Woke Capitalism’s Tragedy of the Commons

The Mouse is in trouble. In April, Republican Governor of Florida Ron DeSantis signed a bill revoking Disney’s special self-governing status in the area around its Orlando theme parks. This prompted the Washington Post’s Henry Olsen to announce “the sundering of the over-150-year alliance between big business and the Republican Party.” His observation received further support in May, when Republican Senator Josh Hawley introduced a bill targeting Disney’s older copyright protections.

As Olsen noted, policies that target big business have recently become more palatable to the GOP’s traditionally pro-business supporters. The Pew Research Center has reported that, between August 2019 and July 2021, the proportion of polled Republicans who say large corporations have a positive impact plummeted from over half to less than a third. It is not a coincidence that this time period overlaps with an acceleration of what has become known as “the great awokening.” As white Democrats have lurched leftwards on issues related to race, sex, gender, and sexuality, leading corporations have taken increasingly progressive public stances on these sensitive topics.

In a 2018 article for the New York Times, conservative columnist Ross Douthat christened this trend “woke capitalism,” and this is what lies at the heart of Disney’s feud with DeSantis. The spat began when Disney’s CEO attacked Florida’s new Parental Rights in Education Act for allegedly targeting LGBTQ+ communities. The new law forbids classroom discussion about sexual orientation and gender identity at primary grade levels. DeSantis, in turn, accused Disney of trying to import “California values” and of folding to pressure from a “woke mob.” Hawley likewise referenced Disney’s social stances in the press release for his copyright bill. “Thanks to special copyright protections from Congress,” he complained, “woke corporations like Disney have earned billions while increasingly pandering to woke activists.”

At first glance, corporate America’s decision to poison its relationship with its core supporters is puzzling. But woke capitalism actually makes sense as an example of Garrett Hardin’s “Tragedy of the Commons,” a theory he introduced in the journal Science over 50 years ago. Considered from that perspective, woke capitalism is both rational and unsustainable.

Hardin was an ecologist, and he used his theory to explain why rational agents overuse environmental resources despite the high costs this behavior eventually brings. He illustrated the concept by telling a story about medieval peasants who share a field of grass on which they graze their animals. If the animals graze moderately, the commons are able to regenerate and the peasants will have grass for their animals indefinitely. If they overgraze, the commons eventually die and the animals and their owners are forced to go hungry.

The peasants overgraze their animals even so, killing the commons and bringing catastrophe. The individual peasant overgrazes for two reasons: first, because he is tempted by the prospect of fattening up his animals; second, because he fears that other overgrazing peasants will take advantage of his moderation if he practices it alone, fattening their animals while his stock remains thin. It is rational for the peasants as a group to use the commons sustainably, but it is also rational for them to overgraze as individuals. This is because the benefits of overgrazing go directly to those individuals who do so while the costs are shared among all, including those who exercise restraint. Hardin’s story has been used to explain the depletion of other types of commons, such as fish stocks, which collapse if used unsustainably.

Woke capitalism can be understood as another Tragedy of the Commons, in which the commons are represented by public goodwill towards big business. Like the peasants whose herds use and benefit from fresh grass, all large businesses use and benefit from public goodwill. Goodwill helps to shield them from unfavorable government policies and legislation and even provides some perks. For decades, it allowed Disney to benefit from copyright laws and its special legal status in Florida. Like grazing animals, corporate America consumes the public’s goodwill over the course of its normal operations via price rises, layoffs, CEO bonuses, offshoring, and other controversial but routine business decisions.

Like grass, the goodwill can grow back, since memories fade and big business also provides tangible benefits to its host societies. However, this requires restraint and, like the peasants, corporations face both temptations and pressures to take liberties. There have been more of these in recent years as a result of the great awokening and the lure of the lucrative but increasingly controversial Chinese market. Since the vast majority of goodwill towards big business has traditionally been found on the political Right and centre, the rise of woke capitalism has been especially devastating to these commons.

