A Moral Capital Market Bubble: How Public Opinion Overvalues and Devalues the Business

By being able to understand the public sentiment, one becomes capable of making money literally out of nothing

Europe's weaning itself off of Russia’s hydrocarbons appears to be just another link in a long chain of events that have allowed public opinion to take control of the political and business process.

Donald Trump’s social media ban, Joe Biden kneeling in front of BLM activists, #Metoo and new eligibility criteria for Oscar nominees all are symptoms signalling an unprecedented rise in the value of such intangible assets as one’s ethically impeccable reputation and commitment to the principles of the public good. However, a bubble seems to be forming in this market of moral capital.

What is the value of virtue?

The proponents of utilitarianism, starting with Jeremy Bentham and others of his ilk, argued that virtuous behaviour carries its own inherent benefits. Bentham's "moral arithmetic" suggested that a balanced calculation of potential pleasure and suffering, as well as public approval and disapproval, could produce a strategy of action capable of maximizing both personal and social utility.

This concept of a connection between beneficence and economic benefits was further developed and expounded on by German sociologist Max Weber in his canonical work "The Protestant Ethic and the Spirit of Capitalism". In it, he demonstrated with consistency how commitment to certain principles of religious morals has contributed not only to the accumulation of private wealth but also to the economic prosperity of whole nations and societies.

Weber's beliefs were undergirded by such a key concept as the notion of "Beruf" that he borrowed from Luther’s translation of the Bible. "Beruf" stands for both a "vocation" and a "calling" in the sense of some supreme task assigned to man by God, a task that can only be accomplished by careful and diligent fulfilment of one’s worldly duties rather than through monastic ascesis.

Weber's identification of one’s profession with a calling, i.e. being in the service of some metaphysical ideals, largely helped shape the generally accepted view of the notion of business reputation. Imbued with the burgher values of industry, thrift and honesty, the 20th century’s business ethics rested on the idea of familialism, encouraging the passing of a business from the father to the son and the accumulation of capital by generations of one family.

This value matrix did not fall apart even after the ownership structure itself underwent a major transformation, and an era of corporate management, reputation risk calculations and strategic branding was ushered in. Despite all the contemporary methods for valuing goodwill, the very notion of the "company’s mission" is somewhat reminiscent of missionaries’ sermons.

These days, however, this ethical matrix is going through a full-scale reboot, with its traditional foundations being subjected to a very thorough reassessment and revision.

A good case in point is last year's much talked about premiere of Ridley Scott's House of Gucci. For all intents and purposes, the shows go beyond just calling into question some specific values, including family, continuity, and loyalty to one’s roots, that were once instrumental in shaping the famous fashion brand into what it is now. It challenges the very need and aptness of even invoking them.

In other words, by tracing the company’s history back to its beginnings and by tracking the evolution of the brand’s value from one era to another using the method of artistic retrospection, the film is basically asking the question of "What moral right do you have to own a business?"

The question of one’s moral grounds for owning property captures the key trend of modern times, which is the affirmation of the primacy of a moral right over a legal right. It is this very logic that guides, inter alia, the West’s policy of economic sanctions from freezing Iran’s assets all the way to seizing the property of Russian oligarchs. In order to make sense of this remarkable civilizational volte-face, one can no longer be content with Weber's idea of "Beruf" but would instead have to turn to philosopher Walter Benjamin's idea of "Schuld", defined as "guilt as economic debt".

In his "Capitalism as Religion," Benjamin challenges the tenets of "The Protestant Ethics", positing that the development of the capitalist system was not driven by the benefit of "virtuousness" but by the benefit of "sinfulness" instead.

According to Benjamin, capitalism used religious dogmata, i.e. moral principles, to impute guilt in order to make a gain by charging "interest on the debt". It is this principle of "imputing guilt" for the sake of amassing debt and multiplying interest income that might be useful in describing the context that modern business finds itself in. This brings to the forefront the question of who is vested with the moral authority to accuse and collect the debt. And so it appears that the answer to this question is public opinion.


The whole trajectory of mass media’s evolution can be very generically described as the movement from one extreme to another. Whereas the "mass" component of traditional media (printed press, radio, and television) was embodied in the way information is used to manage large communities of people via information unification, organization and control, the emergence of new media and social networks have provided the public itself, the masses, with decisive influence tools.

