Australian Economy

Woke capitalism distracts from economic inequality

Right-wing commentary over “woke capitalism” is distracting attention from addressing economic inequality, writes Carl Rhodes.

IN THE TOPSY-TURVY WORLD of woke capitalism, it’s been claimed that a new generation of business people have embraced left-wing politics. Apparently, under the wily influence of the World Economic Forum, good-natured profit-maximisers are succumbing to the mistaken ideology of “stakeholder capitalism”.

Defender of old-school capitalism and the world’s richest man Elon Musk says it is an outrageous scam. He puts it all down with errant simplicity to business capitulating to a leftist agenda.

Nothing could be further than the truth. The whole hoo-ha about businesses turning woke should leave those who benefit from the vast inequalities capitalism produces unperturbed. Nothing is happening that will disturb their undue wealth or privilege.

Despite their testerical overreaction, conservative detractors fail to realise that the newly glossed woke version of capitalism has little to do with corporations leading change. Corporations are simply following social trends that support their own commercial interests. 

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Sure, there is no reason to doubt Mike Cannon-Brookes‘ sincerity in his support of decarbonisation. As Australia’s third-richest person, there is also no doubt that his recent takeover attempt of AGL would, in his words, create “value for [AGL’s] shareholders along the way”.

For retail businesses, the folks at the Commonwealth Bank have found that 53 per cent of consumers are prepared to pay more if they are buying from ‘purpose-led’ businesses. No wonder it’s popular in the corridors of corporate power.

When Menzies Research Centre director Nick Cater claims ‘the rich are using their financial clout to shout over the top of ordinary Australians’, he is wrong. Corporations and the wealthy may be distancing themselves from the sad legacy of regressive conservatism, but their financial interests are not in jeopardy. 

The good news is that progressive political causes are so popular that they are worth cashing in on — times are changing for the better. But there is a critical caveat. When corporations get political, it is almost exclusively on social and environmental issues rather than economic ones.  

Increasing the minimum wage, combatting aggressive corporate tax minimisation, promoting income and wealth redistribution, reversing excessive executive remuneration, sharing the spoils of economic growth and curbing economic inequality are entirely off-limits to the woke corporation’s activist agenda.

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In the post-pandemic world, Australia and the world are waking up to the fundamental economic inequalities that capitalism has produced. When the anti-woke mob makes a big fuss about corporations cow-towing to an out-of-touch urban Left, it is a dead-cat distraction.

If woke capitalism’s detractors want something to be afraid of, it is a growing realisation that the current economic system has benefited the few, not the many. This deserves to be the fundamental political issue Australia needs to address.

The election debacle over whether Australia’s minimum wage should increase with inflation is a case in point. The working-class people Liberal Leader Peter Dutton bizarrely claims his party represents are not there to absorb the shocks of an inflationary economy, while businesses protect their profit margins.

If the corporate backing of woke politics has achieved anything, it is to have divorced the social and environmental causes associated with the Left from the economic problem of inequality.

That is not to detract from the importance of addressing significant problems such as climate change, entrenched racism, systemic sexism or homophobia and transphobia. But, the corporate support of these issues has also served to put the debate over economic justice in the shade.

The Albanese Government’s focus on wages policy and housing affordability is a start. The opportunity we have now is to reinvigorate inequality as a core political issue such that Australia’s prosperity might be shared among the many rather than hoarded by the few.

Carl Rhodes is Professor of Organisation Studies at the University of Technology, Sydney; you can follow him on Twitter @ProfCarlRhodes.

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