How Corporations Influence Politics With "Woke-Washing"

This article is an excerpt from the Shortform book guide to "Woke, Inc." by Vivek Ramaswamy. Shortform has the world's best summaries and analyses of books you should be reading.

Like this article? Sign up for a free trial here.

Want to know how corporations influence politics in America? How are companies taking advantage of liberal politics?

According to Vivek Ramaswamy, American corporations have found a unique way to gain profits, both economically and politically. Ramaswamy’s book Woke, Inc. outlines how corporations influence politics through virtue signaling and falsely claiming to be woke to gain the support of society.

Read on to learn how corporations influence politics, according to Ramaswamy’s concept of Wokenomics.

How Do Corporations Influence Politics?

In Woke, Inc., entrepreneur Vivek Ramaswamy discusses how corporations influence politics and consumers in general through what he calls Wokenomics. Ramaswamy’s concept of Wokenomics explains how American corporations hide their corruption and greed behind the disingenuous virtue signaling of liberal values. He argues that by engaging in Wokenomics, corporations go beyond selling a product; they are selling Americans a new standard for the right way to think and live. He contends that their false alliance with social causes allows them to influence legislation, manipulate consumers, and silence dissent. He argues that Wokenomics’s deceptive practices are weakening democracy—polarizing citizens and concentrating political power in the hands of a small group of corporate elites.

Companies using virtue signaling is not new. Eighteenth-century economist and philosopher Adam Smith claimed that virtue signaling becomes necessary as the market grows. When people rely on several different businesses to provide goods and services, it’s not feasible for consumers to deeply evaluate the merit of each one—from the quality of their products to the ethics of their practices. Instead, consumers can search for particular indicators.

For example, the Better Business Bureau (BBB) rates a business’s trustworthiness. If a business gets accredited by the BBB, then consumers know the company has met certain standards and requirements. If a business advertises that the BBB gave them a high rating to garner customers’ trust, this is a form of virtue signaling.

The problem with using wokeness as virtue signaling is that the concept of woke is so loosely defined and there are no standards for companies to uphold. They can do as little as send a tweet or as much as start their own charities, but both would be considered woke.

Social activists already have a term for this specific combination of woke businesses and virtue signaling. “Woke-washing” is when companies champion social causes while contributing to no meaningful change, or worse, actively making social inequities worse. To contend with woke-washing, advocates hold hypocritical companies accountable through social media and raise awareness through services like the Anti-Racism Daily and BuyPartisan on more productive ways to promote change.

Submitting to Foreign Countries

According to Ramaswamy, the deceptive nature of Wokenomics amplifies the corruption between American corporations and foreign governments. In global capitalism, companies often seek to maximize their profits by partnering with countries that have fewer regulations on valuable resources like raw materials and labor. Ramaswamy argues that Wokenomics distracts consumers from how corporations can influence politics or participate in these unethical partnerships.

When buying from woke companies, consumers believe they’re supporting an advocate for human rights, but Wokenomics doesn’t compel companies to be transparent about their overseas dealings. Ramaswamy argues that because Wokenomics creates trust between the company and the consumer, customers may not be motivated to investigate a business’s international practices if they already believe the company to be morally sound.

Woke companies’ dishonest conduct, therefore, leads to many consumers unknowingly supporting actions that contradict the very ideas they believe in. For example, even though Starbucks advertised its socially responsible mission statement and anti-racist training programs, it has five plantations in Brazil that use child and slave labor under dismal working conditions.

Forgetting a Company’s Misdeeds

Studies show that consumers remember ethical corporate behavior better than unethical behavior. When it comes to how corporations influence politics, people tend to retain negative information better, but researchers hypothesize that people retain positive memories of companies because they prefer to ignore negative behavior that might conflict with their desire to buy a product or spend their leisure time without thinking about serious, political issues.

Woke companies can use this tendency to their advantage. The average American consumer isn’t up-to-date on international news, and if controversy does surface, companies can drown it out with reports of all of their good deeds until most people forget the scandals.

Using Trust to Buy Data

Ramaswamy argues that trusting a woke company’s integrity not only leads to consumers indirectly financing human rights violations in other countries but also keeps consumers in the dark when foreign governments leverage their invaluable resources to demand access to our personal data.

