The History Behind the ‘Woke’ Invasion of Big Business

Jarrett Stepman /

Why is corporate America increasingly stepping in to support “woke” social justice causes?

“These corporations are part of a movement that has been going on in the West and in this country in particular for the last roughly 100 years to move the culture very consistently and very aggressively to the left in order to more or less make ready the path for the revolution,” says Stephen Soukup, author of the new book “The Dictatorship of Woke Capital: How Political Correctness Captured Big Business.”

Soukup joins “The Daily Signal Podcast” to explain how activists have hijacked and twisted the purpose of many of the world’s largest companies to serve left-wing ends, and why Americans need to be concerned about it.

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Jarrett Stepman: We are now joined by Steve Soukup, the senior commentator, vice president, and publisher of the Political Forum and independent research provider, and also the author of a new book “The Dictatorship of Woke Capital: How Political Correctness Captured Big Business.”

Steven, thank you so much for joining us.

Steve Soukup: Thanks for having me, Jarrett. I appreciate it.

Stepman: Absolutely. So your book, “The Dictatorship of Woke Capital,” covers this trend of big business following, I think, the trend of many other big elite institutions suddenly going what we now call “woke,” openly embracing many left-wing social justice causes.

It’s a startling trend because it seems strange that businesses would be so outright political and willing to anger many customers. But you say this has really been a long time in the making and will damage the nature of free market capitalism in America if it continues unabated.

You set this up in the book as an example, a very important one from 2019, a year that you say that woke capital really began to be weaponized and perhaps overplayed its hand.

Several massive companies—I know there was Disney, Netflix, Warner Media—essentially threatened to punish and hurt the state of Georgia’s economy after it passed a fetal heartbeat abortion restriction law.

First Things magazine published Sen. Tom Cotton’s, who’s a Republican from Arkansas, speech that he titled “The Dictatorship of Woke Capital,” which is the title of your book.

Cotton spoke about the redefinition of the purpose of the corporation and shined a light on a growing problem of corporate activism that many Americans were unaware of. Cotton’s speech was really a warning flag about corporate trends long in the works.

You specifically mentioned the environmental, social, and corporate governance, or ESG, model that big businesses increasingly use, and the flip from so-called shareholder to stakeholder capitalism. Can you describe what those things mean, why they’re problematic, and really what’s driving it?

Soukup: When we discuss woke capitalism or woke capital, what we mean is a top-down, anti-democratic movement on the part of some of the biggest and most important names in American business to change the way business functions, to change the definition of capitalism, and to change the very relationship between the citizen and the state permanently.

These corporations are part of a movement that has been going on in the West and in this country in particular for the last roughly 100 years to move the culture very consistently and very aggressively to the left in order to more or less make ready the path for the revolution.

These businessmen, these corporations that have gotten involved in this have forgotten that that’s what the end is, that the end goal is the revolution, but they’ve become very heavily involved in this left-wing cultural movement.

ESG stands for environmental, social, and corporate governance, and it is probably the hottest investment trend in the world, certainly in the West, in Europe, in the United States over the last five years. And this is a successor investment instrument to what used to be called socially responsible investing.

Under the old socially responsible investing regime, anybody who was concerned about their investments and lining those investments up with their values could do so. They could talk to their adviser or they could carefully screen themselves which stocks they picked in order to weed out those companies whose activities conflicted with their values.

It was totally voluntary, it was totally bipartisan and non-overtly political, and it was something that allowed people to opt into the idea that they could align their values and their portfolios, allowing them to sleep at night.

Over the past, say, 10 to 15 years, ESG has become the successor to this, and ESG, unlike the original socially responsible investment movement, is very aggressive and it seeks not to simply screen companies out of portfolios.

It seeks to change companies, to change their boards of directors, to change their management, to change their bylaws in order to force them to comply with certain political beliefs.

So ESG has become a very pernicious and driving force in American business that is pushing corporations to embrace political values over traditional business values.

Stepman: Interesting. How universal have these changes been? I mean, is this all of corporate America? Is this limited to specific sectors? Is there maybe an industry in which this model is being rejected?

Soukup: Well, right now, I would say that it’s almost entirely universal. Much of the growth, particularly last year, in American capital markets came in the ESG realm.

Many of the largest asset management firms in the country, in particular, the three largest passive asset management firms—which are BlackRock, Vanguard, and State Street—who combined control a total of maybe $20 trillion in assets under management, all three of them made sustainability, which is a part of this ESG movement, their primary investment goal.

Which means that they are judging companies not strictly on their business performance, but also on their performance with respect to preparing for climate change and preparing for the decarbonization of the environment.

So it’s widespread and I think I’d be hard pressed to name a sector that hasn’t been touched by this.

Stepman: Well, I think one of the interesting issues with this, of course, woke capital, as we call it, is highly aggressive in injecting itself into many of the issues that Americans are dealing with. But I think what’s really interesting is how uneven it seems they are applying these standards.

While companies were going after the state of Georgia for passing pro-life laws, many of these same companies seemingly turned a blind eye to the malfeasance of China and the Chinese Communist Party despite having business ties in that country.

You mentioned Apple and its CEO, Tim Cook. Apple highlights this problem. The company is highly involved in various environmentalist initiatives and other generally left-wing causes, yet its environmental record in Asia and China seems to be less than ideal and its labor practices appear to be ruthless.

