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Woke Corporations and Cancel Capitalism

Guest: Vivek Ramaswamy, author of Woke, Inc., founder and executive chairman of Roivant Sciences

Social activism and conscious consumerism are on everyone’s mind these days. Big business has taken on causes, from climate change to racial justice. Should corporations get involved in politics?

That’s the big debate right now. Recently, it seems most businesses “need” to take a stance on LGBTQ+ issues, racial equality, or voting rights. This week, we’re joined by Vivek Ramaswamy, author of Woke, Inc.: Inside Corporate America’s Social Justice Scam, who explains why he believes that politics should have no place in business. Ramaswamy is a former first-generation biotechnology entrepreneur, investor, and innovator. He is the founder, CEO-turned-executive-chairman of Roivant Sciences, a pharmaceutical company focused on applying technology to drug development. After publishing his much-debated book, Vivek is a familiar voice and writer on stakeholder capitalism, social activism, and free speech.

“’Stakeholder capitalism,’ which is that businesses ought to be vehicles for advancing, not just the pursuit of profits through the sale of products, but also demand social values, inadvertently poses a threat to democracy. It means that a small group of investors and CEOs determine what’s good for the rest of society, rather than our democracy at large, where every person’s voice and vote counts equally,” says Ramaswamy. 

Altamar has doubts about this argument. Given the repeated failures of government to resolve long-standing issues such as social inequality and racial injustice, corporations are spearheading this new wave of conscious consumerism and promoting social causes. Why is that a bad thing? At a time when millennials and Gen-Zers demand more social “woke-ness”, why not buy at companies that are jumping to demonstrate their activism as a way to ‘stand out’ in the market. 

“I have a particular problem with stakeholder capitalism when it’s espoused by big business. It’s one thing if you’re talking about small mom and pop businesses across the country, running their businesses in ways that accord with their values and those of their customers and take social stands… But when big business in our country has ultimately co-opted decision-making power in our culture that’s best resolved through free speech and open debate on issues ranging from climate change to racial justice. And that’s actually the biggest threat that I think stakeholder capitalism poses to democracy,” explains Ramaswamy.

“What exactly is the scam that you accuse “woke” corporations of?” asks Altamar’s Muni Jensen. The scam is actually pretty simple. The way it works is as a business, in particular, a big business today, you pretend like you care about something other than profit and power, precisely to gain more profit and power. And that new trend dupes the public into believing that businesses stand for something other than the pursuit of profit through the sale of their products, but instead actually sews a crisis of institutional mistrust when you realize that those businesses are actually lying to you. And so, what happens is both in the United States and other countries, consumers vest too much trust in these businesses that ultimately aren’t actually great stewards of the social causes that they purport to advance,” explains Ramaswamy.

New generations of consumers: millennials and Gen-Zers in particular, are hungry for purpose, hungry for a cause, hungry for a sense of meaning and identity. Ramaswamy thinks they are left unfulfilled by corporate America. “[Woke capitalism is] sort of filling their moral hunger with the equivalent of fast food by mixing their morality with commercialism, like going to Ben and Jerry’s and ordering a cup of ice cream with some morality on the side,” Ramaswamy notes and continues, “The problem with a morally hungry millennial is that buying a shirt that signals your morality doesn’t actually satisfy your moral hunger either. It just leaves you starving for more substantial fare. I think that that is the deeper cultural problem at the heart of our nation’s soul,” explains Ramaswamy. 

“Don’t you think that business has a role at all in making the world better and raising awareness on inequality, climate threats, and discrimination? Or should business just worry about its bottom line and its shareholders?” asks Altamar’s Peter Schechter. “I think that abdicating that project and deciding that capitalism should instead fix the kinds of problems that ought to be addressed through free speech and open debate in a democracy is decidedly a turn in the wrong direction…I think the right answer to the kinds of questions that you just laid out is not to force capitalism and democracy to share the same bed,” answers Ramaswamy. “I think what we actually need is a clean divorce between the two sets that each one is prevented from infecting the other, as we see today, and I think to resolve political questions is free speech and open debate. And I wonder what happens when corporations get involved,” continues Ramaswamy. 

“I draw a big difference between small business and big business. I think that the scammy kind of woke capitalism is bad, whether you’re small or whether you’re big, because it’s fundamentally a form of fraud. It’s a form of deception. It’s a form of claiming to do one thing when in fact you’re doing another, saying something that you don’t mean. Whether you’re big or small, there’s an issue I have with that…if you’re a small business that ultimately is expressing and building a product for the pursuit of what you believe ought to be provided to consumers…I think that there’s a version of that that I am perfectly okay with,” says Ramaswamy. “I have problems with all kinds of businesses that are inauthentic about it, small or large. On the people who are embodying their stakeholder capitalist values authentically, my biggest problem with it is really with companies that abuse disproportionate market power to silence dissent,” explains Ramaswamy. 

Want to learn more about Vivek’s view of the difference between corporate propaganda and genuine mission-orientation? Find out more by listening to the latest Altamar episode, available wherever you get your podcasts. You can download the episode here.

Image Source: Brendan McDermid / Reuters


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