Senior Fellow of Real Clear Foundation Rupert Darwall Sees the Polity of Businesses Becoming Armed Tools of Political Agendas

Senior Fellow of Real Clear Foundation Rupert Darwall Sees the Polity of Businesses Becoming Armed Tools of Political Agendas


Live from Music Row Friday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. –  host Leahy welcomed Senior Fellow at the Real Clear Foundation, Rupert Darwall to the newsmakers line to discuss his recent article and defines the design of ESG.

Leahy: We are delighted to welcome to our newsmaker line from across the pond, Rupert Darwell, a senior fellow at the Real Clear Foundation. He just released a study on capitalism, socialism, and a thing called ESG. And if you haven’t heard about it, you got to listen up. It’s very important what he’s written. Rupert, thanks so much for joining us this morning.

Darwall: It’s my pleasure, Michael.

Leahy: ESG, it sounds like a food additive, but it’s much more dangerous. Tell us, what does ESG mean? And why should we care about it?

Darwall: ESG is environmental, social, and government. It’s a form of investing. It’s meant to be for the clean, moral, pure types that want to make the world a better place. And it’s a bit of a con, really, because what it says on the outside is ESG investing, you’re doing well by doing good.

So you’re going to make more money by doing the things that are going to make the world a better place. But actually, it’s all about that at all. It’s politics by other means. It’s the politicization of business and investing. And you’ll say goodbye to those higher returns because that’s just sales chatter.

But fundamentally, it’s about turning capitalism into something very, very different. And it’s also about political power. It’s about giving financial oligarchs on Wall Street and in the big state pension funds like CalPERS in Sacramento and the Neivers New York pension funds, enormous amounts of political power of business.

Leahy: Yeah, that’s exactly it. We’ve noticed, of course, I guess the publicly traded corporations, I don’t know, 90 percent of them seem woke beyond repair. They’re always preening about some moral issue, and it’s just highly destructive it seems to me. When did this really start being a thing?

Darwall: Well, there was a phase of it, I think, in the 1970s because Milton Friedman wrote a fantastic article saying the role of business is judged by how much money it makes for shareholders. It’s about profit. Because if you’re a good business creating and innovating things in the market that customers want, you’ll do well and that kind of thing.

It kind of then went through the 80s and 90s and then receeded. But it’s really come back with a vengeance now. And you may remember, a couple of years ago, the Business Roundtable issued that 181 CEOs signed the Business Round Table statement on stakeholderism.

The businesses are meant to serve a wide variety of interests and demoting the stockholder. So it’s really come in very powerfully. And, of course, the so-called climate crisis, this existential threat to life on earth kind of thing, businesses have got to emit zero. So it’s really kind of taken business and particularly financed by storm might say.

Leahy: I don’t know what your background is other than your finance guy in London and you write about it. I’m a graduate of Stanford Business School. I have an MBA from Stanford way back when. And what I’ve noticed is the ideas that are taught in business schools today seem much more socialist at the highest level than they were when I was in school.

Tell me what you think about this. You have a generation of left-wing socialists now that are influencing these hedge funds like Black Rock and are serving on corporate boards and are in the marketing departments and the finance departments of Fortune 500 companies and they’re forcing that ideology that they’ve grown up with upon these publicly traded companies. Do I have that right or is there another element to it?

Darwall: I think that’s a very important aspect of it. I would also point to there’s also kind of a revolving door between the corporate affairs department of large corporations. At the end of the Obama administration, you saw a load of Obama administration officials exiting the federal bureaucracy and jumping into the C-suites of corporations.

For example, you mentioned Black Rock. One of the Black Rock guys is now a very senior economic advisor in the Biden administration. So it’s kind of this revolving door. It’s this intertwining of business and politics. And in my view, the business of business, the business of business is business. It’s not politics. It’s not politics by other means.

But what we’re seeing is polity of businesses becoming armed tools of political agendas, which I think is very dangerous for democracy, because these questions should be decided through the ballot box and through the Constitution.

The United States has a brilliant, perfect Constitution, if you like, of representative democracy. And the second danger to capitalism because as businesses become woke, they become less innovative and doing less of driving the things that make living standards rise and which makes capitalism the greatest economic system there’s ever been.

Leahy: The title of your study is Capitalism, Socialism, and ESG. But I look at this interconnection between the very large, publicly-traded corporations and government and politics. And to me, the ism that comes to mind is more a form of fascism. What’s your thought about that?

Darwall: Corporatism, because both socialism in its extreme form and fascism, but they both see that the political ideology must trump everything and every aspect of society. And particularly economic ones should be the tools of the state.

