Hannah Arendt considered calling her magnum opus Amor Mundi: Love of the World. Instead, she settled upon The Human Condition. What is most difficult, Arendt writes, is to love the world as it is, with all the evil and suffering in it. And yet she came to do just that. Loving the world means neither uncritical acceptance nor contemptuous rejection. Above all it means the unwavering facing up to and comprehension of that which is.
Every Sunday, The Hannah Arendt Center Amor Mundi Weekly Newsletter will offer our favorite essays and blog posts from around the web. These essays will help you comprehend the world. And learn to love it.
Hilton Als, in reviewing a new book co-edited by Harvard professor Henry Louis Gates, Jr. entitled The Image of the Black In Western Art, The Twentieth Century: The Impact of Africa, is struck by a particular painting, Portrait of Tonia Stieltjes by the Dutch artist Jan Sluyters. The book focuses broadly on “image of the black during the age of mechanical reproduction and how it changed, was modernized, denigrated, and, often, fetishized.” Als, however, fixes on the singular humanity of one portrait: “Tonia’s grave face is powdered white, as was the fashion of the time, but then there is her ‘real’ skin and her style, which is something ‘other.’ My imagination reacts to those levels of density and nonverbal expression more readily than to portraits of black people by artists ranging from Goldie White to Brent Malone. I find their work predictable: it elevates blackness to a kind of folkloric purity and strength that doesn’t allow for labyrinthine humanness, or for the fact that most blacks come from some place they don’t know but, like Tonia, make themselves up out of the whole cloth of Europe, or Africa, or whatever temporary home will have them.... It’s Tonia’s isolation in public, the theatricalization of her different self through paint and dress, that encompasses so much of what makes the black in Western art incalculably lonely, unknowable, troubling, and, sometimes, beautiful, just like other people.”
In the New Republic, Christopher Ketcham makes the case that journalist idol Chris Hedges has a plagiarism problem. Ketcham's account, though bordering on the tedious, overly personal, and the monomaniacal, seems to make its case. It has recently been given further support by a long post by Adam Weinstein at Gawker, which both uncovers further instances of plagiarism and argues that Hedges habitually recycles 1000s of words of his own writing and even whole articles in longer articles and books that he claims to be original work. Hedges forcefully denies Ketcham’s charges and has written a response here that also includes responses from Ketcham and The New Republic. Ketcham’s thesis is that Hedges’s plagiarism must be outed to protect the integrity of journalism, an argument he puts in the words of a journalism expert: “Trust is a journalist’s and journalism’s most precious commodity…if there is even a hint of the possibility that misconduct was covered up, it’s even worse. Journalism will take another hit.” That is true. But equally central to this story is the nature of power. Hedges has said, “You have a choice between which two sets of principles you serve. Justice and truth or privilege and power…. The more you make concessions to those whose fealty is to privilege and power, the more you diminish the capacity for justice and truth.” He is so right. Admirably, Hedges has stood up for his principles, angering the right and the left, and always speaking his mind. We need more publicly courageous intellectuals like Hedges. But in his belief in his own importance to the cause for which he fights, Hedges has not only made mistakes (which can be forgiven) but also has refused to own up to his mistakes and instead has sought to drown out his critics with bluster. His response suggests that privilege and power may mean more to Hedges than he lets on.
In an interview with Granta, cartoonist Adrian Tomine discusses the value of a very informal education: "I've learned a lot of tangible, practical things from studying all kinds of things: comics, illustration, movies, prose, etc. But I think I've learned more from just hanging around creative people and talking to them and learning from their example. I suppose I'm talking about the kind of osmotic learning that comes from getting to know other artists (or writers or musicians or whatever). If you go over to the house of someone whose work you admire, and you look at their bookshelves and ask about things that jump out at you, that right there can be kind of an education. I've even learned a lot from just going to an art store with other cartoonists. Invariably they'll know about some drafting tool I'd never heard of, or have some preference for some brand of ink that they've arrived at after years of trial and error. And on a broader scale, it's really useful to watch how someone - especially someone who's been at it for longer - deals with issues that arise in their art and just in life in general."
