The rise of so-called woke capitalism is a disconcerting phenomenon for conservatives. Why has business embraced this creed?
Anyone who doubts whether wokery has become influential should read Larry Fink’s 2022 Letter to CEOs. It is an effusion worthy of Lord Copper: pompous, self-satisfied, dictatorial.
Fink is a successful man, and knows it. He is Chairman and CEO of BlackRock, founded by him and his partners in 1988 and since 2009 the world’s largest asset manager.
In his 2022 letter he declared:
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke’. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.”
CEOs, he said, must tell their stakeholders “where we stand on the societal issues intrinsic to our companies’ long-term success”, and remember that staff “are increasingly looking to their employer as the most trusted, competent, and ethical source of information – more so than government, the media, and NGOs.”
The pandemic, Fink writes, “shone a light on issues like racial equity, childcare, and mental health – and revealed the gap between generational expectations at work.”
CEOs “must be thoughtful about how they use their voice and connect on social issues important to their employees”:
“How are you ensuring that employees of all backgrounds feel safe enough to maximise their creativity, innovation, and productivity?”
Treat your employees properly and they will produce greater returns for you, and for BlackRock:
“As stewards of our clients’ capital, we ask businesses to demonstrate how they’re going to deliver on their responsibility to shareholders, including through sound environmental, social, and governance practices and policies.”
There is an unmistakeable hint of danger here. If you don’t follow sound ESG (Environmental, Social and Governance) practices and policies, BlackRock will stop investing in your business.
Last month, Fink said at a conference in Aspen that he has since stopped using the term “ESG” because it has been “weaponised” by politicians.
But his desire to show his business practices to be impeccably moral, his contention that impeccable morality defined in ESG terms will lead to higher profits, and his pretence (which in justice to him we should admit may well be sufficient to deceive himself) that there is nothing political, ideological or “woke” about all this, are characteristic of business leaders on both sides of the Atlantic.
There is a portentousness about their pronouncements which is immune to mockery.
Here is Martin Lipton, a prominent mergers and acquisitions lawyer in New York, writing on Stakeholder Capitalism and ESG as Tools for Sustainable Long-Term Value Creation in The Harvard Law School Forum on Corporate Governance in June 2022:
“Some have criticised stakeholder capitalism and ESG as ‘woke’ politics, a threat to shareholder interests and a distraction for boards and management. Others have questioned whether stakeholder capitalism and ESG can straddle ‘doing good’ and ‘doing well’. Uncertainty also abounds as to what ESG truly means.
“We believe stakeholder capitalism and ESG are fundamentally frameworks to enhance the sustainable long-term value of a corporation. Both are tools for boards and management to guide business strategy, risk management and capital allocation in a manner that best serves the financial well-being of a business, and in turn, the interests of shareholders. Time and again, stakeholder and ESG considerations have driven positive societal outcomes (climate and DEI [Diversity, Equity and Inclusion] being among the examples). But stakeholder capitalism and ESG, as we and many investors understand them, do not lead with a political or moral agenda. The north star of stakeholder capitalism and ESG is driving sustainable long-term value creation…
“The purpose of a corporation is to conduct a lawful, ethical, profitable and sustainable business in order to ensure its success and grow its value over the long term. This requires consideration of all the stakeholders that are critical to its success (shareholders, employees, customers, suppliers and communities)…
“…businesses exist in a symbiotic relationship with their key stakeholders: once largely invisible, suppliers and supply chains have revealed themselves as the backbone of the global economy, the competition for talent remains as heated as ever and carefully built reputations have crumbled in step with missteps in customer, employee and community relationships…”
Again we are confronted with a threat of what will happen to us if we do not conform to this morality which claims not to be a morality, this politics which claims not to be political: “carefully built reputations have crumbled”.
Beneath us lies the hell on earth where are found the damned who made “missteps in customer, employee and community relationships”. Let us choose instead the path to heaven, or “sustainable long-term value creation” as it is now known.
What prudish language these prophets of the new religion of business like to employ. In Britain, things are no better. Instead of DEI we have EDI, which stands for Equality, Diversity and Inclusion.
If one wished to uphold Inequality, Uniformity and Exclusion, EDI could be a useful way of concealing the fact, but by many of its practitioners it is treated, as far as one can tell, with sincerity.
Consider this factsheet put out by CIPD, the Chartered Institute for Personnel Development, which calls itself “the professional body for human resources”:
“an effective EDI strategy goes beyond legal compliance and seeks to take an intersectional approach adding value to an organisation, contributing to the wellbeing and equality of outcomes and impact on all employees. This includes: accent, age, caring responsibilities, colour, culture, visible and invisible disability, gender identity and expression, mental health, neurodiversity, physical appearance, political opinion, pregnancy and maternity/paternity and family status and socio-economic circumstances amongst other personal characteristics and experiences”
There is much more where that came from, verbiage about Building Inclusive Workplaces, beneath which can be glimpsed the ancient truth that we have a moral obligation to look after the people who work for us.
