A survey by Frank Luntz, the American pollster, published this week by the Centre for Policy Studies (CPS), contains some striking data. They cover a wide range of subjects relating to politics, economics and the culture wars. There are sobering conclusions to be drawn from these findings not only by politicians and economists, but also by corporate boardrooms, where they will have a chilling effect; companies will ignore them at their peril.
Only nine per cent of voters thought business leaders should prioritise speaking out on important social issues and just 10 per cent believed companies should express views on controversial social or political topics. Only 18 per cent of respondents considered themselves “woke”. Out of a list of 18 ideological options, wokeism was selected as the third most concerning issue. Although an alarming 26 per cent saw “cancel culture” as a good thing, 64 per cent thought it had gone too far and that people should be able to express themselves without fear of the consequences.
For the corporate world, there are some very sobering alarm signals being beamed out from the survey. If only 10 per cent of the public want companies to express views on social or political topics, why are more and more boardrooms lining up to become belligerents in the culture wars? Business always had to contend with the “tax-dodging, hard-faced capitalists” caricature from the Left; now, however, its embrace of woke extremism has earned it more hostile and determined enemies on the Right, their aggression sharpened by the perceived betrayal by a natural ally.
At Goldman Sachs’ annual meeting last April, a shareholder demanded to know why the bank was supporting Marxists against the capitalist policies that had made it a powerhouse. Had its board been taken over by “the far-left woke mob”? That small straw in the wind signalled the incipient revolt of mainstream America against woke corporations. Between April and May, a group called 2ndVote Advisers reported its two exchange traded funds for “unwoke investors” grew from $6m to $25m.
The politicisation of finance is a serious threat to activist companies. While the largest American fortunes – the Bezos, Buffett, Gates, et al. cash mountains – are woke, there is still an enormous amount of less high-profile wealth in America that is conservative-owned. Beyond that, and even more important, is the purchasing power of nearly 300 million American consumers. It might be modest at the individual level, but collectively it is the pool of cash that businesses need to tap into for post-pandemic recovery. Alienating the public shuts off access to that essential resource.
Businesses must be insane to ignore consumer sensibilities. In retrospect, the Target corporation, America’s eighth-largest retailer, was the canary in the coal-mine for detecting consumer backlash. In 2016 Target adopted a policy of allowing men who identified as women to use female lavatories and changing rooms in its stores. In response, the American Family Association (AFA) organised a boycott of Target stores. More than 1.5 million people signed a pledge to observe the boycott.
The effect, which Target continued desperately to deny, was disastrous for the company. Polls reported a fall from 42 per cent to 38 per cent of consumers intending to shop at Target. During the three remaining quarters of 2016, sales slumped by 6 per cent year-on-year. Target’s stock fell by more than 22 per cent – from $82.76 a share to $64 – between April 2016 and the end of 2017, slashing around $10bn from the company’s value on Wall Street. Target pleaded market conditions – nothing to do with the boycott – yet companies like Walmart held steady.
If the boycott was not responsible, why did Target spend $20m on installing a third set of private, single-stall locking lavatories in its stores, in an attempted compromise that provocatively offered these limited facilities to mainstream customers, leaving the main facilities unsafe for women? The high-profile incidents involving voyeurs and sexual harassment at Target stores that occurred during the controversy did not help the company’s image. Two major expansion projects entitled “Store of the Future” and “Goldfish” were both abruptly abandoned.
Between 2016 and 2017 Target’s revenue fell from $73.7bn to $69.4bn. Even if not all of that $4.3bn decline was due to the boycott, the bulk of it must have been, since no other major cause can persuasively be presented. Although the company never acknowledged its policy was a bad one, only that the aggressive publication of its policy had been a mistake, the CEO did ruefully admit: “Target didn’t adequately assess the risk, and the ensuing backlash was self-inflicted.”
At the time, the Target boycott was regarded as a startlingly successful consumer initiative, but as a one-off event. Now, with increasingly woke corporations provoking the outrage of consumers, it begins to assume the character of a pilot project about to be widely replicated. In America, which is ahead of Britain in reacting to woke aggression, conservatives are mobilising to punish boardroom Marxists.
When the already troubled Coca Cola company, after first telling its employees to “try to be less white” (imagine the reaction to the corollary of that instruction), went on to attack Georgia’s legislation to prevent electoral fraud and demanded ethnic quotas in outside law firms handling its business, the resulting consumer boycott of its products forced a hasty retreat and the resignation of the author of the diversity quotas scheme. Other boardrooms that had been planning woke initiatives put them on hold.
They were wise to do so, for a massive backlash against woke corporations is building. A conservative group named Consumers Research has launched an advertising campaign against woke companies, including Coca Cola, American Airlines and Nike. Polls show that only 39 per cent of Republicans – the natural party of business – now trust corporate America.
What on earth possessed businesses, in America or Britain, to imagine they could cosy up to their implacable Marxist enemies, while insulting their conservative customers with impunity? For so long as trading has existed, its golden rule has been “The customer comes first.” Endless pains were taken to consolidate and expand the customer base. Politics was always recognised as toxic in business. A couple of generations ago, Conservative canvassers were routinely warned not to embarrass shopkeepers by offering them political posters for display.
Market analysts, advertising gurus and PR experts, all highly paid, burned midnight oil trying to devise any approach that consumers might find seductive. Today, with business facing a struggle for survival in a devastated post-pandemic market place and companies more vulnerable than ever before, eunuch boards defer to the demands of the woke mob, centred on delusional HR departments, to adopt stances that will alienate large numbers of consumers. In author John Ringo’s telling catch phrase: “Get woke, go broke.”
This is not chiefly a crisis of Marxist infiltration, but of boards staffed by directors so stupid and useless that they cannot recognise the kamikaze effects of breaking the golden rule of keeping customers on side at all costs. Anything that is remotely controversial will suppress business by alienating a percentage of consumers. Even one per cent should be unacceptable to a responsible management which should recognise its responsibility is to deliver profits ethically, not to indulge in social engineering.
Like all market activity, this issue will reduce to Darwinian selection, with those who keep firmly to their proper remit surviving, at the expense of those pseudo-capitalists who attempt to gain esteem from a far left that will never abandon its ambition to destroy them. These virtue-signalling corporations are rampantly hypocritical, routinely exposed for sourcing from unethical supply chains, currying favour with China by never denouncing its human rights abuses, and so on.
But consumers are now sufficiently provoked and vengeful, with access to information, organisation and solidarity on the internet, to punish these firms by boycotting their goods and services. In the UK, this will be a kind of Brexit II, and it will be equally determined and disastrous for the woke establishment.