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Woke Capital: A Dialectical History

The Dictatorship of Woke Capital: How Political Correctness Captured Big Business
by Stephen R. Soukup
Encounter, 2021, 196 pages

In 1654, Peter Stuyvesant, director general of New Amsterdam (later New York) barred Jews from entering the colony. Then all progressive hell broke loose. Under pressure from shareholders, the Dutch West India Company reversed Stuyvesant’s decision and grad­ually “cancelled” him.1 It was an early example of political activism in business.

Stephen R. Soukup argues in The Dictatorship of Woke Capital that the Left today has harnessed the power of business to advance its political ends. Yet “woke capitalism”—meaning capitalism that puts political goals ahead of profit, and where business forever worries about antagonizing public opinion—is nothing new. As the Stuyvesant story suggests, “woke capital” has been around for centuries. Only the ideology behind wokeness has changed.

On some level, Soukup recognizes this. He traces “socially responsible” investing as far back as John Wesley, the eighteenth-century English cleric who founded Methodism, and who told investors to steer clear of businesses that violated God’s law. Even as late as the twentieth century, some conservative investors avoided companies that made alcohol and tobacco. The difference between then and now lies in the nature of today’s wokeness—and its totality. Most major American corporations have joined with academia, elite media, and government bureaucracies to push a progressive cultural agenda.

Soukup’s book reads like an indictment, suggesting a conspiracy at work, almost forgetting that all trades have their seamy side. It brings to mind tracts written in the 1970s that accused the Rockefellers, the Trilateral Commission, and the big banks of trying to take over the world. Yet this is the wrong approach. With so many average Americans today as woke as their corporate leaders, one senses an inexor­able “woke” force moving through society, carrying America’s cor­porate leaders along with it. In fact, that force is capitalism itself.

The Dialectics of Woke Capital

Karl Marx has much to say about capitalism, but Soukup overlooks him, tracing wokeness, instead, back to Marx’s missteps. The absence of any revolution in the West along the lines Marx had predicted led to Gramsci’s view that a cultural revolution within institutions need­ed to precede the economic revolution. This led to Lukács’s position that all of society must first undergo a cultural revolution, which in turn led to Marcuse’s call for a sexual revolution and, later, censorship. The result, says Soukup, is “Cul­tural Marxism,” which, combined with identity politics, is the ideology of today’s woke. Yet if Soukup had paid more attention to Marx, he might have found a better way to explain “woke capital”—and to fight it. In a supreme irony, those seeking to advance a center-right agenda today could benefit from reading Marx.

Marx thought dialectically. What does this mean? Take a certain social phenomenon: it develops to its utmost limits, makes use of all its potentialities, creates the highest thing it can, and stops. This is called the thesis. Then comes the antithesis, a hostile force. It also unfolds to the very end, and stops. Born out of these two hostile phenomena is a third force, the synthesis, making use of the result achieved by both, and reconciling them. And society moves forward again, always forward, toward the new.

A rough dialectical history of the United States since the end of the Civil War might be said to unfold as follows, with woke capitalism the most recent entry. In 1870, most Americans worked as independent small farmers. Most business firms were also small, with one or two employees besides the owner.2 A culture of individualism and a religious ethos that gently repressed greed complemented this economy. The country prospered, yet the economy’s small scale limited how much it could produce. This was the thesis.

Hostile forces emerged in the form of robber barons who built large corporations, sometimes through deceit and manipulation. A culture of social Darwinism that equated worldly success with spirit­ual superiority replaced the older, more innocent religious ethos. Many Americans found themselves subject to both the vicissitudes of the market and business chicanery, as large companies undercut their ability to make a living as independent operators. Indeed, one of the most important changes in the U.S. economy during the second half of the nineteenth century was the dramatic increase in the size of the average enterprise, along with a reduction in the number of firms in each sector.3 The new system produced more wealth than before through improved economies of scale, yet its roisterous atmosphere created uncertainty, and it soon reached its productive limits. This was the antithesis.

