'Woke' Capitalism and the Impact of Coronavirus
The last time a worldwide epidemic endangered the life of virtually everyone on the planet was more than a century ago. But not even the deadly influenza outbreak of 1918 threatened the lifeblood of the global economy the way the current coronavirus pandemic has done.
As the federal government and every governor and mayor in the country try to stem the spreading disease, this secondary threat emerged as fast as the virus was spreading: the cratering of the many service-based sectors of our economy. President Trump and other elected officials will be judged by how they met this challenge. But so will private enterprise.
Free-market capitalism was already under scrutiny even before de facto quarantines left millions of working Americans out of a job overnight and largely confined to their homes. The reasons for this skepticism vary: The Cold War is an increasingly distant memory, schools replaced civics education with identity politics, and the nation’s largest and oldest political institution -- the Democratic Party -- has veered increasingly to the left. The upshot is that polling done by Harvard University’s Institute of Politics shows that about half of Americans under 30 do not support free markets. When presidential candidate Amy Klobuchar told her fellow Democrats “I believe in capitalism” at a February debate, she drew only tepid applause.
In other words, even before a new strain of coronavirus jetted out of China’s Wuhan province to every corner of the globe and every U.S. state and territory, executives knew they were being judged -- especially by young Americans -- by more than their business practices. For many, the solution was a corporate embrace of progressive political views, an approach that has come to be known as “woke” capitalism.
This was the topic explored in the latest RealClear Opinion Research survey, conducted before COVID-19 dominated the news cycle and the American psyche; it asked detailed questions about free market capitalism of more than 2,500 U.S. voters. The results have widespread implications not only for the 2020 elections, but for a private sector reeling in the face of a new pandemic that is straining the ability of vast swaths of that sector to meet their most basic obligations.
“There were already fissures in the status quo,” said RealClear Opinion Research polling director John Della Volpe. “Now, with a crisis unlike anything most of us have experienced, those cracks are only going to widen.”
Della Volpe’s recent survey showed that nearly half of respondents (48%) say political positions held by businesses impact their purchases: 27% said they patronize businesses that share their views and 21% say they buy less often from businesses that hold opposing political views.
“We stopped watching NASCAR, which I was faithful to for 30 years,” said a Democratic woman from Delaware. “We put all my New Balance away in storage because they contributed to Trump.”
“Nike supports the evolution of the African American race within sports,” said a 24-year-old black Democrat from Georgia. “This is something I can relate to and also take pride in.”
“I have stopped going to Hobby Lobby based on their stance on birth control and the LGBTQ community,” said a 57-year-old Florida Democrat. “I will not shop at Publix as the owner donates to the Republican Party,” she added.
But not all Americans who mix politics and patronage were on the left side of the political spectrum.
“Nike has gotten under my skin with their unpatriotic and liberal views,” said a 39-year-old Republican woman from North Carolina.
“I have not set foot in Dick’s Sporting Goods since they stopped selling guns,” a Louisiana Republican explained. “Also, I will not use Citibank because they said they will not finance gun manufacturers. I will not buy from Nike because of the kneeling during national anthem. I stopped shopping at Target because of their transgender bathroom policy. Sell your products. Stay out of politics.”
A 66-year-old Republican from Georgia volunteered that he stopped shopping at Walmart after the giant retailer announced last year that it would no longer sell handguns and limited the purchase of ammunition after horrific mass shootings at two of its stores.
The dilemma faced by fast-food juggernaut Chick-fil-A shows just how tricky “woke” capitalism can be. Widely lauded for its tasty food and quality service, the company isn’t open Sundays because of its owners’ strict adherence to their Christian faith. Chick-fil-A was criticized by both liberals and conservatives in our survey.
“I love Chick-fil-A and like the general attitudes of their employees toward customer service, but I can't endorse their anti-gay views,” one survey respondent volunteered. “I've heard that they are starting to divest from companies that hold anti-gay views and this gives me hope.”
This is a reference to Chick-fil-A announcing that it would no longer contribute to the Salvation Army, but that decision, in turn, alienated other customers. “I cut down on Target, Starbucks, and Chick-fil-A as well because of their liberal views,” said another.
Such attitudes are a result of the increasing willingness of American businesses to wade into controversial political and social issues, with companies such as Nike, Patagonia, Walmart, and others taking bold actions in recent years. These companies challenge the common corporate wisdom that had been in place for decades: that taking positions on divisive issues alienates customers. A growing body of research shows that some consumers want companies to show leadership on social issues.
The Edelman Trust Barometer Global Report, which has studied trust worldwide for almost two decades, showed in its 2020 report that almost three out of four respondents (74%) say CEOs should take the lead on change, rather than waiting for the government to provide solutions.
Likewise, the RealClear Opinion Research poll showed that, while large numbers of voters remain unmoved by politics when it comes to purchasing, many do care about a company’s political stance:
- 38% said they are more likely to buy from companies that make progressive social change a priority, while 11% said they were less likely to do so. Just over half of those surveyed said it makes no difference.
- 28% said they are more likely to buy from companies that make conservative values a priority, while 19% said they were less likely to do so. Just over half (52%) said it makes no difference.
- 38% said they were less likely to support a business if the CEO endorsed President Donald Trump and Vice President Mike Pence for reelection, while 25% were more likely to support that business; 37% said it would make no difference.
- 32% said they are more likely to support a business if the CEO endorsed a Democratic candidate for president, compared to 19% who were less likely to do so. About half said it would make no difference.
The current pandemic will almost certainly make Americans even more conscious of factors that once seemed extraneous to consumers and shoppers. For one thing, Trump has pronounced himself a “wartime president” fighting an “unseen enemy” – and he has put Pence at the head of a task force overseeing the effort. Those efforts have generated partisan critiques on both sides of our nation’s great partisan divide.
Moreover, as entire sectors of the economy are shuttered, often on direct orders of the government, how companies treat their customers and workers will almost certainly become a topic of intense interest to contending candidates -- and to voters.
“Not long ago, we lived in a country where every four years, consumers voted,” Della Volpe said. “Today, when seemingly everything is politicized, from college to weather reports, sports, entertainment, and food -- and now what to even call this deadly pandemic -- we live in an era where voters consume.”