suzanne wang

Reflections on Winners Take All

July 10, 2019

It is difficult to get a man to understand something when his salary depends on not understanding it.
—Upton Sinclair

In 1889, Andrew Carnegie published an essay widely known as the “Gospel of Wealth.” He begins by marveling how the Industrial Revolution dramatically increased wealth and quality of life. Concentration of business in the hands of a powerful few under free-market capitalism made everyone better off, more effective than any other system. The resulting inequality was undesirable but inevitable. It was also solvable, as Carnegie believed that the wealthy had an obligation to be modest and unostentatious, and give away all of their excess money in their lifetime— otherwise, “the man who dies thus rich dies disgraced.” They should consider their surplus as temporary trust funds meant to benefit society. “The millionaire will be but a trustee for the poor,” Carnegie reasoned, putting their wealth to use for their community “far better than it could or would have done for itself.”

The “Gospel of Wealth” was written in a time when people were angry at the extreme wealth made by tycoons like Carnegie during the Gilded Age. Modern, organized philanthropy was just getting off the ground, out of a mix of altruism but also a desire to placate the public. People were distrustful. As Theodore Roosevelt once said: “No amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them.” 0 Over time, however, general public perception of wealthy philanthropists became far less angry in part thanks to Carnegie’s article.

I found this piece of history particularly fascinating when reading Winners Take All by Anand Giridharadas. The example is one of the many that illuminate the core message of the book: that we applaud those that do good in our society without questioning how they’ve done— and profited off of doing— harm. While the “elite” are more socially concerned than ever, they also monopolize and supervise progress as private actors while ensuring the status quo and systems that enable their way of life: “the people with the most to lose from genuine social change have placed themselves in charge of social change, often with the passive assent of those most in need of it.” In short, many of them believe that they are changing the world when they are protecting a system that’s at the root of the problems they claim to want to solve.

Giridharadas describes this mindset as a way of “MarketWorld.” Social change happens through markets and voluntary action instead of public life and law. It’s accepted that “businesses acting as business, not as charitable donors, are the most powerful force for addressing the pressing issues we face.” 1 We can have win-win solutions, or shared value, or triple bottom lines through business as usual. The government, meanwhile, supports the market and invests in making capitalism successful, rather than acting as a check on it.

There’s a lot that I liked about the book. It articulated some of the unease I feel in Silicon Valley. This quote Giridharadas cites from David Heinemeier Hansson, the founder of Basecamp, captures some of it:

“Part of the problem seems to be that nobody these days is content to merely put their dent in the universe… No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it. It’s not enough to serve customers, they have to capture them.”

Here, efficiency rules and people believe societal problems are best solved by private agents and markets rather than the government. 2 Companies claim to be making the world a better place while doing everything they can to reduce tax burdens. The venture capitalists that fund and profit off of them are a select, privileged few. We are incentivized to pursue scale, growth, and wealth, with very specific notions of success in mind. We see technological innovation as the engine of societal progress, and are perhaps less attuned to the systemic and structural foundations— the messiness of cultural and social complexity— of what hinders true progress.

And we live in a city that boasts a high degree of inequality, a gap that is starkly visible on our streets and widening still. How many people would side with Carnegie and say that this inequality is inevitable and entirely necessary, that we can no longer turn back— that capitalism as we know it is too deeply entrenched? Should we just accept that the forces of capitalism are too strong to overcome, and strive to work within the system to make things better? Giridharadas isn’t hopeful, citing Thomas Piketty’s famous study published in 2014. It found that the average pre-tax income of the top 10% has doubled since the 1980s, the top 1% has more than tripled, while the top 0.001% has grown 7x. Meanwhile, the income for the bottom half of American’s has stayed almost the same. Carnegie’s vision may not have played out the way he envisioned.

Some other notes from the book:

  • Technology has created networks that are more decentralized, where there is more power distributed at the border. 3 Even so, Giridharadas argues that tech companies and platforms— despite coming in as outsiders— hold understated power at the center. From The Seventh Sense by Joshua Cooper Ramo: “power is defined by both profound concentration and by massive distribution. It can’t be understood in simple either/or terms. Power and influence may yet become even more centralized than it was in feudal times and more distributed than it was in the most vibrant democracies.”
  • Giridharadas spends a chapter examining thought leadership, which he believes has dramatically framed conversations around doing good. Their language typically focuses on the victim as opposed to the perpetrator (e.g. what can the victim do better, versus where is the perpetrator accountable?), and zoom in on the individual instead of seeing the issue as collective or systemic. Thought leaders are optimists who go easy on the powerful, ie, the people who fund them. As a result, the marketplace of ideas becomes distorted.
  • Along with globalization, the elite increasingly don’t belong to any particularly place. Nor do businesses. As we become disconnected from locations, we don’t necessarily think to invest in our local communities. This resonates a lot with me, having grown up in various parts of the world and working for a very globally oriented community. It feels like a huge part of why gentrification is as unfortunate as it is. This is not to say that globalism is bad, but that there are consequences. Giridharadas cites Jonathan Haidt, who points out that globalists have convinced themselves of “the moral superiority of openness, freedom, and One World,” and Theresa May: “too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ, the people they pass on the street. But if you believe you are a citizen of the world, you are a citizen of nowhere. You don’t understand what citizenship means.”

I’m not fully sold on Giridharadas’ arguments. I don’t think he’s balanced his criticism with any concrete argument of the world he wants to see, or ways to get there. Nor does he really acknowledge the powerful incentives at play that maintain the status quo, the impossibility of the wealthy doing anything much different— because what other choice is there? I’ll take some time to reflect on different perspectives and refine my opinions here (discussion is always welcome!). However, I do love this book for its forceful commentary. It’s refreshing, sobering, and a completely worthwhile read.

0 This sentiment is striking particularly when applied to the Sackler family, who gives millions to fund causes in the arts and humanities, yet has profited immensely off of the opioid epidemic.
1 Michael Porter, the famous Harvard business professor, said this in an article about shared value from 2011.
2 This and the following are very broad generalizations, but they reflect a general attitude I encounter all the time.
3 As described in another great read, Revolt of the Public by Martin Gurri.