We have seen a transition from the one-way and straight-line broadcasting model to a multidirectional and interactive feedback system that enables social control at breakneck speeds and on an unprecedented scale. This spells the end of the method of communication that once allowed to create the "ornament of the masses" (to borrow Siegfried Kracauer’s term) by means of "culture industries" described by Theodor Adorno and Max Horkheimer to give people comforting illusions and to contain aggression by producing Herbert Marcuse's "one-dimensional people". Not only has the mob been able to seize the instruments of control over politics, business, and culture, but it has also been vested with the power of the ultimate moral authority.

The "Leaving Neverland" documentary has done much to burnish the legacy of Michael Jackson, arguably the West's preeminent pop idol. Oprah Winfrey's interview with Prince Harry and his actress wife Meghan Markle was the final drop that completed the dismantling of the heretofore venerated status of Britain’s royal family.

All Instagram users could perhaps be summoned as witnesses in Britney Spears' custody trial; after all, they were the ones who interpreted the star’s video where she was wearing a yellow top as a call for help.

All the events of this kind that we have seen transpire over the recent years - from the Harvey Weinstein case to the ongoing Johnny Depp vs Amber Heard trial - are intended for social media users, the only authority endowed with the right to pass the final moral judgment.

It is this belief in the omnipotence of the audience’s reaction and the identification of public sentiment with the verdict of a higher judge that explains the eccentric behaviour of Trump-like politicians, the flamboyance of entrepreneurs like Elon Musk, or the escapades of celebrity ex-spouses reaching new lows of self-displaying exhibitionism. The triune collective moral judge, personified by a Facebook user, a Netflix viewer, and am Amazon buyer, has been conferred the priority right of imputing guilt. This judge marks the line between "good" and "evil", measures the extent of one’s social usefulness and responsibility, defines the approved form of interpersonal relations, and even transcends the limits of one’s physical existence, going as far as to deny past heroes their right to peace even in death.

This new ruler reigns supreme over companies and brands, governing corporate communications and reputation management. Businesses’ new "moral arithmetic" represents a constant search for a balance between ethical capital and duty.

Businesses are struggling to bear the burden of proving their own public utility while trying at all costs to avoid being assigned the blame for anything at all in this cancel culture era. Google is changing its search algorithms to maintain its inclusivity. Disney theme parks are adopting gender-neutral visitor greetings. Victoria's Secret is parting ways with its "Angels", while snack maker "Cracker Jack" is adding "Cracker Jill" to its range of products. Doesn’t all this look and sound like an investment in one’s moral capital? 

However, this market is looking at a massive bubble that is waiting to burst. Even if the public is omnipotent, it is certainly not omniscient. By being able to understand public sentiment and by handling intangibles and economic expectations masterfully, one becomes capable of creating and monetizing brands with absolutely nothing but their "mission" behind them, making money literally out of thin air.

Creative entrepreneur Billy McFarland raised funds and sold tickets to the Fyre music festival for millennials that never existed. The class-action lawsuit brought against him sought damages estimated at $100 million.

Elizabeth Holmes, the founder of Theranos, an innovative start-up company whose net worth was estimated at $4.5 billion in 2014, sold hospitals and pharmacies a blood-testing technology that could not possibly be invented.

Adventurer Anna Sorokin, posing as the wealthy heiress Anna Delvey, swindled Manhattan’s haut monde out of hundreds of millions of dollars for ostensibly funding a visual arts centre.

These scams were facilitated by their appealing, one way or the other, to moral values, including celebration of diverse and unique life experiences, the desire to rid the world of pain, or support for talent and unbridled creativity. The fact that these scams were ultimately exposed and their perpetrators were brought to account both legally and financially has had no effect on the supremacy of public morality.

Smaller bubbles may have burst, but the big one has only gotten inflated further. The documentaries and feature motion pictures about McFarland, Holmes and Sorokin became extremely popular with the audience, once again confirming that, in the marketplace of moral capital, good and evil, virtuousness and sinfulness, "Beruf" and "Schuld" - mission and guilt - are equally successful in bringing dividends.

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