The problem with the Beckerian logic in this case is that it ignores that being woke can benefit firms, if it significantly increases woke devotion to the company without alienating non-woke consumers. And as Nassim Taleb describes in Skin in the Game: "A Kosher (or halal) eater will never eat nonkosher (or nonhalal) food, but a nonkosher eater isn’t banned from eating kosher." Bowing to intransigent minorities can be profitable when it doesn't produce significant antagonism with other consumers.
Caplan addressed this in the point about niche firms, although it is also worth pointing out that if the work is inoffensive enough to not offend the nonwoke it is a nonissue. Who cares what silliness lurks in the hearts of producers so long as they keep producing what people like?
Yet Caplan was suggesting this would be confined to niche firms, while "deregulating hostile takeovers would largely lead business to stop willfully antagonizing the majority of their customers". Taleb's point is that it can happen for niche things inside large firms. Also it does not need to be inoffensive to the point of being a nonissue. It can be something that annoys the nonwoke but not enough to outweigh the benefits of appealing to the woke.
(Btw, I find Disney's wokeness to be very mild and doesn't bother me the least, but still there is great economist writing a whole article about it, so I guess differences on what annoys people also matter for defining if something is an issue or not.)
You are misunderstanding Taleb's point, I think. The deal with Kosher is that no one who doesn't keep Kosher cares, so making orange juice Kosher doesn't lose sales; the non-Kosher folks just don't even notice. If Kosher oj was somewhat different, like organic oj where you can kind of taste the difference (and at the very least pay for the difference) then it would be an issue for customers, and businesses would have to decide if they wanted to go for it or not. If Woke Co. Orange Juice is indistinguishable from standard orange juice, you are in the Taleb world of everyone gets the same stuff even though only a tiny minority care. If people can taste the blue haired non-binary nature of the oranges and some dislike it, it will become a niche for those who like the flavor and everyone else will get the normal stuff they prefer. That is to say, businesses will stop willfully antagonizing the majority of their customers by saying you are getting Woke OJ whether you like it or not, and businesses will simply cater to the separate markets. Maybe the same company will cater to both groups, who knows.
My problem is that I don't think that most of the works that are being produced are inoffensive, and additionally if what silliness lurking in the hearts of producers and actors is leaking out into interviews and marketing, that's still a problem.
Oh I agree, just that Taleb’s example about Kosher food is based on the fact that the majority doesn’t care about the difference so the minority gets what it wants and it all works out. Hollywood has been a bunch of degenerates and communists for decades, but no one really cares till they start going over the top preachy and groomer like.
I think a lot of conservative Christians like myself cared, but too many in my demographic either chose to swallow the poison pill, or just stop watching anything alltogether (or watching stuff marketed only to us). Abdicating the cultural sphere was such a mistake.
Others have commented objections that wokeness might or might not be a disadvantage from the customer's point of view. I'd like to point out the "supply" side of the equation. For firms that are in any kind of creative business (and I define this loosely since it fits traditional creative, e.g. graphics, publishing, as well as non-traditional like money management, software development), they are in competition for talent and that talent might very well optimize personally for working in woke environments. So, yes, this pushes the woke "penalty" to the employee from the employer, but from the firm's point of view it's a win to be woke to the extent this is true.
I wonder how Netflix employees on average have been feeling after the wokest 15% or so got the ax. If the truly woke are less than 5-10% of the population, or even say 30% of creatives, you are probably still alienating a lot of workforce. And that’s assuming your staffing needs are all one type of person and not a mix of creatives and others who all labor under the same hr dragons.
As a matter of logic, optimizing for profits only is strictly superior than optimizing for both profit and some other thing (presuming of course that profit is what we care about). But empirically, optimizing for profits only can often look like optimizing for profits and some other thing. E.g., Nordstrom apparently optimizing for customer service or Coke apparently optimizing for flavor. If Disney management were actually optimizing ONLY for profit, how would we know? How can we be sure that this would look any different from a world in which Disney management were optimizing for profit and wokeness? Maybe they performed a cynical calculation and decided to appeal to wokeness because they actually believed it to be the most profitable course.
Their profit statements strongly suggest Disney does not have profits among its top priorities. Possibly it is just incompetence, but it seems obvious why people are walking away, or at least people are vocal about it.