Yes, there is. You are absolutely right. It’s a form of corporatism. It’s very nasty. It’s unrepresentative, as I say, it’s about usurping, the Democratic prerogatives of the people through the ballot box.

Leahy: The other element of this to me, for free markets and capitalism to work, the capital markets have to work for all sizes of companies. Large companies and small companies. And of course, startup companies, small companies, entrepreneurial companies, that’s where most innovation does occur.

It seems to me that the rise of ESG, environmental, social, and governance standards among larger corporations has kind of made the capital markets much more difficult for small businesses and those that are providing innovations. Do you see that as well, or am I just looking at it from a small business lens?

Darwall: No. I think what happens is that large businesses call for large woke businesses if you like. When they embrace this agenda they say, well, our business model could be under threat from startups, therefore, because we’re doing what the politicians want and because what Democrats in Washington want, we need protection from startups.

Inevitably you get distortions in markets. You have you know what economists call rent-seeking behavior and businesses trying to protect themselves from businesses that are unencumbered by ESG and are free to perform as they want. I think you’re absolutely right. It’s a big threat to the layer of new businesses which really have driven growth and innovation.

Leahy: The other thing is to look at alternatives to ESG. Is this just a huge group think among hedge funds and Fortune 500 companies? Is there anybody in that world that you see right now that is not embracing ESG? And what consequences are they facing?

Darwall: I would say corporate CEOs are very exposed to proxy battles. If they put their head above the parapet, they’re likely to have a shareholder and stockholder revolt at the next annual general meeting. So they’re quite nervous individuals.

They have to go with the flow. The greatest economist of capitalism was Schumpeter. He wrote that an incredible book, Capitalism, Socialism, and Democracy. And in that, he described the publicly traded corporation as capitalism’s vulnerable fortresses for exactly this reason in that you have a split between ownership and control.

But I think the ESG thing because it’s such a distortion of the capital markets, there will be people who come in and contrarian investors who can make lots of money out of the fools who follow the ESG sales pattern. Because when you have people investing for non-financial reasons, they make mistakes.

They’re the easy ones you can pick off. I think there’s an aspect of it that this is set up so that more savvy investors at some point will make a great deal of money from the investors chasing the fools gold of ESG investing on the basis that they’re going to do well by doing good, which is, as I say, is complete junk.

(Commercial break)

Leahy: Rupert, you mentioned before that ESG actually doesn’t perform well financially, and it’s a bit of salesmanship, if you will, for the left. And you mentioned that perhaps some more savvy investors will come up with contrarian views.

I just sent you an email that includes some information about just such a group based here in Nashville, as it turns out, called 2nd Vote Advisors. And basically, they manage funds and they have private funds that are exchange-traded funds.

One is focused on pro-life. The other is focused on Second Amendment-type issues. They say that without 2nd Vote Advisors as a counterweight to existing asset managers, a progressive ESG agenda will continue when investors can rest assured that we will never vote proxies in support of ESG shareholder initiatives. I don’t know if you’ve heard of 2nd Vote Advisors, but it’s almost as if you predicted they would come into existence.

Darwall: It does sound like that. The smart investors will. When I say smart investors, investors that have got their feet on the ground, and they’re the best ones will see this as an opportunity. Because what will happen is that they will dump lowly rated ESG stocks, which means that they’re cheaper for others to buy.

There’s that thing that Ben Graham, the Warren Buffett guru, said, in the short term, a stock market is a voting machine, and in the long term, it’s a weighing machine. And at the end of the day, what will happen is it will be the cash flows that companies generate. The ESG investing movement is creating a massive investment opportunity for smart investors.

Leahy: But besides 2nd Vote Advisors, is there anybody promoting these contrarian options to ESG investments?

Darwall: That’s one of the things that’s needed to happen because what you’ve got is the big three index providers, ETF index providers led by Black Rock. You’ve got State Street and Vanguard. Those big three, which Black Rock is the largest asset manager in the world have gone woke.

Larry Fink is leading the charge on ESG, climate, and on stakeholderism. He has threatened encumbered management to vote against them if they don’t bow to the God of ESG. That means that if you don’t subscribe to that view of politics and that is what it is, it is essentially politics and ideology, you need to find the ETF provider who will vote your proxies the way that you want and not the way Larry Fink wants.

I think in time you will see alternative providers. The market should respond in the way that people who want politically free investing can have that demand satisfied. But as yet, I haven’t seen those ETF providers come over the horizon. America is still the most dynamic economy in the world, the freest economy in the world, and that over time that will happen. There will be a market reaction against this.

Leahy: How is it that a guy like Larry Fink, who is, in essence, a financially sophisticated left-wing ideologue, how is it that we have so many guys like that now?

