U.S. Markets closed

Influencers Transcript: Darren Walker, November 21, 2019

ANDY SERWER: Some influencers succeed against all odds. Darren Walker did just that then devoted his life to improving the odds for everybody else. A black and gay man from rural Texas, Walker made it on Wall Street, but he left it behind to volunteer full-time at an elementary school in Harlem.

His expertise eventually brought him to the Ford Foundation, where he has served as president since 2013, controlling a $13 billion endowment that makes Ford one of the biggest philanthropic organizations in the United States. He's here to talk about wealth inequality, how he overcame it, and why others shouldn't have to.

Hello, everyone. I'm Andy Serwer. And welcome to "Influencers." And welcome to our guest Darren Walker, president of the Ford Foundation and author of the new book, "From Generosity to Justice, a New Gospel of Wealth." Darren, nice to see you.

DARREN WALKER: Great to be here, Andy.

ANDY SERWER: So let me ask you a little bit before we get to your book and the work you're doing at Ford about a small controversy, perhaps, which is a group of artists that were upset that you supported the closing down of Rikers, which is the big jail in New York City, and moving prisoners to four detention centers. Where does that controversy stand at this point?

DARREN WALKER: Well, the good news is the Lippman Commission, which made a set of recommendations that had as its highest priority closing Rikers, which is truly a scourge on the city of New York in an age of mass incarceration, a time when we at the Foundation and many others around this country have committed ourselves to ending mass incarceration. What we're doing in New York City by closing Rikers and reducing the overall capacity to incarcerate is a good thing for our city.

We will be a model of the way in which we can have a humane and just criminal justice system. So I'm actually quite pleased with the results of the commission. And I actually think the protests were helpful in raising the issue and, I think, raising the debate for the public to understand, I think, at a granular level just why this is such an important public policy issue.

ANDY SERWER: Right. Your mandate at the Ford Foundation, what is it? What does your job entail? What do you seek to do there?

DARREN WALKER: Well, the Ford Foundation was founded in 1936 by Edsel Ford. And a major plank of our mission is to promote and strengthen democracy in the United States and around the world. We believe today that the greatest threat to democracy is growing inequality in the world. So our North Star is working to reduce inequality in all of its forms.

ANDY SERWER: I want to get to that in a little bit. "The New York Times" did a story about you this year, saying you were the man with a $13 billion checkbook. And I think you-- that's slightly overstating it, because you only dispers, what, $650 million a year or something on that order of magnitude. What is that like to have a job like that, Darren, where you're able to distribute so much money, quite honestly?

DARREN WALKER: Well, first of all, I'm very lucky that I have the best board of trustees of any foundation in the world. I have an enormously supportive group of board members who are my greatest champions and who also hold me to account to deliver on that mission of spending that $650 million in the most effective way that we can.

And while it sounds like a lot of money, it is actually a drop in the ocean when we think about the challenges that we face. So as a foundation, we are working on challenges around ending mass incarceration. We are advancing an agenda around human and civil rights in the United States in America-- in America and in the world. We are working to develop systems and structures that promote more participation, more civic engagement.

We have to address the issue of workers and how we put workers at-- in discussions around the future of work, so that it's not just work but workers and their resilience and stability that is our focus. And finally, the arts, the importance of the arts in this country. The arts gives us a way in to look at ourselves as a people, to develop more empathy. And that is essential, because we can't be a just nation without being an empathetic nation.

ANDY SERWER: You mentioned the arts. And I saw that you said, or someone reported, that you sold all the art and bought a whole bunch of new art. Was it really all the art? And how do you make those kinds of decisions?

DARREN WALKER: Well, the board decided that, as we reimagine the Ford Building, that our 1950s art collection was probably not consistent with our 2020 social justice focus. There were no women, no people of color in the collection.

ANDY SERWER: Really, just zero?



DARREN WALKER: And the belief was, and I'm a firm champion of this idea, that the foundation's walls need to represent our work and need to reflect our mission in the world. And so we did deaccesion the collection and took the proceeds of that and acquired new works of art that are quite diverse and I think quite exciting when visitors see them.

ANDY SERWER: You're taking on such huge systemic problems and issues. I mean, the criminal justice system, how do we begin, Darren, to think about fixing it? Well, this is where my book comes in, because one of the, I think, tenets of this new gospel idea is that we have to move from projects and initiatives to really getting at the root causes. And to do that, we have to address the systems and structures that produce inequality, that produce too much disadvantage for too many Americans and people around the world and actually compound the privilege of people like you and me who are highly educated, who have strong networks, who have access to influence. And so what we're interested in is how do we level the playing field.