Is it obvious that wokeness is harmful for Disney? There's clearly some audience that is more favorable to it as a result, as well as some that is less favorable. It does seem likely from the outside that the latter is larger than the former, but it's not completely obvious whether there might be an intensity gap and/or a disposable income gap between the audiences that makes up for this. (Though it could enhance it.)
As I understand it, Disney wanted to stay out of the Florida "Don't Say Gay" law until their staff revolted. I don't think Disney executives are sacrificing any profits for wokeness - they are trying to navigate the politcal climate, staff and customer comcerns in the best way they can to minimise damage.
Office politics, cultural milieu of decision makers, and civil rights law seem better explanations than wokeness as haphazard attempt to maximize profit.
According to Statistica Disney is 1 billion down off their pre 2020 low of 3 billion in profits, down from a 2019 peak of 12 billion. So, yes, it’s been a bad few years. Maybe they are sucking for other reasons, but everyone seems to be hating Disney’s woke crap for the past few years so that seems like a reasonable cause for losing 9 billion in profits during a time when everyone wanted streaming service...
Yea we are in the same spot. Doesn’t hurt that their official merch is mind bogglingly expensive. Interestingly my girls don’t really care for most of the newer Disney stuff. How you lose the 3-8 year old demographic is beyond me, but there it is.
I pay some attention to DIS stock. Movies and Parks got hammered by Covid, and Disney+ has been deeply unprofitable, despite sign-ups trending higher than initial expectations, due to high content spend, which isn't a problem confined to DIS (see NFLX). Meanwhile traditional cable revenue is under relentless pressure.
I've hated DIS content since before it was cool and I hate it even more today, but I really don't think any Woke downside has shown up in the numbers yet. Maybe it will start to later this year or next, but not yet.
But I'll also add that the personality profile of a DIS adult fan seems to be very Woke, I knew some of these people at one time in my life. You might not be buying DIS merch for your kids but there are adult weirdos dropping hundreds or thousands on the stuff, and a whole lot of normies who let TV raise their kids, roll with the tides, and haven't begun to notice or care about this stuff. It's unclear to me how all that shakes out.
Possibly, but a 75% drop in profits is pretty stark still. If I was interested in buying or selling Disney stock I would want to see what the 2022 numbers look like as the first mostly post covid year, but things are looking pretty bad I'd say. Part of that is precisely the very high content cost of their movies and shows; how many bombs does it take to crater their business model? All their businesses seem pretty correlated, in so far as a movie that people don't like also doesn't sell toys and merch. Other than phase 1 Marvel and some Star Wars the past 5-6 years seem to have seen very little cultural impact of their stuff; I haven't seen any kids running around with shirts or backpacks from their recent movies (again, outside Marvel and Star Wars).
Yeah, I was thinking on this, and I think this argument at least can be made: DIS might be held afloat partly by Millennial superfans operating off nostalgia, but they're not going to get that nostalgia effect in the future. Today's kids are not going to be nostalgic for Will Smith's Aladdin the way their parents are for Robin Williams' Aladdin.
This speaks to my view that Wokeness is more like a gradual poison that gradually erodes a brand's reputation and that limits an organization's freedom to operate intelligently than something that is really going to shock companies into overnight ruin.
How does Elon and Twitter fit into this model? I think fits pretty well… He was gonna come in, shake up management to crack down on bots, unwoke the policies, and implement new features. Before the stock market crash, he thought he could get $X improvement in share price. After the market cratered, he probably doesn’t think he can recover as much as was cratered. Checks out to me.
Musk's manifested intent was to increase freedom of speech on Twitter not for strategic purposes but for ideological ones, so it makes more sense to me to include him as part of the "sacrificing profits for ideology" bunch, even if it's not woke ideology.
Unless making the platform more free speech would attract more users and profit. Could go either way, although he did seem to think that it was worth doing philanthropically instead of for profit.
I think a lot of things changed with Musk in the whole process. He both found out it was going to be a lot less financially beneficial (maybe even a big loss) and he probably realized that even as CEO he would have a hard time changing Twitter in the ways he cares about.
