Get Woke Go Broke

This article from the August 2019 IPA Review is by Dr Bella d’Abrera, Director of the IPA’s Foundations of Western Civilisation program:

Earlier this year, the marketing team at Gillette succeeded in alienating its customers in the short space of 1 minute and 48 seconds with its now infamous advertisement titled We Believe: The Best Men Can Be. The ad, which capitalised on the #metoo movement, shamelessly propagated the myth of toxic masculinity by portraying all men as being born fundamentally bad. It commenced with a distressed-looking man as a narrator talking about things like bullying, sexual harassment and toxic masculinity, and then followed it up by depicting these behaviours in a variety of highly implausible and downright insulting scenarios.

Unsurprisingly, there was an enormous backlash from legions of loyal customers (men) who promptly boycotted Gillette’s products, posting images of razors in the bin. While data suggests Gillette’s grooming products have indeed taken a hit, there’s also no doubt the brand itself has been diminished. In the UK, YouGov BrandIndex tracks public perceptions of brands by using a balance of the positive and negative things people have heard. They reported Gillette’s score fell from 5.8 points to -3.4 in a matter of weeks.

In 2016, Target tried to impose a radical new bathroom policy on its customers in the USA and was boycotted by 1.4 million shoppers, which resulted in lower revenues in 2016 and reduced the share price. Meanwhile in Melbourne, the Handsome Her café charged men an extra 18 per cent to account for the so- called ‘Gender pay gap’, as well as making sure to seat women first. This café recently closed down after two years in operation. It turns out that telling 50 per cent of your clientele that you don’t like them is not a good business model after all.

While these examples might well differ in scale, each is an example of ‘woke capitalism’ at work. For the uninitiated, ‘woke’ is defined as a political term of African American origin that refers to a perceived awareness of issues concerning social justice and racial justice. Capitalism, of course, requires no such definition. Together they are employed to refer to companies which adopt the social justice causes of the day by incorporating them into their corporate culture and branding, then foist them onto employees and unsuspecting customers alike.

Behind ‘woke capitalism’ is a cohort of progressives whose mandate appears to push for radical and aggressive new standards, principles and strategies that completely undermine the purpose of their core businesses. In this new world of corporate virtue signalling, ‘diversity’ and ‘inclusion’ trump ‘shareholders’ and ‘profit’.

These progressives are essentially using the financial and cultural power of the institutions to effect social change, regardless of an institution’s mission. They are imposing on their companies an entirely novel obligation to deliver not just economic, but social and environmental ‘returns’ to justify what they call a ‘license to operate’ from the societal stakeholders they claim to represent. Professor Jordan Peterson has called this kind of corporate virtue signalling an “appalling sleight of hand” from executives making “300 times the average worker”.

‘Do-gooder’ CEOs are more likely to engage in irresponsible actions

The rejection by these executives of the traditional focus of management’s responsibility to the firm’s owners and investors comes at a cost. In 2013, researchers at the University of California and the London School of Economics collaborated on a research project which found ‘do-gooder’ CEOs were actually more likely to engage in irresponsible actions. The report proposed that once the executives had successfully established their moral superiority through Corporate Social Responsibility policies, they ceased to properly manage their companies. Indeed, there might be some truth in the saying, “get woke, go broke”.

There is another element to the co-opting of social justice movements by businesses. The more ‘wokeness’ they project, the more they are able to absolve themselves of their responsibilities to employees. Take the Fearless Girl statue recently unveiled in Melbourne’s resolutely asymmetrical Federation Square. The bronze sculpture which stands with legs planted firmly on the ground, hands on hips, and face and chin tilted upwards in an attitude of defiance towards an invisible adversary, has become celebrated globally as a symbol of female empowerment, gender rights and equality.

However, beneath this thin veneer of virtue signalling and clichés there lies controversy and scandal. The Melbourne version is actually one of four placed in various locations around the world including Cape Town and Oslo. The original, which currently stands in Manhattan’s Bowling Green, was first commissioned by a US-based financial company State Street Global Advisors to advertise its Gender Diversity Index, a fund which comprises companies which have a relatively high percentage of women in senior leadership positions.

This year, the sculptor Kristen Visbal learnt she is being sued by State Street Global on the grounds she violated the contract by making and selling replicas. No doubt Ms Visbal will need to channel a considerable amount of Fearless Girl’s fearlessness for her looming legal battle with State Street Global’s legal team.

‘Woke capitalism’ can also fail to appeal to the very groups it aims to please.

As part of its claim, State Street Global is arguing the existence of more than one statue could do insurmountable damage to its global reputation as a champion of women. That particular horse, however, has already well and truly bolted. Three years ago, State Street Global was compelled by the Courts to pay nearly $5 million to settle a lawsuit from its female and minority employees who claimed the company had violated equal pay rights. So much for State Street’s commitment to gender rights and equality.

The mutability of the identity politics- obsessed social justice movement also means ‘woke capitalism’ can also fail to appeal to the very groups it aims to please. These female claimants are not the only women to have taken umbrage with State Street Global’s attempt at being ‘woke’. Many of Fearless Girl’s most vocal critics hail from Feminist ranks who have denounced the entire venture as “corporate feminism”, including University of Kent professor Daniela Peluso, who said the sculpture “mostly ignore[s] the political economy of the surrounding financial institutions that directly and indirectly brought them together”.

Objections have also been made regarding the artists’ depiction of a little girl, which they maintain “casts outdated conventional gender stereotypes”. A female opinion writer for The Washington Post criticised the statue because it “portrays the empowered woman as a child, reinforcing the idea of femaleness as cute and inoffensive—a child with potential, maybe, but not all the way there”.

Logic tells us that ‘wokeness’ and ‘capitalism’ make extremely strange and highly incompatible bedfellows. Take for example, Ben & Jerry’s new ‘Pecan Resist’ ice cream. If you do decide that you need a tub of chocolate ice cream with white and dark fudge chunks, pecans, walnuts and fudge covered almonds, make sure to read the blurb before you buy.

Ben & Jerry’s promise your hard-earned dollars will be supporting “groups creating a more just equitable nation for us all, who are fighting President Trump’s regressive agenda”. Among the organisations are Honor the Earth, which works on “issues of climate change, renewable energy, and environmental justice with Indigenous communities”; and Women’s March, which states its mission is to “harness the political power of diverse women and their communities to create transformative social change”.

This is not only a poor disguise for their political leanings, but also extremely deceitful given the company made $500 million in sales in 2017. Ben & Jerry’s profits by selling products in a competitive market, while at the same time advocating against capitalism in favour of socialism. Never mind also that Ben & Jerry’s is a subsidiary of Unilever, which has come under scrutiny by Amnesty International for using child labour in Indonesia.

What ‘Woke Capitalism’ is doing is to expose the ever-widening rift between the ideologically-driven progressive elite in positions of power and the rest of the population. Most of us simply want to buy a razor that works, or enjoy a tub of chocolate chunk ice cream without being harangued or preached to as we make our purchases.

These companies would do well to heed Milton Friedman’s counsel that “the social responsibility of business is to increase its profits”.