Businesses seeking financing may soon face a flurry of requirements that will, in effect, determine whether they are “woke” enough to be approved by financial institutions for loans or investment.
While the requirements are presented as goodwill toward the downtrodden and the environment, they are underpinned by an ideology with totalitarian tendencies, according to several experts on totalitarianism and market economy.
“Woke” in this sense refers to a set of progressive views that have dominated establishment circles in government, academia, and the corporate world.
But the implications of the climate agenda that have prompted such concerns have little to do with the effects of global warming.
Pragmatically, the financiers’ agenda aligns with the policies of the Biden administration, giving them an opportunity to capture some of the hundreds of billions of taxpayer dollars that the president promises to bankroll. At the same time, they can try to influence the setting up of the regulatory framework, making sure it benefits them, rather than newcomers.
After all, banking executives have a fiduciary duty to bring profit to shareholders, even if the profits are backed by government intervention, according to Peter Klein, Baylor University entrepreneurship professor and research fellow at the libertarian Mises Institute.
“If they can do so by taking advantage of the regulatory system, by taking advantage of the legal system … why wouldn’t they do that?” he told The Epoch Times.
Two-Tiered Economy
Advocates of freedom usually warn against the government’s attempts at central planning. But “it’s not just government officials who have the planner’s mentality,” Klein points out. “It can often be top executives as well.“In government, but, of course, also in private sector, you have sort of a cadre of elite decision-makers who view themselves as being better positioned to make important decisions than other market participants,” he said.
In fact, economist Friedrich Hayek predicted that monopolistic corporations would be first to take on the task of planning the economy under growing opposition to free-market competition.
“The universal struggle against competition promises to produce in the first instance something in many respects even worse. A state of affairs which can satisfy neither planners nor [free market] liberals, a sort of syndicalist or corporative organization of industry in which competition is more or less suppressed, but planning is left in the hands of the independent monopolies of the separate industries,” he wrote in his 1943 book “The Road to Serfdom.”
“This is the inevitable first result of a situation in which the people are united in their hostility to competition, but agree on little else. By destroying competition in industry after industry, this policy puts the consumer at the mercy of the joint monopolist action of capitalists and workers in their best-organized industries.
“Once this stage is reached, the only alternative to a return to competition is the control of the monopolies by the state. A control which, if it is to be made effective, must become progressively more complete and more detailed.”
This is “an apt characterization of where the economy stands today,” according to Michael Rectenwald, retired liberal studies professor at New York University and an authority on corporate socialism—a convergence of government and business interests in establishing a form of totalitarian, socialist rule.
“This financial stranglehold over industries will consolidate the economic status of favored producers and strengthen their monopolization over production and distribution,” Rectenwald said. “The measures will also trickle down to the consumption of end-users, whose carbon emissions will be reduced by default. They won’t have any say about driving gasoline-powered vehicles, because such vehicles will not be produced and gasoline will no longer be available.
“The objective is to curtail the mobility and consumption of the vast majority and reduce them to captives of the Great Reset agenda.”
While the financiers may not be able to completely eliminate non-compliant businesses, “the planners are creating a two-tiered system, with preferred producers/distributors on top and the non-woke producers/distributors beneath them,” he said.
“This is a static hierarchy and will lead to stagnation and likely the need for the state to intervene even more than it is doing already,” he said. “Interestingly, it is the socialists who, in their disdain for competition, aid and abet the formation of monopolies and a static economic hierarchy. The elimination of a thriving middle class is always the road to serfdom.”
Klein acknowledged that what we see now is “not exactly 1940s-style industrial planning.”
“But it’s in the same spirit,” he said.
Freedom Argument
The argument that it’s better, necessary, or even inevitable to consciously direct the economy isn’t new. It has been particularly prominent in the past 100 years and usually promoted by socialists of different stripes.“There’s always been a sense among certain segment[s] of society that unplanned sounds primitive, sounds wild and crazy,” Klein said.
This notion goes back at least to Karl Marx, co-author of the Communist Manifesto, who described socialism as “socialized man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature,” in his Das Kapital.
Yet, the notion stems from a misunderstanding of the price system in the free market, Klein said.
“Proponents of central planning … claim that defenders of certain market-based systems assume that every individual is very well informed and forward-looking and is always going to make the right decision and so forth. That isn’t the argument at all. The argument is that there’s very deep uncertainty about what is the right thing to do,” he said.
The free marketers’ distributed knowledge premise is that among the myriad decisions that individuals make, at least some of them will be right. The solution that actually works will attract the attention of other market participants, allowing the economy to adapt.
“You want a system in which lots of different people can try lots of different things, everyone is motivated to use his or her knowledge to the best of their abilities because they personally reap the benefits and bear the costs of the actions that they undertake,” he said.
Pushing economic decision-making down to the smallest unit of an individual or a family also limits the negative impact of any single wrong choice.
“A decentralized market system limits the harm mistakes can impose whereas in a centralized system small mistakes can have huge harmful effects,” Klein explained.
Positing climate change as a crisis that justifies economic intervention isn’t enough of a saving grace, according to James Taylor, president of The Heartland Institute, a free-market think tank skeptical about catastrophic climate predictions.
At the very least, he said, it should be up for a vote, not pushed from the top.
“Believing strongly that something bad will happen does not justify subverting the democratic process, does not justify taking away people’s rights without at least giving people the right to defend them through the democratic political process,” he told The Epoch Times.
The institution of a corporation itself is a product of government bestowing “certain benefits and protections” on such entities, he argued.
“If they were solely creatures of the economy, then I would agree … that we should leave them alone. But again, these are created with the assistance of the government power and now they’re being used to impose political agendas on American citizens. That’s very troubling,” he said, noting that “this is the very type of unaccountable authoritarianism that the left used to always be concerned about.”
Environmental efforts don’t necessarily need to conflict with prosperity, Taylor says.
It was exactly its prosperity that allowed America to develop new, cleaner technologies that have helped cut air and water pollution by more than half over the past 40 years, he noted.
“When you have a wealthy economy, then you’re able to afford to have policies that are very helpful for the environment,” he said.
