Did the customer ever ask for this?
What often gets maligned as "Late Stage Capitalism" is really "Early Stage Gosplan"
How creditors replaced customers and called it progress
Did the customer ever ask for ESG?
Not anti-pollution. Not cleaner air or better labor standards. The ‘product’ called ESG—the ratings, the green bonds, the impact reports, the carbon accounting theater. Did any customer ever choose a laundry detergent because its MSCI rating improved?
Not really.
Consider this: many of the same people who bought Teslas to prove they were better than you—virtuous, forward-looking, on the right side of history—have, in the last two years, loudly dropped them (and quietly replaced them with gas-powered vehicles). Not because the cars got worse. Because the status signal flipped. A funny story is when TV star Alyssa Milano unironically replaced her Tesla with a Volkswagen claiming the owner was a fascist (you can google what started the “people’s car” in Germany).
Did the customer ever ask for DEI?
Not the idea of a diverse marketplace of ideas. Not the moral case for integration based on merit and competence for anyone of any background. (I DID ask for THOSE things).
But the the ‘product’ called DEI—the dashboards, the compliance trainings, the HR scorecards, the reporting frameworks. Did a single customer ever wake up and say, “I would switch lipstick or buy different corn flakes if only they published their workforce composition metrics by job level”?
No.
That’s not a customer market, is it? That seems more like a fashion cycle.
And that’s a clue.
Did the customer ever ask for AI? Yes, maybe
But AI forced into everything?
Not useful AI—spell check, fraud detection, routing algorithms. The product called AI Everywhere—the chatbot on your bank’s homepage, the “AI-powered” toothbrush, the search engine that now gives you a confident wrong answer instead of ten blue links.
Did anyone ask for any of this?
No. And “Yes.”
What happened?
And who asked?
The “Aha!”
Here’s what happened.
We didn’t build any of those things to make better products for end customers. We built it for capital allocators—for creditors. I know it can be hard to hear that values you believe in are way downstream from a credit instrument, but this is an essay for grown ups, not ideologues.
And once you see that, the whole pattern becomes almost embarrassingly clear.
DEI was built to satisfy institutional investors who demanded it as a risk metric. What impact it had on customer end users was never even asked.
ESG was built to unlock cheaper financing from lenders and bond buyers with sustainability mandates. Customers not consulted.
AI Everywhere was built because boards and VCs demanded an “AI strategy” to justify valuations during the zero-interest-rate frenzy. Not a customer in sight.
Customers were downstream. They were never the user. If the “stream” is the Mississippi River, customers are just the Mississippi Delta. When did that all change?
During ZIRP, the company’s real relationship—the one that determined survival—was not with the buyer. It was with the creditor.
This isn’t capitalism. Capitalism listens to revealed preference—what people actually pay for with their own money. So often we hear the constant haranguing about “late stage capitalism.”
This isn’t late stage capitalism. It’s early stage Gosplan.
What’s Gosplan?
In the Soviet Union (not capitalist), central planners set production targets. Factory managers optimized for the targets. Not for quality. Not for utility. Not for what people actually wanted. For the metric. Customers not consulted.
The result: shoes that fell apart, cars that wouldn’t start, queues for everything. People pretending they were happy.
Now look at the last fifteen years.
Cheap capital created a new class of central planners: institutional investors, ESG rating agencies, board consultants, and compliance officers. They set the targets. Companies optimized for the targets.
Target: DEI disclosure score → companies hired diversity heads and built reporting. Product quality? Unchanged to worse.
Target: ESG rating → companies hired sustainability reporters and bought offsets. Actual emissions? Often higher. But there was a new credit market!
Target: “AI integration” KPI → companies shoved LLMs into everything. Customer experience? Often worse.
The Soviet factory manager didn’t hate shoes. He just had no incentive to make good ones.
The modern CEO doesn’t hate customers (although many don’t use their own products—McDonald’s CEO).