In the midst of the international frenzy of the World Cup, Matthew Futterman describes USA's German-born coach Jürgen Klinsmann as soccer's "Alexis de Tocqueville," endeavoring to create an American style of the game, saying that "he wanted to create a squad that represented what he sees as the defining American characteristic-a visceral hatred of being dictated to." Since, paradoxically, this change came from the top down, it, of course, turned out to be more difficult than easy.
Jacob Soll yearns for the heroic accountant of the early modern Dutch, for whom keeping one's books in order took on a spiritual meaning: "Double-entry accounting made it possible to calculate profit and capital and for managers, investors, and authorities to verify books. But at the time, it also had a moral implication. Keeping one's books balanced wasn't simply a matter of law, but an imitation of God, who kept moral accounts of humanity and tallied them in the Books of Life and Death. It was a financial technique whose power lay beyond the accountants, and beyond even the wealthy people who employed them. Accounting was closely tied to the notion of human audits and spiritual reckonings. Dutch artists began to paint what could be called a warning genre of accounting paintings. In Jan Provoost's 'Death and Merchant,' a businessman sits behind his sacks of gold doing his books, but he cannot balance them, for there is a missing entry. He reaches out for payment, not from the man who owes him the money, but from the grim reaper, death himself, the only one who can pay the final debts and balance the books. The message is clear: Humans cannot truly balance their books in the end, for they are accountable to the final auditor."
Alexandra Schwartz, riffing off the recent release of a book documenting Marcel Proust's letters to his upstairs neighbor, considers the loneliness and alienation of the city's crowd and remembers that, far from the mere writer of In Search of Lost Time, Proust was a real person who lived under neighbors whose loud banging sometimes annoyed him, too. Here is one such missive sent upstairs by Proust: "Madame, I hope you won't find me too indiscreet. There's been a lot of noise these past few days and as I'm not well, I'm more sensitive to it.... If the hammering must be done in the morning, might it be done in the part of your apartment that is above my kitchen, not my bedroom.... If there's too much noise on Sunday morning I won't be able to get out of bed until the afternoon." Schwartz adds, "We who toss and turn, fantasizing about the exquisitely cutting emails we'll never have the guts to send to the invisible others keeping us awake, are happy to have him on our team."
This week on the Blog, Christopher C. Robinson discusses intergenerational justice and the ecological crisis in the Quote of the Week. Lord Byron provides this week's Thought on Thinking. And Roger Berkowitz discusses the conscience of Edward Snowden in the Weekend Read.
What a week it has been in the world of corporate criminality and governmental spinelessness!
On Monday, the British Bank HSBC agreed to pay a fine for $1.92 billion for repeated and systematic violations of two U.S. laws to prevent money laundering. The bank transferred hundreds of billions of dollars for its clients, likely enabling crimes ranging from tax evasion to terrorism. Once again, no one will be indicted, let alone found guilty. The reason: concern that criminal charges would hurt the bank’s business and, because it is so big, destabilize the financial system. The story is too familiar: A bank that is too big to fail gets away with criminal activity with simply a fine. While $2 billions sounds big, it is less than one quarter’s profit for HSBC. Oh, and the banks said it was sorry, sort of: “We accept responsibility for our past mistakes,’’ HSBC’s chief executive said in the statement. Mistakes are not crimes.
Meanwhile, on Tuesday in London, British authorities did make some arrests, something U.S. authorities still seem unwilling or unable to do.
In a predawn raid, police took three men into custody at their homes on the outskirts of London. One of the men is Thomas Hayes, 33, a former trader at UBS and Citigroup, according to people briefed on the matter who spoke on condition of anonymity. The other two men arrested worked for the British brokerage firm R P Martin, said another person briefed on the matter.
These arrests come in the LIBOR rate-fixing scandal, one of the biggest financial scandals ever uncovered. By colluding to fix interest rates that banks use to lend to other banks, banks ensured that they would make more money on their own student loans, mortgages, and municipal financings and consumer loans. The suits by injured parties will be keeping lawyers well paid for a decade.
