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How Corporate America Got Woke: A Review of ‘The Dictatorship of Woke Capital’

In his new book “The Dictatorship of Woke Capital,” Steve Soukup’s explores the rise of progressivism as a cultural force and explains why corporations increasingly are taking sides in politics.


How did corporate America, long considered one of the most conservative American institutions, become a lead protagonist in a culture war over all manner of progressive activism?

We now have a routine spectacle of corporate social responsibility seminars and environmental, social, and governance—or ESG—conferences, where widget makers of all kinds commit to promoting climate activism, identity politics, union labor, and sundry other causes. Somehow, selling an honest product at a fair price seems like a secondary concern in a corporate America increasingly focused on an array of stakeholders with such diffuse boundaries as “the local community,” “the global environment,” and “society at large.”

How did we get here?

Finance professional and political analyst Steve Soukup gives us a fascinating and in-depth answer in his disquisition on modern politicized investing, The Dictatorship of Woke Capital.

The first half of Soukup’s book is a high-intensity sprint through about a century and a half of intellectual history that name-checks everyone from Adam Smith and Karl Marx to Woodrow Wilson, Theodor Adorno, Saul Alinsky, and Milton Friedman. In Soukup’s telling, the shift began when Johns Hopkins University was founded in the image of Germany’s Heidelberg University in the late 19th century, and progressive political theory began to grow in popularity in the United States. The same trends later accelerated when a new generation of continental Marxism hit the US in the mid-20th century.

These developments brought about a revolution in how left-leaning theorists viewed the functions of government—and other large institutions like corporations.

First, in the progressive view, neither the old aristocracy nor liberal democracy were equipped to achieve the necessary goals of society. Rather, a professionally educated elite of administrators and bureaucrats was needed. This was the progressivism of theorists like Woodrow Wilson, Herbert Croly, and John Dewey. They carved out a large realm of governmental authority for administrators, but still considered their role to be outside of politics itself.

Eventually, however, political scientists and management experts, led by academics like Syracuse University’s Dwight Waldo, decided that expertly implementing democratically chosen policies was no longer enough. A subsequent generation of experts would be expected to substitute their own ethical and philosophical standards for those supported by voters.

“Public servants should become active, informed, politically savvy agents of change,” as one of Waldo’s colleagues would later put it.

This is the recipe for what critics of big government have come to call a permanent governing class—civil servants with effective lifetime tenure, collaborating with like-minded activists outside of government, who place their own judgment ahead of that of the voters and their elected representatives.

Yet, the trend of enlightened university graduates turning institutions toward progressive goals wasn’t confined to government agencies. The same logic would eventually apply to the management of corporations as well.

Soukup also recounts how, at the same time that American scholars of public administration and management were expanding their disciplines, self-proclaimed radicals like Antonio Gramsci in Italy, György Lukács in Hungary, and Max Horkheimer in Germany were attempting to revive Marx’s reputation and influence by explaining away many of Marxist theory’s failed predictions. When the German academics of the infamous Frankfurt School went into exile in the United States during Hitler’s rise to power, they began to exert significant influence on academics and writers in the US, culminating with unlikely pop-culture celebrity Herbert Marcuse.

Marcuse was widely associated in the popular imagination with political movements in the 1960s, from student radicalism on college campuses to free love on communes and beach blankets across America. While Soukup argues that he was less of a direct influence on left-wing politics than some have given him credit for, his ideas about the evils of capitalism and bourgeois society were very much part of the liberation politics that swept much of the world in the late 1960s and early 1970s. When soon-to-be Supreme Court Justice Lewis Powell lamented the increasing anti-business influence of radical leftists in his 1971 memo to the US Chamber of Commerce, one of the few people he criticized by name, besides Ralph Nader and Eldridge Cleaver, was Marcuse.

This revolution held that not only was a capitalist economy inherently exploitative, as classical Marxism teaches, but the entirety of modern society is repressive and dehumanizing, with everything from the nuclear family, organized religion, and formal schooling conspiring to circumscribe our essential natures and limit our infinite potential.

With so much of “the system” losing credibility, it was not surprising that public attitudes toward business, ambivalent even in the best of times, turned more hostile. Unfortunately for people with anti-establishment attitudes, there are never enough university fellowships and socialist newsletter editorial positions to go around. Well over 70 percent of Americans work in the profit-seeking private sector, once we subtract everyone who works for government agencies and non-profit organizations. This means that anti-capitalist ideas are coming from inside the building.

This conflict, in which many people—at both the entry-level and management-level—work at companies about which they feel morally ambivalent isn’t entirely a product of progressive ideology, but the academic theory behind it certainly didn’t help. My Competitive Enterprise Institute colleague Fred L. Smith, Jr. has written extensively on this problem—business leaders afflicted with an inferiority complex over their chosen profession and feel the need to “buy back” their moral standing in the world with leftist virtue signaling.

