Handle predicts a shakedown

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He writes,

That is, the capitalists will try to purchase respectability and pay off potential critics that could create real trouble for their businesses by buying ‘indulgences’ in the form of funding donations for certain prominent anti-capitalists, conspicuously and prominently towing the party line in public on the most important ideological commitments, and hiring the right number of the right people for cushy sinecures. If they show they are reliable allies instead of potential threats or rivals, and put enough money where their mouths are, and use their platforms, technological savvy, and expertise to help progressives win elections (e.g. Eric Schmidt wearing his “Staff” badge at Clinton campaign HQ), then in exchange, they will be left alone, and maybe even get some special treatment, favorable coverage, and promotion instead of demonization.

This strikes me as a very plausible scenario. Universities have pacified radicals in this way.

In the mid-1980’s, Freddie Mac made a number of bad loans on multifamily properties in poor neighborhoods. Some of them were cash-out refinances (someone from another company later confided in me that no other multifamily lender did cash-out refis), where the property owners took the money to spend on themselves, did zero maintenance on the properties, and then defaulted on the loans.

The agitation group ACORN saw this as an opportunity to go after Freddie. They organized demonstrations on the theme that Freddie was ruining the dwelling places of poor people. That was indeed one of the unintended consequences of the misguided lending practices, but what ACORN was really after was a big grant from Freddie that amounted to hush many paid to ACORN.

The thing about this shakedown tactic is that it is like paying ransom in a kidnapping. It relieves your problem, but it increases the chances that there will be other victims. In the case of a shakedown by activists, giving them hush money relieves our problem but it hands the group more resources to go and shake down the next corporate victim.

8 thoughts on “Handle predicts a shakedown”

  1. And when it does “silence” progressive agitators, that is only in relation to the briber specifically at that moment. The logic seems to follow “I don’t have to run faster then the bear, just faster then you.” Facebook might direct progressive ire away from it for awhile by directing progressives at some other target (go get those oil companies/bigots/whatever, we’ll use Facebook to help you win elections and donate to your NGO).

    That doesn’t reduce the amount of progressive craziness though. If Facebook does help progressives take down “target X” all of the people who benefited from target X are now worse off. And now a more powerful movement of progressive crazies, fresh off their victory over target X and have digested the power accumulated in their conquest will look for a new target. Maybe it will be Facebook.

    First the SJWs came for the deplorables…and I did not speak up because I was not a deplorable.

  2. That reminds me of Lenin’s “The Capitalists will sell us the rope with which we will hang them”.

    The indulgences businesses buy have expiration dates. Left alone? For how long?

  3. One additional thing to keep in mind is that the overall sector is not [i]merely[/i] rich and prestigious and full of big juicy targets, but that many of the most important companies are fundamentally [i]media[/i] outlets that have the potential to play gatekeeper roles regarding information and to use that power to influence public opinions and perceptions, or, in the alternative, to bypass the common gatekeeping that is characteristic of the legacy media institutions, or even to become rivals using a different set of standards for information filtering.

    So ACORN can shake Freddie down for some hush money, and the progressive elites will support that effort as benefiting one of their coalition’s clients, maybe holding their noses a little, but otherwise whether or not it happens is not a very important issue for them. See also the “predatory loans” settlements.

    But Twitter, Google, and Facebook and now the way social informational social points are broadcast, spread, and establishes, and have all kinds of way to subtle or overtly promote or suppress and generally have “jurisdiciton” over who can say what over their platforms. And, currently, none of that power is constrained by statute or the First Amendment or threat of civil liability, which means that power over information can currently be used in ways that circumvent any of the restrictions on direct state action. Amazon and Netflix and the rest are also media institutions to the extent they produce their own content and decide which content to host or not, or in the case of Amazon which services or pages to host. And of course many of these companies recycle and repackage and deliver the content of legacy media institutions, and so can have an enormous effect not just on that industry but to shape the ideological window of accessed messages. Also, Bezos bought the Washington Post for good reason.

    If everybody is having their worldview and daily passions mediated by a few private internet companies which are also fundamentally media institutions that “curate” access to all the other media instutions, then it is absolutely clear to progressive elites that these companies pose both the greatest potential threat and greatest potential opportunity in a generation to propagate their views, agenda, and aims. That makes it absolutely essential they be strongly encouraged to get fully on board with the program as soon as possible, and be made to stay on board.