Darwall: He was a bond trader who correctly spotted the diverse portfolio and index investing. These are both low costs and over time give very good performance. And he’s ridden that. And now he’s made as much money as he can ever hope to.

And he’s got the whiff of political power in his nostrils. And sitting in as chairman and CEO of Black Rock, he has the best of both worlds of having immense financial power on Wall Street and also access to every political leader he ever wants. So there is a lot of that.

There’s something that he said. Every year he writes to corporate CEOs just telling them what to think. And last year he wrote to them and said all this disclosure stuff, ESG and climate disclosure, and so forth. He says the goal cannot be transparency for transparency’s sake.

They normally say, well, the market needs more transparency and more data. Then he went on to say disclosure should be a means to achieving more sustainable and inclusive capitalism. Now, that is politics. That is pure politics and nothing to do with boosting investor returns or anything like that.

This is the guy acting as a politician wielding political power. The proxy votes that are embedded in ETF index funds, he’s stripping the proxies out of them, and he’s casting them according to his ideological prejudices.

Leahy: The founders, Alexander Hamilton, James Madison, Thomas Jefferson, didn’t agree on a lot. But one thing they did agree on that if an aristocratic manufacturing class ever arose in America, it would be bad for the constitutional Republic.

We have now this aristocratic leftwing financial class, and they have no constraints. I think what has arisen here with guys like Larry Fink is exactly the kind of aristocratic modern feudalism that Jefferson, Hamilton, and Madison would have absolutely loathed.

Darwall: I absolutely agree with that. These Wall Street oligarchs are essentially usurping, the prerogatives of the Democratic and constitutional political state. That’s exactly what’s going on. This is a parallel government that is not really accountable to anyone and certainly not accountable to voters. When Larry Fink talks about inclusive capitalism, he’s actually talking about exclusive capitalism, insider capitalism.

Leahy: Exactly.

Listen to the full interview here:

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Tune in weekdays from 5:00 – 8:00 a.m. to the Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.







2ndvote.Com: Director Amy Wilhite Talks About Their Platforms New 2nd Vote Advisors and Recent Blog News

2ndvote.Com: Director Amy Wilhite Talks About Their Platforms New 2nd Vote Advisors and Recent Blog News


Live from Music Row Friday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. –  host Leahy welcomed the executive director of 2nd Vote, Amy Wilhite to the newsmakers line to talk about 2nd Vote’s growth and their new affiliate 2nd Vote Advisors citing some news on their site as woke corporations step back.

Leahy: We are joined on our newsmaker line now by our good friend Amy Wilhite of 2nd Vote. Good morning, Amy.

Wilhite: Good morning, Michael. How are you doing this morning?

Leahy: I’m great. So 2nd Vote Advisors, your affiliated group, has done a lot of advertising. Second Vote, which rates corporations, has been pretty busy as well. What have you been up to the past couple of weeks?

Wilhite: The advisors’ group is that the for-profit side. We actually supply the research for that. They license that through us. And so they’re doing a lot of great work right now. You’ve probably seen them on Fox Business. Andy Puzder has done a lot of advertisements and commercials on Fox News and different things.

Dan Grant was on last night. So yes, they’re doing great stuff. And you can find more information about them on or Just great stuff. They have two ETFs that are doing really well better than the SMP 500. And so we’re happy to supply the research for them to create those EPS.

Leahy: It seems like to me, Amy, every time you turn around, there’s another woke corporation doing something stupid. Tell our listing audience again what 2nd Vote does and why it’s important.

Wilhite: Yes. 2nd Vote, the nonprofit, which is what I work with and I’m the executive director for is we research companies. Basically anywhere where you spend money. Whether it’s on the charitable side, the retail side of the investment side. And we score them on six different issues that are most important to Conservatives.

On life, First Amendment, Second Amendment, education, the environment, border security, and immigration. And when we say environment, it’s like over-regulating, overregulation, and too much government control.

We’re for good environmental issues and taking care of our country and our earth, but not overregulation. So that’s just to clarify that. And of course, we’re pro-life First Amendment. We’re actually kind of changing that soon to an issue called basic freedom with everything that’s happened with the cancel culture of this world.

And just like a mask issue, do we have the freedom to wear a mask or not wear a mask? Some of those things have just been taken away like going to the church and those kinds of things. We’re going to kind of broaden that First Amendment scope.

And then also Second Amendment, obviously, pro-gun carry, pro-guns, education, and school choice. We’re for that. And then also border security and immigration. Just follow the laws about what’s already in place and no sanctuary cities and those kinds of things.

So anyway, those are our six issues. We score companies and where they’re giving their charitable dollars. We rate them on the score from one to five. One being left, far left and five being right conservative, and then three being neutral.

