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Woke Capitalism Isn’t a Thing—It’s Many Things
Even a narrow set of hypotheticals shows the complexity of questions associated with politicized corporate activism
By Brian Knight
I recently had the pleasure of being a guest on “The Great Antidote” podcast, hosted by Juliette Sellgren, where we talked about “woke capitalism.” Listening to our conversation, I realize there are some things I wish I had been clearer about. But one thing I said, and which I stand by, is that “woke capital” isn’t one thing—it's many things. (In fact, I told Juliette that I should write a piece with that title, and here it is!) The problem is that discussions of “woke capitalism” often conflate many distinct actions. These distinctions matter for how we view a certain action, and what, if any, response is appropriate.
Perhaps the most recent high-profile example of politicized capitalism (which is a better term) is Disney announcing that it would work to oppose laws similar to legislation passed in Florida limiting how some topics are discussed in schools. In response, Florida’s Republican governor Ron DeSantis moved to strip Disney of its special tax district in the state. The governor’s action has led to significant disagreement among people who all profess to be pro-liberty and pro-market as to whether such an act is appropriate.
And it turns out that whether DeSantis’ action was justified has a lot to do with what harm, if any, Disney caused, to whom and how, and whether the response to that harm should involve government action. And it doesn’t stop with Disney because no two cases are necessarily alike.
To illustrate this point, let me offer a hypothetical: Imagine it is June, Pride Month, in a crowded mall in an affluent suburb. Many of the storefronts are festooned with rainbow patterns and images of LGBTQ+ models. In one of those stores, called “Hot Buttons,” a clothing retailer focused on the 15-35 demographic, there is a clerk named Jane, who holds conservative religious beliefs. In which of the following cases, if any, should it be acceptable for her employer to fire her?
Jane refuses to get clothes for a customer who identifies as a certain gender because Jane believes it does not match with their birth sex. She is fired for refusing to follow the store policy of not discriminating against customers based on gender identity.
Jane refuses to wear a “Love Is Love” badge as part of her uniform when ordered to by Hot Buttons management because she disagrees with the implications due to her religious convictions. She is otherwise happy to fulfill any role and serve any customer to the best of her ability. She is fired because the store owner considers her position bigoted.
Same as #2, except the Hot Buttons’ owner is indifferent to the underlying substantive issue, instead firing Jane for insubordination because she refuses to wear the badge in support of the store’s advertising campaign aimed at aligning itself with a cause popular with its clientele.
Same as #3, but Jane’s co-workers refuse to work with her, and the owner fires Jane because he believes Jane can no longer be effective in her job.
Jane wears the “love” badge and ably serves all customers but attends a school board meeting on her own time and argues, passionately but respectfully, that student athletes should only be allowed to compete with others of the same birth sex. Hot Buttons’ owner reads news coverage of the meeting, deems Jane’s views to be bigoted and fires her.
Same as #5, except a customer recognizes Jane at the school board meeting and posts her speech on social media, vowing to boycott the store unless Jane is fired. The video goes viral, and the store owner, correctly believing that Jane is now a liability for the store, fires her to placate customers.
Same as #6, but the customer explicitly states that part of their motivation is to intimidate others who share Jane’s viewpoint in order to suppress that speech.
Same as #7, but this time it is the Hot Buttons owner whose explicit goal is chilling similar speech.
These hypotheticals show just a fraction of the complexity that goes into questions of “woke capitalism.” All of the above cases involve employment decisions, some relating to Jane’s job performance but others to her outside activities. Some examples go to Jane’s ability to speak freely or, arguably, not be compelled to speak (by wearing a button), while others are more mundane. In some cases, the Hot Buttons’ owner is motivated by his own beliefs; in others he seeks to placate customers for purely business reasons. In still other cases, the motivation to fire Jane appears to be a desire not to associate with her, while in others it is to affect the broader political debate.
