BiC and Black

January 22, 2007 by  
Filed under Latest

Just after Christmas 2006, Books in Canada, a Canadian print magazine whose usual fare provides reviews of current books and interviews with authors, published an unusual essay in its pages.

The essay is unusual in several respects. It is, first of all, almost certainly the longest single piece of writing to appear in a Canadian magazine in recent memory: eighteen full tabloid pages, and more than 25,000 words. Second, it has an unusual subject. The essay is a defense of Conrad Black, the man who, less than a decade ago, had control over 60 percent of Canada’s daily newspapers along with a number of prestigious papers outside the country—the Telegraph in Great Britain, the Chicago Sun-Times in the U.S., and the Jerusalem Post—but who is today facing a raft of white collar criminal charges. The essay argues that Black is not guilty of fiscal misdeeds against the shareholders and investors of the matrix of corporations and companies he and his junior partner David Radler constructed during the 1980s and 1990s. Black is, the essay argues, the victim of a conspiracy aimed at discrediting and impoverishing him while radically altering the landscape of corporate business in the United States. Finally, the essay is a hyperbolic paean to the ethos if not the ethics of something that might be called “entrepreneurial capitalism.”

All this is moderately interesting and surprising stuff, and I’ll get to the substance of what’s in the essay shortly. But what is of specific moment here is the context and placement of the essay. It appears in Books In Canada, which is a magazine that has been, on and off over the last quarter century, among Canada’s premier forums for book reviews and essays on a variety of subjects of literary and intellectual interest. It has recently been lively and interesting enough to have attracted both my and Stan Persky’s support, to the extent that a semi-regular column written by us runs in its pages under the title of “Dooney’s Café,” based on our dooneyscafe.com website. In a country that has almost universally gone over to the discursive darkness typified by 900 word maximum “McReviews” of virtually all matters artistic that don’t have publicity budgets in excess of $1M, Books in Canada has recently been a bright, unpredictable and largely non-devotional light.

The authors of “Auto Da Fe: Conrad Black, Corporate Governance, and the End of Economic Man” are Books In Canadas publisher and editor, respectively, Adrian and Olga Stein. What that means is that the huge essay at least isn’t the result of a takeover by space aliens or the Cosa Nostra or by MI5 trying to protect the reputation of the British nobility. The Steins are good people. Olga Stein’s hard work and editorial acumen, in particular, have been largely responsible for the magazine’s renaissance in recent years. Her publisher spouse, Adrian, is a serious, literate person with an interest in ethical philosophy, particularly the work of Emmanuel Levinas, the French-Jewish existentialist thinker whose utopian ethics proposed that in the wake of the Holocaust we accept total responsibility for the condition and fate of the Other.

Thus, at first glance, what a 25,000 word defense of Conrad Black is doing on the pages of Books In Canada has a couple of suitable and related answers. First, it’s their magazine. That is, as the old pop ditty puts it, “It’s my party / I can cry if I want to,” or even utter a lengthy J’Accuse. Second, Black is, among other things, defensible both as a writer and as an historian, plus he’s a Canadian writer/historian—sort of. However, a moment’s reflection reminds us, despite Olga Stein’s editor’s note that Black “as an author, deserves the same consideration we show any persecuted writer the world over,” that he’s not being prosecuted as a writer but as an allegedly crooked businessman.

The essay’s expository devices—a set of references to Umberto Eco’s novel Baudolino, and an account of a black-tie cocktail fundraiser for the Kenyon Review magazine which the Steins presumably attended and at which they marveled at the “special frisson” produced by the “propinquity of New York wealth and philanthropy with the glitterati of the publishing and literary world”—are okay, I guess, and at least literate and literary. The Steins’ essay therefore is, if at a considerable stretch, within the Books in Canada mandate. At very least its disruption of the usual hum of the country’s chattering intellectual class makes it an intriguing if verbose entertainment that isn’t yet another reconsideration of the impact of Robertson Davies’ novels.

