One of The Giving Review’s ongoing themes is that it’s futile—even pathetic—for American business to try to placate its critics by skewing corporate pronouncements and practices toward philanthropic purposes. Recent confirmation of this advice comes from the editorial board of The Wall Street Journal, in a piece earlier this week entitled “King Warren of the Roundtable.”
“King Warren” observed that the Business Roundtable had ventured down the path of placation in its statement urging corporations to serve more than merely the interests of shareholders, but those of a broader array of “stakeholders,” as well.
Almost immediately, presidential candidate Sen. Elizabeth Warren called the Roundtable’s bluff, sending them a copy of her proposed Accountable Capitalism Act for approval. The accountability it demands would be directed toward, as the editorial summarizes, “‘the workforce,’ ‘customers,’ ‘the local and global environment,’ and ‘community and societal factors.’” As she noted, “I expect that you will endorse and wholeheartedly support the reforms laid out in the [act] to meet the principles you endorse.”
Instead of placating progressives, the Journal argues, “the Roundtable has succeeded in energizing Ms. Warren and the left to believe they can scare business leaders into political retreat.”
This confirms what we’ve been told by critics like Anand Giridharadas: the days are over when immensely wealthy corporate executives would be celebrated at Davos or the Clinton Global Initiative with their promises to “change the world” through justice-oriented entrepreneurialism. Like Warren, the left now wants to see something far more substantial than corporate-friendly initiatives that, they insist, change very little.
TGR has also urged businessmen to recognize that it’s pointless to try to purchase respectability through support of avant-garde cultural institutions. The shameful treatment of David Koch after his recent death was just part of a larger movement on the left to expose and expel cultural patrons whose views are insufficiently “woke,” or whose sources of wealth are unacceptable. If the new Warren requirements become the standard of gift-acceptability, that’s going to thin out considerably the number of wealthy Americans eligible to fund and serve on the boards of our leading museums.
In a fine essay for Public Discourse earlier this month, the Acton Institute’s Samuel Gregg reminded us that business serves a distinctive public purpose when it devotes itself to … business. “One primary condition of society’s common good realized by business is the creation and growth of the wealth that provides for people’s material needs and wants,” Gregg notes.
“Woke capitalism,” he argues, “severely distracts commercial enterprises from realizing their common good. Business does not exist to engage in Marxist-like consciousness-raising exercises, alter family structures, establish world peace, or even right a nation’s historical wrongs.”
The defense of business against those who would turn it into an instrument of social justice is hardly a purely libertarian enterprise. Many conservatives of a populist inclination are beginning to emphasize the harms corporations have inflicted on considerable stretches of the American landscape. But they also understand that the solution isn’t to convert business to higher purposes. Rather, we must ensure that it’s paired with a properly vigilant government, which will sustain the workings of the market against the predictable efforts of corporations to bend it to their own advantage.
And we must sustain a vigorous and independent civil society. Only it can repair the damage done when corporations abandon cities and towns, by restoring the vigorous moral and religious communities within which human character can be cultivated and passed on.
The public interest is served, in short, when we recognize that each sector of American society—business, government, and civil society—has a distinct purpose, the blurring of which can only do damage. There’s a lot of friction and mutual suspicion among the sectors, of course, which is precisely what keeps each in its place, thereby sustaining our freedom. Students of Michael Novak will be familiar with these arguments.
As we’ve noted before, Novak—along with Irving Kristol, Robert Bork, and Robert Goldwin—tried to persuade corporate executives attending the American Enterprise Institute’s “CEO Seminars” during the 1970s and ’80s that business must learn to stand up for its own unique contribution to the public interest, by directing its charitable giving to market-friendly intellectuals. Even then, though, corporations were persuaded that it was wiser to appease the left by supporting public-spirited programs on PBS or exhibits of avant-garde art at tony museums.
AEI’s advice fell on deaf ears, in large part because liberal cultural institutions at the time swallowed hard and penned enthusiastic thank-you notes for otherwise-distasteful corporate dollars. The scholars at AEI were left to argue that the notes—along with the plaques, cocktail receptions, and renamed galleries—were deceptive, and that in fact the gift recipients secretly despised capitalism.
The recent experience of the Business Roundtable with Warren makes it much easier to persuade corporations to rethink such naive efforts buy off their critics. Instead of applauding vague, well-intentioned pronouncements or accepting “tainted” money, progressives increasingly dismiss professions of higher purpose and disdain corporate gifts, insisting that nothing less than the utter transformation of capitalism in the name of social justice will do.
For corporate leaders, the pull of conservative friends is now matched by the push of liberal enemies. Perhaps at last businessmen will learn how to mount a respectable defense of their own life’s work.