The growing popularity of government-run industrial policy is one side of a bad economic coin that’s circulating through Canadian and American political circles. The other movement taking shape simultaneously in corporate circles proposes to install corporations as global arbiters and enforcers of environmental, social and governance policies.
All this comes to mind following various news reports about Thursday’s annual meeting of BlackRock, the US$7.5-trillion investment giant whose CEO, Larry Fink, is the world’s leading corporate advocate for a major expansion of the role of Big Business into areas heretofore relegated to the state. Along with a bevy of U.S. CEOs — from 181 companies including Amazon, Apple and GM — Fink last year led a U.S. Business Roundtable call for an end to shareholder-driven capitalism.
Also prior to the meeting, critics from both the left and right were ganging up on the investment firm. The Union of Concerned Scientists, which frets about climate change, called on BlackRock to live up to its self-promoted policies. Among other things, the scientists want BlackRock to apply its anti-fossil fuel strategy in its role as adviser to the U.S. Federal Reserve on its massive COVID-19 financial bailout.
BlackRock’s China enthusiasm has become a key focus of the firm’s ESG critics. Rupert Darwall, a senior fellow at the RealClear Foundation, describes BlackRock and its fellow corporate travellers as fundamentally anti-democratic. “In a democracy, issues such as climate change and America’s relationship with China are decided at the ballot box. There is an election on Nov. 3, the day before America’s exit from the Paris Agreement takes effect.
The stink from Fink will kill retail investors especially. And seriously undermine the value of TFSAs in Canada.
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