October 18, 2021

THE VISIBLE HAND: The Distorted Market for Woke Capitalism.

The founder of modern economics, Adam Smith, was no fan of the merchants of his time. He regarded them as among the most responsible for how “the mercantile system,” as Smith called it, accorded legal privileges to politically connected producers over the interests of consumers. Nor did Milton Friedman have a particularly sympathetic view of the business leaders of late-twentieth-century America. “The two greatest enemies of free enterprise in the United States,” he wrote, “have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.”

Whenever I inform students of Smith and Friedman’s unflattering opinions of the business community, they are invariably shocked. But their eyes start opening when I point out that large established businesses don’t actually like competition, aren’t wildly excited about other people’s new ideas and products threatening “their” market share, and are quite happy to hop into bed with complaisant legislators to use state power to make life difficult for new and potential competitors. At this point, students begin realizing that to be pro-market is not the same as being pro-business. The two are at odds in some very important ways.

This is one way of understanding the phenomenon of “woke capitalism,” and it features in Vivek Ramaswamy’s Woke, Inc: Inside Corporate America’s Social Justice Scam. For if there is anything that characterizes woke capitalism, it is the desire—like the mercantilists of old—to exclude (ironically, in the name of tolerance, diversity, equality, etc.) particular individuals and groups from “their” markets and corporate America in general. In the case of woke capitalists, the excluded is anyone who doesn’t embrace all the usual progressive orthodoxies or who won’t play the woke game to go along to get along.

Plus: “At the nexus of all this is a curious combination: a neo-mercantilist approach to realizing profit alongside a conviction that the business of business somehow involves resolving as many of the world’s political, social, and cultural problems as possible. This reflects deep misunderstanding—if not corruption—of the role of business vis-à-vis other groups’ responsibilities in society.”

Fascinating piece, well worth your time.

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