On Wednesday, Bill Hwang, a high-flying hedge fund Director, pled guilty of wire fraud on behalf of his now defunct hedge fund Tiger Asia and admitted to improper trading by the firm. But Hwang himself walked out of court an innocent man, as the NY Times reports:
Federal prosecutors did not bring charges against Mr. Hwang himself. But he and his head trader, Ray Park, settled a parallel lawsuit brought against them by the Securities and Exchange Commission. Mr. Hwang and his fund will pay $44 million in fines, and he agreed to a five-year ban from the securities industry.
Once again, no one in the United States is being indicted or going to jail. And yet the federal prosecutor claimed victory for the investing public, seemingly unworried about the law-abiding public:
This criminal activity by a hedge fund operator, one of the biggest in the world, is unacceptable,” Paul J. Fishman, the United States attorney in New Jersey, said in a statement. “The investing public must be reassured that they are investing in markets that are operated fairly.
Also on Wednesday Deutsche Bank, the largest German banking behemoth, announced that its offices were raided by German investigators as part of an investigation into tax evasion by two of its top executives. Deutsche Bank has many problems, including a continued investigation to its role in the LIBOR rate fixing scandal that has already claimed settlements from Barclays in England and UBS in Switzerland (see Tuesday and Thursday).
On Thursday, the Swiss financial giant UBS announced that it was close to agreeing upon a $1 billion settlement with regulators in the U.S., Britain, Switzerland and Canada around the LIBOR rate fixing scandal (see Tuesday above).
While some minor players are being charged, once again there seems to be no interest in holding any major players at the bank responsible. As the NY Times writes,
The Swiss bank has reached a conditional immunity deal with the antitrust arm of the Justice Department, which may protect the bank from criminal prosecution under certain conditions The Justice Department’s criminal division, however, could still take action against the bank. UBS also has said it is working with Canadian antitrust authorities by handing over e-mails and other documents implicating other banks.
Over the weekend, hundreds of demonstrators around England protested against Starbucks for its tax minimization strategy. Starbucks capitulated, in part, agreeing to pay a one-time voluntary tax payment to England, something that sets the dangerous precedent of tax blackmail and does nothing to address the underlying problem. Let’s be clear. Starbucks broke no laws. But it did use creative accounting to minimize its taxes. For example, the profitable Starbucks franchises in England paid large fees to Starbucks’ subsidiary firms in low-tax countries for use of Starbucks branding, logos, and for the use of the firms’ coffee recipes. In effect, Starbucks laundered its corporate profits in high-tax England by transferring its profits to lower-cost jurisdictions. This is legal. The business community mysteriously finds it ethical. The protesters are rightly incensed. The real question is why, after hearing about such shenanigans for years, do legislatures continue to refuse to pass basic legislation making such tax minimization standards illegal.
The big story of the week remains the ever-growing insider-trading scandal that has been revolving around the Greenwich hedge fund SAC Capital run by Steven Cohen. Now 12 employees and alumni of Cohen’s firm have been indicted for insider trading (six while working for SAC and six for misdeeds after they left to start their own firms). Cohen himself has not been accused of wrongdoing, but the latest of his allegedly criminal underlings, Matthew Martoma, was Cohen’s right hand man for two years. And the prosecutors know that SAC sold its large positions in two drug-development companies and then shorted the stocks in those companies based on inside information from a trial of those drugs. And they know that Martoma and Cohen had a 20 minute phone conversation discussing their investment in those companies over the weekend before they sold their shares the following week. There is no clear evidence that Martoma told Cohen about his illegally obtained information. While both men remain innocent until proven guilty, Cohen’s firm SAC Capital is clearly a place that intentionally or not encourages illegal activities. Cohen points to his large compliance office of 30 legal and support officers, but one has to wonder about the priorities at the fund.
Actually, not much wonder is necessary. As Jesse Eisinger writes in an excellent essay in Thursday’s New York Times, few of SAC’s investors seem to care about the apparent ethical culture of laxity that surrounds his firm.
Astonishingly, investors don’t seem to mind terribly. They added as much as $1.6 billion in new capital to SAC’s flagship fund from 2010 to the end of 2011, when the insider trading investigation was in full bloom, according to Absolute Return, an industry trade publication.
At least some big institutions have begun to contemplate thinking about perhaps withdrawing money from Mr. Cohen. Congratulations. What took them so long? Citigroup’s private bank has told its clients not to put in new money, according to Bloomberg. What about getting their clients out? Why hasn’t bank given that advice before this?
