America’s most powerful legal organization has lost faith in the market’s power to impose its values on the nation.
“Massive corporations are pursuing a common and mutually agreed upon agenda to destroy American freedom,” attorney Ashley Keller told a gathering of the most powerful legal organization in America last Saturday.
This conspiracy, Keller claimed, includes companies as varied as Facebook, Google, Amazon, Coca-Cola, Goldman Sachs, JPMorgan, Twitter, and Walmart, all of which have joined forces with “the swelling ranks of so-called ‘woke’ people, who are completely and unabashedly opposed to individual rights.”
“Defenders of freedom must face reality,” Keller insisted, before adding the nation’s top advocacy group for big business to his list of enemies. “The Chamber of Commerce is not our friend. The C-suite grandees who finance it are not our friends either. They were erstwhile allies of convenience — and they are now the enemies of a freedom-loving people.”
Keller is a Harvard graduate who clerked on the Supreme Court of the United States, and his audience was the Federalist Society, an organization whose members dominate the federal judiciary and especially the nation’s highest court. He spoke to a conference packed with some of the most influential lawyers and judges in the country — the conference’s speaker list includes more than two dozen sitting federal appellate judges, and I spotted numerous other judges just wandering the convention’s halls.
When someone speaks at the Federalist Society’s annual gathering, they speak directly to many of the most powerful people in the country, some of whom literally have the power to order the Society’s enemies to comply with its wishes.
And while those wishes aren’t clearly defined yet, the enemy increasingly is. Over the three-day span of the Federalist Society’s annual convention, attendees were warned of unprecedented threats to human flourishing, all driven by cultural leftists who have taken over public and private schools, universities, and even big business in order to impose their “woke” agenda on an unwilling public.
Even the theme of the conference — “Public and Private Power: Preserving Freedom or Preventing Harm?” — hinted that something has gone horribly wrong in the private sector.
“Never before” in nearly half a century, “have we seen all levels of government so blatantly disregarding the Constitution and our civil rights laws, and at such a furious pace,” said Kimberly Hermann, a lawyer who sues public schools on behalf of conservative causes, at a panel denouncing “diversity, equity, and inclusion-based curricula.”
Vivek Ramaswamy, a young biotech executive and author of Woke, Inc.: Inside Corporate America’s Social Justice Scam, claimed that “the woke movement in the United States,” and corporations that appeal to it, undermine America’s geopolitical standing against China.
Adam Candeub, a professor at Michigan State University College of Law, complained about Facebook and Twitter’s controversial decision to suppress content about a dubiously sourced story about President Joe Biden’s son Hunter. Less convincingly, he complained about several big tech companies’ decision to temporarily block the conservative social media site Parler after January 6. As Amazon explained after it removed Parler from its web hosting service, it did so because the conservative social media site refused to pull down “content that threatens the public safety, such as by inciting and planning the rape, torture, and assassination of named public officials and private citizens.”
And yet, for Candeub, these incidents were proof that all conservatives are threatened and something needed to be done to rein in tech companies. “If trends continue,” Candeub told the Federalist Society audience, “you’ll be de-platformed.”
It’s a stunning rhetorical shift from a fanatically pro-free market organization that’s traditionally pushed a hands-off approach to business. Historically, the society has sought to undermine corporate regulation, and that has lionized decisions like Citizens United v. FEC (2010), which permits corporations to spend unlimited sums of money to influence elections. The Federalist Society’s conference typically features panels warning about “systematic regulatory overreach” against “regulated industries.”
But now the society appears to have lost confidence in the very free market system it spent decades celebrating.
In a market society, economists Milton and Rose Friedman wrote in 1979, “the consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him.” In theory, if one company adopts “woke” branding that offends its customers, then the market will deliver those customers into the waiting arms of a competitor.
Yet, rather than waiting for the hand of the market to deliver an invisible spanking to “woke” corporations, speaker after speaker at the Federalist Society’s convention called for a central planner to intervene. As it turns out, the society’s commitment to something as foundational as free market capitalism may be secondary to its desire to own the libs.
What exactly is the Federalist Society so mad about?
The conference featured an array of angry speakers raging against private sector leftism, but it was often hard to figure out what, exactly, they were so mad about. Though a mix of panels on “woke” corporations, universities, and secondary schools warned of a multi-institutional effort to impose this ideology on the nation, many speakers never explained what they think this ideology entails. Those that did often described a “woke” person in caricatured terms.
Newsweek opinion editor Josh Hammer defined the “enemy” — and he very pointedly used the word “enemy” — as “the Ibram X. Kendi woke ideology extremists who are trying to poison and rot the minds of our children into hating themselves and hating their country to boot.” Keller claimed that “woketarians” don’t just oppose “individual rights,” they also believe that “America’s founding was an immoral act” and that “the Bill of Rights is racist.”
Numerous speakers deployed the most potent weapon in the anti-woke advocate’s toolbox: the unrepresentative anecdote. Three speakers pointed to the same two incidents — the Hunter Biden article and the moves against Parler — as evidence that big tech is out of control. Speakers on three different panels complained about an incident where a Yale Law School student and Federalist Society member felt “intimidated” after a mid-level administrator pressured him to apologize for an email advertising a “Trap House” party where “Popeye’s chicken” and “basic bitch American-themed snacks” would be served.