That was, as a matter of record, my response to the first half-dozen queries I received asking me if I was in agreement with the controversial notions the Steins argue in “Auto da Fe”. I have to admit that at first I was vaguely pleased to see anyone defending Black and his consort, Barbara Amiel (I think I’ve got the order of that right) after the deluge of Schadenfreude that has followed in the wake of Black’s fiscal and legal difficulties. Much of the rancourous delight, I note, has come from the same people who were willing to sell their offspring or pull knives on their friends to get invitations to the Blacks’ Bridal Path cocktail parties in Toronto during the 1990s. I’ve also been finding the lack of support for the Blacks from the young and right-wing journalist corps troubling. Black, after all, was the guy who provided nearly all of them with the conditions for their “Favourite Year” by starting, and then heavily subsidizing the money-losing National Post well past the point of fiscal common sense. Watching those same people jumping ship—or walking the plank—as the bottom-lining Aspers, owners of the successor CanWest Global, transformed the unruly vibrance of The National Post into an emaciated and often truly nutty hybrid of the Financial Post and The Jerusalem Post should have made at least a few of these Young Turks slightly sentimental about Black. Alas, the only Black alumnus who’s really stayed loyal has been Ken Whyte, now transforming Maclean’s Magazine into the Fraser Institute’s version of Pravda. Even Whyte couldn’t resist letting emeritus editor Peter Newman, who fed the wolves circling the Blacks with his 2005 bio-trashing, Here Be Dragons, from excerpting it on Maclean’s pages.

Because I’m not an expert in corporate law and my accounting abilities are so dull that they make sorting through the mess at Black’s Hollinger corporations a little like trying to repair a wristwatch while wearing hockey gloves, I’ve been trying not to have an opinion about whether Black has committed criminal acts against his shareholders and against the laws of the land. It’d be much easier to let the courts decide that for me during the next several months—or as it will likely turn out, years.

What I have opined, whenever asked, is that Conrad Black appears to be a man being pilloried for his personal arrogance as much as for fiduciary misconduct, and that as corporate kleptocrats go, he’s hardly in the same ranks as the late Ken Lay or Dennis Kozlowski—he of the ice sculpture of Michaelangelo’s David with vodka coming out of its penis. At least Black used the shareholders’ money to buy Franklin Delano Roosevelt’s papers, and then used those to write a serious work of history. Virtually every other corporate captain/criminal has used his or her ill-gotten gains to finance vulgarities of ostentatious wealth: mansions with twenty pink marble-lined bathrooms, or fleets of Hummers, ho-hum. Pointing out that Black at least has good taste in his business excesses is hardly a ringing endorsement, just a small admission that a man who got himself kicked out of Upper Canada College, can’t resist a six syllable word and is unreservedly in love with his wife, who just happens to be a beautiful, intelligent and uniquely obtuse personality in her own right, can’t be all bad.

But having now read the Steins’ essay four or five times, I’m obliged to have a clearer opinion about Black’s guilt and/or innocence, and more specifically about the substance of the Steins’ essay. And at the relevant end of those opinions I find myself asking a number of questions I can’t see any easy answers to.

The Steins’ essay, as I’ve mentioned, is titled, somewhat mysteriously and ambiguously, “Auto da Fe: Conrad Black, Corporate Governance and the End of Economic Man”. The ambiguity lies in the term “Auto da Fe” which, for those who aren’t familiar with the Spanish Inquisition, was the public confession forced (generally after torture) on those accused of heresy, after which, in most cases, the accused were burned at the stake or hanged anyway. In historical usage, Auto da Fe is both the legal announcement of charges against the heretic and the act of carrying out the sentence—between which there was generally no debate whatever. If the Inquisition made an accusation against you, you were going to be found guilty and all that remained to be determined was the degree of penitence you displayed prior to execution. The Steins seem to be implying that something like this is being forced on Conrad Black.

The mystery rests in exactly what “the End of Economic Man” might be when the ascendance of the marketplace as the sole model for human polity during the last 30 years has featured pretty much the obliteration of every other kind of human being but the economic kind. Without getting into gender correctnesses, it leaves me wondering what kind of “man” the Steins envision we’ll have left if Black’s enemies get him.