Corporate America and welfare-state liberalism were the synthesis. In the first half of the twentieth century, the robber barons’ large enterprises became the tamed corporations that promised stable sala­ried employment, while the robber baron himself morphed into the harmless corporate manager, indeed a business bureaucrat. The old religion that had gently repressed greed returned in a slightly new form called the “social ethic,” which promoted the ideal of company teamwork and repressed outward displays of ambition. Meanwhile, government added another layer of stability in the form of FDIC and Social Security and, later, in the form of welfare payments, Medicare, and Medicaid.

After the Second World War, the American economy found itself launched on a great boom, yet this synthesis soon reached its productive limits. By the 1970s, large corporations promising stability had grown less flexible and innovative. Meanwhile, government spending had increased to one-third of GDP. High tax rates sustained the ex­panded welfare state, yet they also discouraged investment, while gov­ernment intervention to increase people’s purchasing power con­tributed to inflation.

A dialectical analysis explains what happened. From 1950 to 1970, welfare and entitlement programs grew from 9 percent of GDP to 15 percent4 (while military spending trended lower but ticked up during the Vietnam War). Capitalism needed a “floor” to avoid the risk posed by a demoralized and disgruntled workforce. In the form of expanded Social Security benefits, Medicare, Medicaid, federally as­sisted welfare programs, agricultural subsidies, and a minimum wage, government became an active force for personal income security. A stable political climate—a necessity for business investment—could not exist without this floor, yet the new government spending led to inflation, which discouraged business investment. It was a contradiction.

Inflation had already climbed to 4 percent on average during the late 1960s, and to 6 percent in the early 1970s, before the “oil shocks” in 1973.5 The origins of this inflation ran deeper: the synthesis was unraveling through contradiction. A century before, a spike in oil prices would have more likely caused a depression rather than inflation, as industries would have curtailed their operations and consumers cut back on their spending. A culture that prized “standing on one’s own two feet,” spurned handouts, and one that believed “what goes up must come down” would have discouraged any artificial in­crease in business or consumer purchasing power through government spending. The synthe­sis that prevailed during the 1970s, however, encouraged such spending. Its culture embraced entitlements and believed “What goes up today is likely to go up tomorrow,” leading to the kind of behavior that accelerated inflation and hastened the demise of the old synthesis.

Hostile forces—the antithesis—soon emerged in the form of upstart companies such as Microsoft, Sprint, and Apple, which spear­headed innovation. In the case of Microsoft, for example, IBM paid Bill Gates to develop an operating system for PCs almost as an afterthought, overlooking software’s potential, and allowed Gates to retain the intellectual property rights, which would fuel the rise of Microsoft.

One hostile force even carried the word “hostile” in its name. A new merger wave broke out in the 1980s that dwarfed all earlier periods of corporate consolidation, with the “hostile takeover,” once a rarity, increasingly the dominant form.6 The result was another con­tradiction of capitalism. High interest rates needed to fight inflation depressed the price of corporate shares, while the deregulation needed to boost the economy allowed corporate raiders to buy out these undervalued corporations and sell off their valuable assets. The mer­gers created new wealth, but also displaced millions of workers and middle managers. Those who kept their jobs often lost the economic security they had enjoyed with the traditional large companies. IRAs and 401(k)s gradually replaced the old company-based defined-bene­fit pension plans. When U.S. corporations threatened to move production overseas, labor’s influence weakened and private sector union membership began its long decline.

During this period, which spans the Reagan years, a new entrepreneurial culture replaced the old Social Ethic. The notion that “greed is good” justified the new economy, much as the Social Ethic had justified mid-twentieth-century corporate America and social Darwinism had justified the robber barons. Yet the entrepreneurial cul­ture’s belief in the “primacy of economic man” ignored emerging tears in the social fabric, ranging from African Americans marooned in crime-ridden cities to families stressed by the new demand that both spouses work. In the latter case, capitalism not only encouraged women to enter the workforce, but also demanded it, and benefited from it. With businesses paying relatively less to any individual worker, both spouses now had to work to maintain the middle-class lifestyle that a single wage earner could once provide—a point that both social conservatives and economic progressives, including Sena­tor Elizabeth Warren, would later focus on.7 These social strains, along with economic uncertainty, limited how much this economic organization could produce.

