It often appears that CEOs of some of the largest global corporations have made the cause of the woke their own. Their willingness to join the fray was demonstrated in their response to the launching of GB News in the UK. No sooner was this new, independent news network launched than sections of big business joined a boycott against it. A campaign was organised to pressure firms to pull their ads from GB News, and companies like Kopparberg, IKEA, Specsavers, Octopus Energy, Grolsch, Moneysupermarket, Vodafone and others swiftly gave in.

Many old-fashioned conservatives were surprised at the willingness of capitalist firms to take a side against GB News. Numerous commentators suggest that what is at work is a case of ‘woke washing’ – that this is all just an opportunistic public-relations exercise. Others assert that the wokeness of capitalist firms will not endure, or that it is not as influential as it appears.
Writing in this vein, a commentator in the Wall Street Journal asserted that wokeness hadn’t exactly captured the American business community: ‘The problem isn’t the American corporation. The problem is a small but influential and unbearably sanctimonious swath of leaders who’ve gone ga-ga over progressive politics.’

But this assessment overlooks the dramatic transformation of the ideological outlook that prevails in the corporate world. Anyone reading leading management publications like the Harvard Business Review will note that their content reflects many of the identity politics-inspired narratives that prevail in higher education. When a commentator writing for Forbes informs readers that woke capitalism is good for the profit margins, it is evident that capitalism has undergone a massive rebranding exercise. Commentators in the mainstream media are in no doubt that ‘CEO activism has become the New Normal’.

Due to big business’s vociferous support for the Black Lives Matter movement, many members of the public have become aware of the dramatic transformation of corporate ideology. Capitalist firms not only compete with one another for a bigger share of the market — they also compete to gain the maximum exposure for their woke credentials. This was clear last summer, when every firm from Nike to Apple to Spotify pledged their support to Black Lives Matter.

Since the US presidential campaign in 2020, woke capitalism has become increasingly active in the sphere of politics. Back in April 2021, more than 120 CEOs, business leaders and lawyers gathered on 10 April for a Zoom meeting to discuss and organise a campaign to defeat Republican state voting laws. They discussed pulling their donations and refusing to move business or jobs to states that passed the Republicans’ voting laws. Several of the speakers suggested that their intervention was critical to ensure the future of democracy.

This Zoom meeting of capitalist oligarchs almost immediately mobilised its corporate peers. The leaders of more than 300 of the most powerful corporations, joined by high-profile celebrities and members of the cultural elites, signed a statement that was published as a full-page ad in the New York Times. Amazon, BlackRock and Google were among the signatories swearing their commitment to social justice.

Suddenly, the CEOs of some of the largest companies in the world were acting as if they were running a political party, rather than a business. Until recent times the capitalist class tended to adhere to a division of labour between itself and the political class. Capitalists were in the business of making money and not moralising about how the public should behave and think. Now, many of them appear determined to invade political life in order to directly influence lawmaking and government. They are determined to ensure that it is their views, rather than those of elected politicians and the people, that prevail. And, as recent events show, these firms even have the power to censor American presidents and force state legislators to back off from certain policies.

A woke corporate oligarchy is no friend of democracy. Not only has Twitter and Facebook banned Donald Trump — Amazon has also decided to ban socially conservative books. So why did the CEOs of some of the most well-known corporations become so directly involved in political campaigning? Why did they decide to start wielding their economic power to promote a variety of identitarian causes?

The rise of the woke corporation

In recent decades, the focus of the culture wars has been the university. Higher education provided the terrain on which identity politics could flourish and where a wide range of ideals challenging Western civilisation and prevailing values could thrive. Opponents of these developments persuaded themselves that this was all because higher education had been subverted by campus radicals. What many critics of cancel culture on campuses overlooked was that similar developments were taking place in other spheres of public life. In particular, they appeared oblivious to developments within the private sector.

t took three decades for the university to become dominated by what was once the counterculture, but which has now become the culture. But in less than a decade business has gone the way of the academy. In his book The Dictatorship of Woke Capitalism : How Political Correctness Captured Big Business, Stephen Soukup points out that this development has been a long time coming:

‘The transformation of Wall Street was no accident. It was the product of a long, careful process, a march through various other institutions, turning them on their heads until the titans of “capitalism” had been fully convinced that their surrender to the culture was not merely inevitable but constituted the only morally legitimate path.’ (1)

But what Soukup’s thesis misses is that the ascendancy of woke capitalism was driven by powerful cultural forces, rather than being an orchestrated march through the institutions.
Pointing to the power of these cultural forces, prescient American social commentator Daniel Bell highlighted in the 1970s the fragile state of capitalism’s cultural authority. His book The Cultural Contradictions of Capitalism (1976) provided an astute analysis of the conflict between capitalist economic growth and the cultural hostility to it. He remarked that the power of capitalism’s hostile ‘adversary culture’ literally ‘shattered’ bourgeois culture to the point that almost no one is prepared to defend it. He concluded that without any significant cultural support, capitalism lacked a ‘moral justification of authority’ (2).