ANDY SERWER: Right, so criminal justice, I wouldn't even know where to begin. So many people incarcerated. I mean, just people incarcerated who are innocent is just one facet of the problem. How do you begin to address it, though?

DARREN WALKER: Well, you begin to address it by an analysis of what produces the results that we get.


DARREN WALKER: We've designed a criminal justice system to produce the results that we get. The pernicious system that we have was intentionally designed. And if you dis-aggregate the patterns, just the pyramid-- if were to do a simple pyramid and say what are the building blocks. The building blocks are a bail system that is a for-profit bail system that ensnares people for low-level crimes and makes it impossible for them, often, to even get out on bail, because they're poor.

It's a set of of of laws and statutes, mandatory minimums, the ways in which certain offenses are disproportionately burdened by people of color. So the difference in the way crack cocaine and powder cocaine, the sentences, are different, because they're two different populations of people who are users.

And so we have to really look at that pyramid. And all of the layers of that pyramid are actually quite identifiable. And so it is quite possible. And we are seeing the results today. And so there's good news in this country. We are incarcerating fewer people, which means fewer families and fewer communities are being harmed. And we are safer than ever as a nation. So this idea of a correlation between incarceration and public safety, we believe, has been disproven.

ANDY SERWER: Right. And it gets harder, though, Darren, with less, say, blue collar jobs, for instance, right? And maybe even bigger than that though, is what we were talking about earlier, which is wealth and income inequality. Is that a cause of this or an effect? It's-- it's all wrapped up, isn't it?

DARREN WALKER: Well, it's certainly interdependent. But let's understand that the question of work in America is among the most important public challenges we have as a nation, because we have created a form of capitalism that I believe is corrosive to the idea of long-term national interest and certainly to long-term worker interest.

So for two decades, workers-- average workers in this country have really received no increase in their wages. And in fact, many of them have lost benefits. My grandfather who was barely literate with a third grade education worked as a porter at an oil company in Texas. He benefited from a profit sharing plan. And that profit sharing plan allowed him, even as a low-wage worker, to live a life of dignity in retirement.

Two years ago, the CEO of American Airlines put in place a profit sharing plan for workers. And he was heavily criticized by Wall Street. In fact, the analysts, some of them downgraded American Airlines stock. And among the things they cited as problematic was the fact that the airline wanted to share more of its profits with its workers.

We're at a point in this country now where I believe the core issue of what kind of country are we going to be-- are we going to have a democratic capitalism that uses a stakeholder model of a series of interests, and those interests being, of course, shareholders at the top, but workers, customers, and communities? That stakeholder paradigm, I believe, we're at a we're at a point of calling into question.

And Marc Benioff's, I think, very powerful op-ed and others, Ray Dalio, Jamie Dimon, other CEOs, Larry Fink, have all talked about this. And so I'm actually quite encouraged that we're seeing, directionally, a change in the discourse from leaders of our corporations and hopefully in terms of their behavior.

ANDY SERWER: We're seeing that, on the one hand, on the corporate side. But on the government side, doesn't Donald Trump make all this so much harder?

DARREN WALKER: Well, at the foundation, we are not a partisan organization. So we don't look at this from the standpoint of who is president. Ideally, we want to have an administration, wherever we work in the world, that believes in justice and fairness and equity. And so in this country today, there is no doubt, irrespective of who is president, that the scourge of growing inequality is having a huge toll. It is part of the reason why we are an increasingly divided nation, because people who work hard, play by the rules find themselves feeling as though they are being left behind. And the data would indicate that too many of them are being left behind.

ANDY SERWER: So speaking of Beinoff's op-ed, for instance-- I mean, he talks about capitalism being dead. Does this mean we need a new form of capitalism? Do we need socialism? Is it-- it doesn't sound like you want to talk about specific political figures. But, you know, you've got a spectrum that has Bernie Sanders, Elizabeth Warren, AOC. How far do we go in terms of infusing socialism? Or what sort of reforms could capitalism use?

DARREN WALKER: Well first of all, let's say we are committed to capitalism. I think the problem is we have a kind of capitalism that is distorting the potential of capitalism to deliver benefits for more people. So we have designed a form of capitalism that over-indexes for higher-income people like you and me and people with assets. And what I think is we need that kind of capitalism that we've had in this country.