The second half of The Dictatorship of Woke Capital catalogs a series of controversial activist campaigns by some of the biggest names of Wall Street: Apple, Disney, and Amazon. The issues are varied, but the overall trend is nevertheless worrying. Rather than concentrating on what they know best and staying neutral in the culture wars, major companies have hitched their brands to one side of a contentious political divide. The verdict on whether this will ultimately be good for business is still very much uncertain.

Specific issues aside, the influence of all of those progressive and Marxist scholars the book documents can be seen in the modern claim that no institution should be outside the political realm. Soukup writes that “this battle is between those who believe that politics is and should be the overriding force in all human interactions and those who believe that politics is just part of the human experience, a part that is best kept as narrow and limited as possible.”

Attempting to turn every corporation in the world into a political combatant will not make the world a better place. One doesn’t have to be a conservative, like Soukup, or a free-market warrior of any description, to appreciate that.

Review of The Dictatorship of Woke Capital: How Political Correctness Captured Big Business (Encounter Books, 2021), 208 pp.

COLUMN BY

Richard Morrison

Richard Morrison is the Senior Editor at the Competitive Enterprise Institute.

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Neoliberalism: Making a Boogeyman Out of a Buzzword by Max Borders

After Salon.com stopped being interesting, they needed a way to drive traffic. Competition for eyeballs is tough, after all. In the dog-eat-dog world of attracting eyeballs, you’ve got to find clever ways to pull in new readers.

One way to drive traffic is to poke people you know disagree with you. And by poking, I mean turning them into a Voodoo Doll.

This variation on beating up a Straw Man has the benefit of the Internet’s sharing magic. That is, if you pick on some group they will feel it. Then they will turn around and express their outrage by sharing your stuff! Voila: instant Internet gold.

In making Voodoo Dolls, you don’t always have to pick on a specific person. You can go for a worldview. Salon has given libertarianism a lot of flak, of course. But now they’re going for an even bigger boogeyman, because the idea is to paint as many people as you can with the same tarbrush.

What better place to go for a big, sweeping label than the academy?

Here’s UC-Berkeley political science professor Wendy Brown talking “neoliberalism” in a Salon interview.

And how do you define neoliberalism? It’s not uncommon for me to experience people I’d consider neoliberals telling me the term is meaningless.

I think most Salon readers would know neoliberalism as that radical free-marketeering that comes to us in the ‘70s and ‘80s, with the Reagan-Thatcher revolution being the real marker of that turn in Euro-Atlantic world. It means the dismantling of publicly owned industry and deregulation of capital, especially finance capital; the elimination of public provisions and the idea of public goods; and the most basic submission of everything to markets and to unregulated markets.

So free enterprise is its clarion call, and even though it requires a lot of state intervention and state support, the idea that goes with it is usually also minimal state intervention in markets. Even if states are needed to prop or support or sometimes bail out markets, they shouldn’t get into the middle of them and redistribute [wealth]. That’s all true. That’s certainly part of what neoliberalism is.

Okay, let’s see if we can make heads or tails of this magician’s patter.

Start with Professor Brown’s concern that people have criticized the term neoliberalism as being meaningless. This doctrine, Brown says, “requires a lot of state intervention and state support, the idea that goes with it is usually also minimal state intervention in markets.”

Huh? If neoliberalism isn’t exactly libertarianism or anarcho-capitalism — because these doctrines certainly do not include or require state intervention and support of markets — then we might say she’s talking about cronyism. And certainly if someone were to build a doctrine around cronyism, that would not be meaningless.

It turns out such a doctrine does exist. But it’s not neoliberalism; it’s corporatism — and it’s a progressivist ideology.

According to Nobel laureate Edmund S. Phelps, quoted in the Freeman:

The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system . . . is . . . an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.

Phelps says,

In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favors declared goals such as industrialization, economic development, and national greatness over individuals’ economic freedom and responsibility.

Today, airlines, auto manufacturers, agricultural companies, media, investment banks, hedge funds, and much more has [sic] at some point been deemed too important to weather the free market on its own, receiving a helping hand from government in the name of the “public good.”

But where does this idea come from? Contra Brown, it’s not from the “free marketeers”. Economist Thayer Watkins says:

In the last half of the 19th century people of the working class in Europe were beginning to show interest in the ideas of socialism and syndicalism. Some members of the intelligentsia, particularly the Catholic intelligentsia, decided to formulate an alternative to socialism which would emphasize social justice without the radical solution of the abolition of private property.

The result was called Corporatism. The name had nothing to do with the notion of a business corporation except that both words are derived from the Latin word for body, corpus.

To be fair, Brown might protest, arguing that she would subsidize, cartelize, and manage the right industries, such as finance. At least she laments the liberalization of these industries, citing Thatcher as an example of neoliberal excess, despite what a basket case Britain had been under prior governments.

