Opinion | Woke capitalism: Revolution or gimmick?
February 26, 2020
Consumers’ increasing awareness of the problems of capitalism has resulted in a movement called “woke capitalism.” The term refers to businesses’ increasing awareness of public interest issues and their promotion of progressive social justice campaigns. “Woke” businesses are still profit-driven, but they seek to convey messages of greater social concern. Prominent among them are brands like Nike and Starbucks, who frequently use their brand influence to advocate for greater awareness of environmentalism and diseases like HIV.
However, evidence of the tangible social impact these campaigns have in practice is sketchy. Juxtaposing businesses’ incentives and the public interest begs a question of priority: Which of these should take the drivers’ seat in making business decisions? For businesses, maximizing profits is still a fundamental principle, and any social messages have to serve commercial purposes. This inevitably leads to the discomfort of capitalizing on the sentiments of people who have actual stakes in these issues.
Pepsi’s 2017 commercial dramatizing police brutality can illustrate this point. Pepsi’s commercial was an adaptation of the Black Lives Matter protest in Baton Rouge, Louisiana. However, the commercial wound up looking like a caricature of a social revolution as a party. Kendall Jenner replaced Iesha Evans, the African American woman in the famous picture from the protest, by handing a can of Pepsi to the police, which immediately put an end to the confrontation. This contrasts with the actual protest. The ease with which the problem is solved with a soda (according to Pepsi) taints the actual struggle of societal movement. The commercial stirred considerable outrage after being aired, and Pepsi eventually had to take it down.
It is obvious Pepsi doesn’t want to promote concrete social changes. Underlying the rise of “woke” businesses are incentives to gain publicity and monetize value. With people’s growing awareness of social justice, consumers today also have concerns about brands’ contribution to the public cause. Knowing this, businesses aim to take advantage of this new consumer culture, as an increasing number of consumers are willing to pay for these liberal values.
It is one of the oldest tricks in the business playbook to bundle products with profitable values. De Beers Group managed to create a diamond industry out of thin air by associating the non-scarce carbonized rocks with people’s yearning for eternal love. Various high fashion brands appropriate street and hip-hop cultures to target young people’s maverick — but high-end — demands. Nike obtains its dominating influence in sports through branding itself as the champion of sportsmanship and athleticism.
But this time, consumerism has manifested itself as liberal in its politics and allows corporations to profit from values such as gender and racial equality. It will inevitably offend people with those values if companies don’t consider the implications of the messages they convey. This is not to say that these business strategies are unjustifiable. In a democratic society, people don’t have to be held accountable for all of their motives, and profit-driven incentives guarantee an efficient, functioning market.
But businesses should be cautious in utilizing important social values to gain customers. First, they shouldn’t make a profit by leveraging public sensibility. Without a sufficient understanding of the social message they convey, they can potentially cause harm to the group the message affects. Second, in an age in which capitalism desperately needs to be reformed, businesses should be genuinely “woke” and stay conscious for the long-term benefit of a more cohesive society, instead of putting up shows to appease increasingly socially conscious consumers. Legitimately conscious companies should align business interests with the public interest, and give the idea of “stakeholders” a broader interpretation. This would mean business leaders are not just responsible for their direct shareholders but also their employees and people affected by externalities.
The belief that businesses should have public interest at heart is not entirely a new idea, but they have to go above and beyond slogans and propaganda and make genuine efforts to reshape corporate culture. This requires business leaders to start engaging in conversations about cooperating for long-term and sustainable developments to avoid falling into the “prisoner’s dilemma,” a lose-lose equilibrium in which everyone makes an effort in their own self-interest, but nobody gains. This inefficient scenario sounds frighteningly similar to the economic situation we have today.
Yutong is a senior in LAS.