Over the last several weeks, many Americans learned a surprising and unpleasant lesson — that corporate America is not only extremely well-heeled and extremely powerful but is also, quite often, extremely hostile to their interests. Twitter, Apple, Google and Amazon are just a few of the companies that flexed their corporate muscles to deplatform, silence and even bankrupt apps like Parler, where users’ views about politics happen to vary, even slightly, from progressive orthodoxy.
But this is nothing new. Corporate action meant to undermine the democratic will has been a hallmark of American business for years now.
In 2016, leaders of corporate America — including Sundar Pichai of Google and Tim Cook of Apple — conspired to overturn the will of the people in the cases of Georgia’s religious liberty bill and North Carolina’s controversial bathroom bill, HB2. In 2019, this same syndicate mounted a campaign, again in Georgia, to oppose the state’s fetal heartbeat bill. Corporate leaders from Amazon and Coca-Cola, among others, signed a letter to Georgia legislators demanding the abortion ban be lifted. More ominously, major entertainment studios, including Disney, Netflix, NBCUniversal, Viacom and CBS, threatened to end production of various projects in the state.
That, perhaps, was the straw that broke the camel’s back. Georgia is home to some 92,000 film and television production jobs, and by inserting themselves into state politics, these companies threatened the livelihoods of ordinary Georgians and the economic well-being of the state.
In so doing, these business leaders also happened to catch the attention of populist conservatives in Washington, including Arkansas Sen. Tom Cotton, who took to the floor of the Senate to vent his rage at “liberal activists” who “have lost control of the judiciary . . . [and] have turned to a different hub of power to impose their views on the rest of the country.” He decried what would become known as “the Dictatorship of Woke Capital.”
Generally, corporate political meddling can come from three sources: From the top-down, when corporate executives substitute their will for the will of the people, as was the case in Georgia and North Carolina. Pressure can come from the bottom-up, when “woke” employees insist their corporate managers endorse actions or positions that are in opposition to beliefs held by the business’ customers.
The third source is applied to corporations from outside-in, primarily from shareholders, who use their partial ownership of companies to direct their policies and force them to take political positions. For years, “socially responsible investing” was a staple in the financial services world. If you were personally opposed to fossil fuels, you and your adviser created screens to ensure that your portfolio remained oil-company free. Or, if you ran a Catholic investment fund, you ran your own screens to ensure that the money you managed was not invested with abortion-related companies. It was simple and efficient, with investors taking responsibility for their ethical principles and the implications for their return on investment.
Over the last few years, however, a new form of social investing — known by the initials ESG (Environmental, Social, Governance investing) — has dominated the industry. The difference between ESG and the old varieties of social investment is that ESG is “activist,” meaning that its goal is not to protect investors but to alter the behavior of companies. By targeting corporate managers and boards and by using shareholder proposal procedures, political activists have been imposing their political beliefs on corporations, often in contravention of the will of the majority of other shareholders.
On Jan. 26, Larry Fink, the CEO of BlackRock Inc., the largest asset management firm on the planet, sent his annual letter to the CEOs of the businesses in BlackRock’s orbit — which, for all practical purposes, is all of the businesses traded on the American stock exchanges and beyond. In his letter, Fink reiterated his firm’s dedication to “sustainability” — usually represented by a company’s efforts to implement a “net-zero” carbon-dioxide emissions plan. He also detailed the measures by which he and his firm will evaluate companies’ dedication to what is essentially his personal political position.
Given that the other two passive-investment giants — State Street and Vanguard — have also endorsed sustainability as a guiding virtue, the “Big Three,” as they’re known, are now aligned on corporate strategy and can, in effect, impose their will on any major corporation that dares to question the efficacy of their environmental preoccupations. Do as we say . . . or else!
In short, Larry Fink and his allies have created a de facto extra-governmental regulatory regime, which will function as a private-sector constraint on the will of the American people. (Although Americans are increasingly worried about climate change, public opinion surveys showed that roughly twice the number of voters said the economy — i.e., the primary function of American business — was a very important issue to them than said the same about climate change.)
For decades, Democrats and the media labeled the GOP the “party of Big Business.” This was never true in the first place, but even if it were, the opposite is the case today. On Wall Street, in Silicon Valley, and indeed throughout the country, big businesses have unofficially declared war on free and fair capital markets, free and fair commerce, and free and fair political expression. This is the Dictatorship of Woke Capital.
Stephen R. Soukup is the author of “The Dictatorship of Woke Capital: How Political Correctness Captured Big Business” (Encounter Books), out Feb. 23.
