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Last week, my company released its 3rd annual DEI report. It consists of a laundry list of DEI achievements, some questionable statistics, and inspiring messages from very well-paid executives.
Performance reviews are another feature of this time of year. Conventional wisdom holds that getting a good review depends on meeting your pseudo-self-defined goals for the year—and, by implication, on setting achievable ones. With that in mind, our executives set measurable, sensible goals with every expectation of meeting them.
That was a joke. The goals were 1/2 women and 1/3 people of color. We were reasonably close on the latter, not that this required any particular change. But our goal for gender parity was hilariously out of line with the ~1/4 we currently have. I could propose various reasons why an engineering- and manufacturing-heavy corporation that makes devices for killing people might not employ so many women, but that’s not really the point. No, this is not a serious goal. It’s advertising.
My company is not particularly woke. It repeats some of the phrases and buys into the aesthetic, but it’s clearly not ideologically captured. If there are true believers, they sure aren’t in charge. DEI is valued insofar as it keeps us from alienating potential talent and potential customers—and no more. At the end of the day it’s not going to shoot itself in the foot in service of equality or equity.
I believe this is true of the vast majority of corporations in the US! Identity politics are a small part of the business signaling that goes on every day. It’s directly proportional to how much the product is a cultural symbol rather than a material good. Apple products or Amazon media or Super Bowl ads are more likely to publicly proclaim their diversity because they’re selling an idea. It does not require true believers, though they help with credibility. The idea itself is what benefits from woke signaling.
This has implications for the trajectory of DEI. Debating whether woke ads are going to increase or alienate support is missing the point. That sort of identity politics is downstream of the culture war, and should not be used to make predictions about “peak woke.” It represents corporate ability to score points off the prevailing winds, not ideologues’ level of infiltration into corporations.
Defense contractors are wildly biased towards veterans. Our hiring is more likely to involve some sort of aggressive patriotism; their scruples are more likely to support selling drones and bombs. Sometimes this even has an advantage of rapport with customers. But this is an end, not a means. It would be a mistake to predict growing evangelism for veterans due to our obvious ideological capture. Likewise, reading DEI reports as a foothold in the culture wars is missing the point. They are a specific form of advertising, and follow the popularity of idpol rather than driving it.
The first generation remembers a time before DEI so they might be able to do it cynically, not make any big changes but just say the slogans and muddle along. The next generation has no memory of anything else. They don't realize that you're not actually supposed to believe that it's feasible to have an engineering department that's 50% women, 30% black and 10% trans. They believe, from the bottom of their hearts, that there are just as many qualified black and women engineers as white and asian men and that it's only sexism and racism that's keeping them out.
And when they try to implement this stuff for real then what can anyone say to stop them? After all, it's right there in mission statement that diversity is a core corporate value, that a diverse company is a more effective company and that it's everyone's responsibility to promote a more equitable society. Anyone who tries to stop them will be not just a racist but also insubordinate.
Your company has AIDS. It's immune system is dead and it's just waiting for pneumonia or strep throat to come in and finish the job.
Your general point is lost on many people. I was talking to my boomer mom about Kanye getting blacklisted for alleged anti-Semitism and her response was basically "I don't see why him getting punished is a big deal, everyone knows the Jews run Hollywood and finance, but everyone also knows it's just not something you're supposed to say in polite company because it's un-PC, so he's an idiot." Except that a lot of my fellow millennials seem to thinking that Jewish overrepresentation is an evil conspiracy theory spread by evil people (I would know, I was one of them). Same goes for the "days of rage" in the 70s.
What "everyone knows" in one generation is often seen as "false" by later generations if it's not allowed to be discussed. I ran into the same things when speaking to Chinese people about the Cultural Revolution and Tiananmen Square. The older folks who were around for those events had nuanced opinions, even the nationalists, while younger people either believe that it "wasn't really that bad, certainly nowhere near as bad as Western propaganda makes it out to be" or they have no opinion at all.
Enforced silence on a topic can be more effective than enforced orthodoxy, since it's so much more subtle.
