NOVEMBER 9, 2018
IN THE EARLY morning hours of September 15, 2008, Lehman Brothers filed the largest bankruptcy claim in history. Its failure unleashed a wave of panic on Wall Street. The Dow Jones dropped 500 points on the day and liquidity froze across the financial system. Forced to act, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke moved aggressively to avert the impending insolvency of AIG, the world’s largest insurance company. The economic meltdown and credit crunch had arrived.
The causal significance of Lehman’s collapse to the onset of the global financial crisis is often overstated. However, for tens of millions of Americans, that moment marked the beginning of the worst recession since the Great Depression and sparked demands for reform that spread as quickly as the financial contagion.
The 10th anniversary of Lehman’s bankruptcy is therefore an appropriate opportunity to ask what, if anything, has changed since the crisis. The answer depends almost entirely on your socioeconomic status. For the fortunate, the economy is fully recovered. Corporate earnings are nearing an all-time high. The Trump administration is rolling back regulations and cutting taxes for the rich. Unemployment is historically low, and real estate prices have skyrocketed.
Yet millions of people are suffering from the protracted effects of the crisis while being excluded from the gains of the recovery — an enduring trend toward greater inequality that began in the 1980s. Wages remain stagnant for a significant portion of the workforce. Economic mobility is on the decline, and US household debt is at an all-time high. Public social programs are being cut, and nearly one in five children is growing up in poverty. Considered in this light, it’s no surprise American politics are irate, polarized, and spiraling out of control.
Anand Giridharadas, the author of Winners Take All: The Elite Charade of Changing the World, sets out to understand why — despite the constant talk of change and progress — the remarkable advancements in American society are failing to translate into broadly shared success. His answer directs our attention to a particular subset of the elite he calls MarketWorld: the winners of the 21st-century globalized economy who, as the self-appointed leaders of social change, promise to improve the unjust status quo.
So how is it possible, Giridharadas asks, that today’s elites are among the most socially concerned but also the most predatory in history? He concludes that MarketWorld sidesteps systemic change and instead prefers to promote enlightened corporate self-interest and market-based solutions that reinforce its own success. Their initiatives predominantly serve as a form of conservative self-defense that leaves the concentration of wealth and fundamental power equations undisturbed. The hard work of lasting change achieved through democratic collective action is thus forestalled by the slow, incremental progress of “giving back” and “doing well by doing good.”
Promising an insider’s account, Giridharadas reports on a set of individuals from the worlds of business, charity, academia, media, government, and think tanks who are participating in and grappling with this winner-safe social change. His subjects range from the downright immoral to the absurd, the well intentioned, and the indifferent.
The author directs his ire toward the misleading “win-win” mentality prevalent among philanthropists, Silicon Valley founders, and attendees of elite international summits such as the Clinton Global Initiative. He is particularly critical of the wealthy and powerful who advertise themselves as the “liberators of mankind” while simultaneously dismantling the laws and institutions designed to protect labor rights and promote equality. Examples such as Elon Musk’s vocal opposition to a unionization drive at Tesla, while promising free frozen yogurt and a rollercoaster, quickly come to mind.
Giridharadas is at his most original and thought-provoking when writing about the people he contends are inadvertently supporting the status quo through the unintended consequences of their actions. The first chapter explores the aspirations of a conflicted Georgetown University student named Hilary Cohen, who is convinced that joining McKinsey & Company is the best way to develop the skills that will enable her to not only “change the world” but also to do so “at scale.”
Cohen is certainly not alone among millennials in the belief that the market, rather than politics, is the best place to solve problems. As Giridharadas notes, a disproportionate number of graduates from elite universities accept jobs with management consultancies and banks. One study by the sociologist Lauren Rivera found that around 70 percent of Harvard graduates applied for positions with these firms. Meanwhile, Pew Research reports that only 20 percent of millennials express trust in the federal government.
Giridharadas weaves this topic throughout the book and considers the consequences of the widespread belief that consulting and finance provide training for being effective in other industries. Former employees of these prestigious firms are highly sought-after in government, nonprofits, and international development. Drawing on his interviews, Giridharadas goes on to argue that the interpersonal networks and prior training of MarketWorld alumni make them more likely to promote market-based solutions that uphold the status quo when occupying positions in these sectors.
Giridharadas also reflects on the moral quandary presented by the rise of for-profit social enterprises. He singles out a startup, Even, that charges an annual fee to regularize the spiky incomes of working-class Americans. The contradiction, as he indicates, is that many companies providing commendable services often benefit from the very problems they profess to improve. In this case, Even is capitalizing on the growing volatility of the labor market and is therefore incentivized not to address the underlying issues making life more difficult for a growing share of the workforce.
Giridharadas makes a compelling case for elites to accept responsibility for fixing a failing system and to do so by advocating solutions through collective action rather than private initiatives. Although disinclined to offer concrete policy recommendations, he deploys the arguments of the political theorist Chiara Cordelli to deliver his conclusion that elites should consider how their professional and personal activities reinforce a system within which so many people need help in the first place. Cordelli rightly contends that a society can only work legitimately on behalf of all its members through common institutions. Ultimately, Giridharadas calls on elites “to return, against their instincts and even perhaps against their interests, to politics as the place we go to shape the world.”
Giridharadas demonstrates an admirable willingness to critique the rich and powerful. His insider account flips the script on the standard “loser-centric” analyses of the populist backlash against elites in American politics and is replete with valuable insights. And yet he misses crucial parts of the story.
Despite the gravity of the problems, he remains hesitant to examine the underlying structural issues to which he so frequently alludes. Most notably absent is any meaningful discussion of the powerful role of elites in the American political process. The problem is not, as he states, that elites abandoned politics. In fact, research shows the wealthiest Americans exert substantially more political influence than their fellow citizens. Their involvement warps policy outcomes due to more conservative preferences on taxation, economic regulation, and social welfare programs.
The Center for Responsive Politics reports that the top 25 individual donors spent more than $610 million on the 2016 election cycle. In addition, corporate America is by far the largest contributor to political lobbying, which totaled a mind-boggling $3.34 billion in 2017. Lee Drutman, a senior fellow at the New America Foundation, has calculated that business spends $34 for every $1 spent by diffuse interest groups and unions combined. The situation presents a remarkable paradox. The very same people who publicly write off government as an avenue for improving the world are often spending vast sums of money to influence its decisions. This diagnosis suggests a revision is required to the conclusion proffered by Giridharadas. Not only must the elite do more to promote the general good through politics, but government must also take action to restore the balance of political power.
Some of the author’s assessments also miss the mark. In certain cases, his broad language risks underestimating the role private actors can play in solving public problems. Giridharadas dismisses the need for public-private partnerships by noting the US government is “arguably the most powerful institution in human history.” This is true, but the executive branch is comprised of thousands of discrete units and subunits with an immense range of responsibilities and constant budgetary pressures. More deserving of his attention is the revolving door between government and lobbying and the risks of regulatory capture.
Giridharadas ultimately succeeds with Winners Take All by adopting a temperate approach that creates space for a conversation. His reporting raises important questions about the contributions of elites to American society while giving them some benefit of the doubt and leaving room for differing prognoses. Rather than produce yet another categorical argument, he avoids snap judgments and is at his best when writing about the gray areas in which well-intentioned individuals are pursuing laudable goals that may simultaneously reinforce an unjust system.
David Talbot is a PhD candidate in politics and international studies at the University of Cambridge. He previously served in the Obama administration as a policy advisor on international economics to the US Secretary of Commerce.