From Boardrooms to Bedrooms, Republicans Want Control




This article was originally published on Aug. 8, 2022, and updated on Dec. 12, 2022.

Today, conservative Florida Governor Ron DeSantis announced that the state is pulling about $2 billion from BlackRock Inc., another move by Republicans to exert control over the independent investing process.

The move by the Florida legislature is considered the largest anti-ESG, also known as “anti-woke, withdrawal announced by a US state.  It comes at a time when Republicans ramp up their fight against Blackrock, the world’s largest money manager.

It also shows that right-wing Republicans are moving to combat corporate activism at a time when corporations worldwide are moving to advance employee relations in investment actions that promote social equality, environmentalism, and transparency.

The Republican anti-woke movement also flies in the fact of Republican claims that they promote “freedom.’ In reality, the Republican definition of “freedom” is to follow what authoritative Republicans dictate is acceptable behavior, whether it be in the open marketplace, political discourse, the boardroom, and in the bedroom.

As the party of corporate leadership, the Republican move against social, or ESG investing, is designed to challenge the role of corporations to run their own investing and internal human resources affairs independent of state regulations.

Anti-ESG is a Republican Goal

The move by DeSantis, a potential Republican candidate in 2024, would assert state controls over independent corporate activities in making financial and investment decisions that reflect an increasingly younger and racially diversified workforce and their investment preferences.

The target of conservative Republicans, including DeSantis, is to derail investment decisions that adhere to Environmental, Social, and Governance (ESG) investing policies, specifically in their pension and other corporate-owned funds.

The money in this battle involves vast sums. There is about $35 trillion in corporate U.S. pension funds. Until recent moves by right-wing Republicans, corporations have had total independent discretion about how these assets were invested on behalf of their employees, especially those enrolled in 401(k)s and pension funds.

But, Republicans do not like how some of the funds designated as ESG investments have been going. Specifically, they oppose ESG funds that avoid investment in oil companies, polluters, companies that employ slave labor, or have poor records regarding their treatment of women, children, and the environment, or investing in certain nations, such as Israel. DeSantis’s pet target is “wokeism” and companies that make investment decisions based on addressing companies that advance systemic racism and economic inequality.

Republicans Want to Control Corporate Investment Decisions

Recently, a group of Republican state officials attacked the investment firm BlackRock for its sustainable ESG investment policies, including its anti-oil company holding policies, which are part of its state pension fund clients’ investment goals. In a letter from 19 Republican attorneys general led by Arizona’s Mark Brnovich, the group said that ESG hurts the returns of their pension funds. The Republicans made that charge without providing any evidence.

Republicans want to control what happens in boardrooms and in the berooms.

More specifically, the Republicans are coming to the aid of oil companies, most of whom have been polluters for decades and are now being excluded from ESG company screening criteria because of their past pollution and anti-environmental records.

To gain some traction, Republican state officials are adopting the guise of trying to protect state workers from what they view as investment policies that dampen returns. However, this is just posturing. Republican state officials have never gone on record as opposing the high fees and expenses, many hidden from plan participants charged by hedge funds, private equity, and mutual fund managers who are state pension fund asset managers.

Instead, the Republicans want us to believe now they are concerned about state pension plan participants when most people can see this is another power grab to gain control over trillions in pension fund assets and direct them into pro-Republican industries, such as oil, gas, private equity, and hedge funds.

ESG investing has about $40 trillion in assets under management worldwide, and for good reason. It creates value for investors and helps achieve environmental goals. But to social and economic conservatives, ESG investing poses a significant threat to corporations’ unchallenged authority. To socially conscious investors, ESG aligns with their personal beliefs and goals for themselves, their families, and their communities.

This power grab by Republicans and social conservatives is nothing new.  As early as the 1970s, right-wingers have rung the bell that capitalism is under attack. In the famous 1971 memo to the conservative U.S. Chamber of Commerce by Lewis Powell (later a Supreme Court judge), the Californian said the free enterprise system was under attack from liberal arts departments at college campuses, the New Left, television, Ralph Nader, the clergy, books, and intellectual journals. Looking back, Powell provided the fuel to start the culture wars that have become the daily fodder for the right wing.

Republicans want us to believe they are concerned about state pension plan participants when people can see this is another power grab to gain control over trillions in pension fund assets

Powell wrote the Memo to the head of the U.S. Chamber of Commerce, the nation’s top lobbyist for the largest US corporations.  He chose this group because these giant multinational corporations were natural allies for Republicans. Powell knew that big business was always going to work with the Republicans.

Today, with ESG investing challenging the status quo, traditional investment managers who want to run state pension funds without outside oversight may have a new force to contend with.

Republicans Fear ESG As A Paradigm Shift

Right-wing think tanks now equate ESG with a major shift in corporate management and ownership. In an article in the right-wing publication Imprimis, from Hillsdale College (December 2021), Michael Rectenwald traces ESG to “stakeholder capitalism” that emerged in the early 1970s (at about the same time as the rise of social investing) and then to the “Great Reset,” a term that appeared in 201 after the 2008 mortgage crisis.

In his version of the story, the “Great Reset” is a process where stakeholder capitalism (aka ESG) confronts the free market system and corporate control to advance “increased government intervention in the economy.”  This theory also involves COVID and climate change, but Rectenwald also said it will lead to “corporate socialism” and what an Italian philosopher, Giorgio Agamben, calls “communist capitalism.”