Companies have taken to issuing reports on how well they are doing on EDI – here’s a link to the HS2 Ltd EDI Annual Report – and compete to see how high they can come in Stonewall’s Top 100 Employers list, which contains the names of many famous organisations.
Stonewall runs a Diversity Champions programme and says:
“when lesbian, gay, bi, trans, queer, questioning and ace (LGBTQ+) employees feel safe and valued at work, it transforms the workplace culture to make it a more welcoming, diverse and inclusive space for everyone.”
It was while attempting to do well in the Stonewall ratings that the Bank of England put in a submission which said that “persons of any and all gender identities” can be pregnant, and promised that the seventh floor of the Bank’s headquarters will offer only unisex lavatories.
In recent months, I have been to the office block which now serves as Sunderland Town Hall, an education college in Nottinghamshire, and the headquarters of GB News in London, and in all three places heard good-natured complaints from women who detest being made to use unisex lavatories.
Why have so many businesses, and indeed so many other organisations, sold out so completely to Equality, Diversity and Inclusion as defined by this sort of gesture?
In part because it is the fashion, and few of us are immune to fashion. When others have succumbed to the pleasures of self-righteousness, why not succumb too?
After all, to reject wokeness out of hand might see one condemned as a bigot, and few of us want that.
Many of us tolerate, with a shrug, assertions which seem ridiculous, but about which it would be unkind, ill-mannered or self-regarding to make a fuss.
If in order to maintain one’s organisation’s reputation one must have unisex lavatories, that may not seem a high price to pay. A friend of mine with chronic illness says the NHS has achieved this in the hospitals she visits by relabelling the toilets which are for the use of the disabled.
The decline in Christianity has left a void, in which the need for some other generally accepted system of moral guidance is felt, and it is generally more practical for an organisation to buy in an ersatz religion than to invent one of its own.
James Marriott yesterday remarked in The Times,
“The similarities between the ‘woke’ movement and Calvinism scarcely need elaborating: the obsession with heretics, with spiritual purity, with the idea that we all bear the ‘original sin’ of prejudice.”
We have also seen a growing aversion to risk: it is safer to obey rules than to take responsibility for decisions.
Teachers a generation or two ago had more discretion, which meant if they had the necessary personal qualities they could exercise greater authority: could be leaders in their sphere.
In the age of the mobile phone, opportunities for independent action are less, because appeal can at once be made to a more senior “line manager”.
In this connection, one may note that many fewer teachers, in both schools and universities, are staunch small-c conservatives.
Businesses which wish to recruit the best products of those schools and universities tend to assume it is best to woo the young with wokeness.
Keynes remarked that practical men, who believe themselves to be exempt from any intellectual influences, “are usually the slaves of some defunct economist”.
He added that few people are influenced by new theories after the age of 25 or 30.
Here, I think, is an often overlooked reason why business has become so “woke”. Many of the people now running the show grew up in the 1960s, when a cultural revolution occurred which had its most formative effect on teenagers. Fink, born in 1952, grew up in California and went to UCLA in the early Seventies.
The influence of the Sixties revolution lasted long after that decade, and gradually became institutionalised: singers whose music at first seemed revolutionary have since risen into the Establishment.
It is the anti-Sixties people, those whose morality was formed in the 1950s or earlier, who have died out. One no longer hears complaints about the corrupting influence of the Sixties.
The abolition of the death penalty, decriminalisation of homosexuality, abolition of the Lord Chamberlain’s powers of theatre censorship, liberalisation of the divorce laws, legalisation of abortion: these and other liberal reforms have become part of the new framework of society.
The pendulum may now, I think, have begun to swing back the other way. Signs of conservatism appear among the young, who are sometimes less drunk and dissolute than their elders.
But the people in charge are not, for the most part, young, and since they found that the shockingly progressive ideas of the Sixties in time became orthodox, they assume that the shockingly progressive ideas of the 2020s will also become orthodox.
An official morality which purports to uphold equality, diversity and inclusiveness serves as a useful cloak for men (they are still mostly men) who become rich beyond the dreams of avarice by getting their boards to pay them preposterous multiples of average pay, perhaps 130 times as much.
If you are ripping off your business by taking out many times more than you put in, a layer of pious hypocrisy, imposed on everyone in the firm by the mighty HR department, can help to conceal what you are doing even from yourself.
Nick Gibb warned at the end of his recent interview with ConHome that many of the young find the vast inequalities which have developed since the 1970s intolerable. How convenient for the Davos class to be able to prate instead about equality, and to believe itself virtuous.