‘Woke’ Capitalism and the 2020 Election

'Woke' Capitalism and the 2020 Election

Politics has entered every sphere of American life. Once upon a time, we neither knew nor cared what our butcher or baker’s politics were – or what the executives at Brand X Inc. thought about public policy issues unrelated to their core mission. We do now. “Woke capitalism” is the term for this new form of consumerism.

In some ways, its concepts are not new. For the better part of a century, Calvin Coolidge was maligned for proclaiming that “the business of America is business.” This is not really what the 30th U.S. president said, but the line became shorthand among Democrats and college professors to describe the presumed callousness of Republicans and their corporate allies. Moreover, opposition to conservatives’ pro-business impulses implied that there was something sinister about the pursuit of profit.

Such feelings are more widespread now than ever. The 2020 election season has revealed itself to be an especially trying time for Americans operating in the private sector — or even for those defending the merits of free-market democracy. Despite record employment for minority groups, Bernie Sanders has pulled ahead of his rivals by demonizing entire sectors of the U.S. economy; in Harvard IOP polling of young Americans under 30, less than half support capitalism; and Nevada Democrats only gave a smattering of applause when Amy Klobuchar declared, “I believe in capitalism.”

All of which raises a host of questions: What do those who run businesses owe to the country? And how much leverage should consumers – who are also voters — exert in attempts to forge public policy in their own image? What shape should that pressure take?

These are among the themes explored by RealClear Opinion Research in an extensive new poll of more than 2,500 registered voters about views of free-market capitalism; the survey was conducted online Feb. 14-17 and carries a credibility interval of +/- 2.14 percentage points.

The findings reveal an electorate quite divided on these questions, but interestingly, opinions vary more by age than political affiliation. The results do not perfectly mirror the open hostility to business voiced on the campaign trail by Bernie Sanders and Elizabeth Warren – and, at times, Joe Biden. But neither do they support the sanguine, what’s-good-for-the-stock-market-is-good-for-America mantra of President Trump. The bottom line seems to be that most U.S. voters don’t demonize business, but they do expect a lot – and this is especially true of those under 40 –  from the private sector.

“At first blush, it looks like the third who say business should take a stand are divided across partisan lines — because 42% of Democrats and only 29% of Republicans agree with that statement,” says John Della Volpe, director of the poll. “But a closer look shows that the divide is generational and not partisan.”

Della Volpe noted that there’s virtually no partisan difference on this question among Americans under 39 (Generation X and Millennials) – 48% of Democrats and 43% of Republicans within this cohort believe business should engage in political or social issues facing the country. Among the Baby Boomer and Silent generations though, voters see this through a distinct ideological lens. Nearly a third (31%) of Democrats and 17% of Republicans over 55 believe taking political stands is a responsibility of business.

 What Do Businesses Owe Society?

The idea that businesses have societal responsibilities that transcend running a profitable enterprise has been debated by management experts since the early 1950s when economist Howard R. Bowen coined the phrase “corporate social responsibility.” He defined this principle as “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”

Pushback came from traditionalists such as famed University of Chicago economist Milton Friedman. “Only people can have responsibilities,” he wrote. Executives can certainly expend their own resources for any manner of perceived social good, he added, but they have no right to apply the resources of their companies’ stockholders to such causes. That was tantamount to spending other people’s money.

Over time, Friedman lost this argument. For one thing, management guru Peter Drucker noodled around with a competing concept. Even if one accepted the logic that a corporation’s duty was to “maximize profits,” this begged a question. Maximize them for how long? A logging company that cut down all the trees in the forest, for instance, would put itself out of business. So the old question gave way to a new one popularized by Drucker: “Is our business model sustainable?”

“The first responsibility of business is to make enough profit to cover the costs for the future,” Drucker added. “If this social responsibility is not met, no other social responsibility can be met.” Initially, sustainability was entwined with environmental concerns. But corporate social responsibility naturally migrated to other issues. What if the educational system is so poor that a business can’t count on the workforce of the future? What if a product is so dangerous – and here Drucker invoked Ralph Nader’s crusade for consumer rights – the public turns against the company and forces the government to regulate the business more heavily? Don’t these relate, ultimately, to the bottom line?