Even when a speaker pointed to a specific incident that involved neither Yale nor Hunter Biden, moreover, they gave little reason to believe that any systemic problems exist.
Hermann, for example, alleged that a school district in Illinois separated white and non-white teachers and gave them “different teacher trainings.” She also complained about a children’s book likening white privilege to a deal with the Devil — a book that has allegedly been taught in maybe a dozen classrooms and recommended to students in a few more. Yet, when she tried to show that these incidents were part of a broader pattern, her best evidence was that “every single school district throughout this country is requiring teachers to take some sort of equity training.”
Ramaswamy, the Woke, Inc. author, even implied that laws banning discrimination on the basis of “race, sex, religion, and national origin” should be repealed. “Not many people are willing to revisit” the question of whether the law should protect classes such as these, Ramaswamy said, but “I am.”
The conference, in other words, featured an array of speakers who created a general sense that values like diversity and inclusion have gone too far — including several who seemed to reject the very idea that these values are worth championing at all. But it was often hard to pin down exactly what “wokism” is, or what the Federalist Society plans to do about it.
That said, many speakers brought up Milton Friedman, and specifically his views about the role of a corporation. Under the “Friedman Doctrine,” a corporate manager is the “agent of the individuals who own the corporation,” and thus must act in their interests — a duty that many speakers claimed was inconsistent with corporations playing politics. Ramaswamy, for example, warned against the “woke executive” who uses “his or her seat of corporate power, and the shareholder resources associated with it, to advance a particular agenda.”
It’s doubtful that the Federalist Society really wants to follow this argument to its logical conclusion. No speaker that I witnessed argued that corporations should be barred from lobbying law and policymakers. And the few speakers who mentioned Citizens United appeared to believe that it was correctly decided. For years, the Federalist Society elevated voices who believe that corporations should be free to spend money to elect Republicans or to lobby Congress to diminish the power of the EPA. And there is no reason to think that it will reverse course on these issues.
But so many speakers at this year’s conference appeared convinced that certain choices corporations have made present such a unique threat that the ordinary rules of free speech should not apply. The undergirding principle behind so many of these speeches was that corporate free speech — and corporations’ ability to shape their own companies’ values — does not extend to actions that promote whatever the Federalist Society means when it uses the word “woke.”
But even if we grant the premise that a corporation that promotes values like diversity is different in kind from a corporation that gives a million dollars to a Republican super PAC, it’s not even clear why corporate diversity initiatives and the like run counter to Friedman’s theory of the corporation. There’s a perfectly plausible argument that when corporate executives make a “woke” comment, decline to provide services to a website that promotes political violence, or run an ad campaign featuring BLM supporters, they’re just exercising good business judgment.
The capitalist case for “woke” corporations
The Society’s rage against “woke” corporations only makes sense if you imagine “wokeism” to exclude any real concept of social and economic justice. Amazon’s decision to block a single extremist website does nothing to allay the harsh working conditions in its warehouses. Corporate America is replete with companies that denounce a regressive bill in public then donate to conservative groups that help reelect these lawmakers in private.
As the Roosevelt Institute’s Kitty Richards told my colleague Emily Stewart, “We should be skeptical of individual companies and their CEOs and shareholders talking about corporate tax rates or specific provisions that seem benevolent,” because they are often “trying to shape policy in a way that will affect their bottom lines positively.”
But let’s take the arguments against “woke” capital offered by people like Keller and Ramaswamy at face value. Yes, corporations have always advocated for their own interests in the political arena, and this corporate speech often promotes the laissez-faire values that used to animate the Federalist Society. But there are, at the very least, anecdotal examples of big companies taking actions that enrage conservatives and delight liberals and Democrats.
The assumption underlying so many of the Federalist Society speakers’ remarks is that, when companies hold diversity trainings or deny server space to websites like Parler, they are advancing the political views of corporate executives at the expense of the company itself. In Keller’s words, “woke” capitalism is driven by CEOs who “like the psychic income they get from virtue signaling,” and who think that appealing to cultural leftists will appeal to “all of the people who go to cocktail parties that New York Times folks like to go to.”
Perhaps. But if companies as diverse as Google, Coca-Cola, JPMorgan, and Walmart are all engaged in the kind of “wokism” Keller despises, he should at least consider the possibility that they are doing so because it is good business.
The business case for “wokism” starts by looking at the political divide between younger and older voters. According to the Pew Research Center, President Joe Biden beat former President Donald Trump by 30 points among voters between the ages of 18 and 29. He won voters aged 30 to 49 by 11 points. Trump, meanwhile, won voters aged 50 and older.
This divide matters to corporate executives because young people wield a disproportionate influence over the market. As Ezra Klein has noted, advertisers are particularly interested in reaching the younger, Biden-supporting cohort of consumers because those younger consumers tend to have unsettled brand preferences. If you convince a young 30-something to buy a Ford truck, there’s a good chance they will drive Ford trucks for the rest of their lives.