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This assumes there is no such thing as a free market. Sure, a single company can suicide by keeping a significant dead weight in its workforce, but they'll just be outcompeted by companies who don't, or maybe even countries who don't. Markets are just entropy, and entropy always wins out.
The free market requires no barriers to entry or exit, which of course does not reflect reality. The larger the barriers to entry, the less likely it is that you'll face any competition at all. It also assumes that individual entities cannot set market-wide prices or wages.
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Sure if you do enough bad policies for long enough then eventually society will collapse and the problem solves itself. I'm not yet nihilistic enough to throw up my hands and wait to be scooped into the dustbin of history when the alternative is to just stop hitting ourselves in the head with a hammer.
Society won't collapse because a few companies might lose out to French, Japanese or maybe Chinese companies, and then have to reform, create new organizations, or limp on as a second rate economy (like Europe has been doing for 50+ years without a sign of collapse). The gap between where the US is now and collapse is monumental. It is the most powerful, rich, and culturally dominant nation in human history. It basically has to conjure up boogiemen to create competitive incentives. Undoubtedly the US will collapse someday, just like every other civilization or nation ever, but woke won't be the cause.
Btw I'm not saying woke stuff is good. It's just an exaggerated threat to terminally online right leaning types. You could realistically go a month in a wealthy suburb living out your life and never have it affect you at work, home or your kids school's. One of the actual biggest issues in America right now is a huge gap between the perceived importance of a problem (Global warming, school shootings, woke, or whatever) and actual significant problems.
The counter-argument/most relevant argument I'd make is that nations can die not only when they lose resources to sustain themselves, but also a desire to.
This really was the crux of the Soviet crack-up. Economically, the Soviet Union was a basketcase, but it was a basketcase that could have held itself together if it wanted to. The post-Soviet states of North Korea, Cuba, or even Russia itself in the causcuses show that a very poor, very dysfunctional state can still hold itself together. Ultimately, suppression is relatively cheap, and rebellion is hard, and barring outside intervention no insurgency in history has thrown out an occupying army without the assistance of another army nearby to assist.
But politically... the deathknell of the Soviet Union wasn't the economy, but the internal sense of political legitimacy. There's a saying that goes along the lines the Soviet leaders wished to be social reformers, thought they were social reformers, pretended to be social reformers, and then finally wished to be social reformers. The ideological justifications and pretenses of the Soviet communist system withered over time in the face of available alternatives, the cyncism of the elites and the populace grew, and over time fewer people were willing to die, or even kill, in the name of authorities viewed as unjust and corrupt and failing. The more the Soviet Union became less a transformational project and more just a corrupt empire of a state, and a state that couldn't even deliver good results, the closer it got to the point where it was unable and unwilling to hold itself together by force.
The issue not just with wokeism in particular, but polarization in general, is that it arguably creates the same dynamics of distrust, disunity, and de-legitimization in the US in what is essentially an ideological state bound by buy-in, not blood-and-soil or religion or other common identities.
Take your pick of post-modernist critiques, but if racism/sexism/-insert-ism is the worst sins of the day, but your political opposition- and by proxy the other half of the country in a two-party system- are the worst sinners of the day and the government is fundamentally build upon, with, and for the worse sins of the era... why continue it, if you can't control it to fix it? If fixing it is even possible, which various critques basically amount to an impossibility? Believe in the good of the commons requires believe that the commons are, in fact, good. But if the commons are not good- and in this case the commons can be shared institutions, norms, or whatever- defecting is rational, even if it comes with long-term penalties. And when defections start occuring, the commons start to crumble.
We already have seen this in various back and forths. The borking of Robert Bork began a practice of practice of blocking / slowwalking judge appointments into the Bush years, which led to the retaliation in the Obama years, which led to the Democrats removing the judicial filibuster, which led to the loss of it to the Supreme Court, where now the organs of the Democratic Party actively discuss and lobby for court-packing or defanging the Supreme Court. The politicization of consolidated national media, which ostensibly strived for neutrality at the start of the era of national news television like CNN but then created ideological conformity that gave first to Fox News for underserved markets, and then to the Trump Russia hoax affair, has not only cratered trust in media in general but driven the development of information silos for much of the American population. Campus free speech issues didn't remain limited to college campuses, but went both up the employment chain and down into primary education, where considerable fractions of both the voting and non-voting publics don't feel safe voicing their own political opinions. The religious right was happy to muster it's social pressure power into politics, and reaped the whirlwind of an equally evangelical zealotry by people who also saw other believers as a problem to be fixed. When everything is political, and you hate your political rivals, you either burn the shared space down to deny it, or you use it against your hated political rivals.