The direct argument of “Auto da Fe” is that Conrad Black is not a criminal perpetrator of fiscal felonies against his shareholders, but rather the victim of a nasty conspiracy of a clique of corporate opportunists who have decided to use the current climate of regulatory enthusiasm to ruin Black while covering themselves in glory, and, one assumes, large denomination US currency notes. Beyond that, the Steins see the forces at the root of the attack on Black as a threat to the well-being of the capitalist system, and certainly to the viable functioning of the American economy.

As usual, you can’t tell the players (or conspirators) without a scorecard, but before we get to the boxscore, we need to remember a few of the rules of this particular game. The game is capitalism. In its ideal or mythical form, someone (an entrepreneur) thinks of a useful thing that the public needs, and then invests and risks his capital to produce that thing. If all goes well, the capitalist reaps the benefits of his production in the form of profits, which are then reinvested in further production, with the slopover surplus spent on whatever conspicuous consumption lifestyle the capitalist fancies. The social spin-off benefits of capitalism include the creation of jobs and a rising, improved standard of living for the society or planet affected; an incentive for technological advancement to produce improved things; and the creation of a market of competing capitalists that is wonderfully and justly ordered by an “invisible hand.”

Two centuries and more down the road from Adam Smith’s Wealth of Nations, in which this economic model was first and famously outlined, the situation of “actually existing capitalism” is considerably altered from its mythic purity. The “invisible hand” has given way to a sometimes-visible, very manipulative hand that is less concerned with heroic entrepreneurs and useful things, and more obsessed with trillion-dollar-a-day global currency transactions, corporate mergers and takeovers, and a tendency to oligarchy and monopoly that Smith himself warned about. For the purposes of this Capitalism for Dummies-style history, perhaps the crucial moment came when the classic entrepreneur decided to use not only his own money but other people’s money in the form of shares in his company sold in a public stock market. This created various categories of people—owners, hired managers and directors, and stockholders, to say nothing of squads of advertising personnel to peddle the more or less useful things produced and a legion of lobbyists to secure regulatory advantage in whatever political regime the corporation was operating—all of whom have different and divergent interests as well as substantially differing degrees of power. The reason for mentioning these elementary matters is that the Steins in their essay don’t, and thus they substantially obscure the underpinnings of the particular internecine squabbles that they detail and that have, according to them, landed Conrad Black in the glue.

The malfeasance that has periodically, and especially recently, resulted from these arrangements has given rise to a desire for reform among both the public and various groups of capitalist investors. This desire for reform currently appears under the rubric of “corporate governance” and is apparently legally embodied in U.S. law in something known as the Sarbanes-Oxley Act of 2002. I say “apparently” because although the Steins rail at length against various regulatory measures designed to govern capitalism, they don’t really analyse this or any other bit of the corporate governance mechanism, and so it’s often not clear what their criticisms are. This is unfortunate because one of the questions at the core of all of this is, How should the capitalist market be regulated within and without democratic societies? It is a question that is only obliquely and confusingly addressed in the Steins’ essay, which is why I’m obliged to make it explicit here and subsequently in this rejoinder. Instead, the Steins pursue an aspect of corporate governance, namely its alleged corruption by a group of corporate governors, that they believe is responsible for Conrad Black’s predicament.

The clique supposedly hounding Black does, in fact, include a number of the principal actors within the corporate governance movement set in motion by then-Attorney General of New York State—and now Governor—Eliot Spitzer, who seems to have acted out of genuine outrage at the recent piracy scandals within the upper echelons of the corporate universe, most of which involve upper management applying “creative accounting” techniques in order to inflate or maintain share values while grossly over-rewarding themselves. The Steins argue that whatever virtue the motives that initiated the corporate governance movement may have had, it has morphed into something quite different, and much less sanguine.

There are a lot of villains in the Steins’ essay, and if I’m going to keep my analysis shorter than theirs, I’m going to have to concentrate on the main ones.