He just spent a decade being rewarded for ignoring them.
Because the reward came from one place: access to cheap credit. And access to cheap credit depended on metrics, not on customer loyalty.
The DEI dashboards didn’t build better products. The ESG ratings didn’t clean the air. The AI chatbots didn’t make anyone’s life better. They just created more complicated surface area to capitalize on—products that address the initial anxiety without making life better for end users.
They weren’t supposed to. They were supposed to satisfy the creditor.
The hidden layer: how financial ideas become products
This is the part no one says out loud.
DEI, ESG, and AI Everywhere weren’t social movements or technological inevitabilities. They were financial products—synthetic instruments created to price risk in a world where money was free.
Here’s the real go-to-market story:
A creditor (or their proxy, the capital allocator) invents a metric.
A consulting class translates it into a corporate initiative.
A compliance class operationalizes it.
A product class is forced to implement it.
A marketing class moralizes it.
A customer base ignores it.
A capital regime shift collapses it.
The customer was never in this loop. The creditor was.
Notice no one asked: Does it work? Or Will it sell?
They asked: Does it signal?
This is not a moral story. It’s a financial one.
The collapse we’re watching
Now money is expensive again. The allocators have less power. The cheap capital that subsidized the scorecards is gone.
And suddenly, all the companies that optimized for DEI, ESG, and AI instead of for customers are discovering something the Soviets discovered in 1989:
Central planning doesn’t collapse because the planners are stupid.
It collapses because no plan survives contact with the customer—and no bureaucrat can simulate a price signal in a free and open market.
The DEI dashboards didn’t build better products. The ESG ratings didn’t clean the air. The AI chatbots didn’t make anyone’s life better.
And now the bill is due. But the bill was always due to the same party: the creditor. Only now, the creditor is asking a different question. Not “what are your metrics?” but “where is your cash flow?”
And cash flow comes from one place. Customers. THAT is the revealed preference of capitalism.
The quiet survivors
Who’s fine?
The companies that ignored the scorecards and kept building for customers. The ones that treated DEI as a human practice—finding the most competent people regardless of background—not a reporting exercise. The ones that reduced waste because it saved money, not because it improved a rating. The ones that used AI only where it actually solved a customer problem—and skipped it everywhere else.
Those companies didn’t make headlines. They didn’t get the premium valuations. They didn’t get the breathless McKinsey reports written about them.
But they’re still standing. And they’re not collapsing.
Because they never confused the creditor for the customer. They borrowed money. They served the person who paid them.
The bottom line
We spent fifteen years building a central planning system and calling it modern capitalism.
We replaced price signals with PowerPoints. We replaced customer choice with compliance checkboxes. We replaced the person with the wallet with the institution with the credit rating.
And now the system is failing—not because markets fail, but because we stopped using them.
The only way out is to remember what a market actually is:
One person, one wallet, one choice—made freely, recorded honestly, and respected absolutely.
The creditor is not that person. The creditor never was.
Everything else is just Gosplan with better fonts.
Rory- You are correct about the last 15 years, but we must go back to the 1970's when the 'maximize shareholder value' mantra came from the consulting firms and was repeated by the creditors. Back then, no one asked the customers if moving manufacturing off shore was what they wanted. In many cases quality suffered, but profits rose. The implications of corporate choices regardless of their motivations are injected into the customer experience from Bud Lite to Nike caving to the CCP. The cartoon drawing aptly shows how the MSM plays an important role in informing that customer experience. So the question remains: Who is calling the shots by either controlling the capital markets or the consumer narrative. It certainly isn't the customer.
Hello Rory. My simple thoughts.
People are not just one dimensional: customers. They are also citizens and members of communities, etc. as you know. If helping disadvantaged groups through something like DEI (putting aside its actual implementation) helps with that with no impact on the product so be it. Maybe the type of society we live in should be considered a “product” to have value. Its customers are called people.