Taking the 'capitalism' out of 'woke capitalism'
GOP officials use state employee pension funds to strong-arm corporations.
Elected Republican officials are increasingly using their states’ public employee pension funds to crack down on “woke” companies that provide services to or celebrate the LGBT community.
Florida Gov. Ron DeSantis is urging the state’s pension fund manager to consider legal action against Bud Light’s parent company amid conservative backlash to the beermaker’s recent marketing efforts, the latest attempt by the Republican presidential candidate to inject himself and the state he runs into the country’s culture wars.
In a Thursday letter obtained by CNN, DeSantis suggests AB InBev “breached legal duties owed to its shareholders” when it decided to associate with “radical social ideologies.” Sales of Bud Light have plummeted in the months since it entered into a minor partnership with transgender influencer Dylan Mulvaney that precipitated a boycott from conservatives.
“All options are on the table,” DeSantis wrote, as the state reviews the impact of AB InBev’s recent financial downturn, though it’s unclear what legal recourse the state might have to challenge a multinational corporation’s business decisions.
A group of Republican attorneys general did something similar this month, in a letter warning Target about the Pride Month merch it sold earlier this summer.
Target’s “Pride” campaign and financial support to organizations such as GLSEN not only raise concerns under our States’ child-protection and parental-rights laws but also against our States’ economic interests as Target shareholders. Target’s directors and officers have a fiduciary duty to our States as shareholders in the company. The evidence suggests that Target’s directors and officers may be negligent in undertaking the “Pride” campaign, which negatively affected Target’s stock price.
Moreover, it may have improperly directed company resources for collateral political or social goals unrelated to the company’s and its shareholders’ best interests. A corporation’s directors and officers owe duties of care and loyalty to the corporation and its shareholders. The duty of care requires that directors and officers act with reasonable prudence. That duty is violated when those directors and officers act with gross negligence. The duty of loyalty “requires an undivided and unselfish loyalty to the corporation” and “demands that there shall be no conflict between duty and self-interest.”
Target’s “Pride” campaign was decidedly not an example of excellence in retail. The campaign prompted a “massive backlash”—from families, its core customer base—that led to the company experiencing “an unprecedented losing streak.” 18 Target’s stock prices dropped by 16 percent and the company lost $12 billion in market value.20 It is likely more profitable to sell the type of Pride that enshrines the love of the United States. Target’s Pride Campaign alienates whereas Pride in our country unites.
The long and short of it: If your company produces a product or takes any sort of action that the right decides to make a thing about — and folks, they’re always making a thing about something — right wing officials can (possibly) sue you for the economic fallout that ensues.
It’s a nifty little trick, applying economic pressure from two sides: Right-wingers can boycott companies they don’t like, and because state pension funds have investments in those companies, the right’s elected allies can threaten to make “woke” companies suffer even more because of those boycotts. See what you made us do?
People can buy or not buy whatever they want. Using the power of the state like this, though, is bullying and thuggish.
If only there was some kind of word to describe that set of affairs.
A third defining characteristic of economic fascism is that private property and business ownership are permitted, but are in reality controlled by government through a business-government “partnership.” As Ayn Rand often noted, however, in such a partnership government is always the senior or dominating “partner.1
Have we tipped into fascism yet? It’s not a word I throw around lightly. It means things. But it’s fair to say the party of capitalism and free markets is a little less free market-ish today. Let’s see of DeSantis and the GOP AGs try to turn their threats — and implied threats — into action. But this isn’t a good sign.
Photo: Dennis Douven
Am I unironically quoting somebody unironically quoting Ayn Rand? Yes. Strange times.