Extending the Culture Wars.

• Author: Zywicki, Todd
• Position: The Dictatorship of Woke Capital: How Political Correctness Captured Big Business

The Dictatorship of Woke Capital: How Political Correctness Captured Big Business

By Stephen R. Soukup

208 pp.; Encounter Books, 2021

The first time I heard the term "woke," just a few years ago, was in an ironic context. The user was poking fun at some half-baked theory derived from the writings of then-obscure French philosophers to "cancel" a college speaker or impose race and sex quotas on the Academy Awards. I had no idea the term would soon migrate from the fringes of academic discourse to the center of American politics and society, used to justify everything from racial preferences in hiring, to attacks on the rule of law, to voting law changes, to attitudes toward women's sports.

It's also emerged on Wall Street and in corporate America's executive suites. In his new book The Dictatorship of Woke Capital, Political Forum vice-president Stephen Soukup argues that "wokism" is poised to transform big business and even the ruthless bottom-line-oriented world of capital markets into a machine to promote progressive policy goals.

How this transformation happened and what it might mean for the future of American society and the economy are the central themes of Soukup's short and useful, albeit incomplete, book. Unfortunately, because the rise of woke capital is rooted in social trends that have evolved over decades, trying to figure out how to reverse those trends is far more difficult than simply pointing them out. Indeed, if anything, the author underestimates the dangers associated with the rise of woke capital in society and its propensity to deepen social division and conflict.

Rise of woke capital / The first half of The Dictatorship of Woke Capital explains the intellectual and institutional background behind the woke capital movement. Soukup sees the rise of woke capital as the confluence of two different strands of history that have intertwined: the development of the woke ideology on one hand and the rise of an increasingly powerful and insulated American elite financial class on the other. He argues these elites are increasingly wielding other people's money to circumvent the democratic process and impose their parochial vision of the good society on the rest of us.

Soukup provides an accessible history of the woke ideology, starting with the roots of the movement in Marxism and its evolution through the Frankfurt School of political theory into the modern ideas of critical studies, in which the class ideas of classical Marxism give way to modern forms of identity beyond class. He identifies German-American political theorist Herbert Marcuse (1898-1979) as a particularly influential figure in bringing about this intellectual transition to the modern age. When harnessed to the revisionist Marxist thought of Italian philosopher and politician Antonio Gramsci (1891-1937), critical studies focused on the value of capturing the elite institutions of society that play a pivotal role in shaping the intellectual superstructure of society. Gramsci's strategy of producing social change by coopting the ruling institutions of society contrasted with traditional Marxism, which preached the importance of popular revolution to overturn the dominant ruling elite.

Aiding this was the growing skepticism of democratic government displayed by Woodrow Wilson and other admirers of the German administrative state. Wilson and other progressives sought to displace the unlearned amateurism of democracy with rule by trained and enlightened elites in government, business, and academia From the beginning, Soukup argues, Wilson and his contemporaries foresaw a cooperative relationship between governmental and big business elites to reinforce each other's activities. He points to the unusual structure of the Federal Reserve, which intertwines private bankers and government officials in a form of public-private elite decision making, as an early prototype of the progressive model of elite governance.

Beginning in the late 1960s and into the 1970s, these two streams of thought--woke ideology and elite governance--converged. Although manifested in multiple ways, most relevant for the current discussion is the idea of corporate "stakeholders," a diffuse set of constituencies with whom the corporation has some relationship and supposedly owes some ill-defined duties. At least initially, the development of this stakeholder theory--that the corporation might take into account the interests of a local community or employees as part of ensuring the long-term success and viability of the company--was unobjectionable. As Soukup notes, even Milton Friedman acknowledged some room for corporate judgment to look beyond short-term profitability for long-term returns. But Friedman also noted that every dollar that a corporation spends to advance a purpose other than the long-tem profitability of the company is a dollar taken from the pockets of shareholders and given to someone else. And instead of spending that money on employees, customers, or some other beneficiary, the corporation could return that money to the shareholders and let them spend it on their preferred beneficiaries.

But Soukup suggests that while Friedman nevertheless recognized the propriety of spending some corporate money to promote "stakeholder" interests, by implication the spending should relate to some long-term enlightened interest of the company and its shareholders. It is hard to see how this would extend to becoming involved in inflammatory social issues such as transgender bathroom access or voting law changes in some distant state. (See "The Problem with Politicizing Corporations," Summer 2021.)

As control over a greater and greater amount of financial wealth has been concentrated in the hands of a small group of financial firms, this has provided them with extraordinary leverage over corporations, society, and the political process. At the same time, there is growing support for the idea that these financial titans, along with corporate executives, should use ordinary people's money to pursue political and social agendas. Financial elites rotate seamlessly between government and Wall Street--most notable, during Donald Trump's administration, both the chairman of the Federal Reserve and the treasury...