Nevertheless, woke capitalism is tempting because it promises higher returns in the short-term. Nike, for example, reported “$163 million in earned media, a $6 billion brand value increase, and a 31% boost in sale” after its controversial 2018 ad campaign featuring athlete-activist Colin Kaepernick. “It doesn’t matter how many people hate your brand as long as enough people love it,” said Nike founder Phil Knight. This thinking makes a narrow kind of sense, as Nike is targeting the youthful and ethnically diverse sections of the public. Many of them liked the ad and did indeed go out and buy the company’s products.

But on election days, these progressive voters wear their Nikes to the polls and vote for progressive politicians who want to raise corporate taxes. As for the older and paler Americans whom the ad offended, they happen to be the voting core of the traditionally pro-business Republican Party. For them, the Kaepernick ad was one more nudge towards populist economic nationalism and away from the pro-market consensus of the Reagan era. In politics, pace Knight, it matters a great deal if these people hate his brand.

On the other hand, corporations that take a conservative position on cultural disputes, or that try to remain neutral, risk being publicly called out and shamed by activists and media outlets. Initially, Disney resisted getting drawn into Florida’s culture war, and its CEO only relented after a media-publicized pressure campaign was mounted by activists inside and outside the company. Even this, combined with Disney’s pledge to donate millions to activist groups, proved barely adequate. “Businesses have had and continue to have a major impact in the fight for LGBTQ+ rights, from marriage equality to the defeat of House Bill 2 in North Carolina and beyond,” declared the head of one activist group. “While Disney took a regrettable stance by choosing to stay silent amid political attacks against LGBTQ+ families in Florida—including hardworking families employed by Disney—today they took a step in the right direction. But it was merely the first step.” The more businesses go woke, the greater the pressure on those that don’t.

The result is an overburdened, depleting commons of public goodwill, as previously pro-business conservatives are turned off by attacks on their values. This loss of goodwill from the Right is insufficiently balanced by new goodwill from the Left, where it has always been meager. The Pew Research Center found that the collapse in Republican support for corporations between August 2019 and July 2021 was accompanied by only modest gains among Democrats. In economic policy, the Democratic Party has continued its drift towards progressivism, apparently indifferent to corporate America’s public embrace of its social views and values.

Consider, for example, the Biden Administration’s attempts to pass the multi-trillion-dollar Build Back Better bill, or its scapegoating of big business for the inflation crisis, and its push to raise corporate tax rates. If these trends continue, corporate America will find itself without friends, squeezed from the Left by progressives like Senator Elizabeth Warren and from the Right by economic nationalists like Senator Hawley. Big business will then have to tighten its belt like Hardin’s peasants, as its bottom line is eroded by ruinous new taxes and regulations.

Watch what happens when Peter Doocy asks the new White House press secretary how raising taxes on the rich brings down inflation, as Biden tweeted last week. Big yikes. pic.twitter.com/UIsACtP8Hv— John Cooper (@thejcoop) May 16, 2022

This might still be avoided, however. One means of preserving a commons is to privatize it. The peasants would be less likely to overgraze if the commons were divided up among them as private property. However, goodwill cannot be entirely privatized because the actions of individual corporations affect how the public sees other corporations. Another means of saving the commons is to charge those who use it. Peasants won’t overgraze if doing so results in a hefty bill. This method has proven effective in protecting fish stocks in countries like New Zealand, where fishermen buy and sell limited fishing quotas.

Something like a de facto “woke quota” or “woke tax” may be taking shape in the United States. Disney was and remains free to erode Republican goodwill towards corporate America by wading into highly sensitive social issues. However, like a New Zealand fisherman, it is now paying a price for depleting the commons. Other corporations seem to be getting the message. So far, big business has tried to avoid getting drawn into the brewing controversy over abortion and Roe v. Wade. A pair of journalists who asked nearly 200 firms about their stances on abortion received replies from only 15. The head of a PR company told the Financial Times that “[i]f you think business people want to get involved with abortion, you need your head examined.”