ESG advocates have probably never heard of this, but it is a powerful theme in right-wing renditions of ESG. In Rectenwald’s telling, “stakeholder capitalism involves behavioral modification of corporations to benefit not shareholders, but stakeholders.”  If this sounds familiar, it should; it echoes Milton Friedman. But there is more. The Great Reset means more state control, more immigration, more printing of money, higher taxes, job losses due to vaccine mandates, and more state control due to the Fourth Industrial Revolution.  All this includes the significant problem of ESG investing.

Back to the Reality of ESG Today

While the “great Reset” may or may not unfold, the current focus of ESG opponents has been on the corporations that have disengaged from doing business with Russia. This means ESG investing has become the focal point for pro-free marketers, cultural conservatives, economic conservatives, and anti-ESG opponents.

Today, conservatives oppose ESG investing for four reasons:

  • ESG policies detract corporations from their primary goal of making the most significant profits possible;
  • ESG gives shareholders too much influence over guiding corporate policies outside of direct business operations;
  • ESG is a threat to traditional corporate and political power.
  • ESG is incompatible with free-market capitalism and conventional economic theory.

The anti-ESG movement is powerful because it combines cultural and economic conservatives. By definition, ESG seeks to advance issues related to environmentalism, workplace diversity, corporate transparency, and the belief that corporations have a societal obligation that extends past geographical boundaries and how business practices will impact future generations.

In almost every area of ESG policies, these goals are challenged by cultural and economic conservatives. For instance, on the financial side, economist Milton Friedman, in a famous New York Times op-ed on Sept. 13, 1970, “The Social Responsibility of Business Is To Increase Its Profits,” argued that asking corporations to pursue social responsibilities beyond profit was akin to preaching socialism. This meant that corporations had to include expenses, such as protecting the environment or advocating for affordable housing, as activities that would interfere with market processes.

Under traditional economic theory, environmental pollution was considered a financial “externality” or an unrelated to business operations. Externalities are external costs to a neutral third party that arise due to the action effect of another party’s activity. According to the Corporate Finance Institute, externalities especially include environmental items such as air, water, and wildlife that have poorly defined property rights.

Traditionally, corporations never paid for the costs of their environmental pollution unless the courts, and later, public opinion, forced them to act.

On the cultural side, conservatives “generally criticize corporate social and political engagement because of the sorts of causes corporations have tended to support as of late. These include issues, such as environmentalism, racial equality, and LGBTQ rights, which are on the other side of the culture war,” according to Abraham A. Singer, Director, Center for Applied Research at the Loyola Rule of Law Institute, Loyola University, Chicago.

Photo: Travel Channel

In a recent example, Florida Republican Governor Ron DeSantis Singer said DeSantis”didn’t seem to take issue with Disney being politically involved, but it deigned to criticize his legislative and social agenda. Had Disney, say, criticized CRT or mask mandates, I doubt cultural conservatives would have an issue with it (whereas free-market conservatives who have a principled commitment to Friedman’s sort of claims might).”

Republicans Target the Magic Kingdom

At the economic level, conservatives opposed to ESG investing frequently invoke the names of conservative economists, such as Friedrich Hayek, the Austrian-British academic who advocated classic liberalism, and free-marketer Milton Friedman. Both taught at the University of Chicago, and they established the role of corporations in a free market economy. Milton Friedman famously said of Corporate Social Responsibility (the term used earlier for ESG investing) back in 1970, “A corporation’s responsibility is to make as much money for the stockholders as possible.”

Friedman was elevated to corporate economist superstar status because he theorized about the links between a competitive, free market, private enterprise, and capitalist system as the critical ingredients of freedom.

But Friedman certainly has his critics. One critic,  Robert Ashford,  specified the shortcomings in Friedman’s understanding of private property and economics. This criticism included how they distorted his free-market model: “It created economic power in a plutocracy, perpetuated chronic underemployment of labor and capital, and suppressed the freedom of most people.”

Liberal economist Karl Polanyi also criticized extreme free marketers for their belief that the ascent of the markets could “lead to the end of politics.” In an article, Dan Pearson called this “a destructive fiction,” which was proven because self-adjusting markets failed to address economic inequality.

More Free-Market Critics of ESG

Another strong critic of Friedman was Nico Vorster, who specifically addressed the tension between the unbridled pursuit of maximum corporate profits and any social responsibility. In his book, “An Ethical Critique of Milton Friedman’s Doctrine on Economics and  Freedom,” Vorster took issue with Friedman’s amoral position that “the very foundation of a free society as the acceptance by corporate individuals of a social responsibility other than to make as much money for their stockholders as possible.”

Vorster went on to say that corporate executives “are not civil servants and have no right under their contract to act on their preferences, to make discretionary decisions or to expend resources of the firm to achieve social goals that cannot be directly related to profits. Any social action would require a business manager to spend money rightfully the property of employees and even customers.”

Friedman also advocated that as long as corporations pay a tax, “there is no justification for permitting deductions for contributions to charitable and educational institutions.” This narrow band of thinking even extended to the environment.

As Vorst said, “Friedman’s separation of economics and ethics also has severe consequences for the relationship between the economy and the environment. Environmental degradation is, according to Friedman, acceptable insofar as the benefits exceed the costs to the people involved.”

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Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry. He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial. He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site,, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).



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