So which industries would she leave private and which “require a lot of state intervention”? And what sort of magic makes any such scheme immune to rent-seeking and capture?

It appears state support of business originated among certain less-communist advocates of social justice. But surely this is not something the more moderate progressives had in mind.

After all, says Brown, “What’s more, if those of us who oppose neoliberalism misinterpret it as simply another word for capitalism, we make the job of fighting it even more difficult. Franklin Delano Roosevelt was a capitalist, after all. But a neoliberal, he most certainly was not.”

Libertarian philosopher Jason Brennan says it’s time to point fingers and name names. In a rare polemic called “Dear Left: Corporatism is Your Fault” he writes,

America is suffering from rampant, run-away corporatism and crony capitalism. We are increasingly a plutocracy in which government serves the interests of elite financiers and CEOs at the expense of everyone else.

You know this and you complain loudly about it. But the problem is your fault. You caused this state of affairs. Stop it.

But the moderate left didn’t want radical socialism. They just wanted regulatory agencies to rein in the excesses of the market. They wanted the government to subsidize or own areas that ought to be considered public goods, like healthcare, transportation, education, and the environment. But good intentions are not enough, writes Brennan.

We told you this would happen, but you wouldn’t listen. You complain, rightly, that regulatory agencies are controlled by the very corporations they are supposed to constrain. Well, yeah, we told you that would happen. When you create power—and you people love to create power—the unscrupulous seek to capture that power for their personal benefit. Time and time again, they succeed. We told you that would happen, and we gave you an accurate account of how it would happen.

You complain, perhaps rightly, that corporations are just too big. Well, yeah, we told you that would happen. When you create complicated tax codes, complicated regulatory regimes, and complicated licensing rules, these regulations naturally select for larger and larger corporations. We told you that would happen. Of course, these increasingly large corporations then capture these rules, codes, and regulations to disadvantage their competitors and exploit the rest of us. We told you that would happen.

Brennan was probably a little upset when he wrote this, but fairly so. People like Wendy Brown have been trying to emblazon corporatism on the tunics of free marketeers and liberalizers for a while now. And they’re generally pontificating from the academy, rather than from the brothels of K St. in Washington, or Venezuela’s Ministry of Planning and Finance.

No one who calls herself a political science professor should have earned her letters without having read public choice theory. No, it’s time to admit that all progressive attempts to stitch together old scraps of socialism with markets will create perverse effects and corruption of one form or another.

Maybe Prof. Brown is okay with “corporatizing” some industries while leaving others in private hands, a la FDR. Hers seems to be an attempt to synthesize the heart of Marx with the will of the people. She says:

“Demos kratia” — “people rule” — is really the term that, however differently it’s been interpreted over different variations of democracy and different centuries, is one that we all cherish on some level. Demos is important because it’s the body, it’s the people, that we imagine are in control of the basic conditions and laws that govern our lives.

Ah, yes “the body,” the corpus. Haven’t we heard that one before? We’re supposed to cherish democracy, because, well, it’s as American as apple pie. Any more reflection would require admitting that the “demos” disagrees about stuff. And that’s a slippery slope to individualism and recognizing the need for tolerance and personal autonomy. This is the fact of pluralism that even the liberal philosopher John Rawls starts with.

Whenever you hear the world neoliberalism, be wary. It could be completely meaningless filler, but it’s always as squishy as silly putty. It’s a label that’s designed to demonize those who would never support it — a word to be accompanied by a sneer. It is a means of defining oneself as against something — preferably a nice soft Straw Man — rather than doing the hard business of coming out ideologically and defending your ideas.

When you realize that accepting degrees of state intervention is a problem of degree and not of kind, it becomes clear the Wendy Browns have nowhere to run but to nebulous concepts like “demos.” That is because between corporatism and communism there is no magical third way, only shades of state coercion, justified by a flimsy majoritarian facade. The choice between nationalized or regulated industries is binary, so the ideological choice set is really only between communism and corporatism. But communism screwed things up. Corporatism screws things up. All the variations screw things up because each permutation involves power and business forming unholy alliances.

People like Wendy Brown and her Salon interviewer Elias Isquith aren’t stupid. And like most people, they have good intentions. They are committed to a particular theory of angels. Demos, that golden calf, is the tired old notion that if we could just blur the peculiarities, individuality, and desires of 300 million people into a single prayer and send it up through the voting booth, what will come out the other side — in Washington, D.C. — is a kind of secular salvation. But this sort of thinking turns on hypostatization, that timeless fallacy of ambiguity that seduces people into collectivism.

We have to look them squarely in the face and say: “You caused this state of affairs. Stop it.”


Max Borders

Max Borders is the editor of the Freeman and director of content for FEE. He is also co-founder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.