If this becomes a trend, corporate America could adopt a more cautious approach to social issues, allowing the commons of public support and tolerance for business to grow back. The alternative is a continuing collapse in goodwill, leading to a bipartisan array of anti-corporate government measures. In either scenario, woke capitalism is unsustainable.


This is a companion discussion topic for the original entry at https://quillette.com/2022/05/24/woke-capitalisms-tragedy-of-the-commons/
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And today State Farm, the insurance company, is in trouble for “supporting a project that pushed LGBTQ books into schools.” Libs of Tik Tok is on the job.

Really, these tip-top corporate execs are Not That Smart.

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Oh dear. The commons and the tragedy of is very well explored in the field of economics including at least one Nobel prize winner. In the modern global economy, with nation-state governance, the key tool for the conservation of the commons is tax law especially land tax. Capitalism (whether so-called woke or not) has a tendency towards overusing the commons. Climate change is one result of the tragedy of the commons, in which the the ‘overuse’ is in the over-fertilisation of the atmosphere with CO2. Appropriate taxes on the resource oil and coal, to conserve the CO2 levels (admittedly not predictable in the get go but has been understood for the past century), would have meant rent equivalent to what it would take to maintain such levels. Perhaps 100 years ago, simply paying that on to prevent deforestation, already on the public radar. Today we need to increase such taxes as would generate $1trillion per year for restoration technologies. As to disney, yes there are good arguments that no corporation should be a law unto themselves, nor should have been allowed infinite copyright. That only stifles creativity because, afterall creativity is born from mimicry. The issue though you mostly refer is an issue of failure of bringing an upgraded democratisation from the 19th C to the 21st c. People therefore are behaving in a most inadequate political manner. Utilising ‘other’ terminology, is fundamental to this old, propagandist, we could even say, juvenile, way of doing politics. And it is rampant among the partisanship of many countries. The only way to address the social issues that parallels the economic address of the commons is by creating fully participation access to the ‘town square’ in an attitude of collaboration, cooperativeness, problem-solving, and ensuring the well-being and advancement of all peoples and the ecology. It requires a governance system that has broken free of the prison of tribalism, niches, and partisanship. It requires the training of independent thinking. In that sense a true commons is a place in which every adult is a party of one, and as such is responsible for bringing listening and consultation, supplication and negotiation to the a non-partisan governong body. Taxes per se is a key government tool for incentivising and disincentivising what the government sees appropriate. It is also a tool for ensuring the conservation of the commons and the distribution of the equity that everyone has in the commons. It’s worthwhile thinking about that equity in regard Dysney, Shell, Amazon, Facebook, Google, Koch Industries, Murdoch etc etc. If the equity and conservation of the commons is not appropriately guarded inside tax policy - incentives and disincentives, then a tragedy of the commons follows. The tragedy of the commons is related to dysfunctional society. Partly in the failure of people not needing to engage with each other directly, humanly, considerately and with relevant rhetoric. And this disengagement is due to that the people occur for themselves, violently, as being another, other than a capitalist, other than a woke person, other than a first nations person, other than a migrant, other than belonging to a united states, other than belonging to the global community, and the list can go on. And none of this otherness is beneficial to any community. It is in itself a drain on the commons and, if for any moment that partisanship leads to good decisions for the commons, over the medium to long term leads to more bad decisions. It is not really talking to the issue of the commons by explaining it in partisan or ‘othering’ terms. Talking in those terms is, in fact, undermining the argument for the commons.

This is not a troubling matter for anyone. Businesses come and go. Human society survived without Disney for millennia. It can live without Disney in the future. The same for Coca-Cola, McDonald’s etc. I do not understand why/how anyone, anywhere has ever bought into the notion of brand loyalty. If these companies cannot thrive and offer consumers a product they like for a fair price, then fuck em’. They can go the way of Sears, JCPenny, Toys R’ Us, PanAm, Tower Records, Polaroid, Borders Books, Blockbuster Video, Pets.com and so many others. Who cares…?

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Is your carriage return key broken?

