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Is Woke Capitalism the New Trickle-Down Economics?

Stakeholder capitalism might be a feel-good corporate-friendly ideology, but so long as some stakeholders are (extremely) more equal than others, it is a flimsy fig leaf trying to hide an economic system that is producing ever-increasing levels of inequality.

By CARL RHODES

capitalism
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Just like the trickle-down economics of a generation ago, stakeholder capitalism provides a moral justification for the pursuit of corporate self-interest while inequality gets worse and worse.

Each January Larry Fink, billionaire boss of asset management firm BlackRock, sends a letter to the CEOs of the corporations his company invests in. In these letters he takes it upon himself to outline his views on the most important issues affecting the business world.  

A well-known advocate of “corporate purpose,” in the past Fink’s letters have addressed the responsibility of corporations’ environmental sustainability, workforce diversity, and the impact of business on society. His mantra has been that people have lost trust in governments that are failing to solve social and political problems, and it’s time for business to step up.

In this year’s letter released on January 17, Fink had a slight change in tack. He still goes on about stakeholder capitalism and how corporations should pursue the interests of the customers, employees,  suppliers, and communities, rather than just shareholders. What he added in 2022 was a direct statement that his approach to business is not “woke” and “is not about politics.”

Stakeholder capitalism, according to Fink, has nothing to do with ideology, it is simply the best way to do capitalism. What could be less woke than that! “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” he opines.

[Read on]