“Woke” capitalism is CSR’s first cousin. Or, some would say, its evil twin.  Regardless, it’s here to stay. It has gone mainstream and migrated into Americans’ thinking, shopping habits, and even voting decisions. U.S. business no longer fights it. Embrace it is a better description. Last year, the Business Roundtable redefined the purpose of a corporation as being “to promote an economy that serves all Americans.”

Drawing on language from the full Business Roundtable statement, Della Volpe gave poll respondents a choice between the old Milton Friedman idea of a corporation and the new idea. The results were not even close:

Says Della Volpe: “Despite the charged rhetoric around capitalism so far in this campaign for president, most Americans agree that what the capitalism of today is missing is a healthy dose of humanity. This is what the conservative Business Roundtable, and many Democrats, have been tapping into when they call for American business to look out for employees, customers, suppliers – and the communities in which they operate.”   

The tension around “woke capitalism” arises when consumers – or organized and highly partisan activists – don’t think a company is taking such obligations seriously. Or when they object to the personal politics of a company’s executives. Or when they think the product itself contributed to a cause they deem destructive. These are subjective standards that vary from increasing global warming to electing Republicans.

Sometimes these sentiments entail simple preferences. About one in four respondents to the survey, for example, is more likely to support actors, actresses and musical artists who share their views – although less than 10% say they’re less likely to support someone whose views are contrary to their own. That’s certainly understandable; it’s human nature, really. Other findings are more problematic if our goal is a civil society in which Americans of different political persuasions can share a meal without the specter of partisan politics hovering over the table like a hostile waiter.

More than one-third of Americans (38%), for instance, are less likely to support a business or a brand they're loyal to if the CEO supports the Donald Trump-Mike Pence ticket. For Democrats, it’s 64%. This wasn’t an isolated finding: When it comes to capitalism, progressives are more “woke” than conservatives: Only 19% of Americans are less likely to support a business or a brand if the CEO supports the Democratic presidential ticket in 2020.

Other significant findings in the survey include the following:

  • Slightly less than half of respondents say that political positions a business or company has taken have impacted their purchasing decisions: 27% say they buy more from businesses that share their views, 21% say they buy less from businesses that don’t share their views.
  • 36% believe American businesses have a responsibility to take action on political or social issues facing the country, including 46% of Democrats and one-third of Republicans .
  • More than a majority (53%) of Democrats are more likely to buy from companies that make progressive social change a priority; 19% of Republicans are less likely.
  • Half of Republicans are more likely to buy from companies that make conservative values a priority, while 32% of Democrats are less likely.
  • When Nike created an ad campaign featuring former NFL quarterback Colin Kaepernick, an athlete famous for taking a knee during the national anthem, Democrats came away with more favorable opinion of Nike (69% more favorable and only 7% less favorable). But Republicans had a less favorable outlook of Nike.
  • 57% of Americans have favorable views of companies like Walmart and Dick’s Sporting Goods that have changed policy and restricted gun sales.
  • Finally, most respondents didn’t want to hear political opinions from the list of professionals we tested. But not all are created equal – and actors and jocks rank near the bottom.

The incumbent U.S. president was not among the options: In our 50-50 nation, the inclusion of the highly polarizing Donald Trump’s would probably skew the social science. But if Calvin Coolidge were alive, progressives and conservatives might receive his sentiments positively. What President Coolidge really said on Jan. 17, 1925 at the National Press Club was ever so much more profound/insightful than the caricature attributed to him. It was very nearly the opposite.

“After all, the chief business of the American people is business,” he said before quickly adding, “Of course, the accumulation of wealth cannot be justified as the chief end of existence.”

Coolidge never heard of “woke” capitalism – or woke anything, let alone corporate social responsibility. But he completed his speech that day with this thought:

“It is only those who do not understand our people who believe that our national life is entirely absorbed by material motives. We make no concealment of the fact that we want wealth, but there are many other things that we want very much more. We want peace and honor, and that charity which is so strong an element of all civilization.”

President Coolidge continued: “The chief ideal of the American people is idealism. I cannot repeat too often that America is a nation of idealists. That is the only motive to which they ever give any strong and lasting reaction.”

Carl M. Cannon is the Washington bureau chief for RealClearPolitics. Reach him on Twitter @CarlCannon.

View original Post


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.