Sam The Banana Man sounds both awesome and terrifying. But I'm curious - what is the likelihood of actually deregulating enough that corporate raiding and hostile takeovers are possible again?
As others have mentioned, this post doesn't really grapple with the labor market dimension of this and the fact that many employees will want to pressure management to adopt more left leaning stances.
To that I would add, for media companies especially there is an additional pressure presented by superstar talent who the company needs to hold on to quite a bit.
For example, Lin Manuel Miranda is a huge talent get for Disney, working on some of their most successful recent films (Moana and Encanto) and absolutely is rich and famous enough that he can drop Disney if they offend his sensibilities.
If Disney buckles to DeSantis in a public way, they could easily see Miranda jump ship over to DreamWorks. And he personally probably produces profit for them north of 100 million. And that's just one star of many.
Most managers are talented at saying woke things but then not doing anything. Coke’s GC went farther and then he was gone. It’s all about the lip service
My experience with anti-left anti-woke right-wingers in Sweden
a) Many are not in favor of freedom and freer markets (less regulated, more deregulated), but are in favor of privileges and special treatments (more pro-business rather than pro-market)
b) Many do not understand that a market can contain both woke and alt-right things that people want to buy, and also do not like the development of eco-hipster raw-food climate friendly vegan merch
As others have mentioned, I don’t think the beckerian logic applies here because I believe woke corporations are viewing the ideology as a pathway to profit in the long run (or mitigation of risk). I think it’s also important to make the distinction between “external” (branding, products/content) and “internal” (culture, hiring practices) corporate wokeness.
I think the logic for external is that if wokeness is the dominant ideology of the top 10% who have a hugely disproportionate share of total consumer spending, then it makes sense to appease them even if it means alienating a certain amount of potential customers. Leftists are also much more likely than conservatives to reject/support a company based on its politics. Companies can’t be apolitical if they want woke support. Disney may be able to absorb it, but this is absolutely backfiring for many corporations (especially midsize businesses). Many even on the left are sobering up from the 2020 “reckoning” and realizing just how absurd wokeness has gotten. Even people who may agree with these ideas at some level don’t make it their whole identity anymore. If you look at who some of the most popular comedians are today, the ones selling out theaters, almost all of them are explicitly anti woke. Meanwhile much of the SNL cast (outside of a few) can’t even sell tickets despite achieving what was at one point the pinnacle of success for a comic. People are voting with their dollars, and it turns out it’s more important for a comic to be funny than be woke.
Internally, I think DEI serves as a kind of insurance policy against the possibility of getting sued for discrimination or any kind of civil rights violation. Implicit bias training, for example, very clearly has no tangible benefits to a firm’s bottom line. However if they DONT do the training (or embrace woke politics more broadly), they have nothing shielding them from the possibility that some crazy woke person is going to sue them for racism/sexism/etc in the work place. Society is basically being blackmailed by the most neurotic and sensitive people and the hucksters who enable them. It’s only a matter of time before companies realize it’s cheaper just to take the risk and fight it in court than to keep flushing money down the DEI toilet, because no matter how many trainings it will never be enough for these people.
Back to the comedy example, it turns out being a comedy writer is really really hard. If you narrow your talent search just to minorities who share your exact politics you’re making an already small talent pool even smaller. The idea that there’s a bunch of Louie CK’s and Dave Chappelle’s out there waiting in the wings who just haven’t had the chance because of some type of oppression just isn’t true. I suspect the same goes for CEO’s, engineers, or any high level position. Imagine if the NBA said they were going to require the league be 50% asian. Sure there may be some gems that wouldn’t have gotten a chance, but the quality of the league and its entertainment value would rapidly diminish.
The "expanded constituency" statute on the table stood out as one of the likely culprits to me. Why would shareholders accept reduced profits rather than support a takeover? Answer: they might have not have a choice.
This article lays out how the whole expanded constituency thing works (for Illinois, anyway, but it's an enlightening case study, and as the article mentions over half of states have similar statutes):
Tl;dr, statutes like these make the corporate entity itself the primary entity to which the corporate directors have a fiduciary duty, and the long-term interests of the corporation and the short-term interests of shareholders can diverge.