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There is plenty of evidence of brand loyalty both now and in the past. But it is still subservient to price differentials. Company failures like some you list are due more to business practice or technology shifts than brand loyalty per se.

FIFO! It’s a specific tax you need to call for, not one based specifically upon general taxation. There are two ways this specific type of tax would operate, one based upon preserving the commons, and the other predicated upon understanding that most land has no inherent value. The article actually states an example where the tragedy of the commons was taking place- in relation to coastal nurseries. A few years back, Hugh Fearnley-Whittingstal campaigned successfully within the EU to preserve coastal nurseries, with the next result that future fishing stocks have at least been somewhat preserved in the relatively small area of Europe.

But land value tax is important in another area. The proliferation of land value taxes, in the form of property taxes, has led to a market in which government holds an unnecessarily restrictive veto over the granting of access to new building land. This has led to a situation where the only economic good produced in surplus is ever-inflating mortgage debt as an asset class. It’s Rentier economics of the worst kind, the only likely result of which is a New Gilded Age.

The only convincing method for breaking this cycle of economic scarcity induced by government force and coercion, is the deliberate restriction of taxes on private property, coupled with a new tax on the value added whenever local government agrees to release new land for building purposes. This is about the only thing which can at this point force the bureaucrats to stop trying to limit people’s ability to live in rural or suburban homes- by make their own public salaries dependent on the release of new lands.

A good example of this is the 50 mile exclusion zone which exists around London. There are plenty of areas of land which are effectively scrub, or concrete wastelands- of absolutely no environmental value whatsoever- yet petty officialdom simply refuses to grant planning permission because they don’t want some plebeian white van man, and his family, moving into their rarefied environs.

The UK is one of the most population-dense countries on the planet. Yet housing accounts for less than 1% of total land usage (and this figure includes ample gardens, in many instances), whilst roads account for nearly 2%. It’s a fallacy that there isn’t room for humans, but it may well be the case that there isn’t room for our machines. Attempting to stack poorer people into concrete and glass obscenities, whilst a relative few get to live in picturesque country retreats and enjoy foreign holidays abroad, is more reminiscent of the Soviet-era Dacha and the privileges enjoyed by the apparatchik than a semblance of free market capitalism. It is a reflection of just how much Statism had managed to parasitically invest liberal Western societies.

Perhaps Shelley should have contemplated Leviathan more, and the hubris of the grandiose less:

My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”

It was not conquest from afar which consumed us,
but greedy bloated indolence from within

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Interesting way to look at this issue.

While the Republican party in recent decades has been pro-(big) business, its recent and deep history is much more complicated. The party has a long-buried, now-reawakening division between Main Street and Wall Street. Points of contention back then included immigration, protectionism, the concentration of finance, and foreign wars. Now they include “culture wars.” The last time this division opened up was in the early 1990s, with Ross Perot and Pat Buchanan. These were the true avatars of Trump, and The Donald modeled his politics in part on them. (Perot urged Trump to run several times.)

However, both political parties were much stronger then than they are today and were able to beat back this reawakened populism. The decline and collapse of the Republican establishment, which focused for several decades on foreign policy and culture wars (the economics of globalized markets seemed unassailable), has opened a large void that populists and would-be populists and retooled has-beens are trying to fill with a new appeal to a rather different audience. That new audience potentially includes many more black, Hispanic, and female voters. The new “Main Street” Republicanism will look different from 1900, say. It will also include more working and middle class voters, with small business owners even more strongly pro-Republican than before. The Democratic vote has been increasingly upscale and white since at least the 2010 election. The trend became too obvious to ignore in 2020: Trump not only received more votes in 2020 than Hillary Clinton did in 2016, his vote increased in every demographic except middle-aged white males, who panicked and voted for Biden, imaging that he is still the moderate Biden of 1990 or thereabouts. Every aware person in the US now knows that it is Biden who is the “accidental president.”

