The muckrakers and trustbusters of an earlier day demanded government regulation of corporations they saw as essentially evil. But today’s progressives tout “woke capitalism,” asserting that corporate America can redeem itself by focusing on advancing a progressive worldview rather than producing products for consumers or dividends for their shareholders.
In their view, corporations should act as partners of the state. Good corporations are supposed to contribute only to good causes and candidates, support favored measures to deal with climate change and promote transgenderism or other favored policies on a myriad of issues. The products they produce or the services they offer are seen as far less important than the causes they promote.
Conservatives who reject this view have become targets of the progressive media for what they call the right’s hypocrisy. They assert loudly and often that conservative support for free market economics was sacred when corporations were mistreating their employees, contributing to Republicans, degrading the environment, and running roughshod over the labor movement, but now that many businesses have developed a progressive social conscience they want the government to reign them in.
This demonstrates an ignorance of both the free-market system they abhor and the attitude of free market conservatives toward the businessmen and women who make it work as it does. The staunchest believers in free market capitalism have never pretended that businessmen are motivated by altruism and the public interest. Adam Smith, often considered the high priest of free markets and free trade, once observed that businessmen rarely get together “even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
That sort of conversation is as apt to take place at a Republican as it is at a Democratic fundraiser.
Smith believed not that businessmen are angels, but that capitalism harnesses their competing interests and desires into a system that benefits the public regardless of their individual motivation. They are, as he put it, “led by an invisible hand to promote an end which was no part of (their) intention.”
What Smith and free-market economists since then have feared has been the willingness of politicians to join the “conspiracy against the public.” It is a conspiracy in which business cedes power to politicians in exchange for favors that benefit them at the expense of their competitors. It is the trade being made today by businesses kowtowing to both an administration hostile to their long-term interests and parroting the memes given them by the progressive left.
The advantages are clear. One need only ask whether Elon Musk supports subsidizing electric vehicles in the public interest or because of his bottom line or whether Midwestern farmers so hot for ethanol subsidies are as interested in eliminating fossil fuels as in the per-bushel price of corn. One could go on.
In too many cases, American business leaders seek special treatment rather than good policies from their political partners. Think of the Chamber of Commerce’s decision last fall to pour money into the coffers of Democrats hostile to the survival of Main Street small businesses because they figured Democrats would increase their majority in the House and believed helping them would guarantee Chamber lobbyists a seat at the table.
Meanwhile, Jeff Bezos of Amazon poured money into groups like Black Lives Matter that disrupt downtown businesses and conveniently force more people to turn to Amazon to do their shopping. At the same time, Microsoft proved more than willing to sell or tailor its platforms to the whims of sworn enemies of this country.
Progressives demanded when Georgia passed a number of election reform measures that corporations should denounce the measure. Coca-Cola and Delta Airlines embarrassingly and counterproductively did so, involving themselves in partisan political squabbles that can only alienate many of their customers as they crawl on their corporate bellies before the politicians they perceive to be in control of their future.
The problem is exacerbated today because corporations once beholden to individual shareholders are now forced to pay more attention to hedge funds and institutional investors as interested in serving the ideological agendas of the woke as in profits. Thus, Exxon and other energy companies find themselves adopting policies that make little economic or business sense and actually drive profits down … to satisfy institutional investors run by social warriors.
The question facing policy makers of both parties is to what extent government can be trusted to keep business focused on business rather than politics. Certainly, the government can outlaw activities that threaten the national security interests of this country, but the real solutions to woke capitalism are alert consumers prone to buy from companies that make decent products they want rather than those that try to win friends by riding the cause of the day and investors who channel their funds to businesses that remember their mission is to serve their stockholders rather than MSNBC pundits and the politicians for whom they shill.
• David A. Keene is editor at large for The Washington Times.
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