1.) Richard Breeden: chairman in the late 1980s of the powerful U.S. Securities and Exchange Commission (SEC). He gained considerable powers for the watchdog organization and wrote the key report on corporate governance in August 2003. That one was titled “Restoring Trust” and the subject was the future corporate governance of MCI Inc, whose founder and CEO Bernard Ebbers screwed his shareholders for $11 billion and drove the corporation—then called “WorldCom”—into bankruptcy. Ebbers was convicted on all charges and sent to prison for 25 years in September 2005. On the other side of Breeden’s ledger, it’s rumoured that he inexplicably didn’t pursue the first person he got by the shorthairs for insider trading—George W. Bush.

Breeden, who styled himself a “corporate monitor” on the title page of his report, is also generally credited with a second, and to our purposes more directly relevant report, “Report of Investigation by the Special Committee of the Board of Directors of Hollinger International Inc.,” written by a committee headed by since departed Hollinger International CEO Gordon Paris and advised by Richard Breeden & Company. Breeden, by the Steins’ reckoning, is the most powerful player in the corporate governance movement, and the primary instigator of proceedings against Conrad Black.

2.) Richard Perle: renowned in Washington, D.C. as the “Dark Prince,” Perle was a director of Hollinger International, but best known as the head of the Defence Policy Board, a quasi-governmental organization that does the long range planning for the Pentagon, and served as the intellectual engine of the Bush Administration’s deep thinking on the Iraq War. Perle has dodged numerous questions about how he can advise Bush on military policy and tactics while running a company, Trireme, dedicated to taking economic advantage of the American presence in Iraq. This is, apparently, a form of conflict of interest that doesn’t seem to excite corporate governance activists. Perle was a longtime Black loyalist until, well, it wasn’t useful for him to be.

3.) Christopher Browne: patrician principal shareholder and executive of Tweedy Browne, the investment company that invested heavily in Hollinger International and was the instrument that began the process of questioning Black’s fiduciary behaviour. For reasons that elude me, Browne hired disgraced Wall Street Journal and Forbes journalist Laura Jereski, a woman of questionable commercial judgment and perhaps of dubious intellectual integrity, to act as his chief analyst on the Hollinger file, and then listened to her when she began to question Black’s integrity.

4.) Paul Healy: Hollinger International’s Director of Investor Relations, and a supposed protégé and friend of Conrad Black, Healy is depicted by the Steins as the person who orchestrated most of Black’s fiduciary miseries, which he did by spoon-feeding Laura Jereski the details of Black’s misdeeds.

5.) Richard Burt: former U.S. ambassador to Germany, Hollinger International board member, Black associate and principal shareholder in a corporate intelligence company called Diligence that sounds suspiciously similar to the companies headed by Richard Breeden and Richard Perle. Burt is every bit as eerily connected as Breeden and Perle to the corporate governance movement and to virtually everything else in the Bush apparatus. He is also, somewhat irrelevantly, a once-and-occasional lover of Judith Miller, the too-connected NY Times reporter who spent 85 days in jail in 2005 and was forced into retirement for being the contact through whom Dick Cheney chief-of-staff Scooter Libby exposed CIA operative Valerie Plame. Libby has since been indicted for perjury and has joined Richard Perle at the Hudson Institute.

Black knew most of these people well. In fact, many of them were his colleagues and friends. Healy worked for him, and Burt and Perle were on the Hollinger International Board of Directors, along with Henry Kissinger and a number of others intimately connected with the two Bush administrations. This is the board, remember, that was criticized for its lax supervision of Black, and became a poster child for what the Breeden Report on Corporate Governance thinks needs to be changed: boards of directors that are like-minded but otherwise-engaged, and inattentive except at cocktail parties.

The Steins’ extremely negative characterization of corporate governance is something of a surprise to me. I thought the corporate governance movement arose out of a common-sense recognition within the business community that having corporate managers and/or large stakeholders screwing small and institutional shareholders was an initially bad idea that had gotten wildly out of control when the pirates realized that the fleet were reluctant to pursue and hang them.

