First note: The Carolyn Parrish post (4 days ago) continues to draw comment, 70 of them so far. At the moment, Truthseeker and Colin are having at it. It kind of feels like someone is having a donny brook in my living room. But let the games continue!
Now for today’s post.
According to the WSJ, a Hollinger board investigation accuses Conrad Black and David Radler of “aggressive looting” and “corporate kleptocracy to the tune of $400 million. Lord Black and Mr. Radler stand accused of “lin[ing] their pockets at the expense of Hollinger almost every day, in almost every way they could devise.
The 513 page report details the alleged abuses: $24,950 for “summer drinks, $90,000 to refurbish Blacks Rolls Royce, $42,870 for a birthday party for Ms. Black, jets for both Black and Radler, and the subvention of homes in England and the US.
Blacks wife, Barbara Amiel, has a taste for extravagance of her own. According to the Times, she
“spent fortunes on designer clothes. A Vogue reporter given access to her closets counted more than 100 pairs of Manolo Blahnik shoes, 40 jewel-handled handbags and a couture collection that would be the envy of a first lady.
The question for anthropology and economics readers is this: what the hell happened? Black was once regarded as a hero of the neo-cons. He was seen to be intellectual uncompromising, a captain of industry who cared about ideas. If appearances are to be believed, Lord Black got himself trapped in a cycle of conspicuous consumption that put his integrity and his empire at risk.
We may agree with Frank when he writes “beyond some point, across-the-board increases in spending on many types of material goods do not produce any lasting increment in subjective well-being. Economic actors do at some point grasp this problem. Presumably, the 100th pair of Manolo Blahnik shows did not bring Ms. Black the pleasure of the first. But she kept buying them.
It is customary to think of this as a kind of madness. Economic actors, sage and careful in other things, can in some circumstances fall prey to what Frank calls “luxury fever. This fever is attributed to status competition, self aggrandizement, and or the seductions of a consumer society.
There will be lots of speculation on this question in the coming days. Indeed, the press is engaged in a kind of “jump out of Lord Black and now lovingly details his descent from power. (A “jump out is, as you guessed, the opposite of the “jump in with which gang members are inducted. The press has turned on Black.)
But why this delighted rush to judgment? I thought this is what we wanted to happen at the top end of a consumer society. We want to keep super producers in harness (if one may use so unbecoming a metaphor). As someone ascends social and economic ladders, dont we want them to spend apace? Why otherwise would they keep climbing? We have no “sticks, when it comes to a man like Black. We want all the “carrots we can muster.
Surely, the last thing we want is to discover is that productive economic players are overtaken by a sudden sense of sufficiency. We dont want Ms. Black to wake up one morning and say, “55 pairs of Manolo Blahniks, thats enough. We dont want Lord Black coming to, and saying to Barbara, “honey, I think were done. Lets cut up the credit cards.
Just as surely, we dont want Black and other players looting funds that belong to the share holder (if thats what happened). But when it comes to their own resources, we want their consumer preferences to scale up endlessly. (“Manolo Blahnik shoes? Are 100 pairs are enough, Barbara? Do you have any Jimmy Choo shoes?) Naturally, there is a moment of discomfort here: that so few should have so much.
But this is how we “incent creators of value.
Frank, Robert H. 2004. How not to buy happiness. Daedalus. 133 (2). here
Heinzel, Mark and Christopher J. Chipello. 2004. Report Slams Hollinger’s Black for a ‘Corporate Kleptocracy.’ Wall Street Journal. September 1, 2004
McCracken, Grant. 1988. Diderot Unities and the Diderot Effect. In Culture and Consumption: new approaches to the symbolic character of consumer goods and activities. Bloomington: Indiana University Press.
Rushe, Dominic. 2004. Black narcissi. Times On Line. here
please, let the black’s of the world consume to their heart’s content. but not on the dime of company, which ultimately, comes out of the pocket of the workers and stock holders.
also, i don’t know how much i can actually trust a man who’s so willing to give up his citizenship for the sole purpose of gaining a title in another.