So the idea of shared prosperity and economic mobility which was produced by the kind of democratic capitalism this country has enjoyed, at least for most of the 20th century, that made our form of capitalism the envy of the world. What we're seeing today does not make America the envy of the world. What we're seeing today is growing inequality, a capitalism that favors the wealthy, people with assets.

So if you are lucky enough, 10 years ago, 15 years ago, to have assets. Those assets as a result of Fed policy, and other reasons. Those assets have grown in value. But the reality is, not a lot of Americans have assets.

And so part of the challenge is, how do we bring down those barriers to asset creation? For young people today, the burden of college debt makes it impossible to imagine accumulating assets. Because for too many, the idea of $50,000, $100,000 in debt, precludes their being able to save.

And so, we have an entire generation of people, of young people, who don't believe that their futures will be better. So that barrier, for example, of education. We've got to fix.

ANDY SERWER: Right. Your book, and I want to ask you about the role of philanthropy in changing the system, and your book is a reference, an homage maybe, references Andrew Carnegie's work. How is it different from, how is your vision different from Carnegie's? And what is the role of philanthropy in trying to transform our society and our economy?

DARREN WALKER: Andrew Carnegie was a brilliant, radical capitalist. He was a ruthless business man and a monopolist, for sure. But his idea that everyone in this country should be literate, should be able to read, should have access to a library was a radical idea.

And so, I want to situate him in that historical context. But Andrew Carnegie also believed that inequality was a normal phenomenon, and that there was no problem with inequality. The problem was simply, how did man like him dispense the bounty that the capitalist system in this country had generated for them.

And so, fast forward 125 years, and I don't think we are simply comfortable saying that people should be able to read. Yes, that was one of the root causes that Andrew Carnegie identified. But today we know more.

And we know that there are root causes that are much more difficult to grapple with, like bias, and prejudice, and discrimination. Things like patriarchy for a foundation that works around the world, the issue of how women and girls are valued is a root cause of poverty.

It's a root cause of the second class citizenship of women in many countries. And so, we can't solve our problems without addressing some of these root causes.

And so, the new gospel idea that I put forward says that we need to address these root causes, that we need to understand that the people who are closest to the problems we're trying to solve often hold the answers, the solutions to unlocking the solutions.

So how do we think about listening to those people, and not necessarily believing that because you have a PhD in economics, that you have the solution.

ANDY SERWER: You mentioned social mobility, Darren, and you're exhibit a of the benefits that can accrue to an individual who is allowed to pursue, or can benefit from social mobility. You grew up poor, black, gay, in Texas, and here you are at, sort of, the center of the universe. How did that story unfold?

DARREN WALKER: Well, my story is a story that could only happen in this country, and it's a big part of the reason why I feel so much gratitude to America, to a nation that I believed cheered me on. I never felt, in spite of whatever other barriers you might refer to, I never felt that I wasn't going to succeed.

Because I had good public schools. I went to a great public university. I had scholarships financed by private philanthropies. I had the Pell Grant. All of these things were in my favor that made it possible for me to get on that mobility escalator, and ride it as far as my own ambition would take me.

What I worry about is that, for too many people, that mobility escalator has slowed down. And for some, it's actually stopped.

ANDY SERWER: Your personal story is a part of who you are. So I'm just wondering, how much of a narrative, a personal narrative, do you think people need for their careers? Is that necessary?

DARREN WALKER: Well, I think we all have a narrative. Each of us has an individual narrative, and each of us has an experience in this country that have made us who we are today. And so, my narrative, I think, is punctuated by seminal events in my life.

So in 1965, my mother and I were sitting on the porch of our little shotgun shack, on a dirt road in rural Liberty County, Texas. And a woman approached the porch, and told us about a new government program called Head Start. And Head start was going to be starting in the summer of 1965, and she wanted to enroll me.

That was a seminal moment in my life, as I reflect on my opportunity. When I was 13 years old, I worked as a busboy in a restaurant. And in that capacity, you are the lowest rung of the staff. And so, me and the dishwasher were the people who were at the bottom.

And when you were a busboy at age 13, black, in a town in Texas, your job is to be invisible. It is to take what people want to discard, and as quietly as you can, manage, for their comfort.

But you're invisible. Your own dignity is not acknowledged. And I learned something from that experience, which is that there are so many people in this country who are invisible, whose challenge is, whose burdens are not understood.