"Courts also allowed directors to rely on long-term corporate plans or
the protection of special cultural features of the corporation to thwart a
takeover transaction clearly favored by a majority of the share-
holders."
It's not such a stretch to imagine Disney's corporate lawyers making the argument that wokeness is "a special cultural feature of the corporation". I wouldn't make that argument with a straight face, but I assume some courts would probably take it seriously.
I’m fairly unconvinced that most individuals care much about wokeism. Sure, many who remain on culture war Twitter or watch cable news know the phenomenon - but that is a minor slice of the population. There are far more individuals who watch Buzz Lightyear without a semblance of realization that some stupid ideology is being pushed on them. Some may worry about this, but I’m not so sure we should. Wokeism as a holistic ideology is so detached from most individual’s daily lives that it is likely bound to fade into the next big thing (we are already seeing this w/ anti-woke ideologies).
Life will be much more simple if one ignores stupidity - dare I say wokeism is just another stupidity one should ignore.
I don't think there are enough eccentric billionaires looking to takeover megacorps that seem to be going off the ideological rails.
The best path is probably to change civil rights law to both stop incentivizing and even actively punish wokeness. If Google was fined 10% of its market cap over what it did to Damore, with the threat of taking another 10% every time it happened again, they would make changes.
We already have the police stealing peoples stuff if they don't follow civil rights law, I'm just proposing it goes both ways.
Ultimately, it would be best to not have civil rights law. But the temptation will always be to lean towards the status quo (bias against certain groups) rather then neutrality until a lack of neutrality is punished severely.
I have always thought that board elections should be by single transferrable vote.
If a board is 9 members, for example, then someone owning 11% of the stock should absolutely control a board spot. It enables a minority proxy fight. Using the Musk/Twitter example, he basically could have forced a member of the board who represented him (he was at 9%, not 11%, but I don't know Twitters board size either) without having to try to get 50%+1 and replace the board entirely.
The problem with the Beckerian logic in this case is that it ignores that being woke can benefit firms, if it significantly increases woke devotion to the company without alienating non-woke consumers. And as Nassim Taleb describes in Skin in the Game: "A Kosher (or halal) eater will never eat nonkosher (or nonhalal) food, but a nonkosher eater isn’t banned from eating kosher." Bowing to intransigent minorities can be profitable when it doesn't produce significant antagonism with other consumers.
I'm pretty sure there is a significant alienation produced by wokeness, though.
Caplan addressed this in the point about niche firms, although it is also worth pointing out that if the work is inoffensive enough to not offend the nonwoke it is a nonissue. Who cares what silliness lurks in the hearts of producers so long as they keep producing what people like?
Yet Caplan was suggesting this would be confined to niche firms, while "deregulating hostile takeovers would largely lead business to stop willfully antagonizing the majority of their customers". Taleb's point is that it can happen for niche things inside large firms. Also it does not need to be inoffensive to the point of being a nonissue. It can be something that annoys the nonwoke but not enough to outweigh the benefits of appealing to the woke.
(Btw, I find Disney's wokeness to be very mild and doesn't bother me the least, but still there is great economist writing a whole article about it, so I guess differences on what annoys people also matter for defining if something is an issue or not.)
You are misunderstanding Taleb's point, I think. The deal with Kosher is that no one who doesn't keep Kosher cares, so making orange juice Kosher doesn't lose sales; the non-Kosher folks just don't even notice. If Kosher oj was somewhat different, like organic oj where you can kind of taste the difference (and at the very least pay for the difference) then it would be an issue for customers, and businesses would have to decide if they wanted to go for it or not. If Woke Co. Orange Juice is indistinguishable from standard orange juice, you are in the Taleb world of everyone gets the same stuff even though only a tiny minority care. If people can taste the blue haired non-binary nature of the oranges and some dislike it, it will become a niche for those who like the flavor and everyone else will get the normal stuff they prefer. That is to say, businesses will stop willfully antagonizing the majority of their customers by saying you are getting Woke OJ whether you like it or not, and businesses will simply cater to the separate markets. Maybe the same company will cater to both groups, who knows.
My problem is that I don't think that most of the works that are being produced are inoffensive, and additionally if what silliness lurking in the hearts of producers and actors is leaking out into interviews and marketing, that's still a problem.