Colin, thanks, I’ve heard the widow story, too. Heard to know what to believe. He has been so badly treated the press. I did some good things for the English press, I think. And the Post is a wonderful newspaper and a great addition to the somewhat sleepy Globe. So he is something more than a pirate, if he is that. Thanks, Grant
Jonnie, I think that choice was forced upon him by a spiteful PM. And I’d like to know who the PM thought he was representing when he made that decision. Not me! Thanks, Grant
Fascinating. “But when it comes to their own resources, we want their consumer preferences to scale up endlessly.” Well. Freedom certainly demands that be allowed. But perhaps I’m just dumb, but is that really what we want? I have to admit, I am a “freemarket” enthusiast, but…I view those who let their preferences “scale up endlessly”, to be very much like addicts (and I mean this in the metaphorical sense). Units of credit, fictional, functional symbols that aid trading and efficiency are wonderful. However, I have yet to meet an interesting person (obviously subjective determination) who actually lived their life by the “carrot and stick” method. Do you? I have to admit that I doubt it. Credit capital is great. But, just as important are the various other forms of capital. My personal knowledge, friends, my contribution to family, community and culture. I was personally always suspicious of Mr. Black, primarily because of the personal similarity between him, and a local drug lord (Cook County, IL) that I had met a few years back. They were both primarily omnivores, mainly dedicated to satisfying their monumental hunger. And more power to them. It just seems a bit too “Leninist” to me to ever have held this particular type of hunger up to any kind of admiration (Lenin to me was the ultimate runaway, non-value capitalist. He controlled the state, the state owned everybody and everything).
“But when it comes to their own resources, we want their consumer preferences to scale up endlessly.”
I thought that the true free market went beyond that type of un-imaginative consumption. Didn’t Mr. Black merely demonstrate that he was not a true capitalist, but merely a chimp hording? But perhaps I am being overly critical. I have yet to understand the “value” of Mr. Black, except of course for his entertainment value.
Isnt capital merely a tool? Just like a computer? When did we return to the concept that display, rather than function was the way to go, display is good, I love my silk/wool sweaters, and dont even get me started on my full length leather coat, or how much it cost, but that is affectation, fun, but not terribly important. And really, is its worth exactly the same as the joy I had the other day, volunteering to push an elderly gentle lady around Lincoln Park zoo here in Chicago in a wheelchair? No. Not for me. Somehow I sense that Mr. Black was slightly off balance in his pursuit of capital and display. And really, I do feel sorry for him. But then again, I regard all my capital as significant. Not just my credits. Psychologically speaking, is Mr. Black really someone we should ever have aspired to be? I always looked at him the same way I look at the young local commies who live in public housing here in Chicago, ideological purists. But I have always pitied them. I have always been lucky to be included in both local poetry readings by starving artists, and fundraisers at the most prestigious functions. Those individuals I have admired on both levels, understood these concepts in ways that men like Castro and Black never will. Perhaps I am being too extreme myself, but to me there is only a hairs difference between Mr. Black and Castro.
Skeptikos, don’t get me wrong, this entry is not about admiration. It says, and somewhat I thought somewhat grudgingly, that if the price of incenting talent is 100 pairs of shoes (etc.) then we pay it. What we don’t want is that “sudden sense of sufficiency” overtaking someone who has something important to offer. We don’t want them opting out. The thing about Black is that it always seemed that his intellectual interests might distinguish him from the usual freespending lord of industry…but apparently not. Thanks, Grant
It isn’t the incentive that we need to concern ourselves with here. The animal in us will always crave the purse that is always full, the kitchen of never ending delights, the body the stays eternally youthfull, the crystal ball that reveals all the worlds secrets.
Blackies problem is that he didn’t want to work for it. He wanted to get all the reward through cleverness rather than hard work – which is why he frauded his millions. Why he packed the board with courtiers and sycophants. Why he indulged in every conflict of interest known to modern corporations.
In clearer times a betrayal of this sort would have been rewarded with hanging to near death, slow removal of the intestines and finally four stout horses to quarter the man.
A society that does not set a stern example for its elite becomes corrupted and weak. We may no longer have access to these harsh methods but a modern equivalent is necessary to keep our culture healthy, dynamic and productive.
One sometimes hears jokes about how Roy Thomson was so stingy he rode the TTC to work. This offends our sensibilites about how an elite man, an aristocratic man, a cultural leader should behave. But old Roy had older, stronger and sterner virtues that respected who he was and what he was to our culture – a creator of value.
Conrad was nothing but a dissapator.