Coca-Cola, Google, Delta Airlines, Blackrock, Unilever, and Facebook. On its face, this list may sound like a great investment portfolio. Instead, as shown in a new book by former biotech CEO Vivek Ramaswamy, these companies serve as the posterchildren of woke capitalism.
Ramaswamy, author of Woke, Inc.- Inside Corporate America’s Social Justice Scam, uses examples from these companies, and many others, to assert his belief that woke organizations who signal commitments to various social causes do so to scam consumers with “the illusion that by engaging in normal acts of consumption we’re fulfilling our social obligations.” Said another way, consumers are being scammed to believe that supporting the right companies with our money somehow makes the world a better place.
Ramaswamy’s wide-ranging book clearly comes down in support of traditional shareholder capitalism—where the main duty of a company is the commitment to driving value for its shareholders. This is juxtaposed with many of the examples the author provides of stakeholder capitalism—defined by corporations that believe they have a duty to address the societal issues important to their stakeholders, such as climate change and racism. The obvious implication is that anyone could be a stakeholder and thus all issues facing society are issues worthy of corporate attention and support or opposition.
Even without the information presented in Woke, Inc., one can see stakeholder capitalism at play in the corporate actions following the death of George Floyd and the passage of Georgia’s voting law.
In one of the more interesting points in the book, the author links the increasingly woke actions of corporations with an ever-growing political divide; in essence, using companies as proxies to signal political identity. Ramaswamy states, “When corporations take sides in America’s partisan culture war, they’re not just signaling their tribe, they’re selling you an easy way to signal yours.”
The author’s point is exemplified by the tug-of-war over Goya Foods. When Goya Foods’ CEO Robert Unanue lauded President Donald Trump, Goya was immediately subject to boycotts and protests. If one purchased Goya products it signaled support for Trump, whereas conversely if one boycotted Goya, it was a statement in opposition to Trump. This trend is not just dangerous for companies like Goya, but for our democratic process in general. A preference for a particular soft drink, clothing brand, or chicken sandwich should have no bearing on political affiliation or social connections.
Ramaswamy also provides additional background on the rise of woke capitalism by noting the influence of big tech, academia, foreign governments, and what he calls the “new managerial class.” And though these areas are connected to the actions of many of today’s corporations, the author misses an opportunity to delve more deeply into the significant influence of social media, particularly Twitter, when it comes to corporate motivations. In addition, the reader of Woke, Inc. will likely be left wanting when it comes to solutions for stemming the influence of woke corporations. For example, the author’s proposal for protecting the speech rights of employees within a woke corporation are too legalistic and, frankly, unrealistic to consider viable. Lastly, while the actions of woke corporations are apparent and harmful, their true motivation for such actions are not entirely clear. Ramaswamy’s assertion that these corporations are purposefully using woke causes as an opportunity to increase profits at times borders on the conspiratorial.
Nonetheless, Woke, Inc. is an informative and enlightening book on the current state of corporate America and provides good background for those interested in learning more about stakeholder capitalism. Despite some of its shortcomings, it’s a book that can arm consumers with something more valuable than the buying power of any coupon. It provides them with the knowledge to make informed decisions about what, when, why, and from whom they buy.