Woke, Inc: Inside Corporate America's Social Justice Scam by Vivek Ramaswamy

(New York: Hachette, 2021), 356

Introduction: The Woke-Industrial Complex

  • "Pretend like you care about something other than profit and power, precisely to gain more of each." (3)
  • Woke: obsessing about race, gender, and sexual orientation (and perhaps climate change) (5); reduces you to the characteristics you inherit at birth and denies your free will (7)
  • "The true solution is to gradually rebuild a vision for shared American identity that is so deep and so powerful that it dilutes wokeism to irrelevance." (7)
  • "A good barometer for the health of any democracy is the percentage of people who are willing to say what they actually believe in public." (10)

Chapter 1: The Goldman Rule

Summary: The Goldman Rule says that "He who has the gold makes the rules" and Stakeholder capitalism says that a firm needs to consider more than just its shareholders. The danger with the latter is that it leads to those with the gold making our moral rules as well. Democracy and Capitalism need to keep their distance to protect both.*

  • The Goldman Rule: He who has the gold makes the rules. (13)
  • Stakeholder Capitalism: companies should serve not just their shareholders, but also other interests and society at large (15)

    • The danger is an extension of the Goldman Rule where they make the moral rules also (18)

    • Encourages capitalism's winners to wield greater power in our democracy (54)

  • Wokenomics: business trend that infuses woke values into big business (18)
  • He criticizes Pope Francis for endorsing Stakeholder Capitalism in the 2020-12 launch of the "Council for Inclusive Capitalism" (25)
  • We need to separate democracy and capitalism to protect them from each other (27)

Chapter 2: How I Became a Capitalist

Summary: Capitalism is an economic system and therefore morally inherently neutral, but it is inherently expansive so we must prudently build walls to contain it and protect religion, family, democracy, etc.

  • His visits to his father's home in Vadakanchery, India growing up taught him about America: "Seeing how much this system revolved around honor and status helped me understand how much the American system revolved around wealth." (44)
  • Capitalism is supposed to be just an economic system (like the caste system is a social system, both agreeing that the size of your bank account has nothing to do with your moral worth (45)
  • The danger of Capitalism is its "inherently expansive quality" and we need to "purposefully contain its scope." (47-48)
  • "We unnecessarily pit groups against each other when we ask who the worst off are instead of asking how capitalism sometimes complicates things for everyone." (51)
  • Capitalism is good, but we need to protect higher things (religion, family, democracy) from it by putting protective walls around them (53)

    • "The solution isn't to change capitalism (Democrats) or ignore its invasive qualities (Republicans) but to prevent capitalism from changing everything else by building protective walls around the things that we cherish most, like democracy." (54)

Chapter 3: What's the Purpose of a Corporation?

Summary: American corporate law rightly extends the massive privilege of limited liability to corporations but demands in return the fiduciary obligation to maximize shareholder returns, ensuring that corporations stay in their lane and focus in the economic sphere. Shareholder capitalism abuses the privilege of limited liability to pursue other interests beyond the chartered economic activity of the corporation.

  • "I personally reject the narrative of systemic racism" (61)
  • The legal invention of the Corporation accomplishes two things (65+):

    • fiduciary obligation from the managers to the owners (shareholders)

    • limited legal liability for shareholders

  • Maximizing shareholder value is about "reining in corporate power—by preventing an abuse of the corporate form to aggregate undue power and social influence and limiting corporations to focus on selling goods and services." (70)

    • Shareholder primacy protect shareholders from management and protects democracy from both managers and shareholders (72-73)

Chapter 4: The Rise of the Managerial Class

Summary: The managerial class of bureaucratic administrators abuses their position (and the business judgment rule) to pursue social ends outside of our democracy.

  • Corporation has founders, investors, and employees, but now also the managerial class: own less of the company and have a personal reputation to maintain
  • The Managerial Revolution by James Burnham (89): capitalism is being replaced by this managerial class (cf. 2017-06-19-Player Piano)
  • His solution: limit the scope of the Business Judgment Rule (BJR) to apply to only business decisions and not social ones (97)
  • As a CEO, the more people you're accountable to, the more powerful you become by being able to pit different stakeholders against each other (one motivation for going public, 103)

Chapter 5: The ESG Bubble

Summary: We have created an ESG bubble by falsely thinking that a constraint will increase returns and large institutional investors putting large fractions of their assets in ESG stocks.

  • "Socially driven economic policy risks creating asset bubbles", which hurt the people and causes those policies were designed to help (cf. The Big Short, 108-109)
  • ESG (Environmental, Social, and Governance) stocks should systematically return worse results because it places a constraint on asset allocation (109)

    • Cliff Asness of AQR Capital explanation: ESG investors refusing to invest in "sin" stocks means that they trade at a lower price and therefore offer people who do hold them higher returns, making the cost of capital higher for these "sinful" companies (111)

  • No-True-Scotsman Fallacy: No scotsman wears red socks, but this one wears red socks, "well no true Scotsman wears red socks". Used to selectively and after the fact define which companies are actually ESG based on performance. (116)

Chapter 6: An Arranged Marriage

Summary: Corporations embraced wokeism after the financial crisis to give themselves cover from anger directed at them creating an "arranged marriage" between the two where both gained more money and power. This endangers our democracy by extending corporate power into social matters.

