John Humphrys - Is 'Woke capitalism' a blessing or curse?

January 28, 2022, 4:02 PM GMT+0

‘Woke capitalism’ is in the news. It’s been fashionable for a couple of years but it’s only recently started to make the headlines and not for the reasons its enthusiasts might have hoped. Is it something we should fear or embrace?

Capitalism is about making a profit. If a company makes no profit that company ceases to exist. So far... so simple. And it works. Or at least, it has done for a very long time. The United States is the richest country in modern history because of it. So why are some of the mightiest companies on the planet now turning towards a form of capitalism that believes making a profit is no longer enough. It’s been dubbed ‘woke capitalism’. Its advocates say it’s all about making the world a better place. Big companies have a social responsibility and it's about time they took it seriously. And who can argue with that?

Its critics say that’s all very well but only so long as it doesn’t hit the bottom line. And that, they claim, is exactly what is beginning to happen. In truth, they say, the ‘lefties’ are taking over and we should all be worried.

Unilever has been a shining star in the capitalist firmament since Victorian times. A mighty corporation by any standards. It was founded by the Lever brother in Merseyside back in 1885. They had a new system for making soap and it worked. There’s scarcely a supermarket in the western world that does not display their products on their shelves: everything from Lynx deodorant to Dove soap, Persil washing powder. Even Marmite. The list is endless and the profits have been spectacular. Its annual turnover is more than £40 billion. But it’s going through tough times. It has just announced 1500 job cuts and its latest attempt to widen its empire still further has suffered a rather humiliating rejection. It wanted to buy the healthcare division of its powerful rival GlaxoSmithKline. They said no and Unilever was forced to back off.

Worse still, in some ways, was an attack on Unilever by Terry Smith. Mr Smith is a fund manager – one of the most influential in the world of investing. He has himself become very rich over the last couple of decades by investing only in those companies that provide goods and services which people like you and me cannot live without. Unilever has always been one of that select group. It has helped make Mr Smith and his investors a great deal of money. But now he has turned on them.

He has written in his annual letter to his shareholders that Unilever – specifically its chief executive Alan Jope and his board - have ‘lost the plot’. What they should be doing, he says, is 'focusing on the fundamentals of the business'. In other words, making products that people want to buy and turning a profit on those sales. Instead, he says they are devoting their time to adolescent political posturing. In simpler terms, its critic would call it ‘virtue signalling’.

Examples cited by Mr Smith and other critics include an attack by one of Unilever’s brands, Ben and Jerry’s ice cream, on the Home Secretary Priti Patel. It accused her of a 'lack of lack of humanity for people fleeing war, climate change and torture'. It may or may not be justified, they say, but what business is it of Unilever? Those critics apply the same logic to some of the more bizarre offerings on its website such as urging its customers to embrace a 'plant-forward diet' and telling them that Richard Hellmann (famous for his mayonnaise of course) was 'an immigrant man of the people'. Or a boast by Knorr that it is 'reinventing food for humanity'.

The historian Dominic Sandbrook has joined in the attack on ‘woke capitalism’ in an essay for the Daily Mail. He wrote: ‘Turn on the television, flick through a magazine or walk past an advertising hoarding, and you can hardly miss the patronising encouragement to 'be kind', the misty-eyed lamentations about 'mental health', the relentless, one-note obsession with 'diversity' and 'inclusion'.

He offered some examples: ‘The chocolate giant Mars recently announced that it was rebranding its M&M sweets to reflect a 'more dynamic, progressive world'. The green female M&M character was to be 'less sexy' and the brown M&M, also female, given heels of a more 'professional height'. (It's worth emphasising that we're talking about walking chocolates here; and no, I'm not making this up.) Then there's Nike, once a sportswear company, but now, if you believe its press releases, a radical political party. Its future, the chief executive recently promised, would be to support 'organisations that put social justice, education and addressing racial inequality in America at the centre of their work'. Whatever happened to making trainers?’

‘Woke capitalism’ says Sandbrook, is the corporate world's equivalent of the Meghan and Harry Show: a ‘suffocating, narcissistic and entirely cynical performance of fashionable virtue.’

Well, that’s a view, but do we really want to return to the days of capitalism red in tooth and claw? The liberal left say positively not. Mighty corporations should be concerned with the wellbeing of society as a whole, they say, rather than worry only about the bottom line and the interests of their shareholders. But there is another view and it was expressed by Professor Carl Rhodes of the University of Technology Business School on the ‘Transforming Society’ website.

He argues that ‘going woke’ need not mean re-writing the rules of capitalism in line with a left-wing agenda or signalling virtue instead of worrying about making a profit. He says it is about making sure that there is no fundamental change so that market capitalism can continue on the trajectory that it has been on for the past 40 years.

Here’s how he puts it: ‘It is not so simple as saying that woke corporations are hypocrites riding popular causes so that people buy their products. To get to the heart of what is going on, it is worth realising that when corporations do align themselves with progressive positions, they are generally focused on social change rather than any substantial changes to the structure or operation of the economy.’

A fundamental rule of woke capitalism. He says, is that ‘politics that threaten the corporate bottom line are to be avoided at all costs. Even when corporations do align themselves with social causes, those causes are generally ones where the real activists have already done the hard work and been successful in influencing public opinion.’

And he makes this wider point: ‘In a global economy where billionaires and large corporations hoard greater and greater proportions of the world’s wealth, the democratic promise of equality is being sacrificed. Human values of community, sharing and justice become regarded as quaint when faced with the inevitable consequences of an economic system based on the pursuit of greed. Woke capitalism buttresses a self-satisfied ruling elite who believe that their wealth is deserved. This all points to a more general facet of woke capitalism. No amount of feel-good moral conviction will allow a corporation to engage in a politics that will harm its own financial fortunes or that of its owners and managers. If we want real progressive change, it’s time to get woke to woke capitalism.’

So where do you stand in this debate? Do you object to being preached at by the ‘virtue signalling’ bosses of big corporations? Are you one of those sceptics who believe that the bosses’ own ‘virtue’ is skin deep and they parade it only to conceal their real motive, which is to maximise their company’s profits rather than build a better world? Or maybe that they are simply scared of pressure from the left liberal lobby? Do you believe that we can have our cake and eat it ... that big companies can make ever bigger profits and behave in a virtuous manner that we can and should applaud? In short, do you believe that capitalism really can make the world a better place – just so long as they keep making big profits?

Let us know your views.

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