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