Editor’s Note: This essay is part of a Law & Liberty Symposium on Woke Capital.
No one ever had trouble finding examples of corporate hypocrisy. Recent months seem to have brought a bounty. The same companies who submit to Chinese authorities have no problem resisting American ones. Corporations threaten boycotts against states whose legislatures pass laws restricting abortion and affirming sex differences and religious freedom. Wealthy CEOs join letters opposing the Trump administration’s efforts to limit illegal immigration. Technology giants that collaborate with China and inherently the Chinese military on AI and Internet censorship express qualms over working with the Pentagon.
The U.S. industries most obsequious to Chinese audiences present themselves as socially, culturally, and economically progressive at home. The National Basketball Association, Hollywood, Silicon Valley, and major financial institutions are exemplars of the “woke capitalism” that has transformed the business landscape in recent years. GM cannot meet the demands of 48,000 striking workers, but it wants you to know that it supports wind power and gender equity. GE suspended pension benefits, but remains a signatory to the U.N. Global Compact, is a highly rated workplace according to the Human Rights Campaign, and received a State Department award for “inclusive hiring in Saudi Arabia.”
What might look like a contradiction is actually a concurrence. Corporations are terrified by the specter of controversy that attracts scrutiny and regulation. Supporting Hongkongers invites rebuke. To be “woke” in America today does not. That is the difference between the celebration of Nike and the demonization of Chick-fil-A. Given the cultural power of the new progressivism, protests from conservatives weigh little in the balance.
Whether they are collaborating with the People’s Republic of China or publicizing efforts to achieve social justice in the United States, America’s woke capitalists are operating according to the instinct of self-preservation. This is not simply about the bottom line. It is about the legitimacy of the corporation in the global economy.
Cynics might ascribe the corporate embrace of woke capitalism to self-seeking. Social justice, they say, is merely a veneer that masks profits. That might be true. On September 5, “Activate: The Global Citizen Movement” premiered on the National Geographic channel. Produced in partnership with Procter & Gamble, and featuring Hugh Jackman, Gayle King, Pharrell Williams, Usher, and Darren Criss, the program is a parody of advertising masquerading as activism.
The episode on the “clean water crisis,” according to a multi-page advertorial in National Geographic, highlighted the fact that “844 million people around the world lack access to clean water.” Fortunately, “P&G, makers of Tide, introduced its ‘Children’s Safe Drinking Water” program in 2004 and since then, with the help of over 150 partners around the world, has provided more than 15 billion liters of clean water to people in need.” The episode “Ending Plastic Pollution” mentioned, “For over a decade, P&G, the makers of Head & Shoulders (H&S), has partnered with TerraCycle, a global recycling company on a mission to eliminate waste.” The episode “Social Justice Reform” is premised on the idea that “while some racial bias is conscious, much is unconscious and can be shaped by images in entertainment, advertising, and media.” That’s why “P&G believes in using their voice in advertising as a force for good by addressing important societal issues while ensuring positive, accurate portrayals of all people.” By contributing to P&G’s $68 billion in annual revenue, you too can help clean water, reduce plastic consumption, and foster racial justice.
Yet the cynics ignore the context in which businesses operate. Corporations don’t generate revenues automatically. They must provide a good or service that consumers want. And they must be relatively unmolested by the heavy hand of government. Procter & Gamble’s “Activate” may be well intentioned. It is also a form of insurance.
Houston Rockets general manager Daryl Morey probably didn’t think he was about to start a diplomatic incident when he Tweeted support for the Hong Kong protests on October 4. More fool he. Chinese social media accounts denounced him within moments. The Chinese Basketball Association, whose president Yao Ming played on the Rockets for about a decade, cut ties with the club. The Chinese consulate-general in Houston instructed the Rockets to “correct the error.” Morey deleted the Tweet.
The episode was an ugly demonstration of the insidious nature of corporate America’s relationship to Beijing. To guarantee safe returns, moguls, companies, and industries with investments in China are more than happy to toe the party line. A week before Morey made the “error” of advocating democracy, Michael Bloomberg, who holds an annual “New Economy Forum” in the Chinese capital, denied that Xi Jinping is a dictator. Earlier, when the trailer for the forthcoming Top Gun sequel made its debut, it did not take long for people to notice that the filmmakers had removed images of the Japanese and Taiwanese flags from the hero’s bomber jacket. The global box office now counts for more than the accurate representation of democratic allies.
Note, however, that the outrage over Morey’s Tweet started online. It then migrated to officialdom. The Chinese public is nationalistic. It becomes outraged at any perceived offense to national honor. American corporations have to take into account the attitudes, sympathies, and sensibilities of the Chinese consumer as much as the wishes of the Chinese government.
Consumer preferences also matter in the United States. Over the summer, Nike removed certain shoes in its Chinese stores because the designer expressed solidarity with Hongkongers. Around the same time, it withdrew from the market shoes carrying images of the Betsy Ross flag because Colin Kaepernick said they promoted white supremacy. In both cases the apparel company was acceding to consumer demands rather than risk government rebuke.
America’s corporations, forever in search of yield, cannot afford to ignore the reality that young consumers are drifting left. The Millennial generation is politically moderate compared to the rising Generation Z. The ideologies of diversity, equity, and inclusion, of intersectionality, of gender fluidity, and of environmentalism, secularism, racial justice, and assaultive speech have become the cultural mainstream (to the degree one exists). Woke capitalism isn’t a passing fad. It’s a sign of things to come.
Corporate behavior evinces the dominant beliefs of society. In China, those beliefs are not pluralistic. And that is increasingly the case in the United States.