Bell’s insights were anticipated by the Austrian political economist, Joseph Schumpeter. In Capitalism, Socialism and Democracy (1942), Schumpeter explained that, through its commitment to rationalisation, calculation and efficiency, capitalism undermines ‘its own defenses’ because it ‘creates a critical frame of mind which, after having destroyed the moral authority of so many other institutions, in the end turns against its own’. Schumpeter claimed that ‘the bourgeois finds to his amazement that the rationalist attitude does not stop at the credentials of kings and popes, but goes on to attack private property and the whole scheme of bourgeois values’ (3). Schumpeter feared that this would destroy ‘those loyalties and those habits of mind… that are nevertheless essential’ (4).

Having weakened traditional loyalties, capitalism lacked its own intellectually compelling normative foundation. This estrangement emerged with full force in the late 1960s, when many of capitalism’s values were explicitly challenged by the countercultural movement. From this point onwards – despite periodic periods of economic expansion and boom – capitalism was rarely able to assert its claim to moral authority with confidence. Since the late 1960s it found it increasingly difficult to counter the appeal of its countercultural adversaries.

The early traces of woke capitalism were visible in the 1970s — an era that saw a historical compromise between old bourgeois cultural values and those of what is often referred to as the New Class. The main driving force behind this compromise were not groups of social activists, but influences that were internal to big business. In particular, many of the leaders of capitalist institutions had become defensive when confronted with criticisms of their activities. They became aware of the need to legitimate their activities and win over public opinion. Big business responded to the widespread attacks directed at it by embracing the narrative of ‘social responsibility’ and promoting itself as an advocate of ‘stakeholder capitalism’. In this way, big business hoped to shed its image as indifferent to any cause or ideals that stood in the way of making a profit.
At the time, a vocal minority of capitalist entrepreneurs and economic liberals became worried that, rather than endowing capitalism with legitimacy, the doctrine of social responsibility would call into question business culture. This concern was articulated by American liberal economist Milton Friedman in a long essay – ‘The Social Responsibility of Business is to Increase its Profits’ – which was published in the New York Times on 13 September 1970. The target of his ire were capitalist entrepreneurs who declared that their concern was not merely profit, but also the promotion of desirable social ends. These ends included ‘providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers’. Friedman warned that ‘businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades’.
He wrote that the doctrine of a socially responsible capitalism sought to neutralise ‘the present climate of opinion, with its widespread aversion to “capitalism”, “profits”, the “soulless corporation”’. However, he regarded this project as short-sighted since it implicitly acknowledged the illegitimacy of the profit motive. Friedman stated that ‘it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces’.
Writing in 1970, Friedman could not imagine that the people he described as ‘pontificating executives’ would come to dominate business culture. Advocates of economic liberalism underestimated the cultural power fuelling socially responsible capitalism. Since the 1970s, critics of stakeholder capitalism have been conspicuously marginalised in the world of business. Recent cohorts of MBAs are likely to have attended business schools where the ethos of socially responsible or ethical capitalism possesses an authoritative status.
A significant proportion of business leaders are now not only politically active, but active in identitarian and cultural campaigns and causes. As one study pointed out;
‘

It is noteworthy that although corporations and CEOs have conventionally been associated with economic conservatism, CEO activism is almost always directed toward progressive political causes. The variety of issues that recent CEO activism addresses is indicative of this, for example, as evidenced by the focus on immigration, gun control, abortion, racial and ethnic tolerance, LGBTQI rights and climate change.’ (5)

The reluctance of many CEOs to explicitly identify with free-market capitalist ideas indicates that business ideology has been radically transformed.

Since the 1970s, it has been possible to identify three distinct phases in the genealogy of woke capitalism. During these different phases, large corporations began to internalise a cultural script that promoted social responsibility, ethical capitalism, sustainability and diversity. These values were actively promoted by a new industry of consultants, trainers and advisers. Often, lobby groups and NGOs were employed by corporations to help ensure that their image and reputation reflected them. This attempt to cultivate a marketable corporate identity ran in parallel with the development of identity politics.

