Questioning the rationality of expanding DEI post its education sector failure

December 18, 2023

By Tim Worstall

Now that we know DEI has failed the insistence is that we must expand it. This is not a rational way to run a society.

DEI is that idea that has taken over universities and colleges across the country – even the schools. Diversity, Equity, and Inclusion, also known as the idea that a capitalist and market society is irredeemably racist and, therefore, the entire system must be overthrown – for that’s where it comes from.

It is such a bad idea that Florida has banned it in the public colleges, as has Oklahoma followed suit. Bill Ackman blames the unfolding disaster at Harvard on it. It’s a stale idea that we are finally beginning to eradicate from parts of American life. Good.

At which point, we have the new insistence from its promoters that it must now be applied to business/ As Fast Company says:

“This is why we need to tie executive compensation to DEI goals.”

Just as the first people to adopt it are rolling it back – as that lousy idea – it doesn’t sound like the time to extend it. But this is the insistence: 

“Capitalism is transforming from profit maximization to sustainable value creation. The Business Roundtable’s meeting in 2019 largely kicked off this transformation and triggered a flurry of activity around measurement and change management for the emerging stakeholder capitalist system.”

The real meaning of “stakeholder capitalism” is, “Let’s not run this as a business but as an extension of a college seminar on DEI.” Which, as we say, doesn’t sound like a good idea given the failure on campus.

“In corporate speak, we call these four pillars “ESG,” with diversity, equity, and inclusion falling under the People pillar. Stakeholder capitalism metrics like these are a step in the right direction.

However, they also leave us hanging. For one, they imply voluntary compliance—that is, no regulatory teeth. And for another, they lack the intersectional lens. In other words, no data disaggregation beyond one protected class.”

The idea is that the law should change so that every company does more of what has failed in the universities. And pay everyone according to this.

Talk about reinforcing a bad idea – even forcing it upon everyone. This is not a rational way to run a society.

And, really, this doesn’t work with companies. Unilever tops the world rankings for DEI. Unilever’s also just parted ways with its CEO; the new one is insisting we’re not going to do so much of that, and even so, there are those calling for a break up of the company as it’s been wasting too much money on — DEI.

Which is one of those problems for DEI in the corporate world. Precisely and exactly because we can measure profits, we find that DEI doesn’t increase them. So, you know, let’s not do that then, right?


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