What I was aware of, if dimly, is that a de facto civil war has been raging inside contemporary corporate capitalism since the collapse of communism in 1989. It is a war between capitalism’s management apparatuses and those who have invested money in the corporations and expect the highest possible return for it. Basically, it has been, until the corporate governance people appeared, a civil war without any detectable good guys. On one side were the plutocratic pirate/bandido/entrepreneurs (the Ken Lays and, allegedly, Conrad Blacks), and on the other, the plutocratic “people”—the wealthy or not-so-wealthy investors who don’t give a damn about anything but short-term profits and the dividends and share-value increases that obtain from radical bottom-lining of corporate activities. When the talk of enforcing corporate ethics began, it seemed like a bright light in a whole lot of darkness. A revival of ethical behavior within corporate boardrooms and shareholder meetings is a timely idea, particularly if notions of the corporate community’s responsibilities to the societies within which they’re lodged are included. That seemed to me to be what corporate governance was about.

According to the Steins, this is wrong in two different ways. First, they claim, the corporate governance instigators are purely self-interested entrepreneurs themselves, and the principal players are there primarily to rack up fortunes for themselves, along with the privileges of power—just like any other gang of bandits. Second, the Steins say, this new echelon of corporate ethicists and “governancers” is siding, wholly and unequivocally against the corporate stakeholders and for the shareholders. If this is true—and it is virtually impossible for someone like me to get a clear view of the issues without months of further research—it really might be a disaster for the capitalist system.

A corporate system constrained by a model of governance aimed solely at maximizing shareholder profits, as the Steins claim, would significantly diminish the innovative flexibility capitalist entrepreneurs require and would initiate a one dimensional and single-minded pursuit of near term profits. While this might not appear to be of much importance to those of us who are not players in this particular game, such a view would be myopic. We are in a historical situation where the political and social system—a system in which corporate business is an integral and arguably controlling factor—is faced with the most complex set of circumstances in human history. Those complexities include global warming, environmental collapse, religious and tribal enthusiasms undermining the culture of Western democracy, and the ascendance of a binary/idiot savant economy—China—that has shown absolutely no interest in ethical rules or constraints of any kind. So there is more at stake here for all of us than just the lusts of corporate stake- and stockholders.

The Steins don’t have to convince me that underestimating the political power and influence of the shareholder classes is foolish, even if, on the surface, shareholders appear to be essentially passive economic players interested only in the security of their capital. This is essentially the same group whose oxen were seriously gored during the bout of hyperinflation that occurred at the end of the 1970s and ran into the early 1980s. Hyper-inflation was fabulously good news for land developers, people holding mortgages, and anyone else carrying debt on real assets. But it was not good news at all for the passive holders of the system’s capital, who lost a portion of their wealth before governments rejigged the entire global banking system to protect them. This occurred even though it wasn’t at all self-evident that the interests of the passive holders of wealth, namely shareholders and those who provide the capital for mortgages and bonds, were any more consonant with the public good than those of the people benefiting from inflation. At the time, it seemed to me that I had glimpsed, for the first time, the true ruling class of Western civilization. It is significant, at least to me, that the beneficiaries of the corporate governance movement are the same people.

At the same time, it is important to recall that the direct power of shareholders has been and continues to be limited. There are different categories of shareholding, many of which do not entail voting power and executive control. Raising alarms about the dangers of a “shareholders’ revolution,” are one thing, but critics of corporate governance rules will have to do more than make ideological claims to demonstrate that the entrepreneur-owners, their appointed boards, and their hired managers are not by and large still in control of the corporations and other ships of state. The claim that shareholders are a particular clear and present corporate danger because of their single minded pursuit of near term profits may be true. But the historical fact is that stakeholders in corporations were already pretty adept at all the things that Ken Lay and Conrad Black have been accused of before the “revolt” of the shareholders that brought “corporate governance” onto the scene. After all, turn of the twentieth century business leaders in manufacturing, railroads, forestry, and high finance weren’t called “robber barons” without reason. One thing that is clear is that the story of progress and regress in corporate reform is historically far more complex than the Steins suggest. Indeed, the Steins (and the rest of us) could do worse than read Black’s own tome about Franklin Delano Roosevelt to learn something about how the American president rescued capitalism through a reform program that produced, among many other things, the mid-twentieth century notion of the “good corporate citizen.” This is not to suggest that the corporations of Roosevelt’s time became “good” or “citizenly”. They didn’t and don’t today because considerations of the public good are secondary if not tertiary within the legal definition of a corporation. But at least the notion became a necessary element in its public relations arsenal.

