The following excerpt is taken from a speech delivered by Michael Knowles at the Club for Growth on Saturday, April 22.
One of the most persuasive defenses of economic liberty in recent memory came from the pope — not this pope, granted, a prior pope. In his 1991 encyclical “Centesimus Annus,” Pope John Paul II declared, “The free market is the most efficient instrument for utilizing resources and effectively responding to needs.” His predecessor pope Leo XIII used even blunter language. He called socialism a “pest,” “a plague,” and a “wicked confederacy” that “seeks to steal the very gospel itself.” Lots of other popes followed suit. Even the relatively liberal pope John XIII warned that a Christian could not “subscribe even to moderate socialism.”
Today, without such clear language from defenders of the traditional moral order, society has taken its cues from the Left, which leaves nothing ambiguous about its desire to destroy that moral order. Is anyone drinking Bud Light this evening? If the stock price of Anheuser-Busch is any indication, probably not. What would possess Bud Light — a drink consumed primarily by frat bros and construction workers — to sponsor Dylan Mulvaney, a transvestite performer so offensive to standards, norms, and women that even many supporters of the LGBT movement can’t stand him? Who on earth thought that was a good idea?
The official explanation is that a rogue vice president of marketing made the call. Though that’s just one of the half dozen or so mutually contradictory explanations that the incompetent crisis communications team at Anheuser-Busch tried to promote last week. First the company stood by the sponsorship, then they didn’t know about it, then they made an ad about horses (or something), then they put the marketing executive on leave. Who’s knows what they’ll come up with next week?
Whatever the explanation, it was a terrible business decision. Anheuser-Busch lost over $6.5 billion in market cap. Bar and customer boycotts of the brand show no signs of ending. Still, Anheuser-Busch won’t apologize. Even stranger, countless companies continue to sponsor Mulvaney despite the unpopularity of transgender ideology and the particular unpopularity of Mulvaney. Aritzia, Crest, Instacart, Kate Spade, KIND Snacks, KitchenAid, Rent the Runway, and several other companies still sponsor the guy. Olay decided to start sponsoring him even after the Bud Light debacle. What gives?
Perhaps the executives of all of those companies just happen to be uncommonly liberal. Or perhaps it has something to do with a nationwide political campaign to bully private enterprise into adopting leftist ideology without ever once having to convince the people or the people’s representatives to sign off on it. Left-wing activist groups, such as the pro-trans “Human Rights Campaign,” rate corporations according to their “Corporate Equality Index,” and one of the key ways a corporation can boost its CEI score is through advertising. Hence, the Dylan Mulvaney beer can.
The Corporate Equality Index is one of the lesser-known parts of the ESG movement of “Environmental, Social, and Governance” policies pushed by the largest asset managers to force companies to adopt a leftist agenda. If companies fall afoul of ESG enforcers then, despite ESG’s unpopularity, they risk being blackballed by the world’s most powerful institutional investors.
Larry Fink of BlackRock outlined how this political campaign works in an infamous 2018 letter to top CEOs. In the letter, which he titled “A Sense of Purpose,” Fink insisted that companies need to serve a “social purpose,” that “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” And “if a company doesn’t engage with the community and have a sense of purpose, it will ultimately lose the license to operate from key stakeholders.” This word choice is significant because it echoes calls by World Economic Forum chairman Klaus Schwab and countless other liberal elites for corporations to serve, not shareholders but “stakeholders” — a slippery term that evades the clear definition and can be said to mean whatever the ideologues who promote it want it to mean.
Ultimately, “stakeholder capitalism” of the kind promoted by Fink and Schwab is nothing more than a ploy to give liberal elites even greater control over the economy and to funnel corporate resources toward the oligarchs’ pet projects. We should fight it tooth and nail — as conservative treasurers and comptrollers have been doing with considerable success over the last couple years. But we should also take note as to why ESG has been so successful.
Conservative officeholders have justified their rejection of ESG on the grounds that they have a fiduciary responsibility to maximize profits for their constituents as shareholders in the companies that receive public investment. All well and good in the short term. But in the long term, this kind of amoral bean-counting language is going to fail just as surely as the rest of it has.
ESG is wrong, not only because it can reduce profit margins — not just because some companies “get woke and go broke” — but also because the leftist causes that those ESG extortion policies fund are unpopular and wrong. And they have no place in a self-governing republic that was founded to be, in the Christian phrase invoked by American statesmen from Governor Winthrop to Ronald Reagan, “a shining city on a hill.”
In the private sector, conservatives must offer alternatives to the woke corporations. We need to offer our own, anti-woke products — our own razors and chocolates. Just to name two totally arbitrary examples. We need to build our own institutions, yes. We also need to exercise just political power.
Economic liberty does not mean throwing up our hands and letting liberal corporations team up with Big Government to squeeze us out of the public square. We must create and defend the political conditions in which proper economic liberty can thrive. Corporations and asset managers — particularly crooked corporations in bed with big government — should not get a free pass.
Barry Goldwater put it well in The Conscience of a Conservative. He wrote, “Let us henceforth make war on all monopolies — whether corporate or union. The enemy of freedom is unrestrained power, and the champions of freedom will fight against the concentration of power wherever they find it.”