Rick Haglund: Can woke capitalism and big business coexist?

By: - May 3, 2021 5:51 am

Bill Gates and Warren Buffett at an event organized by Columbia Business School on January 27, 2017 in New York City. | Spencer Platt/Getty Images

Seven years ago, I wrote a column that carried this headline: “Democrats and big business, you have more in common than you think.”

At the time, major Michigan corporations were better aligned with state Democratic lawmakers on a number of issues than they were with Republicans who controlled every branch of state government.

Those issues included extending constitutional anti-discrimination protections to LGBTQ
people, and greater investment in higher education, public transit and cities.

Even former Gov. Rick Snyder’s $1.8 billion business tax cut in 2011 favored small businesses over major corporations.

I suggested big business could become an important ally for Democrats in convincing voters “that their party is the right one to guide the state to a prosperous future.”

Today, as Republican-controlled legislatures across the country work to suppress voting rights, Democrats and big business have become even more philosophically aligned.

In Michigan, 37 chief executive officers, including leaders of the Detroit Three automakers and Blue Cross and Blue Shield of Michigan, signed a statement denouncing Republican-backed bills in the Legislature that would restrict voting.

And in a two-page New York Times ad earlier this month, more than 300 U.S. companies
expressed their opposition to voting restrictions that a number of states are considering.

“Woke capitalism” is growing as Republicans veer toward authoritarianism. But it’s not clear if the widening rift between corporations and the GOP will benefit Democrats or translate into greater corporate support for progressive policies.

Corporate activism escalated during the past decade as Wal-Mart, Apple and other companies denounced laws in Indiana and other states allowing businesses to discriminate against LGBTQ customers in the name of religious freedom.

Many business leaders also spoke out against President Donald Trump’s Muslim travel ban, his “very fine people, on both sides” comments following a violent white supremacist rally in Charlottesville, Va. and his inciting of the Jan. 6 insurrection at the U.S. Capitol.

M.K. Chin, an assistant professor of management at Indiana University, said growing corporate wokeness isn’t just feel-good public relations.

His research shows that corporate executives are increasingly speaking out on issues that
reflect their own personal values. In addition, companies with more liberal employees also are prompting CEOs to take stands on social issues reflecting those employees’ values, Chin found.

And, of course, companies likely view speaking out in favor of LGBTQ rights and police reform as good business as public opinion shifts in favor of such measures.

“They don’t want to be on the wrong side of an issue, which could hurt their bottom lines,”
David Dulio, an Oakland University political science professor, told me. “We have to remember that corporations are corporations—they’re profit-maximizers.”

Big business and the Republican Party have enjoyed a long, fruitful marriage. Corporate
support for Republican candidates and causes since the 1970s have translated into sharply
lower taxes and less regulation for businesses, Chin said.

Corporate taxes as a share of gross domestic product are about 1%, down from about 4.1% in 1967.

Republican leaders are clearly miffed at this social uprising by corporate leaders. Senate
Minority Leader Mitch McConnell told businesses to “stay out of politics” and has threatened
“serious consequences” for corporations acting like “a woke parallel government.” (But he later said corporate contributions to political campaigns were fine.)

Other Republicans leaders want to rebrand the GOP as the party of the working class. Indeed, Chin said corporations aren’t so much shifting away from the GOP to the Democratic Party as the Republican Party is shifting away from corporations.

The challenge for Democrats is in capturing more financial support from big business.
It won’t be easy. Corporate leaders might be offended by the GOP’s attempt to suppress voting rights, but are captivated by the party’s low-tax ethos.

If big business is sincere about protecting voting rights, boosting racial and economic equality, and addressing other social ills, though, it must go beyond issuing well-meaning statements.

Detroit’s decades-long economic decline, which has only recently begun to reverse, serves as a stark example of corporate leaders acting against their own stated intentions.

Heavy-hitter corporate leaders, including Ford Motor Co. chief Henry Ford II and department store magnate Joseph Hudson were among the founders New Detroit Inc. a racial justice organization formed after the devastating 1967 riots in the city.

But Detroit became the nation’s poorest big city as many of these same corporate leaders  abandoned it, resulting in the loss of hundreds of thousands of jobs.

Michael Rafferty, New Detroit’s current CEO, praised state business leaders who have taken a stand against the proposed voter restriction bills in Michigan.

But “corporations must stop funding those in office who want to pursue these bills,” he said in a recent Detroit Free Press guest column. “Corporations must take a stand.”

And, it needs to be added, start funding those elected officials and candidates who want to
preserve the right to vote and treat everyone equally.


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Rick Haglund
Rick Haglund

Rick Haglund writes the "Micheconomy" column for the Michigan Advance. He's a former reporter and business columnist for Booth Newspapers, now the MLive Media Group, with extensive experience covering Michigan’s economy and the auto industry. He now works as a freelance writer based in Southeast Michigan.