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The problem with the Beckerian logic in this case is that it ignores that being woke can benefit firms, if it significantly increases woke devotion to the company without alienating non-woke consumers. And as Nassim Taleb describes in Skin in the Game: "A Kosher (or halal) eater will never eat nonkosher (or nonhalal) food, but a nonkosher eater isn’t banned from eating kosher." Bowing to intransigent minorities can be profitable when it doesn't produce significant antagonism with other consumers.

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Others have commented objections that wokeness might or might not be a disadvantage from the customer's point of view. I'd like to point out the "supply" side of the equation. For firms that are in any kind of creative business (and I define this loosely since it fits traditional creative, e.g. graphics, publishing, as well as non-traditional like money management, software development), they are in competition for talent and that talent might very well optimize personally for working in woke environments. So, yes, this pushes the woke "penalty" to the employee from the employer, but from the firm's point of view it's a win to be woke to the extent this is true.

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Bryan on racial discrimination: Impossible because discriminating employers would be outcompeted by nondiscriminating ones.

Bryan on Wokeness: Eh, a 5% efficiency loss is no biggie.

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As a matter of logic, optimizing for profits only is strictly superior than optimizing for both profit and some other thing (presuming of course that profit is what we care about). But empirically, optimizing for profits only can often look like optimizing for profits and some other thing. E.g., Nordstrom apparently optimizing for customer service or Coke apparently optimizing for flavor. If Disney management were actually optimizing ONLY for profit, how would we know? How can we be sure that this would look any different from a world in which Disney management were optimizing for profit and wokeness? Maybe they performed a cynical calculation and decided to appeal to wokeness because they actually believed it to be the most profitable course.

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Is it obvious that wokeness is harmful for Disney? There's clearly some audience that is more favorable to it as a result, as well as some that is less favorable. It does seem likely from the outside that the latter is larger than the former, but it's not completely obvious whether there might be an intensity gap and/or a disposable income gap between the audiences that makes up for this. (Though it could enhance it.)

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How does Elon and Twitter fit into this model? I think fits pretty well… He was gonna come in, shake up management to crack down on bots, unwoke the policies, and implement new features. Before the stock market crash, he thought he could get $X improvement in share price. After the market cratered, he probably doesn’t think he can recover as much as was cratered. Checks out to me.

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Sam The Banana Man sounds both awesome and terrifying. But I'm curious - what is the likelihood of actually deregulating enough that corporate raiding and hostile takeovers are possible again?

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As others have mentioned, this post doesn't really grapple with the labor market dimension of this and the fact that many employees will want to pressure management to adopt more left leaning stances.

To that I would add, for media companies especially there is an additional pressure presented by superstar talent who the company needs to hold on to quite a bit.

For example, Lin Manuel Miranda is a huge talent get for Disney, working on some of their most successful recent films (Moana and Encanto) and absolutely is rich and famous enough that he can drop Disney if they offend his sensibilities.

If Disney buckles to DeSantis in a public way, they could easily see Miranda jump ship over to DreamWorks. And he personally probably produces profit for them north of 100 million. And that's just one star of many.

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Seems like more evidence in favor of the idea of the managerial state.

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Most managers are talented at saying woke things but then not doing anything. Coke’s GC went farther and then he was gone. It’s all about the lip service

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My experience with anti-left anti-woke right-wingers in Sweden

a) Many are not in favor of freedom and freer markets (less regulated, more deregulated), but are in favor of privileges and special treatments (more pro-business rather than pro-market)

b) Many do not understand that a market can contain both woke and alt-right things that people want to buy, and also do not like the development of eco-hipster raw-food climate friendly vegan merch

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As others have mentioned, I don’t think the beckerian logic applies here because I believe woke corporations are viewing the ideology as a pathway to profit in the long run (or mitigation of risk). I think it’s also important to make the distinction between “external” (branding, products/content) and “internal” (culture, hiring practices) corporate wokeness.

