I took time this weekend to read Anand Giridharadas’s new book, Winners Take All: The Elite Charade of Changing the World, which is generating some attention thanks to this review in The New York Times. The book is a full-frontal attack on the ethos we celebrate in this newsletter: business leaders who believe they can, and should, do a better job addressing the needs of society.
The book highlights the well-known discontinuities in American life: American scientists make the top discoveries in medicine and genetics, and yet the average American’s health remains abysmally low by global standards. American inventors use technology to create exciting new ways to learn, but the average twelfth grader’s reading is worse today than in 1992. The country has had an explosion of farmers’ markets and Whole Foods outlets, yet obesity is on the rise. The tools for becoming an entrepreneur are more accessible than ever, yet the number of entrepreneurs appears to have plummeted.
All true. But why shouldn’t enlightened business leaders use their superpowers to try new solutions? Giridharadas draws a parallel to slavery, quoting Oscar Wilde, who said “the worst slave-owners were those who were kind to their slaves, and so prevented the horror of the system being realised by those who suffered from it, and understood by those who contemplated it.” The people who do the most harm, in other words, are those who try to do good.
Really? The author ignores the fact that the last three decades have seen the greatest reduction in global poverty in human history, thanks to the very “MarketWorld” values that he attacks. Moreover, he doesn’t offer an alternative solution. Instead, he simply concludes that the “answer to the overwhelming question – Where do we go from here? – is: somewhere other than where we have been going, led by people other than the people who have been leading us.”
That doesn’t wash. Capitalism is still the best system known for addressing the needs of society. The challenge isn’t to scrap it, but to improve it. Giridharadas would like that job to be taken on by a democratic government, not a patronizing elite. But in a world where government has proven unable to meet even its most basic responsibilities (a budget, anyone?), is it wrong for business leaders to try and fill the void? I think not. Giridharadas’s complaint is duly noted. But here at Fortune, we’ll keep encouraging business to do better.
More news below, including the backlash against Nike’s controversial decision to use Colin Kaepernick in its ad campaign.
Well that was quick. Yesterday, Amazon cleared the trillion-dollar valuation mark, but only briefly—by the end of the day, its share price had fallen again, leaving the company with a valuation of around $995 billion. So for now (but probably not for long,) Apple is still the only company that can boast of a trillion-dollar valuation. CNBC
Theranos has defaulted on its loan from the Fortress Investment Group, and will therefore begin its formal dissolution process. The blood-testing firm’s CEO, Elizabeth Holmes, has been indicted for a multifaceted fraud involving alleged lies told to investors, doctors, patients and the media. “We are now out of time,” David Taylor, the general counsel who took over as CEO when Holmes resigned in June, wrote to stockholders. Wall Street Journal
Toyota is to embark on a massive recall of more than a million cars, including the hit hybrid Prius. The issue, which apparently involves the engine wire harness, may lead to a fire risk. There’s been at least one incident of a short circuit that caused smoke. Around half the recalls will take place in Japan, with the rest in Europe, Australia and other countries. In the U.S., around 192,000 Prius vehicles will need to be recalled. Reuters
Emerging Markets Contagion
There are contagion fears over the rout in emerging markets, as the South African rand continues a slide that was precipitated by the country’s surprise recession. Shares in Indonesia and the Philippines are falling, as investors turn their backs on countries with weak economic growth and high inflation. Bloomberg
Around the Water Cooler
The backlash against Nike’s decision to use Colin Kaepernick in its latest ad campaign has helped give the company over $43 million worth of media exposure, according to Apex Marketing Group. Most of that coverage was neutral to positive, though the backlash of course added to the newsworthiness of the move. On the other hand, Nike’s share price fell by as much as 3.9% after the ad release. Fortune
The accusation that led to JD.com CEO Richard Liu’s arrest last week was one of first-degree rape. No charges have been filed yet, but if they are, Liu could face up to 30 years behind bars in the U.S. “We are putting resources to the investigation and our concern is to provide services to the complainant and to ensure that we’re protecting the rights of Mr. Liu,” said Minneapolis Police spokesman John Elder. South China Morning Post
A new McKinsey Global Institute study claims that “artificial intelligence” could contribute an extra 1.2% to annual GDPR growth for the next decade, making its contribution analogous to that of the introduction of the steam engine. One of the report’s authors says the technology will be essential to helping China achieve its target growth rate. CNBC
Did you know that Elon Musk thinks a cave-explorer called Vernon Unsworth is a pedophile, despite the fact that he has no evidence to support this slanderous claim? The Tesla CEO seems determined not to let us forget it—having publicly apologized after the first time he made the claim, and having then doubled down in a subsequent argument over Twitter, Musk has now tripled down, telling a reporter that Unsworth is a “child rapist.” Fortune