So they are not-- they are invisible, often, to elites. They're invisible, often, to people in our milieu, in a city like New York. But they have a life, and they have a narrative, and they have aspirations and dreams.

And my concern is that their dreams and aspirations are being asphyxiated by a kind of pernicious inequality that makes it impossible for them to believe in the American dream. And when the American dream dies, America dies.

ANDY SERWER: Younger people today are facing those kinds of pressures that you're talking about, because they're growing up in a world where wealth and income inequality that didn't exist 20 or 30 or 40 years ago, or not to the extent that does today. Are young people different today, Darren?

DARREN WALKER: No, they're not. Young people are ambitious. They want to believe. They have a growing desire to make a difference in the world. They're idealistic. But the reality is they are challenged by a burden of debt.

They are concerned about climate change, and the environment and ways in which we weren't. They are less likely to embrace the idea of capitalism. So we know these things from the data.

But at the end of the day, young people want to believe in America, and want to believe in the potential of this country to deliver a shared identity as Americans, a shared pathway for mobility, and economic security, and ultimately believe that their generation will in fact be a great generation.

And so, our job is to help them make that reality. It's to lay the groundwork, to soften the ground, if you will, to make it possible for their dreams to be realized.

ANDY SERWER: What about tax reform, in terms of addressing the differences, the disparities in wealth in this country? Would you support, for instance, a wealth tax.

DARREN WALKER: So I'm not going to comment on any particular proposal, but I do believe that this form of inclusive capitalism, that is not necessarily a moral argument, I want to make the business case for the long term ROI.

If we have a more inclusive form of capitalism, that will require us to think about the two R's that we capitalists don't like to talk about. The first being regulation. The fact that one of the reasons we have the kind of capitalism we have today is that we don't have the right regulations to ensure a more shared prosperity paradigm.

And secondly, redistribution. We capitalists don't like to talk about redistribution. But ultimately, in order to have the kind of country, the kind of society, we've got to talk about why don't we have any longer profit sharing for our employees.

When was that taken out of the system? And why? And what would it take to incorporate and redesign that into the system, so that workers share in the bounty of their labor?

And so, we are going to have to talk about things that are difficult, and that make us uncomfortable. But that's the journey that we need to be on in this country now.

ANDY SERWER: Do you have any ideas about which types of regulations?

DARREN WALKER: Well, I just think we've got to think very seriously about the kinds of regulations that put barriers in place. So it's not regulation for regulation sake.

It's to say, what are the barriers for working class Americans, poor people to advance? How can we help enable that? How can we help to facilitate and accelerate that? What regulations would help that to happen?

ANDY SERWER: How do you respond to people, Darren, who say, you've been co-opted? You're on the board of PepsiCo. You're President of this big foundation. You hobnob with all these CEOs. You've left the people that you're choosing to represent, and you're just part of that whole problem now.

DARREN WALKER: Well, I think it's a fair question and a fair critique. I believe that remaining proximate is really important. And for me, on a personal level, I'm very proximate. The idea of criminal justice reform is not an abstraction.

I have had seven of my cousins serve time in state penitentiaries in Louisiana and Texas. I'm very familiar with visiting prisons, not to work on a PhD dissertation, but to visit a relative. So these ideas are not foreign to me.

And I do my very best to, in my work and in my personal life, ensure that I'm not so insulated from the realities of most Americans and most people in the world that I don't understand.

ANDY SERWER: With the-- sure.

DARREN WALKER: Just to be clear on this point, I don't think, because I would not want someone who is a person who is well-to-do and who lives a life that is a life of privilege to feel that in order for them to be legitimate or authentic, they needed to do something special to change their life around who they see and who their friends are.

I think what's important is that you care, that you authentically care, and that you're willing to invest your time and your resources and your philanthropy. And not just ameliorating the problem, but actually addressing the underlying reason why the problem exists. And that, to me, is the measure.

It's not some measure of, oh, well, how many poor people do you hang out with? And who are your friends? And do you have a diverse friends? And questions like that, which I think, while important, are less important than what you actually do with your resources, and how you actually think about these public policy questions.

ANDY SERWER: Darren Walker, President of the Ford Foundation, and author of the new book, From Generosity to Justice, A New Gospel of Wealth, thank you so much for joining us.

DARREN WALKER: Thank you, Andy. You've been watching Influencers. I'm Andy Serwer. We'll see you next time.