Romney and private equity: the new ruling class
When Fraser Bullock–author of this fawning paen–met Romney, Romney was “was leading the company he founded, Bain Capital, one of the leading private equity firms in the world.”
Question: What is private equity? The Economist offers insight in an article titled The trouble with private equity; Private equity has come in for much political criticism, but its more serious problems are financial.
Further question: what sort of professionals manage private equity funds?
Romney articulates himself in the rhetoric of enterprise and finance capitalism; but Romney himself belongs to a different phase of capitalist development, what Drucker refers to in his Post-Capitalist Society as “pension-fund capitalism,” the era of the institutional investor where putative owners (present employees and future pensioners in the case of pension funds) aggregate vast wealth through the medium of institutions. This vast wealth is managed by a professional class of specialists. Yet, argues Drucker, neither the managers (of the funds) nor the owners are “capitalists”. “This is capitalism sans the capitalist.” And sans the capital too, as the money that accumulates in equity funds, pension funds, mutual funds etc. “does not fit any known definition of capital.” In other words, pension-fund capitalism is the abolition of capital and the management of the economy by other means (other than political); hence, for Drucker, our state is rapidly although unevenly transitioning to a post-capitalist era.
The social and political implications for corporate governance in a post-capitalist era, and for market-democracy, the political expression of finance capital, remain an open question.
But this much we do know. The new non-capitalists, in the person of Willard Milton Romney, are attempting to enter public life at the top: the equity sector may soon occupy the White House! Urgent question: What is the character of this new non-capitalist? What does he or she value? How does he or she articulate the historical tasks of our era? We should like to know, only Romney isn’t helping us. So far he speaks to us only in empty platitudes.
Where is the real Romney? What does he really have to say?