Procter & Gamble’s latest revenue report shows the multinational corporation is doing just fine. One of its blue chip brands, however, is not. The consumer goods company took a serious financial shave on Gillette, announcing an $8 billion non-cash write-down on the world’s leading shaving brand, which P&G purchased for $57 billion in 2005.
Gillette, of course, produced the viral commercial on toxic masculinity that created a bit of a fuss in January.
“Bullying, the #MeToo movement against sexual harassment, toxic masculinity. Is this the best a man can get? Is it?” asked the ad, which featured males in various settings bullying, pinching bottoms, and mansplaining.
The ad became a touchstone of sorts for where one stood on the culture war. Many viewed it as a courageous act of corporate responsibility. Others saw it as “virtue signaling corporations.”
To be fair, it’s unclear if the Gillette ad is related to Procter & Gamble’s $8 billion write-down. The company attributed the loss to increased market competition and a decline in demand for razors. (Of course, it’s unlikely any corporation would admit to a marketing blunder of this magnitude if one had occurred.)
In any event, the Gillette ad remains relevant considering the Business Roundtable’s recent announcement redefining the purpose of corporations to include the advancement of various social goods along with shareholder profit.
The statement would seem to formalize the growing trend of “woke capitalism,” a phenomenon that involves corporations using their influence and dollars to advance social justice.
New York Times columnist Ross Douthat has described this dance as “a certain kind of virtue-signaling on progressive social causes…offered to liberalism and the activist left preemptively, in the hopes that having corporate America take their side in the culture wars will blunt efforts to tax or regulate our new monopolies too heavily.”
One need not be a cynic to suspect that corporations may be motivated by factors other than altruism, of course. It’s certainly possible corporations are simply tapping into woke culture to advance their own corporate interests — whether it’s to avoid regulatory pressure, curry favor with political activists, or inoculate their brands from charges of corporate greed.
Sincere or not, woke capitalism is a significant departure from the corporate tradition.
For decades, the conventional wisdom viewed wading into such political territory as a no-no for major brands.
The shift, data suggest, is largely consumer-driven. Surveys show that nearly six in 10 millennials believe it’s important that brands they support invest in causes important to them. More than half of GenXers and Baby Boomers feel similarly.
As fewer companies see remaining on the sidelines a viable option, the question becomes not if they should become woke but how to be woke effectively.
Heineken, for example, was widely praised for a 2017 commercial that was overtly political but managed to explore human differences in an honest, fresh, and relatable way. Next to the Heineken ad, the Gillette commercial appears clumsy and preachy. More importantly, it flunks the first rule of business.
Marketing campaigns that miss their mark, as Gillette’s did, put shareholders at risk. This is no doubt why, following the toxic masculinity ad, Gillette went on an advertising barrage of the more traditional variety.
Profits aside, it’s unclear if the fad of corporate activism is healthy for society. Evidence suggests political polarization, which is culturally corrosive, is the highest it has been in the U.S. since the Civil War. Assuming woke capitalists are sincere in their efforts to build a better society, and not simply using corporate activism as a profit strategy, they may end up fueling this polarization. As some have observed, the cure to polarization is less politics, not more.
There is also something unsettling and slightly creepy about corporations spending gobs of money on multi-million-dollar campaigns designed to tell us what to think.
Suspicious of big corporations selling us products we want at prices we’re willing to pay, corporate leaders must atone for their “obscene” profits with acts of social activism. It’s the 21st-century version of “noblesse oblige” — and it’s built on a fallacy.
The modern era saw unprecedented economic growth and prosperity as humans recognized, and worked to achieve through generations of social and political progress, the inherent economic and moral virtue in a social order built on free enterprise and exchange for all people. The marvels of the modern world, from the light bulb to the iPhone to the InstantPot, were created by profit-seeking entrepreneurs and represent the enduring power of capitalism.
The virtue of capitalism is a truth we must not forget. The rise of woke capitalism suggests we are.
Jonathan Miltimore (@Miltimore79) is managing editor of the Foundation for Economic Education. An alumni of the Institute for Humane Studies journalism program, he formerly was a reporter for the Panama City News Herald, senior editor of the History Channel magazine, and served in the speechwriting department for President George W. Bush.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.