    Occassionally, one is going to have to hang (or threaten to hang) an admiral or two pour encourages les autres and to let everybody know who’s boss and who can bring down whom if one strays too far from the path. The obvious thing that makes every technological company liable for demonization and even legal destruction is discriminatory employment practices. Those companies really can’t do anything about that sword of Damocles hanging over their head, and so they will be playing ball to whatever extent necessary to keep it in the air, hoping they will earn the grace of some prosecutorial discretion by so doing.

    Now, this permanent prosecutorial threat is a terrific way to launder state action and have ideological regulation enforcement outsourced to private entities that aren’t constrained by the First Amendment or other rules. If non-progressives don’t grasp the overall situation soon and do something about it, then their futures will not be very bright.

    • Occassionally, one is going to have to hang (or threaten to hang) an admiral or two pour encourages les autres and to let everybody know who’s boss and who can bring down whom if one strays too far from the path.

      Indeed. The recent summons of Facebook and other “new media” companies to testify before a Congressional committee on their selling ad space to Russians (never mind how ridiculously tiny the sums involved) as a flank attack in the shakedown.

    • When I was in law school, and with good reason, the professors were generally enthusiastic – even evangelistic – about all the ways to stay out of those terrible, horrible, no good, very bad government courts: settlements, plea bargains, “alternative dispute resolution” processes like mediation or binding arbitration, etc. Awful government courts being just a kind of fact of life no one can do anything about. Talk about Complacent™.

      Settlements, consent decrees, and plea bargains in particular were considered so obviously desirable that they hardly needed the whole “law and economics” efficiency analysis, but this justification was provided nonetheless, to gild the lily.

      The trouble is that there are certain failure modes that cause the availability of these methods to drift towards various forms of corruption, and in the manner of exceptions which come, over time, to swallow the rules. (That is apart from the problem of the availability of these devices enabling the government court process to have become so absurdly dreadful in the first place.)

      With plea bargains, the issue is one of the coercion-like incentive being ratcheted up so high that even innocent people can rationally decide to plead guilty. The issue is with long sentences pushing up two kinds of “expected value”. A small probability of detection means incentives that lead to low deterrence for criminals but which are improved, somewhat, when you multiple the probabilities by large or severe sentences. A small probability of an innocent person being found guilty means little fear of going to trial, but which again is increased significantly by the prospect of a guilty verdict being utterly devastating (and, of course, the egregious process itself being just as much of a punishment these days.)

      There are ways to tinker with the system to do better, but the bloom is definitely off that rose for many informed observers.

      With settlements and consent decrees, there are several possibilities, but the major one seems to be outright collusion. For example, if the leadership of a local jurisdiction wants to pursue some policy that is locally unpopular (or occasionally illegal under local law), and especially if they want to do so in some irreversible way that binds their successors, it can completely circumvent these democratic institutional constraints by arranging with federal allies to “prosecute” it for the usual kinds of violations, and then sign a consent decree that makes the new policy compulsory. Then the local leaders can now provide a great alibi and say, “Sorry, we didn’t want this, but there’s nothing we (or you) can do about it, our hands are tied.” Certain federal administrations have also colluded with “plaintiffs” in pretext cases to bring suits that will be settled by imposing permanent requirements for particular policies, which go on to be enforced by court orders. Or they have had prosecutors “throw the fight” and put up such weak defenses that they are sure to “lose” and obtain the court holding that was the ulterior motive all along.

      The existence of even private settlements enables the existence of various kinds of shakedowns accompanied by different possible degrees of collusion. There is definitely a tragedy of the commons problem involved. Each defendant has an incentive to settle quietly, pay the hush money and Danegeld to extortionate entities which can agitate discord (or have friends do it for them), and avoid bad press. But collectively that means a profitable niche for professional shakedown artists constantly moving from victim to victim.

      In such circumstances, it’s probably best to just throw out the option of settlement in the first place. “We’d love to pay you off, but, sorry, we’re going to have to go to court and let a judge decide this one.”

  5. Sure but capitalist have always historically bought off governments or average citizens in the past and I always assumed one reason why unions and wage increased in the 1950s was because the 1950s capitalist saw the socialist changes in Europe after WW2 and the Soviet empire was growing at the time. By 1955 it seemed weird that the average citizens in Europe were better off than the average citizen in the richer US.
    That is one reason why the Jon Galts turn into the Taggarts in 10 years because the Jon Galts benefit from having more citizens buying and supporting your business.

    The simple point of being very rich in a capitalist society (where 70% of choices are made privately), automatically makes you a large influence on the econo-political system.

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