Ramaswamy warns that the Chinese Communist Party (CCP) in particular is collecting our personal data to potentially misuse it. Aside from influencing politics, how corporations use your personal data can also lead to an abuse of trust. Ramaswamy describes Airbnb as the epitome of abusing consumers’ trust. Airbnb emphasizes how much they value their stakeholders, even replacing traditionally exclusive shareholder events with a Stakeholder Day. However, Airbnb shares an immense amount of its customers’ private data with the CCP, including phone numbers and email addresses—neglecting to inform the American public that the CCP is one of their largest and most powerful stakeholders.

Information in the Wrong Hands

Some political commentators believe that the United States and other democratic countries should take more proactive measures to prevent the CCP from mining data. The CCP uses intense surveillance through technological devices to maintain social order in China; they monitor private communication, web searches, and the whereabouts of Chinese citizens.

As Ramaswamy described, Airbnb has shared comparably personal information with the CCP. While it might be unclear what China would do with customer information for a temporary lodging company, in 2021, the CCP’s intentions became more clear when they were reported to have new software designed to gather and categorize negative press shared on social media sites like Twitter and Facebook. This kind of surveillance could endanger the lives of professors, journalists, or politicians who speak out against the government.

Using Trust to Buy Media Presence

The CCP can also use its outsized influence to pressure media companies to present their political values in a favorable light to American audiences. For example, film production companies have frequently had to censor their movies to appease the CCP. Adjustments range from subtle (like the adaptation of the book World War Z changing the plot point in which China was the place of origin for the zombie virus) to overt (like the Dreamworks movie Abominable using a map that depicted disputed lands as part of China).

As the CCP inserts itself into American pop culture, Ramaswamy worries that ordinary citizens may be swayed into viewing China less critically, again because they’re dissuaded from questioning the partnership between woke media companies—which they trust—and foreign governments.

The CCP as a Codependent Partner

There’s no easy way for American companies to detach themselves from China. China wants to compete in the global market and provides alluring incentives for Western companies to contribute to their market and development. However, as Ramaswamy notes, one of the stipulations of having China as a partner is that the CCP will not accept any criticism and quickly punishes companies that don’t comply. Even though companies are aware of the CCP’s transgressions, halting business with China would steeply reduce their profit and cause everyday goods to be more expensive for American citizens.

Political figures like Robert Daly warn of another looming problem: As China begins to build up its own infrastructure, technology, and capital, it will depend less on American companies while our reliance on it remains the same. This imbalance will lead to a power dynamic that might permit the CCP even more influence over American companies and citizens.

The Solution? Entrust Social Issues to Non-Profits

To solve the issue of corporations influence politics, Ramaswamy says that all social issues should be relegated to nonprofits and government organizations, leaving capitalist entities completely apolitical. For this to work, he explains that Americans must have faith that companies with no political influence will naturally come to align themselves with our social values.

Let’s use vapes to illustrate this idea. Although many had hoped that vaping would reduce nicotine addiction among young people, studies are beginning to show that it actually increases addiction. Woke consumers may be tempted to fix this issue by demanding that companies make socially responsible changes like removing the version sold to teens or starting ad campaigns advocating for teen health. However, companies aren’t going to want to lose a large portion of their consumer base and will probably resort to shady tactics to keep marketing to young people anyway.

Ramaswamy claims that if consumers put their money toward nonprofits—for example, ones that educate and assist teens who vape—we have a greater chance of raising a generation of young people who will do the right thing, like having no desire to vape. Thus, the vaping companies of this example would come to a natural end.

Necessary Changes to Nonprofits

Experts claim that ending corporate influence on politics by relying on nonprofits to promote social change means that there must be measures in place to prevent fraudulent or ineffective use of resources. Harvard business professor Regina E. Herzlinger recommends a system in which nonprofits:

– Must make their financial statements transparent to the public.
– Are assessed for the quality and quantity of community efforts.
– Have sanctions applied if they fail to disclose their records or misuse donations.

How Corporations Influence Politics With “Woke-Washing”