Yes, a state like this can go on for quite some time... but who is going to want to fight and die and kill for it, if it comes to it? Especially if any interested outside party decides to help things along in a material way? And why would they want to? The Soviet Union had plenty of resources to pay for people to kill the people who didn't want to be with them anymore. That wasn't the issue- a desire to was.
Woke theory is just one of the discrediting ideologies that undermines that desire for their to be a shared nation. And without that desire, the US can absolutely fall apart even if it still has resources. It's far from impossible to see something that makes Brexit look like a wise and just solution.
Now, for the record, I don't think it will actually go that far. I view a number of the issues in US politics right now as within the scope of past political disruptions that were survived. There are dynamics that make this unique- namely this is the first major American political realignment since the invention of social media, and things that previously wouldn't have been publicized are now prevalent- but my own view is that between demographic changes, internal migrations, and the cycling of the American elites as part of both, the system is in the process of changing rather than collapsing, and more to the point is doing so in the context where a lot of its major alternatives are going to do worse.
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Some reason this reminds me of the fed 18-24 months ago. When it was woke fed and everyone gave speeches that were yada yada yada we need to have monetary policy that helps the black unemployment rate.
The fed got a lot less woke when inflation became an issue. Sort of like woke fed was just an act you did when you didn’t have anything real to deal with.
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Do you have a method for determining whether a perceived problem is worth taking seriously? If so, could you describe it?
Some are easier than others. Mass shootings are a very easy problem to dismiss. If you are less likely or roughly equally as likely to be harmed by something as a lightning strike, then it is a non issue in my view. Mass shootings are within the rough range of lightning strikes. Children drowning in pools is a much bigger issue, albeit also a total non issue in relative terms.
Other problems are indeed more complex. I don't really want to go into detail on global warming right now (I've spent way too much time on here today, I need to get work done), but I think it's quite easy to see that if you do a very pessimistic estimate of economic and technological growth on the timescales where global warming might be devastating (100+ years) and then include the opportunity cost of the measures taken to deal with it (which are all basically growth dampening) then I think it's quite clear that its at best a non-issue and at worst the policies are significant cost to society with little to no benefit. It seems to me very similar to the panic in the early late 19th and early 20th century about malthusian population collapse. It probably would not have taken much of a leap in 1890 to take an extremely pessimistic economic model, look at it, and say "This is fucking dumb, we're going to be too rich for this to matter."
As I understand it, we were bailed out by the Haber-Bosch process without which we would have indeed reached those Malthusian limits. Is this incorrect?
That's not an argument against what I'm saying. You can't predict exactly how future growth will work, but betting it will be there is pretty obvious.
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There are a lot of barriers to free competition that people aren't aware about. One of them is that payment networks, which are required to participate in the modern economy, are in the business of blacklisting people and businesses for opaque and often unappealable reasons. This article, Section 230 isn't the problem, Payment Networks are goes into some detail on this. If your ability to process credit card transactions can be taken away for not playing nice, this is a significant deterrent to sticking your neck out against the prevailing culture.
There's a pretty gaping chasm between "You will have to hire x% women and x% minorities or you'll be blacklisted" and "The payment companies won't let kiwi farms use their services." I don't think payment systems should be weaponized, but blacklisting kiwi farms was not about wokeness, diversity quotas, etc.
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But there is no free market. You won't be allowed on the Nasdaq unless you have enough trans black woman VPs under the rules from last year. How are you going to outcompete a "just build your own international banking system" level of anticompetitive institutional capture?
