Get Woke, Go Broke: Entrepreneur Predicts A Reckoning Against Woke Capital

When Americans invest their hard-earned savings, they do not want those funds backing woke corporations’ political agendas.

Earlier this week, an exclusive Daily Wire poll conducted by Echelon Insights showed that Americans want companies they invest in to stop preaching and pursue profits. While 29% of respondents agreed it is a “good thing” for companies to leverage their financial power for political or social means supported by executives, 58% — twice as many — said it is a “bad thing.”

In an interview with “Morning Wire,” entrepreneur Vivek Ramaswamy explained that there is a “distinction” between actual investors and investment institutions — and the former are tired of the latter tipping the scales of the political debate without their consent.

“This is not a right or left-wing issue,” Ramaswamy, the founder of excellence capitalism asset management firm Strive, explained. “That’s why you see a two-to-one ratio here.”

Ramaswamy observed that even for progressive investors who want to see their favorite causes advanced, the best way to do so is not through a corporate entity.

“The way you would want to do it is to generate wealth for yourself that you can donate philanthropically,” he said. “And the way you generate wealth for yourself is through a capital market that most effectively enhances return. But what you’re doing through a politicized economy is effectively handing that power over instead to a small group of investment institutions, to the corporate boardrooms of this country that aren’t even the most effective ways of advancing your political agenda, even if you wanted to — say, from the progressive side or from the left-wing side.”

The Daily Wire poll found that most investors prefer to focus on profits instead of Environmental, Social, and Governance (ESG) goals — in which a company arranges its operations to be inseparable from a progressive agenda — when they choose their own assets, and most believe that other investors should have the same opportunity.

Ramaswamy noted that there is a “principal agent conflict” at play when “the person who speaks on behalf of the client is saying things to corporate America that the client himself would not want to say.” Indeed, asset managers like BlackRock, State Street, Vanguard — which manage a collective $21 trillion in capital — often pressure companies they hold to pursue racial or gender-based quota systems, diversity programs, and other political initiatives.

“You might ask the question of why it is that those large firms are doing what they do. And this is really just a form of crony capitalism,” Ramaswamy diagnosed. “What they get in return is government favors. I mean, if you look at who got to administer the COVID-19 stimulus packages, it was none other than BlackRock — that’s a pretty profitable business to be in. If you look at who staffs the Biden administration, including the Treasury Department, including in the Council of Economic Advisors, including the vice president’s staff — a lot of BlackRock alumni. They are doing what the party in power wants them to do in return for favors that allow them to aggregate greater not only profit, but greater power.”

What is the most realistic way for investors to opt out of ESG-style investments — a right that 66% of investors supported in the Daily Wire poll? According to Ramaswamy, look no further than market competition.

“That’s a big part of why I founded Strive. To say, you know what we need? True diversity in the marketplace of ideas — including in asset management — that at least matches the true diversity of perspectives in the American economy that everyday citizens and everyday consumers share as well,” Ramaswamy said. “That doesn’t exist today… Do I think that citizens should be able to have their capital invested in ways that take their voice and their preferred advocacy behavior into account by their asset managers? Absolutely.”

“I think that that reform is coming, but it’s only going to come because of actual market competition. Not because we wish it into existence,” he added.

Get Woke, Go Broke: Entrepreneur Predicts A Reckoning Against Woke Capital

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