What has been called “progressive neoliberalism” emerged as the new synthesis, drawing from the two previous historical stages. It reached its high point during the Clinton administration. Capitalism’s rules continued to guide the economy in accordance with the “prima­cy of economic man.” Under President Clinton, for example, shareholders prospered through lower capital gains taxes and more free trade agreements. Clinton also tried to control the deficit while restricting welfare payments.

Meanwhile, in the culture, specific identity groups were targeted for support to manage tears in the social fabric. It was a variation on the old Social Ethic that had tried to help people “adjust” by attending to their feelings. Women got set-asides, while African Americans got easier access to subprime mortgages. Yet more important was the rhetorical support given to these specific groups, which didn’t hang very heavy on the corporate balance sheet. African Americans, wom­en, Hispanics, and Native Americans gained more attention and recognition—for example, in the form of “hate crime” legislation, postage stamps bearing the face of a marginalized group’s leader, or holidays named after the same—with little financial cost. These were “cultural entitlements” rather than economic entitlements, directed toward helping people feel better about themselves independent of their material condition. George H. W. Bush’s “kinder, gentler con­servatism” and George W. Bush’s “compas­sionate conservatism” operated within this tradition, as these mottos supported capitalism, while also trying to compensate people psychologically—and they did, in some nebulous way.

Yet this neoliberalism soon reached its productive limits, which is where “woke capital” comes in. The neoliberal synthesis accelerated the offshoring of manufacturing, while many of the new tech companies employed fewer people than the old large companies did. Wealth increased, but was concentrated in fewer hands, while the bottom half of the population faced increasing pressures on living standards. After 2000, weaker growth brought lower interest rates, which contributed to real estate and financial bubbles.

Enter “woke capital,” which is progressive neoliberalism’s end stage. It differs from neoliberalism primarily in the virulence and intensity of its cultural aspect, with economics remaining largely un­changed. In economics, “woke capital” continues to adhere to corporate America’s version of good capitalism. It continues neoliberalism’s support for free trade and good business relations with China, down­playing any national security risk. If necessary, it overlooks labor abuses in China and at home—a point Soukup raises in regard to Amazon’s workforce, when he notes how the company “has long been accused by former employees of treating workers poorly, with little concern for their health or well being.”8 It overlooks modest proposed increases in income taxes, especially if those taxes hobble small business competitors who cannot avoid them as easily as multinationals. It supports easy money from the Federal Reserve, which buoys equity prices. “Zombie” corporations, in particular, which in 2020 amounted to roughly 20 percent of corporate America, especially support the Federal Reserve’s corporate debt pur­chases to help them stave off bankruptcy.

It is woke capital’s cultural aspect that departs dramatically from earlier forms of neoliberalism. It is strongly antidemocratic, for woke capital must repress democracy. Its productive potential has already reached its limits, so it cannot legitimate itself through economic performance. Indeed, some economists call low growth under woke capitalism “the new normal.” The economy has experienced low growth since George W. Bush’s second term. In the years immediately before the 2008 Great Recession, annual GDP growth hovered around 2 percent. Under Obama, GDP growth remained near 2 percent. Even under Trump, a business-friendly Republican, GDP never hit 3 percent annual growth, averaging 2.5 percent before the pandemic.9 Compare this with the 4 percent annual growth during neoliberalism’s heyday under the Clinton administration.

Americans feel this low growth in their everyday lives. One-third of college graduates today hold jobs that do not require a college degree. High school graduates working in fields with low barriers to entry, such as construction, the building trades, or administrative services, fear losing their jobs to immigrants—and woke capital favors unrestricted immigration. Even college graduates worry. The case of IT workers at Disney who lost their jobs to Indian nationals in 2014, and who were forced to train their replacements, has not been forgotten.10 Meanwhile, roughly half of all Americans aged eighteen to twenty-nine were living at home with a parent even before the pan­demic, held back by a low-growth economy.11 Woke capital cannot coexist with democracy be­cause it stifles too many people in their productive lives—and those people rebel.