  • The "arranged marriage" of wokeness and capitalism so both can gain more money and power (129)
  • Milton Friedman in 1970 NYT Magazine: "the doctrine of 'social responsibility'" if in business, if "taken seriously would extend the scope of the political mechanism to every human activity" (129)

Chapter 7: Henchmen of the Woke-Industrial Complex

Summary: He discusses how the executive branch uses fines and nonprofits to funnel money into desired causes outside the appropriation power of congress.

Chapter 8: When Dictators Become Stakeholders

Summary: International stakeholders, especially China (and in his experience Saudi Arabia), are exerting increasing control over American corporations and universities.

Chapter 9: The Silicon Leviathan

Summary: Silicon Valley engages in "idea-fixing" by censoring what they don't like on their platforms, enabled by Section 230. He suggests amending Section 230 to also require adherence to the First Amendment.

  • Facts and policies are different: we must be able to debate policies and not have debate shut down in the name of "science" or "facts" when in fact it is a policy decision (184)
  • Silicon Valley engages in "idea-fixing" by abusing market power to gain more social, cultural, and political power (195)
  • "Once it becomes acceptable to silence people under the banner of fighting hate speech, whatever speech powerful interests dislike becomes hate speech." (200)
  • Big tech is enabled by Section 230 of the Communications Decency Act of 1996

    • 230(c)(1): platforms aren't a publisher, so they can't be held liable for what their users say on the platform

    • 230(c)(2): "Good Samaritan" provision allowing them to censor content

    • His solution is to amend Section 230 so that companies are also bound by the First Amendment (208)

Chapter 10: Wokeness Is Like a Religion

Summary: Wokeness is the new orthodoxy and the new "Church of Diversity" is the real threat to diversity of thought.

  • Jesus Christ condemned by the Grand Inquisitor in The Brothers Karamazov: "wokeness sacrifices true diversity, diversity of thought, so that skin-deep symbols of diversity like race and gender can thrive." (216)
  • Antiracism is a profoundly religious movement in everything but terminology, the "Church of Diversity" (216)
  • We can't dismiss the "Church of Diversity", but "we need to take its concerns seriously and provide a better answer to those very concerns than woekism does." (239)

Chapter 11: Actually, Wokeness Is Literally a Religion

Summary: He makes a legal argument that political thought effectively is in the same category as religion for the purposes of limitations on discrimination.
- The Bostock decision extended civil rights protections to sex even though that wasn't in the Civil Rights Act of 1964: political affiliation can similarly be added (247)

Chapter 12: Critical Diversity Theory

Summary: He proposes a new "Critical Diversity Theory" to bring true diversity of thought to organizations.

  • Objectives of Critical Diversity Theory (267)

    • Define what types of diversity of thought are important to an organization

    • Measure diversity of thought in an organization

    • Select for diversity of thought when hiring leaders

  • Excellence, opportunity, and civility (alternative to diversity, equity, and inclusion) (270)

    • Excellence first: diversity is not an end but a means

    • Institutional purpose: each institution should define its own purpose

    • Institutional pluralism: institutional pluralism should be part of the larger American pluralism

    • Separation of corporation and state: for-profit companies focus only on making products and services for profit, not social and political agendas

    • End discrimination: stop discriminating on the basis of race, gender, etc.

Chapter 13: Woke Consumerism and the Big Short

Summary: We increasingly sort ourselves into tribes, and this is fueled even more by the echo chambers of social media platforms. We lack a shared national identity, an issue foreseen by the Founders.

Chapter 14: The Bastardization of Service

Summary: He proposes compulsory service for American youth to discover its greatness by working together to build it.
- "In America we simply can't do anything just for its own sake anymore" (307)

Chapter 15: Who Are We?

Summary: Americans live with the paradox of diversity and unity, and we need to build the unity in how we describe America.

  • True pluralism is that we have many identities within us against the woke narrative that we are defined by our genetically inherited attributes and rather than having free will we advance the interests of whatever group we happen to belong to (322)
  • As American's we live with the paradox of our diversity and our unity: (325+)

    • "Our diversity is meaningless if there's nothing greater that binds us together" (325)

  • "Capitalism and democracy are the mother and father of America": 1776 was the year of both the Declaration of Independence and The Wealth of Nations (326-7)
  • Wokeness perverts E Pluribus Unum "from many, one" to "from one, many", where the characteristics you inherit at birth determine who you are and what you can achieve
  • America is an idea, and "the way we as citizens choose to describe America changes the way America actually works" (327)

Topic: Wokeness, Capitalism, Politics, #wishlist

Source
- 2022-02-15-Tue

Bibliography

  • The Managerial Revolution by James Burnham (89)
  • The Big Short by Michael Lewis (109)
  • Stakeholder Capitalism by Klaus Schwab (130)
  • White Fragility by Robin DiAngelo (138, 217)
  • The Brothers Karamazov by Fyodor Dostoevsky (215)
  • The Big Sort by Bill Bishop (278)
  • What Money Can't Buy by Michael Sandel (288)
  • The Federalist Papers (292)
  • The Wealth of Nations by Adam Smith (327)

Created: 2022-02-21-Mon
Updated: 2022-03-18-Fri