The biggest, most sophisticated investors certainly put an enormous amount of pressure on hedge funds. But almost none of it is about ethics and clean culture. It’s about performance. A fund that runs a few ticks lower than its peers for several months running can get put out of business.
Many institutional investors have so perfected the art of looking the other way that they make bystanders on a New York City subway platform look like models of social responsibility.
The operating standard is to allow fund managers — or affiliated businesses or employees — to go as far as they can until the moment they are caught doing something wrong. Through their actions, Citigroup, Blackstone and the others are sending a message that they will forgive rotten ethics for great returns.
Eisinger asks the right question: At what point does “willful blindness turn to complicity”? It is hard to resist that basic conclusion.
While all these scandals were unfolding, I led a discussion on Monday evening about The Intellectual Origins of the Global Financial Crisis at the last great bookstore in New York City, Book Culture, up near Columbia University. We had a standing room only crowd and ran out of chairs (thank you all). The discussion featured excellent panelists, all of whom are contributors to the new book of the same name published by Fordham University Press and edited by myself and my colleague Taun Toay. The other panelists were Robyn Marasco, Paul Levy, and Vincent Mai.
One of the main issues raised was the sea change in values. In his contribution to the volume, Vincent Mai, former Chairman of AEA Investors and now of Cranemere LLC, writes:
The first thing is just a complete change in the values of the people who are in the financial community in Wall Street, and in the culture. And, as I said, it’s not to say that the people in my era were all angels and that they’re all devils today. But, having said that, there has been a huge cultural shift.
Mai tells that when he began
there was a set of ground rules that governed the way you did business that imposed a discipline that was central to the way Wall Street worked. It was the same in all the firms. And I’ve watched with a combination of fascination and horror at the way the world has changed, turned upside down.
Paul Levy, Managing Director of JLL Partners, reminds us that good people work in business but he laments that these people are increasingly trained in narrow specialties and without the broad interests nurtured by excellent liberal arts educations. Levy writes,
I am no saint, but I can tell you that when I started my working careers as a corporate lawyer I wanted to be financially successful, although I did not have a firm view on how to get there.
Nowadays, Levy laments, college graduates make $150,000 per annum and quickly expect to make $300-$400,000 and soon more than $1 million. He writes: “Getting money has become the goal, instead of building the person.”
Robyn Marasco resisted the notion that greed is behind our current problems. Greed, she writes, is often good.
Moralizing against greed is no match for the realist recognition that what is often called greed—greed for life, greed for love, and greed for knowledge—is constitutive of human striving, what Spinoza called conatus, what Schopenhauer names the will to life, what Nietzsche terms the will to power. Greed is, indeed, good, if by it we mean a dynamic and energizing force that resists satisfaction in any particular object.
Our conversation touched on the moral hazard created by the lack of criminal sanctions on any of the main players in the financial crisis, something that the news summary from this week highlights. Above all, we spoke about the upending of values and the question of how to change or restore earlier values that have been lost. And, of course, we talked about Hannah Arendt.
Few thinkers saw more clearly than Arendt the connection between what Nietzsche called the devaluing of the highest values and what we today call global capitalism. Ethics requires setting limits to behavior and the political bodies that set such limits are the trustees of firms, city councils, state governments, and national legislatures. Whether these ethical limits are legal or moral, they establish common sense criteria about what is right and what is wrong.
Arendt sees that globalization—what she at the time understood as imperialism—is actually a political corollary of nihilism, the illegitimacy of all moral and political limits. If we as a people no longer feel sure that certain behavior is simply wrong, we will be willing increasingly to lower our ethical standards in order to compete with firms and nations that operate according to lower or different standards. There seems to be no ethical limits to the depths to which our companies will sink in the pursuit of profit; and profit becomes the only meaningful and objective criteria to judge success in a world in which all other values are relative and questionable.
Arendt’s insight into the intellectual origins of the rise of capitalist rationality is the impulse behind The Intellectual Origins of the Global Financial Crisis. The book grew out of the 2009 Hannah Arendt Center conference and its recent publication is as timely as ever. On this week of seemingly endless examples of corporate malfeasance, our new book is your weekend read.