Both parties had progressive wings (centered in the Middle West and Plains) until the Great Depression and New Deal. That era’s Republican version took a wrong turn into a dead end, supporting Prohibition and isolationism and opposing almost all immigration, for example. The “culture war” of that era centered around small-town Protestant mores in conflict with the more mixed culture of the rapidly growing cities.

Meanwhile, the Democrats have finished the transformation that began with the rise of the Clintons, namely, its transformation into an elite, bicoastal entity that isn’t a broadly based political party any more. Instead, it’s a loose alliance of wealthy donors (who do you think funds all those “woke” causes?) and legacy media, supercharged with Twitter mobs and wokesters recently graduated from institutions of Higher Brainwashing. The upper middle class that sustains the party essentially works for this elite. The party’s pillars are now Big Media and Hollywood, Wall Street, and Big Tech. This is a party with less and less to say to ordinary people, but with plenty of big money donors and allied media properties.

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“This loss of goodwill from the Right is insufficiently balanced by new goodwill from the Left, where it has always been meager”. It may not work in general. However, it does work in specific cases. Consider Apple. Apple might be the worst company in the world. However, by waiving the rainbow flag (in some countries), Apple has found that it can get away with anything. The list of Apple abuses (protected by the rainbow flag) is long.

  1. Apple is the number one corporate tax evader on the planet. Apple makes 10s of billions in profits worldwide (including the USA) and then shifts all of the profits to Ireland. Of course, it doesn’t pay any significant taxes in Ireland either. Calling Apple a corporate tax cheat is an understatement.

  2. Apple ‘proudly’ waves the Rainbow flag… Except in countries where that might cause real problems (India, Muslim countries, etc.). In those countries, the rainbow flag is notable by its absence. So why does Apple wave the rainbow flag in the USA (and possibly Europe)? See point 1. Apple has discovered the terrible truth that it can get away with anything with the right flag.

  3. Apple fires people who are perceived to be a ‘problem’. An example would be Antonio García Martínez. Of course, Apple was quite willing to do business with Dr. Dre ('Bitches ain’t shit but hoes and tricks ').

  4. Apple treats it’s assembly workers so badly that it was forced to put up suicide nets to stop workers from killing themselves. That’s the level of morality of Apple.

  5. Of course, it gets worse. Apple uses slave labor (Uighurs) to build its products in China. Supposedly, ‘Privacy’ is a fundamental human right, but actual slavery is OK with Apple.

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I noticed this as well. The Disney flame-out seems to have had positive consequences. As a consequence of Disney, companies now appear to be loathe to get involved in controversial issues. This is mostly a good thing.

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The framing here makes sense on the surface, but I’m not sure it explains the kinds of things that are going on inside corporations related to so-called social justice that are seemingly counterproductive to the corporation’s stated objectives and in some cases are downright pathological. E.G., the time wasted haranguing white employees about their white privilege, hounding out anyone who disagrees, etc. It seems to me that this article assigns a certain level of rationality to the actions of corporations that I’m not sure exists. Really, I think there’s just a lot of social conformity and cowardice at work here, neither of which are necessarily rational.

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Large corporations will choose to focus on ideas like social justice precisely because they mean absolutely nothing. The performance is part of their own marketing campaign; internally, and externally. Their efforts remain the same: focus on profit motives. If these moves prove to be completely unprofitable, then they can die. We will see if Netflix can stave off its current hemorrhage and survive another decade. Perhaps…
But in the end, corporations are reflections of whatever the society at large is engaged in. If they are too big to fail then they are likewise too big to think… They are mere “superpredators” (to borrow from HRC), reacting to stimuli in their environment in an effort to maximize their own profit and expand their corporate girth.

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I am a State Farm customer. I sent a note to my agent, who is a local small-businessman. I said that the State Farm agents should COLLECTIVELY write to the Corporate management to indicate that this trannie shit support is madness.

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I just got off the phone with my agent, who told me interesting things:

  • Corporate has apologized for this insanity
  • Agent who did this is getting reprimanded, but not fired - I’m in favor of this
  • State Farm is an INSURANCE COMPANY, which means CONSERVATIVE
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BTW, according to Nobel Prizewinner Elinor Ostrom the commons works perfectly well as long as the commoners all belong to a community where they know each other and can judge each other and can sanction bad behavior. See her page on La Wik for details.