This focus on young consumers has several implications. For one thing, it means that television studios will tend to produce content that appeals to the younger, more liberal audience that advertisers want to reach — thus causing America’s pop culture to embrace young people’s values. It also means that companies will try to market their products to people who share these values, even if such a campaign might alienate older consumers.
Consider, for example, Nike’s decision to make Colin Kaepernick, the former NFL player and racial justice activist, the centerpiece of a 2018 ad campaign. This campaign mystified many older consumers — an SSRS poll from that year found that just 26 percent of adults over 65 agreed with Nike’s decision to feature Kaepernick.
But Nike also knew that two-thirds of the company’s customers are under 35, according to a report by CNN, and a plurality of this age cohort supported Nike’s decision to feature Kaepernick. The views of older voters didn’t matter to Nike. From a purely capitalist perspective, “woke” branding helped Nike sell shoes.
Young people also care a great deal about diverse workplaces. A 2018 survey by the consulting firm Deloitte, for example, found that millennial and Gen Z employees “working for employers perceived to have a diverse workforce are more likely to want to stay five or more years than those who say their companies are not diverse (69 percent to 27 percent).” The same survey found that younger workers are more likely to remain at a company with a diverse management team.
So companies that want to attract new consumers and recruit a talented workforce must appeal to younger individuals who largely reject the Federalist Society’s values. That may lead to a number of corporate policies that offend people like Keller or Ramaswamy. And it may mean that companies like Google or Amazon risk an uprising among their software engineers if those companies get in bed with a site like Parler. But it’s hardly evidence that corporate executives are engaged in a conspiracy to promote “wokism” at the expense of their shareholders.
Even if business leaders are wrong that appealing to young, left-leaning consumers is a good business plan, moreover, sanctioning these companies for doing so could require upending one of the most foundational principles of corporate law. Although corporate law typically does allow shareholders to sue the directors of a corporation if the shareholder believes that they are behaving counter to the corporation’s interests, corporate leaders benefit from something known as the “business judgment rule,” which ordinarily protects business-related decisions that are made in good faith.
The law, in other words, is built on the premise that companies should be free to experiment with business tactics that may annoy some individuals, and the proper remedy if a company makes bad business decisions is that it will lose consumers to its competitors. Let the market work, rather than turning businesses over to a central planner.
Never underestimate the Federalist Society’s ability to reshape the law
Although conservative rage against corporate “wokeness” was a centerpiece of the Federalist Society’s gathering, it’s unclear what exactly the various speakers plan to do about it. Several speakers offered policy proposals, but there was no consensus around a single idea.
Although several speakers expressed skepticism about efforts to foster racial diversity, some of them supported policies to promote what Northwestern law professor John McGinnis referred to as “intellectual diversity” — that is, policies encouraging institutions to hire political conservatives. That could mean affirmative action programs for conservatives, or something more akin to an anti-discrimination law protecting people with conservative views.
Several speakers at a panel on “Private Control Over Public Discussion” pointed to an opinion last April by Justice Clarence Thomas, which argued that social media websites should be treated as “common carriers” and subjected “to special regulations, including a general requirement to serve all comers” — a standard that would require Twitter and Facebook to restore former President Donald Trump’s accounts and that could potentially prevent these sites from refusing to link to disinformation or hate speech.
Randy Barnett, a Georgetown law professor, offered a slightly different solution: Strip many social media companies of their ability to curate most of their own content, and require them to adhere to the same rules that apply to government censorship. Under this approach, Twitter or Facebook could still remove “fraud, incitement to imminent lawlessness, personal threats of violence, or other unlawful harassment, obscenity, or child pornography,” but would be unable to remove hate speech. Or speech that induces people to commit a crime such as invading the United States Capitol, so long as the crime is not “imminent.”
At least one speaker suggested that lawmakers should rely on sanctions and menace to cow “woke” institutions into compliance. Hammer, the Newsweek editor, insisted that conservatives need to “wield in state legislative chambers some degree of power to punish our enemies within the confines of the rule of law.”
In any event, the Society’s members appear to be in an early stage of brainstorming how to target “woke” institutions and remake them in a more conservative image. It’s not yet clear which specific policies will emerge from this process — or which ones will become law.
But that’s no reason for anyone who fears such an agenda to remain complacent.
At the Federalist Society’s 2015 convention, the speakers offered a similarly disjointed array of proposals to limit the power of federal agencies such as the Department of Labor or the Environmental Protection Agency. Though none of these proposals emerged as the Society’s consensus view in 2015, the Federalist Society’s views on agency power shaped the Trump White House’s decisions regarding who to appoint to the federal bench. By 2019, five members of the Supreme Court — a majority — had signed onto a doctrine known as nondelegation which could give the conservative Court a veto power over any regulation handed down by a federal agency.
And then, just this month, the Supreme Court announced it would hear a case that is likely to implement this nondelegation doctrine — and that could gut the EPA’s authority in the process.
When the Federalist Society identifies an enemy, in other words, it is very good at convincing its judges to target that same enemy. And those judges now control the Supreme Court.