Oh I agree, just that Taleb’s example about Kosher food is based on the fact that the majority doesn’t care about the difference so the minority gets what it wants and it all works out. Hollywood has been a bunch of degenerates and communists for decades, but no one really cares till they start going over the top preachy and groomer like.
I think a lot of conservative Christians like myself cared, but too many in my demographic either chose to swallow the poison pill, or just stop watching anything alltogether (or watching stuff marketed only to us). Abdicating the cultural sphere was such a mistake.
Others have commented objections that wokeness might or might not be a disadvantage from the customer's point of view. I'd like to point out the "supply" side of the equation. For firms that are in any kind of creative business (and I define this loosely since it fits traditional creative, e.g. graphics, publishing, as well as non-traditional like money management, software development), they are in competition for talent and that talent might very well optimize personally for working in woke environments. So, yes, this pushes the woke "penalty" to the employee from the employer, but from the firm's point of view it's a win to be woke to the extent this is true.
I wonder how Netflix employees on average have been feeling after the wokest 15% or so got the ax. If the truly woke are less than 5-10% of the population, or even say 30% of creatives, you are probably still alienating a lot of workforce. And that’s assuming your staffing needs are all one type of person and not a mix of creatives and others who all labor under the same hr dragons.
Bryan on racial discrimination: Impossible because discriminating employers would be outcompeted by nondiscriminating ones.
Bryan on Wokeness: Eh, a 5% efficiency loss is no biggie.
As a matter of logic, optimizing for profits only is strictly superior than optimizing for both profit and some other thing (presuming of course that profit is what we care about). But empirically, optimizing for profits only can often look like optimizing for profits and some other thing. E.g., Nordstrom apparently optimizing for customer service or Coke apparently optimizing for flavor. If Disney management were actually optimizing ONLY for profit, how would we know? How can we be sure that this would look any different from a world in which Disney management were optimizing for profit and wokeness? Maybe they performed a cynical calculation and decided to appeal to wokeness because they actually believed it to be the most profitable course.
Their profit statements strongly suggest Disney does not have profits among its top priorities. Possibly it is just incompetence, but it seems obvious why people are walking away, or at least people are vocal about it.
Is it obvious that wokeness is harmful for Disney? There's clearly some audience that is more favorable to it as a result, as well as some that is less favorable. It does seem likely from the outside that the latter is larger than the former, but it's not completely obvious whether there might be an intensity gap and/or a disposable income gap between the audiences that makes up for this. (Though it could enhance it.)
As I understand it, Disney wanted to stay out of the Florida "Don't Say Gay" law until their staff revolted. I don't think Disney executives are sacrificing any profits for wokeness - they are trying to navigate the politcal climate, staff and customer comcerns in the best way they can to minimise damage.
Office politics, cultural milieu of decision makers, and civil rights law seem better explanations than wokeness as haphazard attempt to maximize profit.
Interesting! Some kind of elasticity of demand for woke products.
According to Statistica Disney is 1 billion down off their pre 2020 low of 3 billion in profits, down from a 2019 peak of 12 billion. So, yes, it’s been a bad few years. Maybe they are sucking for other reasons, but everyone seems to be hating Disney’s woke crap for the past few years so that seems like a reasonable cause for losing 9 billion in profits during a time when everyone wanted streaming service...
I still let me kids watch Disney stuff from back in my day, but I don't buy merchandise and we are never going to the parks.
Yea we are in the same spot. Doesn’t hurt that their official merch is mind bogglingly expensive. Interestingly my girls don’t really care for most of the newer Disney stuff. How you lose the 3-8 year old demographic is beyond me, but there it is.
I pay some attention to DIS stock. Movies and Parks got hammered by Covid, and Disney+ has been deeply unprofitable, despite sign-ups trending higher than initial expectations, due to high content spend, which isn't a problem confined to DIS (see NFLX). Meanwhile traditional cable revenue is under relentless pressure.
I've hated DIS content since before it was cool and I hate it even more today, but I really don't think any Woke downside has shown up in the numbers yet. Maybe it will start to later this year or next, but not yet.