The question is whether this applies to corporate officials. More likely they are vulnerable to attacks by well-born activists trying to save the world from racist-sexist-homophobes like you and me.

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In other words, they work in small communities just like pure democracies. But when large external forces come in, the commons can be eliminated by monetizing. Look at the notion of AirBnB. When it involved “remote couchsurfing”, it was fine - inexpensive housing. Today, however, large numbers of corporate groups are buying up housing, using it for short-term rentals, and completely wrecking the rental AND ownership market. In my medium size town of Sioux Falls, there are more than 350 AirBnB properties. Costs in Sioux Falls for housing are rising very quickly.

Generally, I agree with your point, but would quibble with this:

It makes a lot of sense on the individual level and from a limited perspective, but in the institutional sense I think they trade short-term safety for long-term insecurity, and in many ways they are just beginning to acknowledge the reality of the new paradigm into which they’ve boxed themselves. People focus too much on profits and self-interest as motives, both personal and commercial, and not enough on the constraint of survival. They were trying to mitigate a potentially catastrophic reputational risk and instead signed up for a far larger one. That’s where cynicism gets you.

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With Netflix the difficulties are more fundamental than the woke infatuation. When they first entered the market they were innovative and had a first mover advantage in a new market they had effectively created. Now the streaming service finds is a fiercely competitive market. Had they been wiser, they would have built up an unassailable lead in fostering creative talent, especially in the areas of screenwriting, production and directors.

The lure of big stars has always been overrated to my mind- if you have scripts which they love and which will win them plaudits then they will come anyway, as witnessed by the fact that A-list actors and actresses seem to be perennially willing to participate in independent film-making which has artistic merit.

They should have been focusing on their stable of talent. Hollywood had gone in the wrong direction, becoming increasingly formulaic, ruled by committees intent on providing representation across every conceivable dimension of race, gender and sexuality. They could have consolidated their reputation as a disruptor and taken the mantle from Hollywood once and for all.

Think of it this way- Bridgerton was one of Netflix’s most popular recent shows, but it was so ahistorical, especially in terms of casting, that it wasn’t ever going to have anything other than a limited audience appeal. Personally, I don’t mind the odd bit of ethnically inappropriate casting, provided the actor involved has sufficient gravitas- although I take exception to the elderly and infirm being played by young and the fit, unless they actually have the talent to convey the indignity of decay. It’s when it’s done gratuitously and for ideological and unmeritocratic reasons that I can’t stomach it.

But at the other end of the polar spectrum, we see lovingly protrayed historical movies which don’t have to slightest inclination to nod to political correctness. The Trial of the Chicago 7 was good, if hardly historically accurate. The Dig was excellent. A rational approach would have Netflix offering high quality content to all tastes- but the cosmopolitan and woke biases make this all but impossible. With Hillbilly Elegy, they basically amputated the central thesis of the memoir, which was that although government can help a little at the margins, there are substantial social problems which government is completely incapable of solving. I imagine they didn’t want to upset the woke with such a basic and unassailable truth.

To put it another way, over the long-term they should have been focusing on the means of production, more than the current productions themselves. The wokeness was ultimately self-limiting to their creative venture.

Using Hardin’s Tragedy of the Commons to explain the prevalence of woke capitalism is very wrong. In Hardin’s Tragedy of the Commons each peasant gains materially by grazing his herd on the commons. Despite ESG (Environmental and Social Governance) standards applied to companies, no business gains anything material from woke. They’re doing straight politics and social engineering. One cannot simply make a metaphoric analogy like this; it’s illegitimate and a trick of language. If there’s a real Tragedy of the Commons in social psychology then cite the research which demonstrates it; otherwise please don’t apply explanations of real things to psychological processes. Ideas, ethics and psychological processes are neither property, nor capital.

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