On this episode of We the People, Stephen Soukup, author of The Dictatorship of Woke Capital: How Political Correctness Captured Big Business discusses the left’s gradual takeover of corporate America and why the free market hasn’t been able to prevent it, the dangerous impact of shareholder activism, and efforts to push back on it.
The concept known environmental, social, and governance (ESG) theory has a long history of similar, predecessor concepts both in academic literature and in the business world. For over a century, critics of the market economy, largely inspired by progressive political goals, have argued that for-profit corporations should not limit them- selves to seeking profits for their shareholders, but should engage—or be required to engage—in various sorts of activism to address social problems and concerns. This movement grew up alongside evolving expectations of social responsibility within the business community that motivated many managers and executives to provide a range of services voluntarily to employees and to their local communities.
A new report made by and for activist shareholders provides a window into the world of woke financial pressure campaigns. Conservatives are rightly vexed by “woke capitalism,” exasperated at the ways in which big American corporations are increasingly weighing in on sociopolitical issues—invariably, it seems, in favor of the progressive left. Certainly, many businesses are under pressure to do so.
In addition to being a financial journalist, I work in money management, where I help design and manage funds that invest in stocks and bonds. My focus has always been on choosing securities based on investment quality, not on the political positions that a company may take. That practice has been rooted in the expectation that the companies in which we invest are focused on delivering shareholder return, and that any political involvement it may have is subordinated to that end. It has become readily apparent, however, that such an assumption is no longer safe to make.