Capitalism is Killing Our Democracy
We’re in the middle of a second Gilded Age, but no one wants to admit unrestrained capitalism is the problem
TRADER MONTHLY WAS A LIFESTYLE magazine that ran from November 2004 to February 2009. While the publication’s stated audience was well-heeled participants in the financial trading community, its target market was predominantly male and white.
Before its demise due to the financial crisis, Trader Monthly was known for glorifying all things material and objectifying the fair sex. Once described as a combination of the Robb Report, Maxim, Institutional Investor, and Forbes, the magazine was a staple on New York trading desks.
For a brief moment in time, the magazine, with its signature covers depicting masters of the Wall Street universe, usually accompanied by an anonymous female who appeared in awe of their companion, was as popular on Manhattan trading desks as the latest celebrity sex tape.
Aimed at 30-years old males with an average annual salary of $400,000 (£206,000) it provides a mix of cars, models and advice. "We tell our readers how to make money and how to have fun spending it," founder Magnus Greaves told Reuters. As well as profiles of successful traders, it also gives advice on how and where to bet and take risks…
Lonely? Try Trader Dater. Got an outrageous expense bill? Send it in. "We are looking at an industry that is very testosterone driven," Randall Lane, editor of Trader Monthly told Reuters news agency. "This is a group that is 97% male."
It should come as no surprise that not everyone appreciated the magazine’s business model:
Critics of the magazine say that pandering to such masculine interests does nothing to modernise today's financial market place. "It's offensive," Linda Friedman, a partner of Chicago law firm Stowell & Friedman. "It contributes to a hostile work environment. It results in women being treated as sex objects and denied opportunities. It reinforces all the stereotypes we have fought so hard against."
Trader Monthly was mandatory reading for any trader with aspirations of obnoxious wealth and its accompanying trappings. So despite its unseemly business model, I was a subscriber to the magazine. I was a Wall Street trader, and that was how I rolled at the time.
The magazine’s glorification of obscene wealth accumulation aside, perhaps its most fascinating element was the contradiction between its predominantly white male readership and Magnus Greaves, its former publisher, who is Black.
The publication met its demise due to the collapse of the very system it glorified, proving the gods have a sense of humor. Most of the articles from Trader Monthly are forgettable, but one has stuck in my memory. In an issue covering the greatest trades of all time, the magazine mentions John Paulson. I’ve discussed Paulson’s trade in a previous post:
In 2005, in one of the greatest trades of all time, Paulson made a series of bets against the sub-prime loan market with the help of Wall Street investment banks.
As a result of the housing market’s collapse, Paulson made his firm $15 billion in 2007 alone. The following year, he made another $5 billion by betting against the very financial firms that facilitated his initial sub-prime mortgage strategy.
I’ve heard that, after making his firm $20 billion, Paulson’s take-home pay was about $4 billion.
One day about ten years ago, I sat in our kitchen gushing over Paulson’s financial exploits. After a while, my wife Shannon, who had heard enough, asked me, “Don’t you think that’s too much money for one person to make?” Was it right, she asked, for an individual to make $4 billion because millions of people lost their homes?
At first, I was annoyed that she would ask me such a question. As a trader, the question was a personal affront bordering on blasphemy. Isn’t making as much money as possible, I argued, the raison d’être of capitalism?
It took me a few years, but ultimately I realized Shannon was right. Perhaps a culture built solely on wealth accumulation as a primary objective is the problem with capitalism—at least our version of it. Our country’s interpretation of the capitalist ideal is so warped that we allow the inequality it spawns to exist with barely a complaint.
As this 2012 video illustrates, the mythology we’ve built around capitalism is far from the reality of how it functions.
We’ve been here before. The period between the Civil War and the 1890s, known as the Gilded Age, was an era of unprecedented wealth accumulation, corporate greed, and corruption. John D. Rockefeller, America’s first billionaire and founder of Standard Oil, dominated the world’s oil industry. When asked by a reporter how much money is enough for a single individual, Rockefeller’s response was emblematic of capitalism gone viral:
“Just a little bit more.”
At the time, Andrew Carnegie controlled steel production, and Jay Gould monopolized the U.S. telegraph system, a feat comparable to owning the entire internet. Today, however, Silicon Valley billionaires amass wealth on a scale that puts their robber baron forebears of the first Gilded Age to shame.
Of course, none of this information is breaking news. We know the system is unfair, yet few have the stones to point out that the emperor is indeed unclothed. America’s capitalistic model functions like a grotesque joke, where those with the most wealth never are the punchline.
My unquestioning acceptance of the system allowed me to rationalize John Paulson’s outlandish wealth accumulation while ignoring the suffering necessary for its occurrence. This same mindless acceptance permits us to countenance billionaires who fly into the edge of outer space in personal rockets while their employees scrounge on government assistance.
Because we’ve convinced ourselves that American capitalism is the be-all-end-all, we tolerate a senator who lives on a yacht and drives a Maserati to his job at the U.S. Capitol. Meanwhile, the constituents he represents struggle to eke out a hardscrabble existence. This certainty in the system explains why few complain when meatpackers force their employees to risk their lives working amid a pandemic or when our courts classify corporations as people and money as speech.
Instead, in the style of Trader Monthly, mainstream publications like Vanity Fair glorify capitalism's excess, while ordinary citizens scrape to afford a tank of gas:
This year’s theme is “Gilded Glamour,” a concept that leaves plenty of room for interpretation and pulls inspiration from New York’s Gilded Age, when excess and grandiosity defined both the decades and the fashion. As skyscrapers began to spring up, decorating the New York skyline, millions of immigrants arrived in the city, changing its cultural landscape forever.
We champion our system despite its perverse outcomes, even as it imperils the foundation of our democracy. How else do we explain why the Joe Rogans and Tucker Carlsons of the world continue to thrive, despite the hate and misinformation they perpetuate?
That’s the problem with unrestrained capitalism. It’s so damned profitable no one is willing to change it.