The Missing Right-Wing Firms: Hanania's Plausible Resolution
By Bryan Caplan
Last year, I tried to figure out why there aren’t a lot more right-wing (or apolitical) firms. A recent piece by Richard Hanania comes down firmly in favor of my Explanation #4. To review:
Explanation #4. Few moderates or right-wingers care enough to create a major profit opportunity. While they don’t relish looking over their shoulders, they prefer their current job to an alternative where they can shoot their mouths off but earn a $1000 less per year. In this story, the left proverbially just “wants it more.” And as usual, the market takes the intensity of conflicting preferences into account.
Hanania presents a pile of evidence that despite near-parity in ordinal preferences (the number of Americans who support Democrats roughly equals the number who support Republicans), there is a massive imbalance in cardinal preferences (the number of Americans who strongly support Democrats vastly exceeds the number who strongly support Republicans).
Evidence? Read the whole essay for the graphs; I’ll just summarize here.
1. Vastly more people donate money to Democrats than Republicans.
So while Biden beat Trump in the popular vote by 51%-47% (+4), in the donor game, Biden beat Trump by 61-39% (+22%). It is therefore unsurprising that Biden got more donors than Trump across most professions, and in almost every large institution.
This pattern doesn’t appear to be unique to 2020. In 2016, Hillary Clinton outraised Trump 2-1, including both the campaigns and Super PACs although Trump did beat Hillary in number of small donors as defined by those making contributions of $200 or less.
In the 2012 election, Obama raised $234 million from small individual contributors, compared to $80 million for Romney, while also winning among large contributors.
2. Left-wing protests attract far larger crowds:
In September 2009, at the height of the Tea Party movement, conservatives held the “Taxpayer March on Washington,” which drew something like 60,000-70,000 people, leading one newspaper to call it “the largest conservative protest ever to storm the Capitol.” Since that time, the annual anti-abortion March for Life rally in Washington has drawn massive crowds, with estimates for some years ranging widely from low six figures to mid-to-high six figures. March for Life is not to be confused with “March for Our Lives,” a pro-gun control rally that activists claim saw 800,000 people turn out in 2018. All these events were dwarfed by the Women’s March in opposition to Trump, which drew by one estimate “between 3,267,134 and 5,246,670 people in the United States (our best guess is 4,157,894).
3. Liberals are also much more likely to personally shun conservatives than vice versa:
Those on the left are more likely to block someone on social media over their views, be upset if their child marries someone from the other side, and find it hard to be friends with or date someone they disagree with politically.
Hanania thoughtfully adds: “Not letting politics interfere with personal relationships is a sign that politics isn’t all that important to you.”
4. Leftists are much more likely to seek low-paid jobs yet politically-relevant jobs:
A final way to understand cardinal utility is to consider the media and academia. Generally, these are professions that have absolutely terrible career prospects, and they draw people with high IQs who could expect to be making a lot more money doing something else. But for those who make it in these fields, individuals get to have an influence in society that is disproportionate to their status as measured by income.
People go into academia and journalism for generally idealistic reasons. Some conservatives might be turned away from these professions for political reasons, which poses a “chicken or egg” problem. In my experience though, a smart young person going into journalism is probably better off going into conservative media than they are liberal media, which is already saturated with people with elite degrees who cannot find stable employment. There’s a great deal of demand for conservative journalism among the general public, but few competent conservatives who want to be journalists given what the profession pays relative to what else smart people can be doing.
By the way, Hanania piece clearly surpasses mine by generalizing from business to institutions in general:
Asking why corporations are woke is like asking why Hispanics tend to have two arms, or why the Houston Rockets have increased their number of 3-point shots taken over the last few decades. All humans tend to have two arms, and all NBA teams shoot more 3-pointers than in the past, so focusing on one subset of the population that has the same characteristics as all others in the group misses the point.
I think one reason Woke Capital is getting so much attention is because we expect business to be more right-leaning, and corporations throwing in with the party of more taxes and regulation strikes us as odd. We are used to schools, non-profits, mainline religions, etc. taking liberal positions and feel like business should be different. But business is just being assimilated into a larger trend.
Corporations are woke, meaning left wing on social issues relative to the general population, because institutions are woke. So the question becomes why are institutions woke?
So the real story is just that right-wingers are apathetic? Hanania suggests a competing spin:
There’s a way to interpret the data discussed above that is more flattering to conservatives than presenting them as the ideology of people who don’t care. Those who identify on the right are happier, less mentally ill, and more likely to start families. Perhaps political activism is often a sign of a less well-adjusted mind or the result of seeking to fill an empty void in one’s personal life. Conservatives may tell themselves that they are the normal people party, too satisfied and content to expend much time or energy on changing the world. But in the end, the world they live in will ultimately reflect the preferences and values of their enemies.
Overall, Hanania provides a wonderfully compelling explanation for a wide range of social phenomenon. He doesn’t really address the question of, “What changed?” But that’s pretty obvious in his framework. What changed is that the left-right fervor gap has grown rapidly over the last few decades. Especially among the young, who famously feel more fervor than their elders. Makes sense to me.
My main criticism: Hanania still fails to explain the sheer uniformity of left-wing cultural dominance. Competition normally delivers more diversity than we’re getting. And for that, I stand by my Explanation #5, which I flesh out greater detail here.
Explanation #5. Discrimination law covertly stymies the creation of right-wing firms. Most obviously, any firm that openly and aggressively opposed #MeToo and #BLM would soon be sued into oblivion.
Which does raise the question: Since the right runs the government roughly half the time, why don’t they try a lot harder to defang the “discrimination laws” that do so much to cause political discrimination?
P.S. Hanania’s piece thoughtfully discusses several other big issues, so read the whole thing.