You mentioned Apple’s Foxconn iPhone factories operate in a special zone in China. You wrote that suicide is so rampant that the company actually had installed nets in many buildings to catch falling bodies. On top of that, Apple appears to be silent about the fact that the communist countries put over a million Uighurs in concentration camps.

Can you talk about this situation? It seems that wokeness doesn’t actually apply to tyrannical regimes.

Soukup: No, it doesn’t. And that’s one of the reasons why I highlighted Apple in the book, is because at home, as you mentioned, Apple and Tim Cook are ESG darlings. Tim Cook is a very outspoken, in fact, probably the most outspoken, well-known CEO when it comes to social justice or environmental matters.

Not a single issue with respect to a large social justice matter occurs in this country without Tim Cook feeling that he needs to get involved in it, write an op-ed, or make a statement, or use some of the corporation’s money to try and rectify the problem.

But as you said, in China, it’s a different story. Tim Cook spent the last 20 years investing very heavily in the People’s Republic of China and the Chinese government considers him an ally.

When the protesters in Hong Kong over the last couple of years were getting a little bit too out of control for the government in Beijing to tolerate, one of the things that the government noticed was that they were using certain apps to organize and to plan their protests.

And so the government in Beijing requested that these apps be removed from the Apple App Store, and lo and behold, Tim Cook and Apple had those apps removed specifically because the government in Beijing requested it.

So this social justice viewpoint does, in fact, end at the nation’s borders. It doesn’t apply in China, and as you said, neither does Apple’s reputation for being green.

The overwhelming majority of the energy expended in the creation, manufacture, distribution, and sales of Apple products is not used by Apple Corporation itself. It’s used by their contractors.

Foxconn, one that you mentioned, … they’re headquartered in Taiwan or in the People’s Republic of China. And they are no way, shape, or form as green as Apple is or as green as Apple would like for everyone to believe that the entire process is.

So both with respect to social justice and environmentalism, Apple is a much different country in China than it is in the United States.

Stepman: Interesting. So what does companies going woke mean for employees, especially those in these huge companies where, presumably, employees hold a range of opinions? How are employees affected by this transition?

Soukup: Well, it can affect employees any of multiple different ways. Unfortunately, as we’ve seen since probably the beginning of the year, companies are more and more willing to punish employees whose politics they disagree with. So this can be very disconcerting for employees.

The irony, of course, is that this movement, the ESG movement or the stakeholder capitalism movement, prides itself on being much more amenable to the causes of other stakeholders than shareholders, including employees.

So this movement that proudly proclaims that it is much more favorable to employees is actually turning around and punishing employees for violating … the political orthodoxy. So this is a pretty clear example of rank hypocrisy that we’re seeing, particularly amongst some of the larger tech companies in this country.

Stepman: Is there anything consumers or conservative consumers can do? I mean, do boycotts work on these companies? Can you complain to these companies? Are there examples of people effectively pushing back as just individual citizens who don’t appreciate this trend?

Soukup: Well, yeah, absolutely. My personal opinion, my personal preference is for people not to boycott, but to engage with the companies.

If we think about how this happened, how we got to this position, it’s because activist shareholders began pressuring companies 10, 15, even 20 years ago to do what the activists wanted. And as is always the case, the squeaky wheel gets the grease.

What we need to do is reverse engineer that and become squeaky ourselves. If we disengage, if we boycott, if we leave the playing field, then they take it without any opposition whatsoever.

I think that that’s a mistake, to leave the field. I think we’d be better off engaging. And if you presume, as I do, that customer service departments hate getting complaints from irate customers, you can only imagine that investor relations departments hate getting complaints from outraged shareholders. So if you happen to be a shareholder, then you can push back even more effectively.

So, yeah, there are things customers and consumers and various individuals can do. There are ways that they can fight back and push back against this tyranny.

Stepman: Absolutely. So, you conclude the book by calling for a reorientation of big business away from these woke models with the line: “Depoliticized business, depoliticized markets, back to neutral.” What do you mean by that?

Soukup: Well, what I mean by that is that I would like to see a business return to its primary function, which is to function as business, not to function as a political arm of various ideologies, which is where we are at this point.

The much maligned and wrongly maligned shareholder model of capitalism that was explained very clearly and very concisely by Milton Friedman in 1972 was a very overtly moral depiction of what capitalism should be.

And that depiction was that if somebody trusts you enough, somebody believes in your abilities enough that they will give you their capital, that it is your responsibility to use that capital in the ways that you told them that you would use it and to use that capital to develop the product, to develop a service, and to deliver that to customers and to make a profit. That’s a moral code for business.

If somebody gives you something, you do with it as you are expected to do with it. You behave responsibly with it. That is where I’d like to see American business get back to, is to believe that it is a business’ responsibility to handle the resources it has been given carefully and conscientiously.

That’s not a political statement. That’s not a political end. That is an effective end based on the moral structure of how capitalism in fact developed.

Stepman: Again, the book is called “The Dictatorship of Woke Capital: How Political Correctness Captured Big Business.” Steve, thank you so much for joining us on The Daily Signal.

Soukup: Thanks for having me, Jarrett. I appreciate it.

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