drop in its country’s standard of living. That is something the Taliban may shortly discover as they try to consolidate their hold over a society famously fragmented along ethnic lines. Terror reinforced by purloined American weaponry may work, at least for a while. And yes, the universalist pretensions of the Taliban’s Islamism will win over some hearts and minds, as will the order, however harsh, that their form of Sharia brings with it. Nevertheless, if the Taliban, a movement still strongest in its Pashtun heartland, come into too abrasive a conflict with the traditional loyalties of other Afghans to their kith, kin, and tribe, they may struggle.

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