Anti-Woke Capitalism, the First Amendment, and the Decline of Libertarianism

Amanda Shanor & Sarah E. Light | October 8, 2023

Firms across the globe, including financial institutions like banks, asset managers, and pension fund managers, are adopting strategies to account for the risks they face from climate change. These strategies include declining to invest in certain emissions-intensive projects or advising firms in their portfolios to report or reduce climate impacts and risks. These forms of private environmental governance can be characterized as one aspect of the “E” within a broader management strategy of “ESG,” or the management of environmental, social, and governance factors. Regulators in the United States and other countries are beginning to mandate that firms take some of these factors into account.

With the rise of firms’ consideration of ESG factors has come backlash, often under the umbrella of anti-wokeness. This backlash has come to a head in the form of state laws prohibiting state agencies and municipalities, including state pension funds, from doing business with financial institutions that are alleged to be “boycotting” the fossil fuel industry or that are broadly taking ESG factors into account. These laws are part of a larger trend of targeting firms’ decisions to address social and governance issues like declining to invest in gun manufacturing or taking positions on other social issues, including racial justice, abortion, and LGBTQ+ rights.

The last three decades of First Amendment law have been strongly influenced by laissez-faire constitutionalism, stemming in significant part from the adoption of libertarian ideas by the conservative legal movement. New so-called “anti-woke” capitalism laws represent a fundamental shift in the conservative legal movement away from libertarianism, First Amendment Lochnerism, and deregulatory constitutionalism and toward identitarianism and efforts to directly influence the substance of firm decision-making. This Article traces this important turn away from laissez-faire law and policy, which has significant constitutional implications, particularly for the First Amendment. These anti-woke laws, and the identitarian politics they reflect, may foreshadow a similar turn in First Amendment law.

At the same time, these laws raise important First Amendment issues. These include the difficult questions of when a governmental motive is sufficiently untoward to trigger heightened scrutiny or render a law unconstitutional, and when a social practice should be considered a medium of expression in public discourse for constitutional purposes. These issues have long vexed courts and scholars and are also crucial to the disposition of many of today’s most contested First Amendment questions.

This Article offers the first in-depth constitutional analysis of these so-called “anti-woke capitalism” laws. Rather than declaring that some of these laws—which vary across doctrinally significant axes—are constitutional or unconstitutional, this Article focuses on articulating the questions and constitutional values that should guide analyses of these laws and others like them that regulate social practices at the intersection of political and economic life. By focusing on the First Amendment’s underlying objectives—to protect decisional and participatory liberty in both political life and the marketplace—this Article uses these laws as a lens to clarify and rethink existing doctrinal categories in order to forward a conception of the First Amendment that advances democracy in a thoroughgoing way.