The Pandemic Reveals a Growing Polarisation

The state, its citizens and Capital are in the same boat. History shows that unless we address the increasing social inequalities, the storm that is now brewing can cause the boat to capsize, writes Robert Weil in a column for Affärsvärlden.

Column in Swedish Magazine Affärsvärlden 25 of August 2020

The summer of 2020 has, in many ways, been a different summer that has made us all reflect. For my part, it has been one of both historical flashbacks and references to the future through the world of books. Not least, they have made me think about my family’s experiences and what they tell us about the time in which we are living.

My summers as a child were not like most of my friends’. They spent their summers at their families’ country houses all around Sweden. I, on the other hand, travelled around with my parents in their shattered Europe that started to be rebuild – a Europe that, during the Nazi 1930s, tore our assimilated Jewish family apart, no longer allowing it to live openly in places where it had been for generations. Now after the war, the survivors were scattered over Europe and some had left for Israel or the United States, like my grandfather. He was forced out of his management position at Deutsche Bank when it was “Aryanised” by the Nazis.

My family had a background in industry, trade and banking, but also as rabbis. My childhood became a history lesson in the structure of industrial society, the political challenges, the widespread hatred of Jews and capitalism, how that all that is solid melts into air capital was created and disappeared, both due to internal and external circumstances. I learned that anything that is solid can evaporate.

In the summer, our car journeys were mainly to our relatives all over Europe, only later were there trips to our family in Israel and the United States. I am pretty sure it is these early summers that have instilled in me my great interest in external analysis that not only evaluates financial material, but also the surrounding culture, policies and political gestures. All this analysing has made me cautious and even a little too scared to take excessive risks. Not without reason. My interest in the humanities and its obvious link with community-building has probably made it easier for me to look into the future. At the same time, I have been amazed by how many people in the industry do not seem to fear the pandemic and the gaps that have been brought to light in the spring and summer, but unwittingly seem to think that everything is back to normal. The stimuli of society seem to have completely disconnected Capital from the world’s everyday financial realities. My reading shows that history often repeats itself. Albeit in different guises. Here is an attempt to summarise my lessons learned.

First to the book that has been closest to my heart, The Order of the Day, written by Éric Vuillard and winner of the 2017 Goncourt Prize. It was the gift of the summer and a starting point for many intriguing encounters. Because of Covid-19, I have exclusively met with a maximum of four friends at a time. This has resulted in frequent important discussions, practically impossible in larger groups, stimulated by The Order of the Day. It opens with a secret meeting on the 20^th of February 1933, just weeks after my grandfather, Ludwig Weil, was forced to leave his position as Head of Deutsche Bank Munich, as well as a large number of boards of major German companies. In his position in the industry he worked with the very people who attended the secret meeting, including Gustav Krupp, Günther Qvandt and Wilhelm von Opel. A total of 25 people from major German companies were represented. The meeting takes place in the Reichstag in Berlin with Adolf Hitler, the new President of the Reichstag, Hermann Göring, and the incoming President of the Reichsbank and Minister of Finance, Hjalmar Schacht. The purpose was to ensure the loyalty of the industry during the impending Nazi takeover. Without the financial guarantees of these men, obviously all male, the Nazis would never have come to power. Entrepreneurs, on the other hand, could work in symbiosis with politics. When the Nazis began their attempts to seek alliances to stop Communism and wipe out Jewish life, the military was needed.

This created a shortage of workers, which was met with slave labourers from concentration camps funded by the then “Aryanised” Deutsche Bank — as described in Dark Towers by David Enrich. According to Enrich, this is also Donald Trump’s main bank to finance his business.

Unfortunately, there are obvious similarities between the collaboration between Capital and politics of the German 1930s, described in The Order of the Day, and the collaboration we see in today’s United States, where Capital chooses to turn a blind eye when it comes to Trump’s racist rhetoric. In the United States, Capital has benefited from the economic benefits of Trump’s policies through significant corporate tax cuts and deregulation, resulting in enhanced wealth and freedom. This, at the expense of the less privileged. The US government deficit has increased dramatically, and the state tax revenues are not adequate to provide the necessary health care and education for the American society to be able to bridge the gaps and prepare its population for the major technological shifts that have only just begun.

On the whole, Covid-19 has exposed the polarisation of the United States and fundamentally shaken its unequal construction. This is shown, in particular, by the Black Lives Matter movement. James Baldwin’s wise voice in, The Fire Next Time, from 1963, reminds us of the country’s long overdue changes in justice. While the United States became one of the world’s most important countries politically and economically, it accepted the vulnerability of the Black population. We can only hope that the movement that has now been launched can make a real difference.

Our Swedish reality is not too different from that of the world around us. The pandemic has particularly affected the weak, exposing our social inequalities, and risks widening them even more. We are at a point in time when most business managers and investors know in their heart that corporate responsibility is not just about creating value for their shareholders, but also involves strengthening the whole of society and providing sustainability at all levels. This particularly applies to our educational system, which requires improvement, becoming more egalitarian at a time when we will have a greater shortage of skilled labour than ever before.

The state, its citizens and Capital are all in the same boat. Sensible companies and sensible members of society build empowered and egalitarian societies. All this sounds familiar, that is how we have historically achieved growth. Hopefully, the storm that is now brewing all around us can make us realize that the boat will capsize, unless we deal with the polarisation. I know this by listening to Vuillard and Baldwin, and not least to my family’s experiences that keep echoing in my mind.

Robert Weil

Founder and owner of Proventus AB and The Robert Weil Family Foundation