An examination of the specific details of Conrad Black’s descent to criminal prosecution through the Steins’ eyes leaves you with the distinct impression that Conrad Black is a man surrounded by a web of intrigue, self-interested ambition, incompetence, and at times, not-entirely-explicable malevolence. It is a web that apparently reaches into both the most powerful offices—and bedrooms—of the American Republic, although the warp and woof becomes tenuous the closer one gets to the current U.S. presidency and strangely funky when it gets close to Black.

Much of the funk, unfortunately, is the product of evidential and logical gaps in the Steins’ essay. The essay isn’t footnoted, and the endnotes and the short bibliography that they provide do little more than establish the Steins’ philosophical values. This may have something to do with the fact that much of what remains factually ambiguous is in front of the courts, as well as caution in the face of the combative and partisan arena within which the epic economic stakes are being played out. The essay doesn’t always offer a logically coherent narrative, either, possibly because its scope is so ambitious. But the narrative also goes off the track because whenever it approaches exactly what Conrad Black has been accused of, it tends to respond with rhetorically clouded economic philosophy of the most general sort. Some of this, it should be noted, may be the result of fear of litigation against the authors.

So be it, I suppose, although their enterprise may be doomed by the mutually incompatible purposes of securing Conrad Black’s fiduciary innocence while arguing that corporate governance is a threat to the safety of the capitalist system.

The Steins’ narrative of how the attack on Black began and why it is being carried out is probably the essay’s weakest element. There is no more than a single passing mention in their text of David Radler. Radler is the crucial insider and star witness slated to testify against Black in court in order to protect himself from further charges than the one fraud count to which he will plead guilty, cutting a deal that will see him off to a two-year term in a minimum security country club. Nor are Black’s co-defendants in the criminal fraud charges so far lodged—Jack Boultbee, Peter Atkinson and Mark Kipnis—even noted in the essay.

Then let’s recall, briefly, the character of man the Steins are trying to defend here. Conrad Black is, as New York Times journalist Bryan Burroughs pointed out, a man with a “jaw-dropping sense of entitlement…[who] thought of shareholders as sharecroppers, bugs on his corporate windshield.” He is also a man who petulantly renounced his Canadian citizenship, sued the Prime Minister of Canada and called Canadians “whining, political conformist welfare-addicts” as he was heading out the door to accept a British peerage. In the two years before his long crash-landing began in 2003, Hollinger International racked up losses of more than $550 million US—not exactly a situation designed to pacify restless sharecroppers or stockholders.

One of the defenses the Steins use in supporting Black’s high-handed flamboyance is to compare it to that of early twentieth century American newspaper tycoon Randolph William Hearst, saying, well, this is how newspaper tycoons behave, and really, Black isn’t half bad if you stand the two next to one another. Defending Black’s life and management styles by comparing them favourably to the excesses of someone operating 80 years ago is at best mixing apples and oranges—or old, shriveled oranges with fresh ones. It is also a little like arguing that Conservative prime minister Brian Mulroney’s nine year attempt to dismantle Canada’s political and economic sovereignty during the 1980s and early 90s was just fine because Mulroney wasn’t dead drunk the way his conservative primogenitor Sir John A. McDonald generally was. The reality is that over the course of a century, standards of acceptable behavior change. Had he been operating in the 1920s, sure, Conrad Black would have cut a fairly pale figure amongst his robber baron contemporaries. But this isn’t the 1920s. For better or worse, it’s the Post-Communist era, the Triumph of Capitalism, where nobody quite knows what’s good or ill and thus every impulse invites fundamentalisms of one sort or another, even inside capitalism itself, apparently.

