When capital and ideals clash, capital smothers ideals in their sleep
The collapse and rebirth of the Valley’s preeminent private company was the most bewildering business story of 2023 and an object lesson in a truth that’s hiding in plain sight: When capital and ideals clash, capital smothers ideals in their sleep. The end of the charade that OpenAI was a nonprofit signals the beginning of the end of ESG.
We are always ready, and want, to believe that this time it’s different, we will do good while making billions. The last big corporate jazz hands was the ESG movement, purporting to prioritize environmental, social, and governance concerns over shareholder returns. Succumbing to this siren call, we abdicated our responsibility to discipline corporations and curb the externalities wrought by the pursuit of profit, believing instead that one profit-seeking entity could cajole another profit-seeking entity to seek something else.
When a “nonprofit” takes a billion dollar investment from a for-profit, it has been bitten by the dead and is now also a profit-seeking White Walker.
Which reminds me (somewhat) of some comments made by Derek Bok, a former president of Harvard, with respect to higher education: Institutions choose survival over morality.