Soukup accurately traces this antidemocratic trend, citing two phenomena that have grown over the years. First, the old American ideal of value-neutral public administrators has given way to the new belief that public servants should be agents of change. Meanwhile, a so-called science of public administration has declared these change agents to be “experts,” thereby shielding their decisions from public input. The resultant shift in power from Congress to nonelected agencies and judges has been well-documented, leading to rulings by fiat on social issues, such as abortion, and economic issues, such as energy exploration and transport. Second, on the basis of arguments like critical race theory, speech is repressed in the name of genuine tolerance.

Both public and private sectors work in tandem to impose woke capital’s ideology, as Soukup notes. In state institutions, this occurs through public school curricula, faculty diversity oaths at public uni­versities, and language restrictions in governmental agencies. In the private sector, it occurs through mandatory corporate diversity seminars, in which, in extreme cases, whites are forced to remain silent while also being accused of racism.12 Those who do not conform to the new speech codes are fired, or sometimes “canceled” altogether.

The Contradictions of Woke Capital

Marx’s description of nineteenth-century monarchial bourgeois abso­lutism in The Eighteenth Brumaire of Louis Bonaparte has curious parallels with today’s antidemocratic tendencies. During the French Revolution and under Napoleon I, the state bureaucracy was only the means of preparing the class rule of the bourgeoisie, according to Marx. During the Restoration, under Louis Philippe, it was the instrument of the ruling class. But under Louis Bonaparte, the state made itself completely independent—what some conservatives see in the “deep state” of today. The reign of Louis Bonaparte also saw immediate and dramatic censorship—again, not unlike today. In mid-nineteenth-century France, these events took place during a period of 2 percent annual economic growth—with France performing worse than its neighbors—and when 10 percent of the population owned 85 percent of the wealth.13

The French bourgeoisie faced a tough situation, not unlike that faced by today’s American upper-middle class. As Marx observed, they feared the stupidity of the masses when the masses were too conservative—the “deplorables” of their day—yet they also feared the insight of the masses when the latter were too revolutionary—the “socialists.” They clung to Bonaparte because he promised “order.” Bonaparte censored, tried to eliminate the secret ballot, and encouraged mayors to penalize citizens if they failed to vote in an election designed to keep him in office (the last idea eerily similar to a recent proposal by a Democratic Connecticut legislator). Yet the French bourgeoisie acquiesced because they needed an all-powerful state allied with an all-powerful business community to protect them—even if the rhetoric sometimes went against them. Bonaparte proclaimed himself the representative of the bourgeoisie, yet at other times proclaimed himself the representative of the poor, and humiliated the bourgeoisie. Beneath the confused and contradictory situation, simultaneously farcical and imperious, was a desperate desire on the part of the bourgeoisie to maintain the material order amid low economic growth.

And so it is under woke capitalism, which encompasses state, business, media, and cultural institutions, all working together to preserve a material order that hangs by a thread. Woke leaders find themselves caught up in the same contradiction as Bonaparte, who, Marx wrote, soon discovered how hard it is to give to one class without taking from another in a low-growth economy. White woke leaders attack charter schools, for example, but African Americans and Hispanics support charter schools at much higher rates, so woke leaders must compensate nonwhites in other ways, typically through rhetoric condemning whiteness. Likewise, while dissolving people’s employment in the energy sector, or promoting unlimited immigration, or pushing small businesses into bankruptcy under cover of the pandemic, woke leaders hold out the promise of future “green jobs.” This recalls the strategy of Marx’s Bonaparte, who dissolved actual workers’ associations, but then promised miracles of association in the future.

The contradictions of woke capital are embodied in the so-called California model. This economy is defined by a small upper class of tech executives, largely white, and the doctors, lawyers, and accountants who service them, also largely white; then a small middle class composed mostly of government employees; and at the bottom a large mass of working poor, typically nonwhite. All this makes California today one of the most classist and racially unequal societies in the United States, despite proclaiming itself to be at the vanguard of cultural progressivism.

A Futile Response

Nevertheless, Soukup wastes energy in how he fights back, as do many conservatives. He calls out woke capitalists, including J.P. Morgan’s Jamie Dimon and Disney’s Bob Iger, for their greed. Yet to the extent that they are greedy, such moralizing accomplishes nothing. As Marx explained, people living in a capitalist society cannot help being greedy. Shaming them into changing their mindsets, by calling their riches “filthy,” as Soukup does, is futile. For it is not greed that causes capitalism, according to Marx, but capitalism that causes greed. The only way to change consciousness—to get rid of greed—Marx argued, is not to moralize but to destroy the capitalist system. But that, too, is a futile gesture and will not happen in the United States. Every previously existing communist society has failed to improve people’s material standard of living when compared to a capitalist one.