Unless I’m missing something, right now the Nasdaq has four sets of financial requirements. The NYSE has two. Neither involves an ESG score, or in fact any criterion judging the ethics of their listings.
How do you go from there to banning insufficiently diverse companies?
Does this count?
US stock exchange sets diversity rules for listed companies
Is a binding decision that requires changing the boards of 75% of Nasdaq companies something worth taking note of?
It does say "or explain why they do not" which can either be meaningless or the option 75% will take depending.
If I say because I put my family members on the board, or because I think diversity is stupid, what actually happens?
The quote "these rules will allow investors to get a better understanding" seems to suggest that either the numbers or your explanation will be visible to investors.
Checking the text it does say companies that choose not to comply will have to say why. There don't appear to be any official punishments for picking that option. "The Exchange would not evaluate the substance or merits of a companies explanation" seems to support that.
Which isn't to say this is not a big deal, its essentially a capitalized social shame model, using investors as the instrument. Assuming investors lean a particular way it might be more effective than a simple requirement in actuality.
But it is useful for context to know what the unspoken "or else" is.
But then Blackrock has ESG/DEI guidelines.
BlackRock Is Sick of Excuses for Corporate Boards Lacking Women
From one side or another, at an earlier or later point of your business development, if not from Nasdaq then from Blackrock or Goldman Sachs or silent or not-so-silent conspiracy of antagonistic HR managers whom you cannot replace with loyal ones, you will start to feel pressure mounting and compelling you to actually make costly decisions.
Right if enough investors are on board, then it's a problem. But the change of rules is then downstream of that. It's a symptom, not a cause. If the Exchange is correct that this is information the investors want then the Exchange should probably facilitate that.
Though I'll note some of the companies did reply "We don't need a woman director" and the "punishment" presumably will be Blackrock not investing in them. Which I am fine with, you can choose to invest or not invest for whatever reason you want. Maybe someone will choose to invest because the company said that, and if not well that is something companies should have to take into account.
If Blackrock were asking Why don't you have 2 evangelical directors, I think that is fine too. They should be largely free to make their investment decisions as they like. If they make bad choices they'll presumably lose money (or if they are right and diverse companies make more they will be making those companies more profitable). Companies should be able to take moral stances, Hobby Lobby should be able to not fund contraception for their employees and Blackrock should be free to only invest in companies with a female director. Then I am free to decide to use Hobby Lobby or Blackrock based upon their choices or ignore them entirely and use some other criteria.
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Assuming that it's just the social shame model, should we consider this intervention acceptable?
Assuming we accept it, will it actually fix the problem it's purportedly aimed at?
Assuming it doesn't fix the problem, what's the likely next steps?
Well "just" a social shame model is underselling it. Social shame is arguably more effective than a law or regulation in many cases.
But it does depend on the people doing the shaming or in this case investing. Do they prefer to invest in companies that hit the target or ones who say this target is stupid (though actually i think this will not be very common, see below) My guess is it won't be particularly effective because profitable companies will still get invested in, because there will be plenty of investors who think thats the most important thing.
I suspect most companies won't hit the target , but will also not say this is stupid. Their explanation will be, we tried, we are commited to diversity and will continue to search for blah blah. Something with plausible deniability.
What will happen after? Well i think it depends on why they stopped short of a mandate, was it due to investor push back? Or they thought it wouldn't hold up legally? Or the Exchange themselves wouldn't go any further (as at least it can be framed as only giving investors nore information). I don"t know enough about that to make a good prediction.
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Christ. Yes it is. Objection retracted.
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Someone should tell Musk that since he sure doesn't seem to care and is the richest man alive.
The nasdaq and banking sector are themselves part of the free market. I also suspect you overestimate the rigidity of these guidelines anyways (someone look up Walmarts board real quick and tell me when they're going to be blacklisted), Either way, the banking sector itself has a lot of competition internationally and internally. Most startups don't finance themselves off bank loans.
These rules are loosely enforced today, but that's part of the slippery slope. It always starts with high minded, vague, non-binding commitments. Then you write some rules and some policies, but of course you're not going to be strict about them. Then when those rules actually get enforced, you can't complain - after all that's always been the rule, and nobody is above the rules.
