Woke capitalism: a contradiction in terms.
Woke capitalism is invading the boardrooms of many of this country’s most iconic companies. The latest example involves the beer brand Bud Light and its involvement with biological male and transgender activist Dylan Mulvaney.
According to Fox Business, in the week following the company’s social media efforts at helping Mulvaney celebrate “365 days of being a girl,” sales of Anheuser Busch beer brands cratered – dropping by as much as 50 percent.
Another recent example is the failure last month of Silicon Valley Bank in California. Because SVB is located in the very epicenter of leftist politics in the United States, it’s little surprise that SVB’s management was keen on diversity, equity and inclusion – a.k.a. “DEI.” The bank’s website had an entire section dedicated to the espousal of its DEI vision and its commitment to hiring practices governed by DEI principles as a primary consideration in employee candidate selection.
Of course, much (most) of the media are falling all over themselves to say that SVB collapsed solely because of the bank’s failure to properly manage its liquidity. That is technically true. The bank’s collapse is a textbook example of bad banking. When your short-term deposits are backed by investment in low-interest Treasury bonds with long maturity dates, and when the value of those bonds goes down due to an increase in interest rates, a liquidity crisis is almost inevitable.
But what the media fails to consider is why such a basic banking principle escaped the notice of the management at SVB. Neither the Biden administration nor the media dares to explore the very real possibility that SVB management was so fixated on progressive social issues that they devoted too little time and attention to the basics of running a bank.
The examples of Bud Light and Silicon Valley Bank aren’t isolated. Other big brands like Amazon, Apple and Google are jumping into the DEI fray. Much of the “D” component of DEI, i.e. diversity, revolves around LGBTQ and transgender issues.
As we mentioned, sales of Anheuser Busch beer brands are suffering because of their woke marketing of Bud Light. The Walt Disney Company has seen a near fifty percent drop in its share price since it jumped into the gender fracas by producing trans- and gay-themed movies for children.
The problem with woke capitalism is that it is almost always at odds with sound business practice. It’s hard enough to succeed in a competitive marketplace. You need good people and good management who are singular in their focus on producing a quality product while controlling costs. Among its pernicious effects, wokeness leads to diversity hiring that prioritizes the ticking of this or that socially conscious box over putting the best person in place to do the work necessary to bring about success.
Silicon Valley Bank and Budweiser are the latest examples of what happens when wokeness crowds out sound, focused, results-oriented management. They won’t be the last.
All the while, America will continue to lose its once formidable competitive advantage in an increasingly competitive world marketplace.