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The DEI Regime
Every Fortune 100 company has now adopted “diversity, equity, and inclusion” programming.
“The chief business of the American people is business,” President Calvin Coolidge once said. One hundred years later, Americans’ chief business increasingly is managing racial and sexual politics through the ideology of “diversity, equity, and inclusion.”
I have surveyed the programming of every Fortune 100 company and have confirmed that all of them have now adopted so-called DEI programs. These initiatives are no longer limited to high-technology firms in the coastal enclaves; they have spread to traditionally conservative sectors such as agriculture, manufacturing, insurance, and oil and gas. The result is clear: every major corporation in the United States has submitted to DEI ideology and begun to make it a permanent part of its legal and human resources bureaucracy.
No doubt some of these programs are benign. Many companies adopt DEI policies out of pressure to conform. Other companies, however, use diversity, equity, and inclusion to promote the most virulent strands of critical race theory and gender ideology. I have documented many examples: Bank of America teaching employees that the United States is a system of “white supremacy”; Walmart telling workers they are guilty of “internalized racial superiority”; Lockheed Martin forcing executives to deconstruct their “white male privilege”; and Disney promising to abolish the words “boys” and “girls” in its theme parks and inject “queerness” into its children’s programming.
Three factors drive corporate executives to adopt DEI programs. First, these initiatives serve as an insurance policy against frivolous race- and sex-discrimination lawsuits. The legal department can point to mandatory trainings and policies as evidence that the company is “doing something” to prevent discrimination. Second, executives create these programs to appease internal activist groups that want to use the corporation as a platform for left-wing race and gender activism. Third, splashy DEI initiatives, such as Wal-Mart’s $100 million “Center for Racial Equity,” form part of a reputation-laundering strategy, improving a company’s public image and preempting Black Lives Matter-style protests through fashionable philanthropy. As a bonus, corporate executives, most of whom are rich but not famous, can use the associated galas, events, and junkets to boost their social status and hobnob with celebrities and political figures.
Some conservative commentators have pointed out the internal contradiction of corporate DEI policies: they don’t reflect the values of customers and don’t serve the bottom line; the political meaning of the word “equity,” for example, is predicated on an anti-capitalist worldview. But this assessment misses the broader point that, given the current political, social, and legal incentive structure, executives are making a rational decision to adopt DEI policies, even if they are doing so in bad faith.
Conservatives’ goal should not be to point out the executives’ hypocrisy but to change their incentives in order to change their behavior. This goal is eminently feasible. In recent months, Florida governor Ron DeSantis has begun to develop a model for challenging the hegemony of the DEI bureaucracy. He has abandoned the traditionally Republican premise of corporate non-intervention and embraced a more muscular, Teddy Roosevelt-style strategy for combatting corporate malfeasance. Last year, he passed the Stop W.O.K.E. Act, which prohibits companies from promoting critical race theory-style scapegoating, stereotyping, and harassment. Next, he won a high-profile fight with Walt Disney Co., stripping the company of its special governing status and dealing a significant blow to its public reputation.
These actions in Florida have already had a ripple effect nationally. Corporate executives have been wondering about how to “avoid becoming the next Walt Disney Co.” Some firms, including Netflix, have laid off diversity, equity, and inclusion employees—in anticipation of economic headwinds, no doubt, but also because the recent controversies around DEI more generally have opened up the space to do so.
Conservatives need to build on these efforts by developing a comprehensive agenda for pushing back against left-wing ideology in corporate America. First, legislators must protect firms from frivolous discrimination lawsuits and abolish the “disparate-impact doctrine,” which presumes that firms are guilty of discrimination if all identity groups don’t achieve equal outcomes. Next, political and business leaders must work to rein in the Environmental, Social, and Governance (ESG) policies driven by the BlackRock–Vanguard–State Street shareholder nexus through antitrust enforcement at the governmental level and by fostering new competitors in the private sector—such as Vivek Ramaswamy’s recently launched Strive Asset Management, a firm that promises to restore the primacy of “excellence over politics.” Finally, conservative activists should follow the Disney model and vigorously target the reputation of firms that insist on promoting critical race theory and gender ideology at work. A clear message should be sent to executives: “declare neutrality in the culture war, or we will make you pay a price in the marketplace.”
The road ahead will be difficult. Bureaucracies have an instinct for self-preservation, and DEI ideology has embedded itself in the country’s prestige institutions. But nothing is more important for the success of American innovation and self-governance than prevailing over a regime that seeks to supplant “life, liberty, and the pursuit of happiness” with “diversity, equity, and inclusion” as the governing principle of the United States.
Originally published in City Journal.