Most presidential candidates publish a hagiographic autobiography tying the personal challenges they’ve overcome to their policy goals and vision for the country. Vivek Ramaswamy’s Capitalist Punishment: How Wall Street is Using Your Money to Create a Country You Didn’t Vote For, released in April of this year, contains almost no information about who he is and fails to mention that he is running for president. Instead, the 240-page book mainly deals with contemporary issues in corporate governance law which are hard to imagine fitting neatly into a stump speech. But then, Ramaswamy is an unusual presidential candidate running a strange campaign. He appears to be borrowing the strategy pioneered by the likes of Andrew Yang and Pete Buttigieg four years prior: project an image as a whiz-kid outsider, say yes to every media request, and support policies popular with the party base but ludicrous to policymakers. This strategy is serving him well; a recent poll put Ramaswamy in second place at 13 percent of the vote, ahead of household names like Ron DeSantis, Mike Pence, and Nikki Haley. Buttigieg leveraged his long-shot campaign into a cabinet position, and Yang very nearly became mayor of New York. Where will Vivek Ramaswamy be in four years? If a Republican wins the White House, Capitalist Punishment seems to suggest Ramaswamy has his eyes set on an influential position at the Securities and Exchange Commission (SEC) or perhaps in the Department of Energy. Should his star continue to rise, Ramaswamy may be among the favorites for the nomination in 2028.
For this reason, the book is worth taking seriously. Its primary object of scrutiny is “environmental, social, and governance investing,” or ESG. This is a catchall term which has come to refer to everything from racial and gender diversity in boardrooms to investment in renewable energy infrastructure. Although the idea has been around for decades, it came into vogue in the late 2010s, when stock market index providers started creating ESG ratings and indices to entice socially conscious investors. Capitalist Punishment has many villains, the most important of which are the asset managers BlackRock, State Street, and Vanguard (popularly referred to as the “Big Three”). Combined, they own about 20 percent of the average publicly traded company.
Ramaswamy accuses these giant asset managers of two sins: greenwashing and the newly coined “greensmuggling.” The greenwashing phenomenon has been well-documented and extensively criticized from the left; either to provide a PR boost or to entice socially conscious investors, companies downplay their negative environmental impact and embellish their emissions reductions. Greensmuggling is, according to Ramaswamy, more pervasive and sinister. It occurs when funds not explicitly advertising ESG goals or strategies use their power as investors to implement a pro-ESG agenda.
Much of the book is spent making the case that greensmuggling is illegal for various reasons. Ramaswamy argues that asset managers are violating pension regulations by investing funds for any reason except the financial benefit of their beneficiaries; he claims that the large percentages of firms partially owned by the Big Three constitute an antitrust violation; and he asserts that the Big Three are breaking various SEC rules. Although it is hard to imagine Republican primary voters getting particularly incensed about these technical legal questions, one imagines that BlackRock’s lawyers will read these chapters with great interest should Ramaswamy manage to secure a position in the next administration or get a test suit in front of the ultraconservative Supreme Court.
