Corporations of the World, Unite!
The internal contradictions of “woke capitalism” are a mixed blessing for the Democratic Party.,
“Woke capitalism” has been a steadily growing phenomenon over the past decade. The muscle of the movement was evident as early as 2015 in Indiana and 2016 in North Carolina, when corporate opposition forced Republicans to back off anti-gay and anti-transgender legislation.
Much to the dismay of the right — a recent Fox News headline read “Corporations fear woke left minority more than silent majority” — the movement has been gaining momentum, obscuring classic partisan allegiances in corporate America.
This drive has a fast-growing list of backers from the ranks of the Fortune 500, prepared to challenge Republican legislators across the nation.
Right now, the focus of chief executives who are attempting to burnish their progressive credentials is on blocking legislation in 24 states that curtails access to the ballot box for racial and ethnic minorities — legislation that, among other things, reduces the number of days for advance voting, that requires photo ID to accompany absentee ballots and that limits or eliminates ballot drop boxes.
Perhaps most threatening to Republicans, key corporate strategists attempting to woo liberal consumers have come to believe that their support for progressive initiatives will generate sufficient revenue to counter retaliation by hostile white voters and the Republican politicians who represent them.
The corporate embrace of these strategies has generally received favorable press, but there are some doubters.
Adam Serwer, a staff writer at The Atlantic, argued in “‘Woke Capital’ Doesn’t Exist” on April 6 that capital “pursues its financial interests in whatever political or social context it finds itself.”
As Serwer puts it,
For big firms, talk is very cheap. Similarly, the actions of Major League Baseball, Coca-Cola, and Delta reflect the political landscape in Georgia and its interaction with their bottom line, not the result of a deep ideological commitment to racial equality.
Similarly, Michael Walther, a national correspondent for The Week, argued in an August 2017 article, that
We should not be looking to corporate America for moral instruction or making exemplars of its leaders or heaping approbation upon their bland, cynical consultant-designed utterances.
Apple’s Tim Cook, Walther continued, “tells us that he is against racism. I believe it. Good on him.” As commendable as Cook may be for his antiracism, Walther writes, he
is the C.E.O. of a corporation that has made profits on a scale hitherto unimaginable in human history by exploiting cheap labor in a poor country ruled by tyrants whose authority is perpetuated in no small part thanks to Apple’s own compliance in its silencing of dissent and hiring the smartest lawyers in the world to make their tax burden negligible.
Companies leading the charge against laws promoted by Republican state legislators include Delta Air Lines, Coca-Cola, Merck & Co., Dell Technologies, Mars Inc., Nestle USA, Unilever PLC and American Airlines.
And just two days ago, 30 chief executives of Michigan’s largest companies, including Ford, General Motors and Quicken Loans, declared their opposition to similar changes in voting rules pending before the legislature.
The headline on an April 10 Wall Street Journal story sums up the situation: “With Georgia Voting Law, the Business of Business Becomes Politics.” The law was described by USA Today on April 10 as one “that includes restrictions some activists say haven’t been seen since the Jim Crow era.”
Last week, executives from over 100 companies held a video conference call to explore ways to voice their opposition to pending and enacted election legislation.
For many Republicans, the future of their party’s dominance in such states as Texas, Florida, North Carolina and Georgia rides on their ability to hold back the rising tide of minority voters.
While Republicans are convinced of the effectiveness their legislative strategies, poll data from the 2020 election suggests they may be mistaken. Republicans made inroads last year among Black and Hispanic voters, the constituencies they would now suppress, while losing ground among white voters, their traditional base of support.
Growing numbers of Republicans are refusing to buckle under pressure from the corporate establishment.
For Gov. Brian Kemp of Georgia, who rejected Donald Trump’s pleas to overturn the state’s presidential election results, the controversy offers the opportunity to claim populist credentials and perhaps to win back the support of Trump loyalists.
“I will not be backing down from this fight,” Kemp declared at an April 3 news conference:
This is a call to everyone, not only in Georgia but all across the country to wake up and get in the fight and help us in that fight. Because they are coming for you next.
In Texas, where American Airlines, Dell Technologies, Microsoft and Southwest Airlines have opposed laws under consideration by Republican state legislators, Republicans have been quick to go on the attack.
