The hypocrisy of woke capitalism

When companies engage in politics, they are less effective in their primary role, that of wealth creation…

In my last columns, I explained how woke ideology sows division between groupscreates a culture of victimization and blocks the way to financial freedom.

But since those who disagree with this new orthodoxy do not want to be censured or silenced, two-thirds of American citizens say, when asked about it, that they are afraid of express their opinion in public.

(Citizens’ willingness or reluctance to speak their mind is an almost unparalleled barometer for assessing the health of a democracy.)

This has become the modern version of McCarthyism.

If you don’t buy into the cause, then you are part of the others and therefore part of the problem.

It goes without saying that discrimination still exists to this day. And we should do everything in our power to eradicate them. But the majority of Americans are aware of the historic struggle of women and minorities in their country. And in the world besides.

And there isn’t a single person with savvy to oppose diversity and equality. But there is a difference between education and indoctrination, and between inclusion and intolerance.

A communication effect…

Yet this poisonous ideology has now spread from universities to civil society and corporate boards. Shareholder capitalism is gradually being replaced by woke capitalism. And it’s one of the biggest business scams of our time.

Here’s how it works.

Listed companies present themselves as something other than “greedy companies” eager to increase their turnover and profits. They drape themselves in a veil of virtue to improve their public image, divert attention from their harmful practices and (ahem) increase their turnover and profits.

This is ostentatious virtue taken to the extreme. However, like ostentatious virtue on a personal level, it is mostly empty talk and gestures.

And often, there is a backlash: employees, customers, suppliers and investors are offended.

For example, Walt Disney opposed a Florida state rule that prohibits public schools from educating students between the ages of 5 and 8 about issues related to sexual orientation and gender identity. Millions of parents across the country took offense, including many potential Disney customers.

Another consequence: the Walt Disney World amusement park could lose the status of “special tax territory” which it has enjoyed for 55 years.

The groups Uber and Novartis have issued lengthy press releases in support of the Black Lives Matter movement, which campaigns in particular for the police to be defunded and for investigations to be carried out into white supremacists in the military.

Coca-Cola has implemented corporate programs to teach employees to be “less white” (ie, less arrogant and less oppressive).

Delta Air Lines and JPMorgan Chase have made preposterous and provocative comments about Georgia’s voting reform bill. (Joe Biden has said of this law that it is the equivalent of “Jim Crow laws” for the 21st century.)

In 2019, Nike stopped marketing a line of shoes after activists claimed the “Betsy Ross” flag they were sporting [NDLR : un drapeau conçu durant la guerre d’Indépendance des Etats-Unis, avec 13 étoiles] represented slavery.

Apple refused to help the FBI unlock the iPhone of a Muslim man who killed three officers at Naval Air Station Pensacola. In contrast, the IT giant helped the Chinese Communist Party ban public protests in China in 2022, by disabling AirDrop functionality on phones sold in the country.

… and an effect on investments

Many management companies have withheld investment capital from companies that fail to meet certain environmental, social and governance standards. Most of these funds performed poorly. Especially in 2022.

Management companies won over to the woke cause consider companies producing fossil fuels as harmful companies and, therefore, that they have no place in an investment portfolio.

Still, the best performing sector in 2022 was energy, by far.

Free market capitalism sees no problem with corporations spending their money to achieve their goals, whatever they may be.

Woke capitalism is different. These are management companies that promote progressive social values ​​that often have nothing to do with consolidating or promoting their business.

This irritates or disappoints many stakeholders. So the question is why companies do it.

The first reason, of course, is that some employees, customers and investors share their view. They also want to curry favor with some progressive politicians in order to gain favorable regulatory treatment. This often involves keeping applicable regulations in place, or even strengthening them.

Why ? Because state and federal regulations are so complex and costly that they prevent the emergence of new competitors.

Political wokes flatter the ego of some CEOs who would love to wield quasi-political power but are unwilling to spend the time, energy and money needed to win an election.

There are also subsidies involved. For example, in January 2020, the British pharmaceutical giant AstraZeneca, announced with great fanfare its intention to invest $1 billion in initiatives aimed at combating climate change over the next ten years.

Two months later, the group received a grant (not a loan but a grant) from American taxpayers to subsidize for-profit vaccine development. (The company insists that there was no quid pro quo. But receiving $1.2 billion on the spot in exchange for a promise to invest $1 billion over the next ten years frankly looks like to a bargain.)

Then an effect on productivity

Woke capitalism also distracts from the problems created by certain companies. For example, Coca-Cola now provides anti-racism training to its employees. At the same time, the group’s products fuel obesity, diabetes and heart disease in black communities.

Nike has hired American football player Colin Kaepernick, who wants to promote “social justice”. Yet the company manufactures its shoes in sweatshops overseas and sells them at prices inaccessible to suburban children.

Many big corporations have taken on the role of progressive governments.

Not only does this weigh on companies and their stock prices, but it also contributes to polarizing the political landscape.

Corporate executives are expected to make decisions about research and development spending, advertising, and outsourcing. It is not up to them to decide whether a higher minimum wage is better than full employment. It is not for them to decide whether it is better to reduce the carbon footprint of the country or to reduce the energy costs of their companies.

Business leaders are also citizens, of course. And they have every right to speak in a personal capacity. But it’s another thing to use the publicly traded companies they run to promote their personal political views.

To come back to the nub of the problem, companies, like individuals, do not need to resort to ostentatious virtue. After all, they already play essential roles. They fight body and soul to meet our desires and our needs. They create tens of millions of jobs. They pay billions in taxes every year.

And, above all, they offer shareholders excellent returns on investment over the long term.

Woke capitalism is silly. It is ineffective. And it is useless.