Wall Street, which according to progressive mythology is the citadel of greed and corruption that defines conservatism, has become the straw man for all of capitalism’s supposed excesses and flaws. Yet while the Left’s attacks are unrelenting, progressives have had considerable success in implanting their social and cultural agenda within corporate America. The reorientation of employment policies, corporate governance, and daily business operations under the guise of corporate social responsibility (CSR), diversity and inclusion (D&I), and environmentalism, among other programs, signifies a worrying trend that is both undermining business objectives and foundational American principles.
The Left’s accomplishments are changing the way some of the pillar institutions of capitalism address markets and society. Businesses, like universities, are being distracted from their primary function (namely, to produce and sell something) by their newfound obligations as tools of value dissemination. In recent years, every major U.S. bank, among other financial institutions, has begun to publish at least one annual CSR report lauding its purported successes in the pantheon of progressivism — race, gender, environmentalism, and sexuality — and outlining a strategic plan to progress on all the work that still needs to be done.
Many corporations, particularly on Wall Street, have thus become the street hawkers for progressivism, bullied into their new roles as champions of faux-justice by those seeking to chisel the bedrock of the American way. As on college campuses, the social-justice warriors have been pushing from numerous sides — activist shareholders, external pressure groups, government agencies, and a new generation of management that has already been molded by the progressive-dominated universities and business schools.
In support of the CSR agenda, an entire industry has developed. Firms now exist to help managers find diverse employees and suppliers. Consultants and activists have set up shop to — take your pick — aid or pressure companies to increase the diversity of their headcount or become more environmentally conscious. Financial institutions no longer look just to traditional metrics of success — credit ratings, Forbes 100 lists, or stock prices — but are now inundated with new corporate rankings on LBGT-friendliness and workplace equality.
CSR is becoming increasingly formalized and regulated. Under new rules promulgated by Dodd-Frank, for instance, financial institutions regulated by the Securities Exchange Commission, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC), among other regulators, are now being encouraged to assess their D&I policies for both employees and suppliers. According to the FDIC, information from a financial institution’s self-assessment report will “be used by the agencies to monitor diversity and inclusion trends and identify leading policies and practices in the financial services industry” — in other words, to pressure non-compliant institutions into altering their practices. Although currently all reporting is, as a matter of law, voluntary, it is only a matter of time before interest groups, politicians, and regulators collude to formally stamp the imprimatur of progressivism on all personnel decisions of financial companies.
The harm caused is palpable. Budgets, resources, and the attention of management are being diverted, and outside interest groups are having say in places where they have no business. Bank of America, the second-largest bank in the U.S. and named (dubious distinction) the best global bank for corporate social responsibility in 2015 by the magazine Euromoney, brags in its annual CSR report (150 pages) of the 68,000 man-hours wasted in progressive D&I indoctrination, or, as it writes, “training.” Likewise, AIG, one of the largest insurers and the notable beneficiary of a post-recession taxpayer-funded bailout, touts that enrollment in its employee-resource groups (essentially extracurricular clubs that target one of the preferred D&I groups) increased by 4,200 percent since 2012, to over 10,000 employees. Banks are spending billions on so-called diverse suppliers (i.e., female or minority-owned businesses) — Bank of America spends over $2 billion annually on such vendors, while Wells Fargo spends more than $1 billion.
By turning the workplace into a battlefield where values clash, ideology overwhelms the organic personal relationships that need to exist there, replacing them with impersonal labels-based caricatures.
Of course, all of this gets in the way of primary business objectives, such as hiring the most component workforce and sourcing inputs from the best suppliers. When businesses elevate some perceived social value above the efficiency of their operations, they necessarily raise their costs or skimp on their product. As critics of affirmative-action programs have been arguing for decades, if the quality of the D&I employee or supplier is as good or better than that of the alternative, the D&I program would not be needed in the first place. These financial institutions are essentially choosing to hamstring their operations, foisting the costs of this value-laden agenda on their customers, employees, and shareholders.
However, while the impacts on the businesses are noteworthy, the costs to employees and, by extension, to society are more pernicious. The irony of these programs — and ultimately the thinking that supports them — is that they undercut the principle of tolerance that they purportedly aim to establish. By turning the workplace into a battlefield where values clash, ideology overwhelms the organic personal relationships that need to exist in such environments, replacing them with impersonal labels-based caricatures. An employee can no longer like or dislike coworkers because of their personality or work ethic but is forced to accept or reject them because of their gender, sexuality, race, or political orientation. The consequent employee discord and unhappiness not only add to CSR-induced costs to the business but also aggravate the growing partisanship in society as even more areas of personal life become politicized.
In a progressive version of the trickle-down theory, employees are under tremendous pressure to conform. The Left targets its efforts on a few managers, who then disseminate the mantra through their organizations, with the goal of yielding a windfall of new adherents to the ideology. Those who disagree are silenced, for fear of losing jobs or being labeled intolerant. The mislabeled safe spaces that are prolific on college campuses are now also in the boardroom, where multi-colored ribbons adorn door handles in solidarity with progressive ideals, while a Trump bumper sticker or a comment regarding family values will serve as a roadblock to career progression or get you a pink slip.
In truth, the wholesale overhaul of the American value system is precisely the objective of the progressive program. The leftist infiltration into Wall Street is intentionally impacting employees’ values, creating spillovers to society and ultimately undermining the cultural and economic principles that have made the United States a success. By coercing and shaming the management of financial institutions — cast as the cretins of capitalism, they are already perennially on the defensive — progressives are successfully undercutting one of the last standing bastions of free-market principles.
— Filip Fabricius is a pseudonym. The author works at a financial institution as an economist and analyst.