The three phases of woke capitalism

Although these different phases overlap, there is, I would argue, a clear distinction between the different phases of woke capitalism.

First, there was the 1980s and 1990s. In this period, corporations became increasingly hospitable to particular ‘progressive’ values. It was at this point that corporate mission statements began to highlight firms’ professed commitment to environmentalism and sustainability. Companies also began to take racial and gender equality more seriously. It was through the medium of human resources that these values became integrated into corporate culture.

Then, in the decades that followed, corporations radically transformed their internal office structure. Relations at work became increasingly formalised and codes of behaviour gradually limited the role of traditional banter and office politics. It was at this point that codes of conduct about bullying and harassment proliferated. At the same time, many corporations undertook to protect the interests of different ‘stakeholders’. At least at the level of rhetoric, there was a perceptible shift from shareholder to stakeholder capitalism.

The third and final phase covers the past 10 to 15 years. During this time, corporations began to internalise the outlook of identity politics. Gradually, more and more CEOs embraced woke causes. The most important development of this era was the rise in the political activism of corporations. Companies have always sought to influence the political process behind the scenes. But during this period their political activity became self-consciously assertive and public.

The past decade has brought with it a dramatic reversal in the United States in the attitudes of Republicans and Democrats towards corporate power. Polls show conservative support for business is plunging. As the Financial Times reports, the share of Republicans saying they trust corporate America had fallen from 53 per cent last October to 39 per in May 2021. Meanwhile, Democrats are now more likely to trust business.

This reflects not only the transformation of business culture, but also the transformation of businesspeople, particularly the leading CEOs of the corporate world. People like Bill Gates of Microsoft, Tim Cook of Apple, Larry Fink of BlackRock and Bank of America’s Brian Moynihan personify a new type of corporate executive. They are committed to redefining the purpose of a corporation away from serving shareholders to a diffuse notion of public duty.

These executives reflect the cultural attitudes promoted in higher education, business schools and the media. The views of these so-called ethical capitalists were codified in August 2019, when the CEOs of nearly 200 multinational corporations signed a statement pledging to lead their companies for the benefit of customers, employees, suppliers and communities in addition to shareholders. That sentiment was also echoed in ‘The Universal Purpose of a Company in the Fourth Industrial Revolution’, the manifesto of the World Economic Forum in 2020.

Woke CEOs revel in their status as cultural celebrities and delight in demonstrating a degree of disdain towards society’s traditions. When you listen to a Silicon Valley entrepreneur, or the guys involved with new start-ups in London, they flaunt their commitment to being edgy and to the breaking of taboos. This sentiment is constantly highlighted by the PR and advertising industry, which encourages brands to wear their social-justice commitments on their sleeves and project the image of a taboo-breaker.

Some critics claim that all this corporate virtue-signalling about gay marriage or gun control or Black Lives Matter is simply an exercise in opportunism and public relations. Recently, Vivek Ramaswamy, who stepped down as CEO of his biotech firm Roivant Sciences in January, said in a New York Post op-ed that he was ‘fed up’ with corporate America pretending to care about social justice to boost profits. This is the argument of his new book, Woke, Inc.: Inside Corporate America’s Social Justice Scam.

No doubt many CEOs taking the knee are pragmatic and opportunistic individuals. But they are also the products of a cultural milieu that is hospitable to identity politics and hostile to traditional conservative and even classical liberal values. Through their school and university education, many of today’s CEOs have been socialised into the norms that underpin cancel culture. They are not merely scamming the social-justice movement – they have become its fully paid-up members.

With the recent intake of a millennial workforce, woke capitalism has come of age. Many millennials working at large corporations like Apple and Google demand that businesses become safe spaces for their identities. They also expect their companies to support the latest woke fads.

Woke capitalism and its intervention in political life represents a far greater direct threat to democracy than the workings of cancel culture on campuses. Corporate power can have a formidable impact on political institutions and lawmaking. Corporations have the economic muscle to threaten people’s livelihoods and force communities into submission. Curbing the power of these woke corporations is one of the most important challenges facing those of us committed to the cause of democracy.

Some critics of woke capitalism have invested their hopes in mobilising shareholder power against woke business leaders. This is a strategy that is doomed to fail, since many of the large investment funds, like BlackRock, which own the majority of shares, are also woke.

No, the way to counter woke capitalism is by taking it on in the open, with a populist message that exposes the anti-democratic outlook of these sanctimonious oligarchs.

25 June 2021