Coca-Cola is one of the largest and best known consumer products companies in the world. Many of its products contribute to the rich world’s obesity epidemic. Rather than confront that very real harm, company leaders have instead found a convenient distraction in pledges and policies around social issues.
That’s one example that biotech executive turned Republican Presidential hopeful Vivek Ramaswamy puts forward in his 2021 book Woke, Inc.: Inside Corporate America’s Social Justice Scam.
Today’s obsessive use of “woke” by American conservatives to dismiss any progressive policy or perspective is silly and lazy. (Even authors I follow closely have done so). I reluctantly got the book expecting another shallow rendering of partisan talking books. This isnt that. In truth, I think the “Woke Inc” title may be limiting, even if it has proven effective in selling books.
Vivek has something to contribute to the conversation. I’ve written about the perils of today’s shareholder capitalism, but Vivek offers a nuance I hadn’t seen before: Big companies are using progressive talking points to distract from challenges they are better suited to address.
As he puts it: “If you claim to owe the public everything, you will in fact owe it nothing.”
Like all of the books I read, I’m not endorsing any other author’s policy stances. I did appreciate the book, whether or not I agreed with much of the author’s conclusions. Below I share my notes for future reference.
My notes:
- “Pretend like you care about some thing, other than profit and power, precisely to gain more of each
- Fearless Girl statue in Wall Streets gets embroiled in a court case
- Steven Kaplan compares shareholder capitalism to US car industry in 1960s and 1970s losing competitiveness to Japanese car companies by working in too much union closeness
- Author thinks the bigger point is what he calls the Goldman Rule: he who has the gold makes the rules, and so corporations are using woke trends to distract
- Goldman Sachs said they’d take prioritize companies with “diverse” board member, even after S&P companies already had at least one female, yet they also ignored the 1Mdb scandal in Malaysia. As author asks: What people of color do they care about?
- Author argues stakeholder capitalism is no different than Citizens United or Hobby Lobby (companies choosing what political stances they prioritize)
- Author criticizes Jamie Dimon for his joke: “I would love to be president. I just don’t like the idea of running to be president.” But the hassle is part of the democratic process that CEOs like avoiding, author argues
- Author: “If you claim to owe the public everything, you will in fact owe it nothing.”
- “There are far more CEOs who are eager to grab money and power in the name of justice then there are CEOs who are agnostic to money and power and care only about justice.”
- Instead of Coca-Cola confronting the diabetes and obesity epidemic they contribute to, they use DEI initiatives to get progressive credit
- Author asks: why was my Roviant board and staff fixated on BLM and not the Chinese issues even though we did business there?
- The separation of ownership and control
- The 2015 Delaware chief justice Leo Strine: Delaware law “reveals that… directors must make stockholder welfare their sole end”
- Dutch East India company: Rapacious growth abroad and philanthropy at home to assuage criticism
- Thoughtful liberals say corporations are given special privileges of limited liability (the state created them) so they should be asked to do more for society in return (Like in Bradford Delong’s Slouching Toward Utopia)
- “The creation of a limited liability corporation was important tool to unlock, not only productivity through the private sector, but also potentially limitless corporate power that can infect other spheres of society on the marketplace for goods and services. By limiting the focus of corporate boards, the shareholders, on financial interest alone, corporate laws are actually confining the sphere of influence of corporations. That protects our democracy, and other civic institutions from corporate overreach” Nonprofits are opposite, author adds: we give them tax exempt but we want only charitable causes
- Corporations started as monopolies and railroads and others for specific issue (Like in the book For Profit). Build a bridge but not a road. But by the late 1800s, US moved to general incorporation. Ultra vires and profit was an American approach ; European corporatism had a mix of elites deciding societal goals. The Americans separated civic work and innovation to focus corporate superpower of limited liability. Author argues Milton Friedman missed that this limited corporate power
- Author’s change: Remove liability for LLCs when they do behavior that isn’t profit maximizing. (They’d either change behavior or admit their social stuff is PR)
- “To successfully merge business with politics, managerial elites must control both.”
- Author argues administrative state is independent enough to serve as a fourth branch of government
- Michael Landon in 2016 said that western democracy is threatened by gradual decay under well educated well mannered and well-funded elites. He wrote the modern American government implicitly “transfers, political power from national legislatures to executive agencies, transnational bureaucracies, and treaty organizations”
- Author argues that companies typically have three legs of the stool, the founders, investors, and employees. He says the managerial class is to companies what the administrative state is the government
- A 1998 paper on the separation of ownership and control, written by Michael Jensen and Eugene Fama: agency cost of managers, wielding day today control, but owning relatively little of companies
- Hans Burnham’s 1941 book The Managerial Revolution: of these corporate and governmental bureaucrats becoming new leadership beyond democratically elected officials
- Lind argues there’s no clear lines between portions of our economy now. “diplomats, become investment bankers, investment bankers become ambassadors, generals, sit on corporate boards, and corporate executives sit on nonprofit boards.”
- “accountability to everyone is accountability to no one at all”
- Author argues Volkswagen, WeWork, Wirecard and Nikola are examples that used woke reputations to evade their bad behavior
- Pharma should maximize profit before patents expire. Expecting them to give in leads them to cheat elsewhere (Allergan pledging only 10% price increass at same time they tried to sue the Mohawk tribe)
- Business judgement rule (BJR) has gone too wide: “using the corporate dime needed to fund your favorite social causes is no less a conflict of interest than a classical financial conflict of interest.”
