Coffee drinkers and donut eaters learned something troubling recently. The owners behind JAB Holding Company — the German firm that owns or controls Krispy Kreme; Panera Bread; several coffee brands, including Keurig Green Mountain, Peet’s and Caribou; Pret a Manger and Einstein Bagels — revealed that the family fortune was in no small part built on their mid-century ancestors’ enthusiastic collaboration with the Nazi regime, including the use of forced labor in their factory and home.
It’s an open question whether the $11 million or so the Reimann family has promised to donate to an as-yet-unspecified organization is enough to atone for this shameful corporate heritage. But let’s, for the sake of argument, take the Reimanns’ denials of prior knowledge and their willingness to face their family’s awful history at face value.
What does it say about our economy when capital’s provenance is so opaque that even the direct descendants inheriting it did not understand where it came from, let alone the consumers whose relationship with that capital is mediated almost entirely through the artificial distinctions of brand identity?
Businesses, of course, need money to grow and scale. But our traditional picture of where this money comes from is increasingly out of date. Privately held companies like JAB Holding are today displacing traditional “shareholder capitalism.” The Wall Street Journal, for instance, found that in 2017 at least $2.4 trillion was privately raised in the United States — more than the $2.1 trillion raised through public markets.
This less regulated and less transparent private money is increasingly in the driver’s seat of the economy. For all its flaws, the model of the public corporation at least, in theory, promised opportunities for broad participation and the possibility of public oversight. The black hole of private finance, however, makes no such…