Crusade against ‘woke capitalism’ cripples American business

(This article was published by De Tijd)


This article first appeared in and has been translated from De Tijd

Republican politicians in the US have a new favorite punching bag: ‘woke’ companies that embrace a progressive agenda under the pressure of sustainable investing. The business world is thus drawn into the culture war. “This is new territory for companies.”

Society has evolved in the meantime, says Joe Zammit-Lucia, founder of the think tank Radix and author of ‘The New Political Capitalism’. ‘ESG is essentially about how we as a society no longer accept some practices, such as damage to the climate. The socio-political-cultural environment in which companies operate has changed, and as a society we expect companies to adapt to it. That is not new either. The Friedman Doctrine of the 1970s is an example of a move in the other direction,” says Zammit-Lucia.

Zammit-Lucia believes that ‘very challenging’ times await as the business community is swept up in the culture war. “This is new territory for companies. Political issues are emotionally charged, and moreover very volatile and unpredictable. Companies don’t like that. Moreover, with stakeholder capitalism you have different stakeholders who all want something different.’

Some things require a different approach. ‘For example, boards of directors in which very different views can clash,’ he continues. ‘Companies must also learn to communicate in a politically sensible manner. Take the abortion debate in the US. Both camps believe they are morally right on their side. A compromise is not possible, while many companies find it difficult to stay out of that debate. As a health insurer, for example, you must then calmly acknowledge that there are different views and explain clearly why you have made a certain choice.’

The fact that companies are in danger of losing part of their consumers is not so problematic for Zammit-Lucia. ‘Companies already do not serve everyone with their products.’ That they have to do politics is also not new. ‘Every company is a political institution. Businesses have a major impact on the way we live. It is therefore nonsense that companies have nothing to do with politics.’

The question remains why the Republican Party is willing to jeopardize its relationship with business through its antagonistic rhetoric and legislative initiatives in the states where it is in power. ‘That fits in with the highly polarized political climate in the US,’ says Zammit-Lucia. Waving ‘woke capitalism’ is a political tactic to reach the working class. It is instilled that the woke ideology is destroying America’s competitiveness and costing jobs.’

These excerpts are from a longer article in De Tijd

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