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Putting aside, for a moment, whether wind and solar will ever generate enough electricity to meet humanity’s demand, what mechanism is best suited to get such clean electricity online?

In the U.S., one quarter of the gigawatt generating capacity now available has been invested based on companies having demand for such output locked in.

These would-be producers of green electricity use PPAs or power purchasing agreements as a risk reduction play to justify investment up front to be repaid over time by customers.  With a PPA, the buyer of green electricity promised to pay, over time, for consumption of that form of power.  With a PPA in place, the producer of such power can, with confidence, invest in generating capacity and so financial capital is deployed to reduce future contributions to global warming, where the risk/return relationship justifies the expenditure.  The risk is shifted to the customer, who then faces the problem of finding customers who will pay for such use of electricity.

PPAs also revise time horizons, collapsing future use into present financial value.

The point of capitalism, as deftly noted by Adam Smith, is that customers drive the system, not capitalists.  Producers who can’t sell at a profit just go out of business.  Society has spoken against them: what they offer is not valued.

And high-tech companies, which operate giant data centers using lots and lots of electricity to produce a service vital to our daily lives, are well positioned to enter into PPAs with potential producers of electricity from wind and solar technologies.

It’s a win/win/win formula, rather beyond the ability of government to make happen by fiat: “Thou shall!”

Two very prominent and “big” American companies are having trouble making a profit.

Boeing reports a $3.3 billion loss for its third quarter.

It has only made profits in 3 out of 14 quarters since the crashes of its 737 Max 8 aircraft in 2018 and 2019.

Secondly, Meta or Facebook, if you like, reported a 4% decline in quarterly revenue from the same period last year.  Its profit for the previous quarter was 1% below earnings for the equivalent quarter last year.  Its stock price has dropped 16%.

The misconception – very much touted by Karl Marx – that capitalism is just a never-ending flow of money to capitalists (“Mr. Moneybags,” Marx called them) needs to be challenged, again and again.  Not every company succeeds day in and day out.  Only those who properly and adroitly take care of their stakeholders do well in the long run.

There is in life and especially in capitalism, risk.  Risk brings on the bad with the good.  Putting risk in the calculation of probable outcomes of business and finance should be a no-brainer for us all.

It is true, as Adam Smith complained, that many in business and finance will try to arrange circumstances to remove risk, even abusively, at times, by hook and by crook, in order to turn capitalism into rent extraction.

For ever so long, many have taken it for granted that in power hierarchies, those on top coast from privilege to privilege and are secure.

Often forgotten, however, is the old saying, “shirtsleeves to shirtsleeves in three generations.”

Now, in hierarchies of rent extraction – dictatorships and crony capitalist systems – something like what you have today will be there tomorrow, only more so, does seem to apply to the top ranks.

But in free market capitalism, risk is not fully under control and so losses can occur.

General Electric is splitting itself into three independent companies, a failure of its once so profitable and so admired business model.

Goldman Sachs’s profit just slid 43%, so the company is reorganizing, the better to survive volatility in financial markets and to earn fees, no matter what the economy does.  The company will fold investment banking and trading into one profit center and merge asset and wealth management into another.

The company’s CEO is shifting priority away from once very profitable high-risk, high-return lines of business to products and services that generate consistent fees.  Wealth management is less remunerative, but steady.

Today, October 27, 2022, is the one hundredth anniversary of Benito Mussolini’s March on Rome, the insurgent action which brought him to power in Italy a few days later.  As the Prime Minister of Italy, Mussolini, a former mainstream socialist and a follower of the syndicalist Georges Sorel, would build out an economic and political system of national socialism.  He would call it “fascism,” using an ancient Latin metaphor for binding individuals together in a corporate unity.

We have almost entirely forgotten Mussolini, but that is a grave mistake.  His version of socialism – a nationalist one, turning its back on class conflict and promoting a “volk” – has proved to be the more successful version of socialism.  Along with international proletarian communism, fascism is also an anti-capitalist mode of organizing a society, using corporatist management of enterprise under the suzerainty of one political party and its leader, its “Duce” or its “Fuhrer.”

While experiments in proletarian, Marxist socialism failed, Mussolini-ism is still very much with us.

Putin’s Russia and Xi Jinping’s China are quite obviously “national” socialist states, centered on the mythos of their respective “volk” community.