But I'll also add that the personality profile of a DIS adult fan seems to be very Woke, I knew some of these people at one time in my life. You might not be buying DIS merch for your kids but there are adult weirdos dropping hundreds or thousands on the stuff, and a whole lot of normies who let TV raise their kids, roll with the tides, and haven't begun to notice or care about this stuff. It's unclear to me how all that shakes out.
Possibly, but a 75% drop in profits is pretty stark still. If I was interested in buying or selling Disney stock I would want to see what the 2022 numbers look like as the first mostly post covid year, but things are looking pretty bad I'd say. Part of that is precisely the very high content cost of their movies and shows; how many bombs does it take to crater their business model? All their businesses seem pretty correlated, in so far as a movie that people don't like also doesn't sell toys and merch. Other than phase 1 Marvel and some Star Wars the past 5-6 years seem to have seen very little cultural impact of their stuff; I haven't seen any kids running around with shirts or backpacks from their recent movies (again, outside Marvel and Star Wars).
Yeah, I was thinking on this, and I think this argument at least can be made: DIS might be held afloat partly by Millennial superfans operating off nostalgia, but they're not going to get that nostalgia effect in the future. Today's kids are not going to be nostalgic for Will Smith's Aladdin the way their parents are for Robin Williams' Aladdin.
This speaks to my view that Wokeness is more like a gradual poison that gradually erodes a brand's reputation and that limits an organization's freedom to operate intelligently than something that is really going to shock companies into overnight ruin.
How does Elon and Twitter fit into this model? I think fits pretty well… He was gonna come in, shake up management to crack down on bots, unwoke the policies, and implement new features. Before the stock market crash, he thought he could get $X improvement in share price. After the market cratered, he probably doesn’t think he can recover as much as was cratered. Checks out to me.
Musk's manifested intent was to increase freedom of speech on Twitter not for strategic purposes but for ideological ones, so it makes more sense to me to include him as part of the "sacrificing profits for ideology" bunch, even if it's not woke ideology.
Unless making the platform more free speech would attract more users and profit. Could go either way, although he did seem to think that it was worth doing philanthropically instead of for profit.
I think a lot of things changed with Musk in the whole process. He both found out it was going to be a lot less financially beneficial (maybe even a big loss) and he probably realized that even as CEO he would have a hard time changing Twitter in the ways he cares about.
Sam The Banana Man sounds both awesome and terrifying. But I'm curious - what is the likelihood of actually deregulating enough that corporate raiding and hostile takeovers are possible again?
As others have mentioned, this post doesn't really grapple with the labor market dimension of this and the fact that many employees will want to pressure management to adopt more left leaning stances.
To that I would add, for media companies especially there is an additional pressure presented by superstar talent who the company needs to hold on to quite a bit.
For example, Lin Manuel Miranda is a huge talent get for Disney, working on some of their most successful recent films (Moana and Encanto) and absolutely is rich and famous enough that he can drop Disney if they offend his sensibilities.
If Disney buckles to DeSantis in a public way, they could easily see Miranda jump ship over to DreamWorks. And he personally probably produces profit for them north of 100 million. And that's just one star of many.
Seems like more evidence in favor of the idea of the managerial state.
Most managers are talented at saying woke things but then not doing anything. Coke’s GC went farther and then he was gone. It’s all about the lip service
My experience with anti-left anti-woke right-wingers in Sweden
a) Many are not in favor of freedom and freer markets (less regulated, more deregulated), but are in favor of privileges and special treatments (more pro-business rather than pro-market)
b) Many do not understand that a market can contain both woke and alt-right things that people want to buy, and also do not like the development of eco-hipster raw-food climate friendly vegan merch
As others have mentioned, I don’t think the beckerian logic applies here because I believe woke corporations are viewing the ideology as a pathway to profit in the long run (or mitigation of risk). I think it’s also important to make the distinction between “external” (branding, products/content) and “internal” (culture, hiring practices) corporate wokeness.
