Woke, Inc.

1. Woke capitalism: A new form of corporate power that threatens democracy

Financial success in twenty-first-century America involves the same simple steps. First, the Pledge: you find an ordinary market where ordinary people sell ordinary things. The simpler, the better. Second, the Turn: you find an arbitrage in that market and squeeze the hell out of it. An arbitrage refers to the opportunity to buy something for one price and instantly sell it for a higher price to someone else.

The rise of woke capitalism has transformed American corporate culture. Companies now claim to serve not just shareholders, but broader societal interests. This shift allows corporations to accrue greater power and influence over every aspect of our lives. By promoting progressive social values, businesses deflect attention from their pursuit of profit and power.

Examples of woke capitalism in action:

• State Street's "Fearless Girl" statue, which promoted gender diversity while facing a lawsuit for underpaying female employees
• Goldman Sachs' diversity quota for board members, announced just as it paid billions in fines for corruption
• Corporate support for Black Lives Matter while continuing practices that harm minority communities

The danger lies in corporations assuming the role of arbiters of social values, a function that should belong to democratic institutions. This corporate takeover of moral decision-making threatens the foundations of American democracy.

2. The managerial class: How executives use stakeholder capitalism to escape accountability

Speaking as a former CEO myself, I'm deeply concerned that this new model of capitalism demands a dangerous expansion of corporate power that threatens to subvert American democracy.

The managerial class has emerged as a powerful force in modern capitalism. These executives, who often own little of the companies they run, use stakeholder capitalism to increase their personal power and influence. By claiming to serve multiple stakeholders, they effectively become accountable to no one.

Key aspects of managerial power:

• Executives use social causes to build personal brands and open future opportunities
• Board members, often selected by CEOs, provide weak oversight
• The "revolving door" between government and corporate positions reinforces managerial dominance

This shift undermines both shareholder interests and democratic accountability. The author argues for limiting the scope of the business judgment rule to prevent executives from using corporate resources for personal social agendas without shareholder approval.

3. The ESG bubble: How corporations profit from social causes

Good fundraising strategies don't always make for good investment strategies. Asset prices may rise in the short run because there are more dollars chasing them due to the expectation they'll keep rising. But that's the logic of a Ponzi scheme.

The rise of ESG investing (Environmental, Social, and Governance) has created a new asset bubble. While proponents claim ESG strategies outperform traditional investments, the author argues this outperformance is likely temporary and driven by increased capital flows rather than fundamental value.

Concerns about the ESG bubble:

• Rapid growth in ESG-mandated assets (projected to be 50% of all managed assets by 2025)
• Conflicting data on ESG performance, with cherry-picked results
• Risk of market distortions as investors prioritize ESG factors over financial fundamentals

The author warns that the ESG bubble may be ripe for a crash, similar to the 2008 housing crisis. However, he notes that woke capitalists often win in the end by using their do-good image to capture government favor and funding.

4. Foreign dictators as stakeholders: How autocracies exploit woke capitalism

China and Saudi Arabia have cracked the code of stakeholder capitalism. They've realized a simple truth, the same one I learned years ago during my summer at Goldman Sachs: whoever has the gold makes the rules.

Authoritarian regimes have learned to exploit woke capitalism for their own benefit. By positioning themselves as important stakeholders, these governments can influence corporate behavior and whitewash their own human rights abuses.

Examples of autocratic exploitation:

• Chinese government pressure on tech companies to share user data and censor content
• Saudi Arabia's use of corporate connections to downplay the murder of Jamal Khashoggi
• Corporate silence on human rights abuses in China while vocally supporting social causes in the US

This dynamic allows foreign dictators to use American companies as tools for achieving their geopolitical objectives. It also creates a false moral equivalence between democratic and authoritarian systems, undermining America's moral standing on the global stage.

5. Big Tech's threat to democracy: Censorship and ideological control

Speaking as a citizen, I couldn't stomach it. I argued in The Wall Street Journal, along with my former law professor, that companies like Twitter and Facebook are legally bound by the First Amendment and that they break the law when they engage in selective political censorship.

The rise of Big Tech censorship poses a significant threat to American democracy. Tech giants like Google, Facebook, and Twitter have increasingly used their platforms to suppress certain viewpoints and shape public discourse.

Examples of Big Tech overreach:

• Censorship of content related to COVID-19 and election integrity
• Suppression of news stories unfavorable to certain political candidates
• Deplatforming of users and entire platforms (e.g., Parler) for political reasons

The author argues that these actions constitute a form of state censorship, as tech companies are effectively acting as agents of the government due to congressional pressure and legal protections like Section 230. He proposes treating Big Tech companies as state actors bound by the First Amendment when they engage in content moderation.

6. Wokeness as a religion: Legal and cultural implications

According to the EEOC's own terms, wokeness is literally a religion. It turns out that being a religion is a double-edged sword from a legal perspective. Our law both protects employees' religious beliefs and protects them from having their employers' religious beliefs imposed on them.

Wokeness functions as a de facto religion in modern American society. It provides a comprehensive worldview, moral framework, and set of rituals that parallel traditional religious structures.

Characteristics of wokeness as religion:

• Original sin (e.g., white privilege, systemic racism)
• Rituals of confession and penance (e.g., diversity training, public apologies)
• Heresy and excommunication (e.g., cancel culture)

The author argues that recognizing wokeness as a religion under existing legal frameworks could have significant implications for workplace discrimination cases and First Amendment protections. This recognition could both protect employees expressing woke beliefs and prevent employers from imposing woke ideology on their workforce.

7. The bastardization of service: How performative altruism undermines genuine civic engagement

Service is too often bundled with an ulterior motive in America. Only the best of us pursue it for its own sake. For the rest, including my younger self, it's frequently packaged with something self-serving to make it more appetizing.

The commodification of service has distorted the meaning of civic engagement in America. From high school students padding their college applications to corporations using social causes for marketing, genuine altruism has been replaced by performative gestures.

Consequences of bastardized service:

• Cynicism about the motives behind charitable actions
• Prioritization of visible, marketable causes over more impactful but less glamorous work
• Erosion of the intrinsic value of helping others

The author proposes mandatory civic service for high school students as a way to cultivate genuine engagement and create a shared national experience. This approach aims to foster a sense of civic duty and shared identity that transcends superficial differences.

8. Rediscovering American identity: Moving beyond woke essentialism to true pluralism

I reject that narrative, and I think every American should too. I'm not just a man. I'm a proud father, a loyal husband, and a grateful son. I'm not just a person of color. I'm a Hindu, a child of immigrants, an American citizen, and a proud native of Ohio.

True American pluralism embraces the complexity of individual identities rather than reducing people to a handful of immutable characteristics. The author argues for moving beyond the narrow confines of woke essentialism to rediscover a shared American identity.

Key aspects of rediscovering American identity:

• Recognizing the multiple, overlapping identities within each individual
• Emphasizing shared values and experiences that unite Americans across differences
• Balancing individualism with a sense of national unity (E Pluribus Unum)

By rejecting the reductive categories of woke ideology and embracing a more nuanced understanding of identity, Americans can forge a stronger sense of national solidarity while preserving individual liberty and diversity.

Last updated: January 22, 2025