Soukup is correct to point out that woke capitalists are hypocritical. Woke capitalists boycott companies that lack diversity in the boardroom, but then overlook egregious human rights violations in China and other countries. They rail against sexual assault when it involves Republicans but often ignore the issue when it involves Democrats. They protest the murder of George Floyd but then ignore the thousands of African Americans killed annually in the nation’s cities, while also overlooking the destruction of nonwhite small businesses during the recent BLM protests.

But trying to shame the woke into being less hypocritical is a waste of time. Woke capitalists cannot avoid being hypocritical, just as the nineteenth-century French bourgeoisie could not avoid being hypocritical. Their hypocrisy arises from their politics, which arises from how they make their living—although not necessarily from how much they make. Many woke CEOs and social workers, for example, embrace the same woke ideology, as both benefit in their own way from the system, even though CEOs earn more. Both groups need hypocrisy to conceal from themselves how the woke system is rigged on their behalf, and even violates their own sense of justice and fairness.

Marx observed similar hypocrisy in nineteenth-century France, in how the bourgeoisie clung to self-deceptions to conceal from themselves the reality of their system while also maintaining their enthusiasm for it. A favorite method of the bourgeoisie, he observed, was to grab onto heroes and villains of the past, to resurrect old names, old dates, and old edicts, thereby reliving old struggles to glorify their situation in the present. The bourgeoisie supported Bonaparte’s police state to preserve their way of life in the present, while also, Marx teased, imagining themselves victims in the era of the ancient Pharaohs, daily bemoaning the hard labor they had to perform in the Ethiopian mines and the long whips of their overseers.

It is no different today, as the woke imagine themselves victims in struggles long past while supporting harmful economic and antidemocratic policies. They mentally transport themselves into long-past epochs, finding heroes, for example, in the suffragettes of the late nineteenth century, from whom they borrow speech and imagery, as if the problems of disenfranchised pioneer women and today’s woke female attorneys and business executives were the same. They imagine themselves fighting in the Second World War, at Bataan or Guadalcanal, against fascism. Some woke “social justice warriors” were so bold as to demand that they be classified as military veterans and be given free health care at Veterans Affairs facilities.14

As Marx would say, the woke do all this to conceal social contradictions from themselves that would otherwise tear their consciences apart. When demanding open borders, they invoke the spirit of Jesus, but they have nothing to say to the worker who fears for his or her livelihood. They invoke the spirit of Dr. Martin Luther King and condemn violence, but they overlook antifa smashing windows and assaulting inno­cents. It is no easy task for the woke to twist themselves into a pretzel, and to carry on in that position, yet they must. Their ideology preserves their consciences, as well as their livelihoods. It justifies the low-growth material order in which they earn their living. For many who make a mediocre living, it justifies their resentments, and comforts them in a different way.

No less futile is Soukup’s call to make business less political. “Depoliticize business. Depoliticize markets. Back to neutral,” Soukup writes.15 Yet everything is political, as Marx observed (along with many others). Business only seems apolitical during calm moments of synthesis, when capitalism follows the smooth highway. Most people agree on the big issues at such times, and politics seems to disappear. But politics is always there; it’s just less obvious, and it quickly re­turns to prominence when the synthesis unravels. In the 1990s, during the peak of the neoliberal synthesis, the establishment agreed that Republican ideas should run the economy while Democratic ideas should run the culture, leaving just a few marginal issues to debate, such as the ethics of stem cell research and the Monica Lewinsky scandal. In foreign policy, Francis Fukuyama wrote “The End of History,” suggesting that liberal democracy had triumphed, and that the great debate over the best regime was over. A moment of synthesis allowed for a broad consensus that hid politics—the 1990s became known as “the holiday from history.” Yet politics returned when the contradictions of capitalism returned.