And this is just the tip of the iceberg. What if, instead of being motivated by religious beliefs, Jane is motivated by atheistic natural philosophy? What if, instead of a school board meeting, Jane is overheard eating in a restaurant? What if, instead of speaking respectfully at the school board meeting, Jane is hostile or even derogatory? What if Hot Buttons is a publicly traded firm, so instead of the owner deciding to fire Jane, it is a store manager with a fiduciary duty to shareholders?
What if, instead of firing anyone, the owner of a private firm announces they will use firm funds to support or oppose candidates or legislation? What if, instead of an owner, it is a manager of a public firm who decides to fire Jane or spend firm resources? What if instead of firing an employee the firm refuses to do business with someone? What if instead of a clothing store, it is a bank, airline, hospital or some other essential and/or highly government-subsidized industry? What if the employer treats employees differently for similar conduct based on what side of an issue they are on? What if the motives are mixed or unclear?
It is possible that none of this matters and the answer is the same in every case. But reasonable arguments can be made that how we should feel about what happened, and the appropriate legal or regulatory response, will vary based on the facts, circumstances and competing values at play. Further, to the extent some government intervention is justified, what those interventions should look like depends on what happened and who is affected. Is there a harm that should be legally cognizable, and if so, what should redress be?
For example, is there a cognizable harm to Jane in scenario #1, or is Jane just refusing to do her job, which is fetching clothes for customers to try on? Is wearing a badge part of her job, as in examples #2, #3 and #4, even if it contains a political and ethical statement she disagrees with and is not otherwise essential to her ability to perform her duties? Should it matter if the company is using the statement as a marketing strategy or if it reflects the moral views they want their employees to embrace? In other words, has Jane been harmed in some way, or is this just part of what she signed up for?
What if instead of “Love Is Love” the badge says “Jesus is Lord” or “Make America Great Again” or “There is no God”? Should co-workers or customers have an effective veto over who they work with for normative or culture fit reasons, or should the logic of anti-discrimination law apply where co-worker and employee preferences against a protected class or characteristic are generally not a valid excuse for termination?
Even if you believe that employers should have broad authority to dictate workplace conduct, what about hypotheticals #5-#8? Should employers be able to fire employees for expressing political opinions outside of the workplace, including while petitioning government assemblies? Should it matter if the choice on the part of the firm is purely economic? Should it matter if the intent, by whomever is pushing the issue, is to suppress political speech in pursuit of a political outcome?
To be sure, tensions between economic power and political participation, including speech, are not new. As UCLA legal scholar Eugene Volokh explains, economic coercion targeting votes was prohibited by some states as early as 1839, and several states have laws protecting employees’ right to speak to various degrees. These laws are grounded in the need to protect the integrity of both our elections and our broader political process. But Volokh also notes some of the concerns with such laws infringing on freedom of association (the idea that the ability to choose who one enters into relationships with is an important part of individual liberty, albeit not without limitation) and the firm’s desire to please customers. So how should we balance these concerns, and should phenomena like social media and increasing polarization change our calculus?
At what point, if any, should the state step in, and what should it do? In all the hypotheticals above, the answer could be something like “make the store rehire Jane or pay her damages.” But it could also be “take away the store’s license to do business” or “revoke a special tax district.” And in a different scenario, where the employer is spending money rather than firing people, should it matter if the firm is closely held, private with a limited number of shareholders, or a public company with millions of dispersed investors?
What action, if any, the government should take is a central question. If the government response is unduly muted, it is possible important rights that the government should protect will remain under threat. Conversely, an excessive or poorly designed response will risk not only harm to the legitimate rights of employers but also broader damage to the market system and rule of law.
My point is not to provide answers but to show, with a fairly narrow set of hypotheticals, the complexity of questions associated with politicized corporate activism. I’ve said previously that we need a taxonomy of “woke” capitalism to sort and assess the different issues and respond accordingly. In the meantime, unless corporate politicization recedes significantly on its own (and it might) we face the risk that both politics and commerce will be misused.