It's worth asking - when is the right time to make a fuss? When the rule is written, or when the rule is enforced?
I think its good to make a fuss. I just think this is all a bit exaggerated. There are specifics which are more or less problematic.
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The existence of rare entities able to resist coercion does not disprove the general effectiveness of coercion. Most businesses are not Wal Mart. Most businesspersons are not Musk.
I don't expect that either are outliers. I suspect boards pretty closely match upper middle class demographics of whatever region predominates their recruiting pool. Go google Microsoft's board. I bet it's mostly white people because Seattle is very white. Likewise, I bet Ford is very white because midwestern upper middle class people are almost all white.
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I’m skeptical that the second generation ever really comes about. There are a lot of financial incentives not to deny the reality beyond what is required for a decent public image. And that image will be insulated from the less visible practices of any company. As long as a company can make the right gestures and set (unrealistic) goals in the favored direction, it can keep doing practical stuff. Or get eaten by someone who does.
Mission statements have been jokes since at least the 90s. Probably since ancient Sumer, but I couldn’t find a source for it. And yet companies keep making them, because the cost-benefit remains low.
Mission statements have been jokes, and small or large treasures in both money and manpower and legitimacy spent on them, regardless. A company need not replace a quarter of its existing workforce (or put them on estrogen) to find its HR staff bizarrely willing to tolerate bad employees that are on the 'right' side of that line, to bring harsher standards against those on the 'wrong' side, or to promote hilariously illegal policies.
Which in theory could be fine from a pure libertarian perspective, but I'll bring a variation of the rant on McCarthyism forward. We decided -- not that long ago! -- that discrimination on the matter of race, gender, ethnicity, or religion were Bad. And then it turned out the determination wasn't exactly on those means.
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"Here at Ea-nāṣir and Sons, we are committed to providing a well-trained and motivated team to safely produce copper products that meet industry standards and ensure customer satisfaction."
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...Within the company, or within society as a whole? This game doesn't stop at a corporation's borders.
Late last week, someone posted the story of a middle-aged anti-racist professor getting wrecked by the next generation. While being evidently committed to the ideology, the professor also had competing values that balanced out his views and behaviors, to at least some extent. Crucially, he could not actually deliver on what his ideology promised: legible progress toward an "anti-racist" world. He gained status by making promises, and then he failed to deliver on those promises, which left him vulnerable to a younger, meaner type shoving his principles and reservations out of the way to implement the ideology "for real".
You might be right that the corporate environment is less receptive to such pushes. But the corporate environment's concessions are helping to shape the cultural environment, which shapes the political environment, which in turn can impose arbitrary new rules on the corporations. If the second generation can't arise inside the corporation, that doesn't mean they can't impose their will from the outside.
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In tech, it already has.
You and @Bernd have made similar claims. What exactly do you mean by tech?
I’d argue that the position of tech giants in today’s market puts them more in the category of consumer goods. Phones, social media, etc. are less insulated from personal tastes. That leads to tech as tastemaking, and it makes them relatively vulnerable to social pressure.
I think my industry is insulated not just because I’m not in California, but because we don’t sell to the general public. Same for heavy industry, for big finance, for medicine…who’s going to cancel us? We are not making our money off of the perception of fashion.
Tech. The FAANGs, and the SF startups, and the various companies who aren't startups any more but want to be FAANGs
You can call a tail a leg but it won't make it so. The names of the sectors are somewhat arbitrary but at least they are pretty well agreed on. Consumer goods is e.g. Unilever and Proctor and Gamble... and there's evidence at least of P&G being "second generation".
And I’m saying that the consumer goods category is what’s most responsive to idpol. The market of middle-class liberal consumers is really insulated from heavy industry. Not so much from iPhone trendsetting.
There's no "pull" from consumers in either tech or consumer goods, it's all push from the companies and their ad agencies. No consumers wanted that Gillette (P&G) ad about how men suck, least of all the consumers of men's razors. The "it's consumer demand" thing is just a threadbare fiction told to dismiss complaints, and it's long since worn through.
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