I think the logic for external is that if wokeness is the dominant ideology of the top 10% who have a hugely disproportionate share of total consumer spending, then it makes sense to appease them even if it means alienating a certain amount of potential customers. Leftists are also much more likely than conservatives to reject/support a company based on its politics. Companies can’t be apolitical if they want woke support. Disney may be able to absorb it, but this is absolutely backfiring for many corporations (especially midsize businesses). Many even on the left are sobering up from the 2020 “reckoning” and realizing just how absurd wokeness has gotten. Even people who may agree with these ideas at some level don’t make it their whole identity anymore. If you look at who some of the most popular comedians are today, the ones selling out theaters, almost all of them are explicitly anti woke. Meanwhile much of the SNL cast (outside of a few) can’t even sell tickets despite achieving what was at one point the pinnacle of success for a comic. People are voting with their dollars, and it turns out it’s more important for a comic to be funny than be woke.

Internally, I think DEI serves as a kind of insurance policy against the possibility of getting sued for discrimination or any kind of civil rights violation. Implicit bias training, for example, very clearly has no tangible benefits to a firm’s bottom line. However if they DONT do the training (or embrace woke politics more broadly), they have nothing shielding them from the possibility that some crazy woke person is going to sue them for racism/sexism/etc in the work place. Society is basically being blackmailed by the most neurotic and sensitive people and the hucksters who enable them. It’s only a matter of time before companies realize it’s cheaper just to take the risk and fight it in court than to keep flushing money down the DEI toilet, because no matter how many trainings it will never be enough for these people.

Back to the comedy example, it turns out being a comedy writer is really really hard. If you narrow your talent search just to minorities who share your exact politics you’re making an already small talent pool even smaller. The idea that there’s a bunch of Louie CK’s and Dave Chappelle’s out there waiting in the wings who just haven’t had the chance because of some type of oppression just isn’t true. I suspect the same goes for CEO’s, engineers, or any high level position. Imagine if the NBA said they were going to require the league be 50% asian. Sure there may be some gems that wouldn’t have gotten a chance, but the quality of the league and its entertainment value would rapidly diminish.

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The "expanded constituency" statute on the table stood out as one of the likely culprits to me. Why would shareholders accept reduced profits rather than support a takeover? Answer: they might have not have a choice.

This article lays out how the whole expanded constituency thing works (for Illinois, anyway, but it's an enlightening case study, and as the article mentions over half of states have similar statutes):

https://lawecommons.luc.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=2541&context=luclj

Tl;dr, statutes like these make the corporate entity itself the primary entity to which the corporate directors have a fiduciary duty, and the long-term interests of the corporation and the short-term interests of shareholders can diverge.

"Courts also allowed directors to rely on long-term corporate plans or

the protection of special cultural features of the corporation to thwart a

takeover transaction clearly favored by a majority of the share-

holders."

It's not such a stretch to imagine Disney's corporate lawyers making the argument that wokeness is "a special cultural feature of the corporation". I wouldn't make that argument with a straight face, but I assume some courts would probably take it seriously.

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I’m fairly unconvinced that most individuals care much about wokeism. Sure, many who remain on culture war Twitter or watch cable news know the phenomenon - but that is a minor slice of the population. There are far more individuals who watch Buzz Lightyear without a semblance of realization that some stupid ideology is being pushed on them. Some may worry about this, but I’m not so sure we should. Wokeism as a holistic ideology is so detached from most individual’s daily lives that it is likely bound to fade into the next big thing (we are already seeing this w/ anti-woke ideologies).

Life will be much more simple if one ignores stupidity - dare I say wokeism is just another stupidity one should ignore.

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I don't think there are enough eccentric billionaires looking to takeover megacorps that seem to be going off the ideological rails.

The best path is probably to change civil rights law to both stop incentivizing and even actively punish wokeness. If Google was fined 10% of its market cap over what it did to Damore, with the threat of taking another 10% every time it happened again, they would make changes.

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I have always thought that board elections should be by single transferrable vote.

If a board is 9 members, for example, then someone owning 11% of the stock should absolutely control a board spot. It enables a minority proxy fight. Using the Musk/Twitter example, he basically could have forced a member of the board who represented him (he was at 9%, not 11%, but I don't know Twitters board size either) without having to try to get 50%+1 and replace the board entirely.

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