I think the logic for external is that if wokeness is the dominant ideology of the top 10% who have a hugely disproportionate share of total consumer spending, then it makes sense to appease them even if it means alienating a certain amount of potential customers. Leftists are also much more likely than conservatives to reject/support a company based on its politics. Companies can’t be apolitical if they want woke support. Disney may be able to absorb it, but this is absolutely backfiring for many corporations (especially midsize businesses). Many even on the left are sobering up from the 2020 “reckoning” and realizing just how absurd wokeness has gotten. Even people who may agree with these ideas at some level don’t make it their whole identity anymore. If you look at who some of the most popular comedians are today, the ones selling out theaters, almost all of them are explicitly anti woke. Meanwhile much of the SNL cast (outside of a few) can’t even sell tickets despite achieving what was at one point the pinnacle of success for a comic. People are voting with their dollars, and it turns out it’s more important for a comic to be funny than be woke.
Internally, I think DEI serves as a kind of insurance policy against the possibility of getting sued for discrimination or any kind of civil rights violation. Implicit bias training, for example, very clearly has no tangible benefits to a firm’s bottom line. However if they DONT do the training (or embrace woke politics more broadly), they have nothing shielding them from the possibility that some crazy woke person is going to sue them for racism/sexism/etc in the work place. Society is basically being blackmailed by the most neurotic and sensitive people and the hucksters who enable them. It’s only a matter of time before companies realize it’s cheaper just to take the risk and fight it in court than to keep flushing money down the DEI toilet, because no matter how many trainings it will never be enough for these people.
Back to the comedy example, it turns out being a comedy writer is really really hard. If you narrow your talent search just to minorities who share your exact politics you’re making an already small talent pool even smaller. The idea that there’s a bunch of Louie CK’s and Dave Chappelle’s out there waiting in the wings who just haven’t had the chance because of some type of oppression just isn’t true. I suspect the same goes for CEO’s, engineers, or any high level position. Imagine if the NBA said they were going to require the league be 50% asian. Sure there may be some gems that wouldn’t have gotten a chance, but the quality of the league and its entertainment value would rapidly diminish.
The "expanded constituency" statute on the table stood out as one of the likely culprits to me. Why would shareholders accept reduced profits rather than support a takeover? Answer: they might have not have a choice.
This article lays out how the whole expanded constituency thing works (for Illinois, anyway, but it's an enlightening case study, and as the article mentions over half of states have similar statutes):
https://lawecommons.luc.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=2541&context=luclj
Tl;dr, statutes like these make the corporate entity itself the primary entity to which the corporate directors have a fiduciary duty, and the long-term interests of the corporation and the short-term interests of shareholders can diverge.
"Courts also allowed directors to rely on long-term corporate plans or
the protection of special cultural features of the corporation to thwart a
takeover transaction clearly favored by a majority of the share-
holders."
It's not such a stretch to imagine Disney's corporate lawyers making the argument that wokeness is "a special cultural feature of the corporation". I wouldn't make that argument with a straight face, but I assume some courts would probably take it seriously.
I’m fairly unconvinced that most individuals care much about wokeism. Sure, many who remain on culture war Twitter or watch cable news know the phenomenon - but that is a minor slice of the population. There are far more individuals who watch Buzz Lightyear without a semblance of realization that some stupid ideology is being pushed on them. Some may worry about this, but I’m not so sure we should. Wokeism as a holistic ideology is so detached from most individual’s daily lives that it is likely bound to fade into the next big thing (we are already seeing this w/ anti-woke ideologies).
Life will be much more simple if one ignores stupidity - dare I say wokeism is just another stupidity one should ignore.
I don't think there are enough eccentric billionaires looking to takeover megacorps that seem to be going off the ideological rails.
The best path is probably to change civil rights law to both stop incentivizing and even actively punish wokeness. If Google was fined 10% of its market cap over what it did to Damore, with the threat of taking another 10% every time it happened again, they would make changes.
We already have the police stealing peoples stuff if they don't follow civil rights law, I'm just proposing it goes both ways.
Ultimately, it would be best to not have civil rights law. But the temptation will always be to lean towards the status quo (bias against certain groups) rather then neutrality until a lack of neutrality is punished severely.
I have always thought that board elections should be by single transferrable vote.
If a board is 9 members, for example, then someone owning 11% of the stock should absolutely control a board spot. It enables a minority proxy fight. Using the Musk/Twitter example, he basically could have forced a member of the board who represented him (he was at 9%, not 11%, but I don't know Twitters board size either) without having to try to get 50%+1 and replace the board entirely.