The Bootlegger and Baptist (1983) theory of regulation present a practical explanation for why these such coalitions are effective vehicles for camouflaging rent-seeking behavior by a firm. Armed with the public appeal of the moral arguments posited by the Baptists, the Bootleggers can quietly lurk in the shadows, funding initiatives that will advance their self-interest. The ethical advocates create a smokescreen that provides cover for the business interests, superficially obscuring the stigma of corporate advocacy. Since few examples of political action invoke the ire of the average citizen than policy campaigns that line the pockets of big business.
The trend of “woke capitalism” is bringing the Bootleggers out of shadows and into plain sight. CEOs are now openly standing in unison with political activists speaking out against topics ranging from police brutality to environmental issues. The Bootleggers can work openly with the Baptists to promote a positive image while still silently providing monetary support in the background. The social justice messaging of “Woke Capitalism” extends beyond corporate activism and is observable in the product market and advertising. Some companies adopt marketing that emphasizes social consciousness to secure the business of Gen-Z. Typically, companies use this tactic to target younger consumers with higher preferences for ethical products and brand authenticity, requiring companies to go beyond philanthropy and mandating community services hours for their employees; their ethics almost be conveyed in their branding.
The most recent alliances forged between business interests and political activists take the form of four main taxonomical categories. Some of the various types of Bootlegger and Baptist coalitions feature collaboration between firms and activists. Other coalition types that form within the technocratic structure of the corporation; are between different departments within the organization. Woke coalitions have several notable classifications of “woke” corporate alliances. The main subcategories include proactive and reactive forms of rent-seeking.
The reactive models for “woke” coalitions include two subtypes of collective action organization, the interaction between external actors and collaboration between internal employees. The first variety of reactive coalitions are rent-seeking alliances formed to restore the company from a sullied reputation caused by criticism. The objective being to mitigate the loss of sales and social currency amid public controversy. Some firms directly attempt to distance themselves from the controversy through their activistic partnerships. The second type of reactive “woke” coalitions are the intracompany factions designed to divert attention from potentially costly internal controversies. In instances of hostile work environment ligation, the legal team, the human resources department, and executive management band together to avoid a publicity nightmare. Human Resources and legal work together to legally distance the company from a harassment incident. Legal working on navigating the statutory and tort concerns while HR works internally to establish an anti-harassment campaign intracompany. All the while shielding executive management from more scrutiny and accountability.
Finally, the last two variants of “woke” coalitions aligning business interests with moral advocates to facilitate proactive forms of rent-seeking. Similarly, the proactive coalitions can be delineated into examples of internal and external collaboration. Proactive partnerships form to capture potential gains and avert the costs of prospective controversies. The most salient example of such external cooperation would be firms standing behind a woke cause, anticipating that such an alliance will obscure the firm attempting to shape current regulation (regulatory capture). However, we cannot forget the proactive inter-department coalitions that are emerging within corporations. For example, several companies are hiring diversity and inclusion “coaches” as a peripheral subset of human resources. The human resources department defends the existence of these staff members by emphasizing the need to educate employees to avoid instances of harassment and discrimination. The diversity coaches preach the virtues of cultural sensitivity and other tenants of the “woke” philosophy.
Superficially these alliances between big business and “woke” activists seem relatively benign. However, there are profound consequences for the integrity of capitalism and the rule of law. This paper will demonstrate how the four types of woke B&B coalitions undermine capitalism and the rule of law. Woke capitalism has made it easier than ever for business interests to create the façade of morality but are unjustly bending the rules-of-the game in their favor. Wokeism provides the veil obscuring corporate America’s hand in the legislative till. In effect, generating more anti-competitive laws that undermine both the rule of law and free trade.