Woke capitalism — the last step in the left’s ‘long march through the institutions’?
So-called woke capitalism is all around us — and you may very well be helping to finance it.
Why are Marxist progressives targeting big companies and corporate boardrooms, and how are they doing so?
To understand the “why,” you must become familiar with the early 20th century Italian Marxist political philosopher Antonio Gramsci.
Gramsci posited that in America there existed a “cultural hegemony,” which was how he referred to the prevailing ideology in a society. He argued that capitalism in the U.S was favored in large part because nongovernment cultural institutions upheld “bourgeois values” to help make capitalism widely accepted. Institutions such as academia, the media, the church, the entertainment industry, social clubs, and big businesses promoted these bourgeois values, providing protection from political opposition to capitalism.
To usher in a Marxist revolution and overthrow the capitalist system, Gramsci argued, first the communists had to take control of the cultural institutions and in turn dictate the prevailing ideology of society. This effort was labeled the “long march through the institutions.”
You may have never heard of Gramsci, but he was highly influential among Marxists, and in particular caught the attention of the members of the Frankfurt School — the group widely cited as shepherding in “cultural Marxism” to America.
We see the results today of that march. Universities, public education, the media, social media, Hollywood, etc. are run by progressive Marxists, and as such control the vast majority of the flow of information and ideas, especially to the youth.
One of the last remaining cultural institutions not coopted by the leftists, however, had been big businesses and corporate boardrooms.
Completing the long march through the institutions in order to assume complete control over our cultural hegemony is the “why” of woke capitalism. Now on to the “how.”
ESG stands for “Environment, Social, and Governance” and represents “standards” created to evaluate companies on their social impact, rather than profitability.
In short, the “environment” component includes metrics like GHG emissions reductions and a company’s use of renewable energy, the “social” component focuses on workforce diversity and income equality, and “governance” measures company values and evaluates which public policies the company publicly supports or opposes.
ESG’s origin story can be traced back to a 1994 letter sent by then–United Nations Secretary General Kofi Annan to more than 50 CEOs of major financial institutions. The letter implored the CEOs to participate in a joint initiative as part of a UN Global Compact and with the support of the International Finance Corporation. The letter argued that “embedding environmental, social and governance factors in the capital markets makes good business sense and leads to more sustainable markets and better outcomes for societies.”
In more direct terms, the ESG effort’s goal was to leverage financial power to compel companies to become more socially progressive.
The effort has enjoyed tremendous success.
According to this Harvard Law School report, “Ownership of public companies is increasingly concentrated among a handful of large institutions,” and “As part of this shift, Blackrock, Vanguard, and State Street — ‘the Big Three’—now together hold about 25% voting power across the S&P 500” — and one of the three is the largest shareholderof 88% of companies on the S&P 500.
These “big three” utilize ESG scores to help determine their investments. In short, your company must have a satisfactory ESG score in order to get funding from these financial giants. Blackrock alone has $9 trillion in assets under management globally. Investment from these big three can make or break a company and their stock price.
Instead of focusing on profitability, companies need to meet ESG standards.
Hello, woke capitalism.
And to be sure, this is not a natural, market-based phenomenon. ESG and the big three are highly political in nature. BlackRock executives spent time in the Obama administration and now hold key positions in the Biden administration. Very recently, the Securities and Exchange Commission proposed rules to force companies to disclose ESG metrics.
Indeed, a leading international “responsible investment” organization brags that “there are over 650 policy tools and guidance and more than 300 policy revisions which support, encourage or require investors to consider all long-term value drivers, including ESG factors.”
So, how are you possibly helping to fund woke capitalism?
Blackrock, Vanguard, etc. manage many major index funds and exchange-traded funds, many of which you may likely find in your 401k or investment portfolio.
ESG is the Marxists’ tool to complete their long march through the institutions. The unholy alliance of big government and big finance is their means to weaponize the finance industry to bring businesses to heel.
But that alliance is no match for we the people. Pull any investments you have that are managed by the “big three,” and refuse to give your consumer dollars to companies espousing values you abhor.
We have the power to turn back this latest step in the left’s long march by insisting “go woke, go broke.”
Brian Balfour is senior vice president of research for the John Locke Foundation.