Weekly Rundown: The Veil of Ignorance

From an early age, I was inherently curious about economic and political systems. Perhaps it was because I was an immigrant child who had lived in both socialism and capitalism, I was always trying to puzzle out how a small group of people could decide what was best for an entire population. 

I read Plato, Thomas Hobbes, J.S. Mill and Marx, always contemplating what exactly it was that made a society work. How do we make sure people are happy and fulfilled? How do we make sure everyone is productive? How do we encourage innovation? How do we guarantee health and safety to millions? Is freedom necessary? Equality? Justice? What actually makes a society successful?

One political philosopher who addressed these issues was John Rawls (1921-2002). His work was recognized by Bill Clinton for having helped “a whole generation of learned Americans revive their faith in democracy itself."

Rawls proposed that we should make societal and moral decisions behind a so-called "veil of ignorance." Imagine if we, as the founding fathers (or mothers) of a society, stepped into a room together to design the rulebook. We do not know what place we would take in this society or which cards life would give to us; intelligent or not so intelligent, white or black, rich or poor, male or female, qualified or still learning, etc. What rules would you then create that we would all be okay with? What would you change about the current rulebook?

The #BlackLivesMatter movement, in my opinion, boils down to this premise. Do you feel that opportunities for happiness and success are fairly distributed through our society? If not, how would you adjust the system to address this?

Once you give everyone the same opportunities, it is entirely up to them to build their life the way they want to. I’d say that’s an integral part of the definition of freedom.

Rawls also introduced the principle of “justice as fairness”, in which he argued that the talents and dispositions we are born with are mere happenstance and that therefore we should not feel that the wealth that follows from the exercise of those talents is properly fully ours. Therefore, it is our duty to ‘give back’ to those who are less fortunate. For example, if you were smart enough to be a doctor, it would be ‘just’ for you to donate some of your time to those who could not afford healthcare. In the same vein, if you were a wealthy businessman, it is your duty to not only to create jobs for others but to support young and rising talent. 

Each of us gets to decide what we owe to our community, but it is worth keeping in mind, that being part of a society means we all contribute something.

This Week By The Numbers

Friday brought an unexpected rally in the U.S. markets, as Trump held a press conference to deliver the good news: a surprising job report, adding 2.5 million new jobs in May, with the total unemployment rate dropping from April’s 14.7% to 13.3%. The announcement followed more good news as the Dow Jones gaining 829 points, closing in on its previous highs in February. 

Top Stories of the Week

21.5 million Americans continue to file for jobless claims

Nearly 1.9 million people applied for U.S. unemployment benefits last week, evidence that many employers are still cutting jobs even as the gradual reopening of businesses has slowed the pace of layoffs. The total number of people who are receiving jobless aid rose slightly from the previous week to 21.5 million.

Oil climbs more than 5% to 3-month high ahead of OPEC+ meeting

Oil prices rose on Friday, alongside an unexpected improvement in May’s U.S. jobless rate and OPEC’s decision to bring forward discussions about whether or not to extend record production cuts. Also in oil - Russia declared a state of emergency after an oil spill in the Arctic. 

New York reports lowest coronavirus fatalities in eight weeks

The number of lives lost from the virus on Thursday dropped to 42, marking the lowest daily death toll in eight weeks, according to Cuomo. The state also reported the lowest number of total hospitalizations to date. The number of daily deaths related to Covid-19 have been on a slow but steady decline from the height of the state’s outbreak in late March, when close to 800 people were dying every day. The governor attributed the state’s significant progress to New Yorkers, who “changed their fundamental behaviors.” Read Full Story.

A Federal Reserve $500B initiative to buy municipal bonds is being expanded. 

The Fed said Wednesday that all states can now designate at least two cities or counties that can directly utilize the Municipal Liquidity Facility. In addition, the central bank said that governors can now designate as participants two issuers who receive revenue from services such as public transport, airports, toll facilities, utilities and other government activities. Full Press Release.

Reddit co-founder Alexis Ohanian resigns

Ohanian resigned from the company's board and urged it to replace him with a black candidate. He said he'll use future gains on his Reddit stock to "serve the black community," and pledged $1 million to Colin Kaepernick’s Know Your Rights Camp. Reddit has been widely criticized for allowing racist conversations on its platform.

SoftBank launches $100M+ Opportunity Growth Fund to invest in founders of color

The Opportunity Growth Fund “will only invest in companies led by founders and entrepreneurs of color,” according to an internal memo from SoftBank’s COO, Marcelo Claure. The fund will initially start with $100 million, meaning that there is scope for SoftBank (the primary limited partner) or other limited partners to add more over time.

---

Thank you for reading the latest edition of the Weekly Rundown. As always, reach out with feedback or ideas for the next edition.

Best,

Tatiana Koffman —> tatiana@tatianakoffman.com

Disclaimer: This email does not contain financial advice and was created solely for informational purposes.