“Texans are fed up with corporations that don’t share our values trying to dictate public policy,” Lt. Governor Dan Patrick, a Republican, declared in a news release attacking liberalized voting protocols. “The majority of Texans support maintaining the integrity of our elections, which is why I made it a priority this legislative session.”
Other Republicans are explicitly warning business that it will pay a price if it goes too far. “Corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order,” Mitch McConnell, the Senate Minority Leader, declared at an April 5 news conference. “Our private sector must stop taking cues from the Outrage-Industrial Complex.”
In the past, the corporate community has been one of McConnell’s most steadfast allies and its current adversarial stance is a major loss.
Alma Cohen, a professor at Harvard Law School, and three colleagues, analyzed campaign contributions made by 3,800 individuals who served as chief executive of large companies from 2000 to 2017 in their 2019 paper, “The Politics of C.E.O.s.” They found a decisive Republican tilt: “More than 57 percent of C.E.O.s are Republicans, 19 percent are Democrats and the rest are neutral.”
I asked W. Bradford Wilcox, a conservative professor of sociology at the University of Virginia, for his assessment of the conflict between big business and Republicans. His reply suggested that Kemp’s defiant stance will resonate among Republican voters:
The decades-long marriage between the G.O.P. and big business is clearly on the rocks. This is especially true because the G.O.P. is increasingly drawn to a pugnacious and populist cultural style that has more appeal to the working class, and Big Business is increasingly inclined to support the progressive cultural agenda popular among the highly educated.
The response of the white working-class to the leftward shift on social issues by American businesses remains unpredictable.
Democracy Corps, a liberal group, conducted focus groups of white Republicans in March and reached the conclusion that conservative voters are cross-pressured:
The Trump loyalists and Trump-aligned were angry, but also despondent, feeling powerless and uncertain they will become more involved in politics.
While anger is a powerful motivator of political engagement, despondency and the feeling of powerlessness often depress turnout and foster the belief that political participation is futile.
Opinion on the motives of corporate leaders diverges widely among those who study the political evolution of American business.
Scholars and strategists differ among themselves over how much the growth of activism is driven by market forces, by public opinion, by conviction and by the growing strength of Black and Hispanic Americans as consumers, employees and increasingly as corporate executives.
James Davison Hunter, professor of religion, culture and social theory at the University of Virginia, is interested in the psychology of those in the executive suite:
At least on the surface, corporate America has accommodated progressive interests on these issues and others, including the larger agenda of Critical Race Theory, the Me-too movement, the gay and transgender rights, etc. There has been a shift leftward.
The question he poses is why. His answer is complex:
The idea, once held, that what was good for business was good for America is now a distant memory. A reputation, long in the making, for avoiding taxes and opposing unions all in pursuit of profit has done much to undermine the credibility of business as a force for the common good. Embracing the progressive agenda is a way to position itself as a “good” corporate citizen. Corporations gain legitimacy.
The fluid ideological commitments of business should be seen in the larger context of American politics and culture, Hunter argues:
Over the long haul, conservatives have fought the culture war politically. For them, it was the White House, the Senate and, above all, the Supreme Court that mattered. Political power was pre-eminent.
Progressives have struggled in political combat, while in the nation’s cultural disputes, in Hunter’s view, the left has dominated:
Even while progressives were losing elections, gay and transgender rights, feminism, Black Lives Matter and critical race perspectives were all gaining credibility — in important cultural institutions including journalism, academia, entertainment, advertising, public education, philanthropy, and elsewhere. Sooner or later, it was bound to influence corporate life, the military, and other so-called conservative institutions not least because there was no credible conservative alternative to these questions; only a defensive rejection.
How will this play out?
We will continue to see ugly political battles long into the future, but the culture wars are tilting definitively toward a progressive win and not least because they have a new patron in important corporations.
Malia Lazu, a lecturer at MIT’s Sloan School of Management, argued in an email that the public’s slow but steady shift to the left on racial and social issues is driving corporate decision-making: “Corporations understand consumers want to see their commitment to environmental and social issues.”
Lazu cited studies by Cone, a business consulting firm, “showing that 86 percent of Americans would support a brand aligned with their values and 75 percent would refuse to buy a product they saw as contrary to their beliefs.”
