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Terms of Trade | Can capital be inherently socially progressive?

Jan 17, 2025 06:12 PM IST

To go to war with capitalism from a class perspective, you need to have a solid class alliance behind you.

This is an interesting question to ask but not an easy one to answer. From the abolition of slavery and ushering in of civil rights in the US; the world’s largest capitalist economy, to debates on whether or not private capital can help break the shackles of caste discrimination in India, one can debate it at multiple points in time and geographies. The reason this column is asking this question is the sudden surge in some of the biggest companies in the US taking an anti-woke turn as Donald Trump prepares to take over as the president once again.

Supporters of President Donald Trump rally at the U.S. Capitol on Jan. 6, 2021, in Washington. (AP Photo/Jose Luis Magana)(AP) PREMIUM
Supporters of President Donald Trump rally at the U.S. Capitol on Jan. 6, 2021, in Washington. (AP Photo/Jose Luis Magana)(AP)

The turn has been so stark that the Financial Times, one of the most authoritative voices on capitalism, ran a story asking whether corporate America was going Maga?

“In a mirror image of the 2020 corporate rush to support social justice causes after the murder of George Floyd by a policeman, companies today are reshaping the way they interact with their customers, employees and society at large…Companies are scrapping diversity, equity and inclusion (DEI) departments, cutting their support for racial diversity charities, and dropping out of climate change groups. They are also scrubbing anything that could be perceived as “woke” from public statements, corporate documents and advertising”, the FT story says.

To be sure, what is being offered by capital in return for being in the good books of the new regime in the US is not just a reneging on what many would call "subjective" socially progressive views or affirmative action. With companies like Meta, which owns social media giant Facebook, also diluting their fact-check policy, even the so-called objective regulations are being dialled down. It is almost a retrospective concession to the mass base of the new president who has been peddling what is nothing but lies to further their political agenda.

Companies, especially on Wall Street, reneging on their climate finance commitments is yet another example of running away from the objective truth of a worsening climate crisis. In this case, the primary driver is protecting the short-term profits of established businesses such as fossil fuels and automobiles, sustainability be damned.

The only question which needs to be asked is whether these companies were pretending to be woke, socially or climate-wise, earlier, or are they pretending otherwise now in order to escape the wrath of the new regime in the US. There is of course an easier answer to this question. These multi-billion-dollar empires would do anything which keep their business and profits safe. When it required being woke, they turned woke and when it required being anti-woke, they were happy to oblige. The US, by the way, is not the only country to have seen such a U-turn by capital. “Secularism” in India has had its share of capitalist cheerleaders who have become cold towards its fate in the last decade.

Where does all this leave the larger question about capital being an engine of social inclusion and diversity? It would be wrong to claim that the marriage of capitalism and social justice has not led to a percolation of opportunities towards hitherto discriminated/under-represented sections of society. However, what can also be said at the same time is that this representation has been in the nature of co-opting the social have-nots within the system rather than changing the system per se. The latter would have tilted the scales in favour of the larger communities of such discriminated constituencies as well as the poor from the majority/privileged sections.

The larger constituency of the discriminated has continued to suffer under what is increasingly becoming an unequal and elite-controlled economic system. This is an argument which can be made for the US as well as a country like India. The overarching problems of the population are a lack of well-paying jobs, stagnant real incomes and increasingly rising living expenses notwithstanding the inflation rate. Of course, the historically discriminated groups face a double whammy on account of their accumulated backwardness.

It is this suffering at the hands of the larger economic regime which turned the poor, including the socially discriminated, against the so-called progressive party in power. Trump gained support among almost all demographics in the 2024 elections, including those whose interests will suffer because of the scraping of DEI policies by companies and universities. What explains this seemingly irrational behaviour on the part of the voters?

There is a simple answer to this question. Exceptions aside, a lot of the beneficiaries of the so-called woke policies of the highest echelons of the American establishment have been historically discriminated against by people who already managed to break through the glass ceiling of economic discrimination. While such policies have unleashed what can be rightly described as a palace coup in the erstwhile white, conservative-dominated enclaves of leadership and managerial wealth, they failed to generate enough traction at the bottom of the pyramid to prevent somebody like a Trump from storming the gates of the American establishment. In fact, Trump exploited these policies as an effective othering tool to mobilise the white voter base which was captured well in slogans such as “Kamala (Harris) is for they/them, President Trump is for you”.

Now that Trump is in power, the old order is happy to shed its pretence of wanting to share the spoils and is undoing even the limited gains which the palace coup from above had achieved in the first place. The coup d'état that Trump’s second stint in power has unleashed has an important lesson for socially progressive voices who were naïve enough to trust capitalism in their battle to push the envelope of social inclusion.

To be sure, not everything under the Biden administration was a benign, token sharing of spoils for capital. His people did push some of the biggest companies on issues such as regulation and anti-trust laws which had a bearing on their profit outlook and even survival. People such as the Federal Trade Commission chair Lina Khan became the face of this pushback. This is exactly why some of the biggest players of Wall Street were backing Trump for a significant part of the campaign.

Bank of America CEO Brian Moynihan articulated the resentment such policies generated against Biden in an interview with Financial Times earlier this week. “You’ve seen that [pushback] happen in other countries”, where people reject being “controlled” and told “what to do”, he says. He thinks this happened in the US election and says BofA will “be the beneficiary of that movement”, the FT story said.

The moral of the story, however, remains the same. Even to go to war with capitalism from a class perspective, you need to have a solid class alliance behind you. The Democratic Party establishment and Joseph Biden made another cardinal mistake. They were too consumed in fighting a palace coup to worry about what was happening outside. It is this neglect of basic political economy which allowed Trump to hunt with the (capitalist) hound and run with the (working class) hare at the same time during the campaign.

Biden is right about warning against the threat of an oligarchic takeover of the US in his farewell speech. But fighting this takeover will require that the Democratic Party and the progressives at large fight the real battle rather than palace coups. Disabusing themselves of delusions about basic political economy is a necessary condition for such course correction.

Roshan Kishore, HT's Data and Political Economy Editor, writes a weekly column on the state of the country's economy and its political fall out, and vice-versa

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