Why do corporations so often accept the demands of unhinged activist groups, even when doing so comes at the expense of short-term profits? Why do management teams that panic over a one-tenth-of-a-percent change in quarterly earnings suddenly acquiesce to policies that can amount to economic suicide?
There are many reasons. In social and political matters, multiple forces usually operate at once. But here I want to describe one particular mechanism I encountered firsthand some twenty years ago, when I was sitting on a corporate board.
At the time, the corporation I worked for relied on an internal analysis claiming the following: if negative coverage appeared in major international media outlets and persisted for more than twenty-four hours, investors would begin dumping the stock. The share price would fall—sometimes precipitously—until it reached a level at which a rival firm could easily acquire a controlling stake and carry out a hostile takeover.
The trigger for such negative coverage could be almost anything. A flawed product launch. A failed project. But just as easily, something political. Suddenly the press would decide that your company is racist, or destroying the planet, or harming kittens—or something of that general sort. And not only could this destroy the company. It could destroy you personally. Other firms would hesitate to hire you, fearing that your presence would provoke the wrath of the same activist networks.
From this flowed the panicked fear of activists—and the impulse to bribe them. Looking back, I cannot say with certainty whether that analysis was actually correct. Perhaps it was produced by the internal public relations department (there was no separate “corporate social responsibility” unit back then, let alone DEI) as a way to frighten management and increase its own influence. Who knows. What matters is that it worked.
And this, in a very real sense, is what Elon Musk has disrupted.
Here is a man who is openly politically incorrect, despised by activist groups across the ideological spectrum—and yet he remains firmly in business. More than that, he has acquired the ability to assist others who find themselves targeted by what might be called the liberal mob. I am not claiming that he necessarily does so. Only that the possibility now exists.
Once someone like Elon Musk is part of the world of big money, space opens up for smaller, less prominent villains as well. Politically motivated negative media coverage no longer has to be automatically fatal.
This represents a far-reaching shift in power—one we have not yet fully appreciated and that will unfold gradually. The fact that Donald Trump has served as president of the United States is only a minor element of a much broader transformation now under way in the Western world.