Woke capitalism, that strange phenomena where corporations start adopting progressive political causes, was all the rage at the World Economic Forum’s meeting in Davos last January. Politicians from around the globe rubbed shoulders with business moguls and high-minded celebrities. They spruiked the importance of ‘stakeholders for a cohesive and sustainable World.’
How things have changed! After the sudden human and financial devastation brought on by COVID-19, what had been touted by the Davos crowd as a ‘better capitalism’ is laughable.
Corporations would back progressive political causes out of genuine concern for others, we were told. They would take over where government left off in the provision of public goods, we were promised.
Fair Weather Corporate Friends
So where are these corporations now when we need them? Like fair weather friends, big business is doing little to make any significant difference. Let’s take investment firm BlackRock as an example.
In his 2019 BlackRock chief, Larry Fink wrote a letter to the CEOs of the corporations in which his company invests in. In that missive, he asserted that because of the ‘failure of government to provide lasting solutions, society is increasingly looking to companies […] to address pressing social and economic issues.’
Come COVID-19 time, and BlackRock’s contribution has been to fork over just $50 million of relief for those affected. Whoever benefits from that will be surely grateful, but it is a financial drop in the ocean for BlackRock, and for its billionaire boss.
2019 was the year that right-wing reactionaries were on their soap boxes decrying woke capitalism as a corporate capitulation to the snowflake left. ‘Woke capitalism is our enemy’, they protested. ‘Woke capitalism corrupts business’, they moaned.
2020 shows that the reactionary pundits were wrong. Feel good corporate self-righteousness has done nothing to make any real changes to capitalism’s agenda. Corralling wealth in the direction of the owners of capital is still the name of the game. If ever increasing levels of global inequality is not enough to prove it, then response to the COVID-19 crisis is.
When The Going Gets Tough, the Woke Back Down
Nike, the poster child of woke capitalism, courted controversy in 2018 when it released an ad campaign featuring Colin Kaepernick. This had some impact in stimulating public debate about racism and police brutality in the United States and around the world.
There is more to it than that. It also bolstered Nike’s brand and presaged a $6 billion increase in the company’s market value. By comparison, Nike’s contribution of $15 million to COVID-19 response is pathetic.
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The list of global corporate giants making token contribution is pathetically long. Amazon committed $3.9 million in the UK. Not bad for a company that avoided $100 billion in tax over the past ten years. On the more generous end of the scale, The Gates Foundation and Netflix have pledged $100 million each. Facebook founder and CEO Mark Zuckerberg threw in $25 million.
This is all chump change when it comes to the vastness of corporate wealth. It’s infinitesimal compared to what will be needed to address the health and economic effects of COVID-19. That bill is estimated at $5 trillion in the United States alone.
Corporate Purpose Laid Bare
Just last year, the Business Routable (the US club for big time CEOs) felt it reasonable to proclaim that the purpose of business had fundamentally changed. No longer beholden to shareholder primacy, CEOs were now fundamentally dedicated to all stakeholders. Hmm?
That these same CEOs have not stepped up in any significant way to help with this crisis demonstrates the poverty of the Roundtable’s sanguine proclamations. If corporations were genuine in wanting to take over where government has left off, where are they now?
Well, they are lining up the world over crying poor-mouth in hope for tax payer funded government bailouts. The neoliberal mantra was for small government when it came to corporate regulation, welfare and education. Hypocrisy is rife when those who are ferociously from the neoliberal trough are the first in the (corporate) welfare line.
As well as that, mass layoffs and surging unemployment on a global scale show where corporate priorities lie. So does the risk of cashed up corporates like Apple, Johnson & Johnson, and Unilever bolstering their monopoly power by buying up smaller competitors struggling to survive.
Will we remember how empty the rhetoric of woke capitalism was after the COVID-19 crisis is over? While corporates at the big end of town might be scrambling for power as the world gets sick, now is a time not just to deal with the present crisis, but to plan for a different future.
It is true that the COVID-19 crisis clearly shows that the neoliberal experiment has failed to prepare the world for crisis. But, it has also demonstrated that the experiment is not any good for normal times either. Corporations might like to talk up their social credibility and political righteousness, but when times get tough they are no where to be found.
In crisis we have seen the retreat of corporations and the market and the return of elected governments in setting the conditions for the future welfare of citizens. After the crisis, we need to learn from the COVID-19 example and get back to building a future that restores a socially driven democracy for the people.
In this hour of darkness, we need to restore hope in a shared prosperity that does not cast its fate in the fickleness of fair weather friends.