And we really want companies to just be neutral and to stay out of the culture wars, to quit being so divisive and know that when you’re buying a cup of coffee that’s what you’re getting. So we score that. We put our research out there and put our scores out there, and so anyone can look at our research and look at what we’re doing and then base their shopping habits on the scores.

We’re really trying to get people to be more aware of where their money is going. You wouldn’t vote for a candidate who’s going to be for those things that you’re not for. Why would you go shop somewhere at a place that doesn’t match your values?

Leahy: That makes a lot of sense. How big is your research team to support all this Amy?

Wilhite: It’s has grown by a lot, but we’ve got about five in place, and then we have a whole advisor group that kind of handles that and overlooks that, too, as well. We’ve grown a ton here recently with more part-timers. We’ve got volunteers and then we’ve got the advisor side. As you may know, it takes a lot of time to look at 990s which is what we do. We look at it.

Leahy: And by the way, a 990 for our listening audience, 990 is a form that a 501 (c) (3) or (c) (4) nonprofit group must file with the IRS every year. And supposedly they’re supposed to have all sorts of information about who gives them money, at least for a 501 (c) (3)

Wilhite: Exactly. So our research team will look at that, see where the money is going. We also look at their public stances and maybe some of the CEO statements that come out. We look at indirect donations, direct donations.

We look at a lot of different things to come up with that score and make it really simple. We have an app that folks can download, and it’s free, and it’s not in the App Store. It’s not in a Google Play store, but it is on your browser. You can just go to your phone and add the app to your home screen. Very simple.

Leahy: I also noticed and I had noticed that until this morning when I was looking at you have an area called on your website, You have an area called featured content, and I’m looking at what you’re featuring.

You’ve got information on the human rights campaign, United Way Guide, Planned Parenthood, Southern Poverty Law Center, and Black Lives Matter. The United Way guide. Tell me about that, because that’s very interesting to me.

Wilhite: United Way, they do some great things, but also a lot of people don’t realize that they give to Planned Parenthood. And when we started doing the guide for United Way, we found that over 83 chapters were giving to Planned Parenthood, and we did put them on notice.

We let them know that we were doing this, and we were putting this information out there. And since we’ve been doing this, the chapters have dropped to about 55 or 54 chapters that are giving to Planned Parenthood. So it has dropped.

And we feel like our work is making a difference because there are not as many doing that anymore. If you’re giving to United Way, you can look on our website and see exactly which chapters are giving to Planned Parenthood. It’s kind of similar to the other guide that we have there.

There’s an everyday shopping guide that you can check out where you should grocery shop. Which ones score a three to a five. And again, four and five is a conservative side. And we applaud that. We are a conservative research group, but three is good. We consider that good. If it’s a three, it’s neutral. And that’s a good score, too. We’re not saying to only shop at four and five but get to those that are three as well.

Leahy: I noticed also, you have a very interesting story that you posted on your website about a technology firm called Base Camp. They’ve been in the news of late. In April, they announced a new policy requesting that employees not discuss controversial issues on the company-wide communication platform.

So that was praised. About a third of their employees quit because of that. Then here’s a very interesting situation. Last week after some of its disgruntled employees threw a fit during a conference call when Ryan Singer, the head of strategy at Base Camp, pushed back on claims that the company and society as a whole had been a ‘white supremacist culture’ and an employee attacked him for being a ‘white male.’

Shortly afterward, the company’s leadership suspended Singer place some under investigation. In response, Singer resigned. This is funny what you wrote at ‘One cheer for a Base Camp trying to do the right thing, but firing a top employee for standing up to other staff members who push leftist values is unacceptable.’

Are you seeing a lot of that a lot of allowing left-wingers to rant all they want in corporations? But if you push against it, as was the case in Base Camp, you get fired.

Wilhite: I think we all see that you see it all the time, and people live it with what they do in their job. Sometimes they’re afraid to even speak out on things, and you almost get punished if you want to step up for what you might believe if it’s on the right side.

It’s happening all over. And that’s another thing that we do have. Just like you see in the Base Camp article. We put out blogs each week and a lot of it’s what’s going on and things that would be of interest here. But also we’re trying to also be positive and show some of the things that are going on that are also positive.

A lot of the companies are walking back from some of the liberal stances. Especially on the Georgia election laws. A lot of companies came out bashing that and then stepped back recently. I know Pfizer stepped back. They kind of decided at a board meeting when someone was asked, well, we’re going to stay out of that.

Leahy: That’s probably a good, good thing.

Listen to the full second hour here:

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Tune in weekdays from 5:00 – 8:00 a.m. to the Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
Photo “Amy Wilhite” and “2nd Vote” by