At one telling point, the Steins make the highly rhetorical gesture of enumerating all the jobs Conrad Black provided for workers, and how many papers he’s published, adding that “…this immense economic product was produced while serving the duplicate public service function, with its attendant financial burden, of communicating the news and buttressing the basic institutions of free speech and democracy. Without dedicated newspaper proprietors prepared to serve this function our democratic freedoms would be greatly imperiled.”

In the real world, it’s hard to argue that Black’s effect on the Canadian newspaper business has ever been sanguine to anything except the bottom line at corporate headquarters and/or the various Black residences around the world. The exception to this—and virtually the only one—was his creation of the National Post, which is almost universally recognized by the journalists who worked for it as the most fun they ever had or will have. But a quick conversation with anyone who worked at any of the smaller newspapers Black took over, particularly the ones serving communities outside the major urban areas, will get you chapter and verse about how those papers were gutted, and journalists and other employees systematically terrorized and intellectually demoralized. It is also easily argued that the National Post was never a high-water mark in the history of journalism, let alone Canadian democracy. Its journalism was both ideologically directed and ideologically coloured, sometimes well into shades of yellow. Conrad Black was not a man interested in journalistic or intellectual balance, nor did his newspapers make any attempt to practice it. And in these late stages of the kleptocratic George W. Bush presidency, democracy and free speech remain in greater peril than at any time since the Second World War, and there is little evidence that any element of the corporate media has recently offered either protection or that it plans to in the near future.

One of the questions not broached by the Steins is why Black had all these global high rollers on his Hollinger board in the first place. The Steins are curiously silent here, but I have a theory that is lodged so deep in Black’s character that it sounds ludicrous until alternative answers to the question collapse. Conrad Black is, as anyone who has read his books will instantly attest, a disciple of Thomas Carlyle, who believed that history is best explained by the actions of “Great Men”. Carlyle’s view of history is, in that sense, the opposite of the Marxist theory of history, which supposes that history is explainable as the conflict between social and economic forces. Both views, I should point out, are deeply partisan (and therefore partial) theories of how things actually work, and therefore, at least in my view, faintly silly.

But Black brings a distinctly “Amielesque” twist to Carlyle’s view of history that is laugh-out-loud silly even while it is evident in most of Black’s judgments, whether historical or fiduciary. Black believes that history is what powerful people decide at cocktail parties, and if you want to affect the course of anything profound, it’s a matter of bringing the right power-group together in the right room. Ergo—and I’m a lot more than half serious about this—Conrad Black spent an inordinate amount of his social and intellectual energy putting powerful people into cocktail parties under his “governance”, and he did it because it made him believe that he had his hands on the levers of history. It probably also made him believe that he was above the rules of ordinary men and women, and that since he had access to the levers of history, he could do whatever he wanted.

All of this may explain why the Steins’ Auto Da Fe is less successful as a defense of Conrad Black than as a critique of corporate governance, which the Steins clearly regard as the new face of totalitarianism. I’m not sure it’s any more than one of many forms of fundamentalism that has emerged from the absence of alternate forms of economic polity after 1989. And I get the sense, at several points, that the Steins are reaching for explanations to situations that are both shockingly and sometimes incomprehensibly corrupt, in which, for instance, public officials responsible for setting military and diplomatic policy in the United States are simultaneously setting up companies to profit from situations created by the policies they are creating.

If half of the political malfeasance their essay identifies is actual and prevalent, then the corruption at the heart of the current Bush Administration and American corporate life is as breathtaking as it is alarmingly open. And as the Steins propose, it makes the system’s pursuit of Conrad Black seem frankly hypocritical, self-serving, and curiously gratuitous.