- “in his book, Restoring the Promise: Higher Education in America, economist Richard Vedder calculated the ratio of campus bureaucrats to faculty had held steady since 1976, they would be 537,317. Fewer administrators, seven universities $30.5 billion per year and allowing student tuition to decrease by 20%.”
- “To me, America’s about empowering true innovators, like founders, true, risk takers, like investors, true thinkers like professors, and true elected leaders over the bureaucratic intermediaries who are hired to manage them all”
- Author says that Lind believes it’s a battle between elites and ordinary people, the author views it as a battle between hired hands and those who embody the essence of an institution (professors at universities, doctors at hospitals, or founders and shareholders of companies)
- Cause of subprime mortgage crisis wasn’t corporate greed but a governmental push in the 1990s for more homeownership: “socially driven economic policy risks creating asset bubbles”
- Cliff Asness has shown ESG investing should underperform because it has constraints. If fewer invest in sin companies they should over perform due to a discount rate
- Burton Gordon Malkiel introduces the greater fools theory in his 1973 book Random Walks Down Wall Street
- Ludwig Von Mises (who influenced Hayek and Friedman)The Anti Capitalistic book: either you beat your father on the same terms or you say you are morally superior
- Milton Friedman and Klaus Schwab, who wrote a 1973 paper setting up Davos, had rival views of where global capitalism should go
- DOJ can offer corporate fines a discount if made as donations to favorite nonprofits (Obama era plan)
- Author calls it logically inconsistent that the NBA supports BLM but backed away from the Rockets GM’s criticism of China’s treatment of Hong Kong; that Disney pushed against Georgia abortion bill but not against filming Milan in China. (My thought: Is it inconsistent? Couldn’t they respect national boundaries?)
- China and Saudi Arabia use some themes to let companies talk proudly in the US but kneel for profits in their kingdoms
- Author calls Chamath Palihapitiya (early Facebook employee turned VC and podcaster) woke
- Silicon Valley isn’t price fixing it is “idea fixing” 194
- antitrust has changed: “the main victim isn’t the consumer in the market; it’s the citizen in our democracy”
- “Censorship becomes rebranded as social responsibility”
- In 1924 US secretary of commerce and the future US president Herbert Hoover wrote “it cannot be thought that any single person or group shall ever have the right to determine what communication may be made to the American.… We cannot allow any single person or group to place themselves in a position where they can send through the material with shall be broadcasted to the public.”
- Intel’s Bleep product (AI accelerated speech filtering): these may start as censoring conservatives but they’re tools for all to worry about
- Section 230 has two key provisions: platforms aren’t publishers, and platforms can pull stuff they feel is inappropriate.
- Would we have had a more fractured social media environment if not for Section 230? Many smaller niche sites that fought many lawsuits and policed content? Maybe a mistake but now likely too late to undo
- Author argues if you’re a 230 company you have to protect first amendment
- Author says Justice Powell’s take for UC vs Bakke was a good starting point for diversity; contrasted this university with Harvard’s “holistic review” of candidates
- “American colleges routinely discriminate against Asians in the name of diversity.”
- Author argues we want diversity of thought but we’ve lost that with race and gender only as proxy. Argues it should be about socioeconomic background (His company had loan repayment program for employees who grew up poor with debt and stayed)
- Three kinds of workplaces for politics: apolitical, deliberative and orthodox
- Based on Bostock Supreme Court case and Title VII author argues political opinions expressed on personal time could be a protected like religion: “Because of the Civil Rights Act of 1964, a literary agent can’t fire a Muslim employee for asserting that transgender women are actually men because the Quran says so, it must also say that the agency can’t fire someone white for asserting the same thing because her preferred brand of feminism says so.” (If it’s not at work)
- EEOC two part definition of religion: (a) believe fervently, and (b) explains everything
- Onionhead and other court cases arguing secures non theistic forms of religion so author says wokeness is religion and should come with similar legal protections (what employees can do and what employers can’t) (Others argue “wokeness” is a religion)
- Larry Somers was forced to step down as Harvard president after his comments about white men outperforming women in engineering roles. He shared three hypotheses for why: one that men were more drawn to those jobs, another was that hiring discriminates against women, and the third was the most controversial in which posted that there was more variability in male cognition related to the mass in science. There’s a higher standard deviation in test scores for boys and for girls (more high-performing and low-performing boys, while girls are more similar in performance)
- Book Cynical Theories and “the grievance studies affair” grew out of Alan Sokal’s hoax paper in 1996
- The problem with race and gender being used as proxy metrics for diversity of thought is that one it reinforces the incorrect assumption the genetic characteristics predict some thing important about the way a person thinks, second visible diversity can be used as a shield against true diversity of thought, and it fuels real racism and sexism by fostering tokenism.
- “You can get things you want anyway and order some equality on the side.”
- An anti-federalist paper written under the pen name Cato reads “but whoever seriously considers the immense extent of territory, comprehended within the limits of the United States, together with the variety of its climates, productions and commerce, the difference of extent, and number of inhabitants and all; that is similar tude of interest, morals, in politics, and almost everyone, will receive it as an intuitive truth, that I consolidated republican form of government there, and can never form a perfect union… This on kindred legislature, therefore, composed of interests opposite, and a similar in their nature, will, and it’s exercise, emphatically, be like a house divided against itself.”
- The US Constitution’s religious freedom and birthright citizenship were remarkable triumphs but maybe our country too big and too different to go on forever
- Mandate civic service for high school summer break