The October issue of our newsletter Pegasus, soon to be published and sent to you, will contain a longer essay of mine on the lasting impact of national socialism.

We often struggle with the abstraction of ethics and morals, compassion and responsibility.  They are not tangible assets, though they have tangible impacts.  They are, are they not, like Adam Smith’s “invisible hand,” which we can’t touch, but which process can give us our daily bread.

At the Caux Round Table, we more and more feel an obligation to point out and even attempt to “measure” intangibles, like social capital and human capital, as essential to a moral capitalism.

So, I was struck recently when reading this account in a report on the fighting in Ukraine: “Sergo’s story, and many others that I heard like it, illustrates the real reasons for Ukraine’s success, which go far deeper than the critical U.S. supply of long-range, precision weapons or the shoddiness of the Russian army.  The Ukrainians know why they are fighting; theirs is an existential war for survival. … “We are smaller than Russia and don’t have so much artillery or manpower, but we have social capital,” said Yehor Soboliev.

Jesus said something about the value of the intangible, of the spirit: “Neither shall they say, Lo here! or, lo there! for, behold, the kingdom of God is within you.” (Luke 17:21)

The Dao De Jing notes that: “We make a bowl from a lump of clay; it is the empty space within the vessel that makes it useful.  Thus, while the tangible is of selfish advantage, it is the intangible that creates that usefulness.”

The New Criterion is a monthly journal on arts and the intellectual life published in New York City with Roger Kimball as its Editor and Publisher.  It derives from the articulate and avant-garde tradition of New York City intellectuals, only its non-conformity takes on the conventional wisdom of progressive intellectuals and activists to expose the underside of those narratives.

Kimball is an eloquent writer, never at a loss for a good turn of phrase and unabashed about being judgmental.

In this recent essay, he deconstructs the adoption of woke virtue signaling by the Wharton Business School.

In effect, he refuses to accept “virtue signaling” as a constructive morality for business.  In this, he indirectly ratifies the position of Adam Smith that the morality, the prudent usefulness of business is to create wealth and so improve the conditions under which humanity can live.

Someone must pay for most everything we need or desire and where, do you suppose, the wealth to make all those payments will come from?

Under Abraham Maslow’s hierarchy of needs, he supposes that we want to move from meeting basic needs of food and shelter to higher order, more intangible desires to experience self-actualization.  But to live a life that permits self-actualization (the way most of us want to self-actualize) takes money.  So, again, to live as most of us would wish, we need wealth.  Those who create the wealth which flows our way do us a great service.

Making possible those better circumstances for us all is virtue in action.

Kimball’s disdain for the superficial in business education reminds me of the old saying, “If you want golden eggs, the first thing you must do is catch the right goose.”

You can read his essay on the American Greatness website, where he frequently contributes, here.

After reading Michael Hartoonian’s essay on technology in our September issue of Pegasus, Professor Hashim Kamali sent me his draft article on technology and the moral purposes of Sharia law in Islam – the maqasid.  In my judgement, study of the maqasid should be of priority for all non-Muslims and more widely emphasized within the Muslim ummah, as well.

You may read his essay here.

Prof. Kamali draws on the maqasid to make an important distinction between the black letter law and the higher purposes, which give law its virtuous legitimacy.

This distinction was also drawn by Jesus Christ in this passage from the New Testament:

Woe to you, teachers of the law and Pharisees, you hypocrites!  You tithe a tenth of your spices–mint, dill and cumin.  But you have neglected the more important matters of the law–justice, mercy and faithfulness.  You should have practiced the latter, without neglecting the former. (Matthew 23:23)

Prof. Kamali is the founding CEO of the International Institute for Advanced Islamic Studies in Kuala Lumpur, Malaysia.  He previously served as Professor of Islamic law and jurisprudence at the International Islamic University Malaysia and also as Dean of the International Institute of Islamic Thought & Civilisation from 1985 to 2007.  One author has described him as “the most widely read living author on Islamic law in the English language.”  Prof. Kamali received his BA from the University of Kabul, his LLM in comparative law from the London School of Economics and Political Science and his Ph.D. in Islamic and Middle Eastern law at the University of London.  He features in the book, The 500 Most Influential Muslims in the World (2009, 2010, 2016, 2019 and 2020).