But at the same time, implying that Black is being persecuted because his impersonation of Louis XVI (with Barbara Amiel’s contributory Marie Antoinette outbursts) made him appear a dangerously loose cannon to the corporate governance elites may dovetail neatly with a critique of the larger currents of contemporary capitalism, but it doesn’t really get Black off any of the many hooks he’s on. Fiduciary malfeasance is still an affront to both the legal and economic systems we agree to live under, even if those policing the latter may be villainous themselves. Finally, devoting 25,000 words of moral umbrage to a deadly internecine corporate squabble, however immoral, hardly seems an efficient use of the ethical interests the Steins normally evince, which range from Immanuel Kant’s categorical imperative to Emmanual Levinas’ post-Holocaust ethics. The ethical plight of Conrad Black that they passionately discern hardly seems in the same league.

The larger picture the Steins paint requires some outside-the-box thinking to gain perspective. Sensible people are very reluctant to depict the United States as a conspiratory oligarchy, but the elements of oligarchy are clearly visible, and the conspirators are easy to find, if not to manacle to one another. The fact that a son of a U.S. president was elected president himself less than a decade after the father was democratically defeated despite the son having highly evident character flaws and a relative absence of skills, intelligence and talent is telling. George W. Bush admittedly isn’t Kim Jong Il, but there are some distressing similarities.

Many of the insights the Steins have into the workings of the American corporate civil war require that sort of outside-the-box perspective to grasp, and even then, tend to remain similarly tangential. Their notion that the corporate governance movement has produced a particularly virulent sub-oligarchy in an astonishingly short time may be unorthodox thinking, but it hardly strains credibility if you recall the YK2 hoax, where entrepreneurs inside the computer industry used the same combination of technical ignorance and fear to hose governments and industry for billions. Occasionally, we need to remind ourselves that not only is capitalism not run by rocket scientists, its characteristic responses are reptilian core reflexes.

The weakest link in “Auto da Fe”, in my view, is the limited options the essay is able to envision for corporate polity. In the twenty year civil war, the binaries have been stakeholders and shareholders and the divergence of their interests is found in the gathering of profits. Stakeholders like Lay, Ebbers, Kozlowski and if you believe the charges, Conrad Black, stole from passive, unsuspecting shareholders to enrich themselves. The corporate governance movement, with its monitors and entrepreneurs and its legislative expression in the Sarbanes-Oxley Act of July 2002, is the shareholders’ retaliation. If taken to its logical ends (as the Steins believe is happening) this counter-revolution will be economically destructive well beyond anything perpetrated by the renegade stakeholders.

I’m in agreement with the Steins when they point out that “…one can see without any prophetic talent where this collusion of corporate intelligence, and heavily financed corporate governance hedge funds will ultimately lead”. Where I diverge is in their defense of stakeholder/entrepreneurs as the sole relevant energy of capitalism.

We need to remember that the word “entrepreneur” is the French term for “enter and take”, and how short a trip it is from there to “break and enter” and other forms of criminal theft and/or anti-social aggression. The Steins trot out John Maynard Keynes’ truism that the field of action between “rational calculation and entrepreneurial action” is indefinable and wild, and then go on to romanticize the effect of entrepreneurial activities. It is fair to point out in the face of that sort of romanticization that among the “animal spirits” that vitalize economic activities is a preponderance of social psychopaths and arrogant assholes—not that I’m convinced that Conrad Black fully falls into either of those categories. But to suggest that society ought to protect and elevate entrepreneurs when they consciously stand outside the categorical imperative—as Black has throughout his career—is as foolish as it would be to stand by and let the binary revolution of the shareholders destroy the system.

Entrepreneurial Capitalism, now that the intellectual and economic collapse of Communism has left it without competition and the human species without alternative forms of polity, desperately needs to be restrained and guided even if the corporate governance movement isn’t the one to do it. What it needs, awkward and old fashioned as it may seem, is the reintroduction of the “public good” into its gearing, even if the complexities that notion will inevitably introduce causes the system, temporarily, to grind to a halt. If it is what it claims to be—a vital, irrepressible energy and an essential component of the human spirit—it will quickly make the needed adaptations.

January 22nd, 2007 6447 words.

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Brian Fawcett is a Toronto-based writer.