Lazu contends that “there is a generational shift in America toward increasing justice and collective responsibility” and that as a result, “institutions, including corporations, will make incremental change.”
John A. Haigh, co-director of the Mossavar-Rahmani Center for Business and Government at Harvard’s Kennedy School, does not agree with those who see business motivated solely by potential profits, arguing instead that idealism has become a major force.
“Corporations have an obligation to deliver high performance for their shareholders and other stakeholders — customers, employees, and suppliers,” Haigh wrote in an email. But, he continued, “corporations also have an obligation to do so with high integrity.”
In the case of challenges to restrictive voting laws, Haigh believes that
there is also a possibility that they are behaving with some sense of their moral obligation to society — with integrity. The right to vote could be seen as a pillar of our democratic system, and blatant attempts to suppress votes are offensive to our core values.
Haigh says that he does not want
to sound Pollyannish — these are difficult trade-offs within corporations, and it is much more complicated than simply “doing good.” But there are thresholds for moral behavior, and companies do have an obligation to speak up. There is a long history in the U.S. around issues of civil rights and their suppression, and mixed engagement by companies in addressing these issues.
Neal Hartman, a senior lecturer who is also at MIT’s Sloan School of Management, argued that in attacking voting rights, Republicans violated a tenet of American democracy important to voters of all stripes.
Not only have the restrictive proposals in Georgia and other states awakened “strong levels of activism among many moderate-to-liberal voters,” Hartman wrote by email, but
many people in the United States — including a number of more conservative individuals — believe voting should be as simple and widespread as possible. It is a fundamental principle of our democracy.
Corporations, Hartman continued,
are responding to calls from the public, their shareholders, and their employees to respond to bills and laws deemed as being unfair.
Hartman argues that “voting rights is front and center today,” but
not far behind will be efforts to thwart LGBTQI rights — bills targeting the transgender community are already being introduced and passed — as well as continuing battles regarding abortion and the rights of women to choose.
There is some overlap between the thinking of Robert Livingston, a lecturer in public policy at Harvard’s Kennedy School, and Haigh and Hartman:
What we are seeing in Georgia is an affront to people’s basic sense of morality and decency. And people will sometimes subordinate their self-interest to cherished values and beliefs. Many of these companies have credos and core values that are internalized by their leadership and employees, and we see leaders becoming increasingly willing to express their disapproval of the reckless temerity of politically savvy but socially irresponsible politicians.
Livingston acknowledges that many companies are
motivated by their own interests as well. Major League Baseball is an organization that depends on people of color. Nike tends to cater to an increasingly youthful and diverse customer base. So, there is something in it for them too.
But, he continued, “I’ve worked with a lot of top leaders and can tell you that for many of them, it’s more a question of principle than politics.”
Joseph Aldy, a professor of public policy at the Kennedy School, noted in an email that willingness to engage in controversial political issues is most evident in the case of climate change:
The climate denial/climate skeptic attitude that characterizes many Republican elected officials is increasingly out of step with the majority of the American public and the American business community.
Instead, Alby wrote,
the continued focus on cultural issues among Republicans reflects a growing estrangement between the business community and the Republican Party.
There are several possible scenarios of how these preoccupations and conflicts will evolve.
Insofar as the split between American business and the Republican Party widens and companies begin to cut campaign contributions, the likely loser is Mitch McConnell, the leader of the party’s corporate wing. Any limit on McConnell’s ability to channel business money to campaigns would be a setback.
Such a development would further empower the more extreme members of the Republican Party’s Trump wing and would embolden Republican officials to escalate their conflict with corporate America.
For example, David Ralston, the speaker of the Georgia House — which has just passed a retaliatory bill penalizing Delta by eliminating a tax break on jet fuel — told reporters: “You don’t feed a dog that bites your hand.”
Finally, for Democrats, the leftward shift of business is a mixed blessing.
On the plus side, Democrats gain an ally in pressing a liberal agenda on social and racial issues.
On the downside, the perception of the party as allied with corporate interests may take root and Democratic officials are very likely to face pressure to make concessions to their new allies on fundamental economic policies — bad for the party, in my view, and bad for the country.
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