Building a New Synthesis

Rather than waste time condemning politics or trying to convert the woke by shaming them, critics of woke capital should focus more on building the new synthesis. Woke capitalism will eventually undermine itself, as all capitalist forms do. It is already happening. Keeping wages and prices low, whether through open borders or other means, sustains business investment, but it also discourages consumption, as workers fear for their jobs, earn less money, and save more, thereby inhibiting business investment, which manifests itself in persistent deflationary trends despite a decade of massive government stimulus. Woke capitalism appeases disadvantaged minorities through inexpensive cultural stratagems, such as tearing down historical statues or changing the names of high schools, thereby distracting attention from more material issues and keeping woke capitalism safe. Yet the same identity politics also weakens capitalism. As Marx observed with respect to religion and nationalism, identity politics introduces noneconomic drives into busi­ness, causing distortions and inefficiencies.

Trumpism is not the new synthesis. It is at best the antithesis. It is woke capitalism’s opposite. Woke capitalism supports free trade; Trumpism supports protectionism. Woke capitalism supports black identity politics; Trumpism supports white identity politics. Woke capitalism distrusts free speech; Trumpism supports free speech.

Any new synthesis will have to unleash some new productive potential. Its contours are not yet entirely visible, but it is likely that government will play a larger role than under neoliberalism, while corporate structures and incentives will need to be shifted away from monopoly and financialization. The pendulum will probably need to swing back toward manufacturing sectors and small businesses. In any event, building out a healthier economy is the only effective ave­nue for displacing woke capital.

In the new synthesis, identity politics will likely fade as nonwhites continue to assimilate, based on current demographic trends, rendering today’s racial classifications, so essential to identity politics, irrele­vant.16 Just as neoliberal and woke culture turned gender into a social construct, so will the new synthesis, spurred on by demographics, turn race into one.

Capitalism is everywhere, in everything. To speak of capitalism’s late stage, as some people do, makes no sense, for capitalism is an infinite spiral, a winding staircase. There is no final stage. American moderates and conservatives should take heart: “woke capital” is not forever. The next historical stage beckons.

This article originally appeared in American Affairs Volume V, Number 3 (Fall 2021): 200–11.

1 Alan J. Singer, “The Case against Peter Stuyvesant,” New York Almanack, December 16, 2018.

2 Robert Heilbroner, The Economic Transformation of America Since 1865 (New York: Harcourt Brace, 1994), 18.

3 Heilbroner, Economic Transformation, 45.

4 Heilbroner, Economic Transformation, 187.

5 Heilbroner, Economic Transformation,  193.

6 Heilbroner, Economic Transformation, 207.

7 For example, see Elizabeth Warren and Amelia Warren Tyagi,  The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke (New York: Basic Books, 2003).

8 Stephen R. Soukup, The Dictatorship of Woke Capital: How Political Correctness Captured Big Business (New York: Encounter, 2021), 165.

9 Joseph Zeballos-Roig, “Trump Boasts the Economy Reached Historic Heights during His First Term. Here Are 9 Charts Showing How It Stacks Up to the Obama and Bush Presidencies,” Business Insider, October 22, 2020.

10 Gabrielle Russon, “Legal Fight Ends for Disney IT Workers Who Trained Foreign Replacements,” Orlando Sentinel, May 9, 2018.

11 Richard Fry, Jeffrey S. Passel, and D’Vera Cohn, “A Majority of Young Adults in the U.S. Live with Their Parents for the First Time since the Great Depression,” Pew Research Center, September 4, 2020.

12 Christopher F. Rufo, “Obscene Federal ‘Diversity Training’ Scam Prospers—Even under Trump,” New York Post, July 16, 2020.

13 Rondo E. Cameron, “Economic Growth and Stagnation in France, 1815–1914,” Journal of Modern History 30, no. 1 (March 1958): 1–13.

14 Dr. Warren J. Blumenfeld, “Is It Time to Expand the Definition of Veteran,” lgbtq Nation, September 29, 2018.

15 Soukup, Dictatorship of Woke Capital, 170.

16 John J. Miller, “‘Majority Minority’ America? Don’t Bet on It,” Wall Street Journal, February 5, 2021.

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