‘Social Justice Debt’ Is Turning US Businesses Into ‘State-Owned Enterprises’

The emerging reality of US government and banks dictating how companies do business and how people think via ESG policies resembles the CCP’s policies more than America’s free enterprise system

Hundreds of climate protesters walk from Times Square to New York Gov. Kathy Hochul’s office to demand more action against climate change, in New York on Nov. 13, 2021. The protesters, representing a cross section of environmental groups, are demanding that New York State do more to pass legislation that will hold major companies with a history of polluting accountable. Spencer Platt/Getty Images

Commentary

“It’s the journey, not the destination, that matters,” goes the old saying with regard to life.

Perhaps so. But when it comes to the fate of America’s financial and economic system, the destination is ultimately the only thing that matters. In fact, the journey on which we now find ourselves is actually a preview of our destination, and it’s, without doubt, an ugly one.

The drive to render “social justice” in America feels more like an all-encompassing “social debt” that all companies and businesses owe certain groups of society. The federal government, with its urge for top-down control, will ensure that “debt” is paid. This is nothing more than a backdoor into turning American companies into essentially “state-owned enterprises,” similar to what the Chinese Communist Party (CCP) has been doing for decades.

Let’s look at how debt is being used in China and compare notes with what’s going on right here in the good ol’ U.S. of A.

Massive Debt Crushing China’s Economy

Over the past decade or so, China, led by Xi Jinping and the CCP, has seen its domestic debt explode. The reasons for China’s exploding debt included the state’s overreaction to the global financial crisis of 2008, when it issued a $600 billion in stimulus to its economy, compared to the $152 billion U.S. package and Japan’s $100 billion stimulus. It did so again in 2020.

Since then, debt levels have ratcheted up, mostly through local government funding vehicles (LGFV), which are made by local, CCP-controlled banks. The debt is an off-balance sheet of large but unknown amounts. Much of it consists of debt rollover cycles, where new larger loans are issued to cover old, unpaid ones. Today, China’s debt is growing four times faster than its economy, at an annual rate of about 20 percent.

As a result, China’s corporate debt-to-GDP (gross domestic product) ratio of about 160 percent is well above the global average of about 100 percent. About three-quarters of it is a nonfinancial corporate debt attached to state-owned enterprises. In other words, the CCP is responsible for the debt levels that are crushing the economy.

And yes, much of that debt is in China’s collapsing real estate investment sector but certainly not all of it. In fact, because the Party controls the money and lending policies, massive indebtedness is standard across the Chinese economy.

In contrast, growth in the Chinese economy is slowing. Where it used to report annual rises in GDP of 7 percent or even as high as 10–12 percent over the past several years, China has only managed to report about 3 to 5 percent in annual GDP growth, which includes debt service in GDP calculations.

A Chinese migrant worker walks by the People's Bank of China (PBOC) in Beijing on May 1, 2013. The PBOC released the "Financial Stability Law (Draft for Comments)" on April 6, 2022, saying that resolving financial risks is a "constant theme." Mark Ralston/AFP/Getty Images

Rather than take responsibility for the unsustainable debt levels imposed on businesses by the CCP, the Party lays the blame at the feet of local governors. The CCP then uses it as an excuse to confiscate even more private companies and divest powerful business titans of their assets and lofty positions.

‘Social Justice’: A New and Pervasive Debt That Everyone Owes

Now compare that debt dynamic to the deep “indebtedness” of “social justice” in which American businesses now find themselves, care of state and federal policies. In the name of righting past social injustices—both historic and imagined—companies are being coerced to adopt a “woke” culture and business models.

The “social justice” or woke message is clear: Companies must do more to “fight racism and social injustice.” Unfortunately, the implicit message seems to be that a company’s success is due to social injustice, which constitutes a debt that all companies owe to society at large and to certain groups and subgroups of society specifically.

This new woke policy is a massive undertaking wherein the U.S. government pushes businesses to change how they do business. That involves adhering to woke ESG (environmental, social, and governance) business practices on a broad and penetrating scale. For many companies, noncompliance could result in the threat of legal action, media exposure, and reputational damage.

The low-hanging fruit are these policies that are hiring requirements according to diversity, equity, and inclusion criteria for federal workers, which stipulate representation of all groups of people, especially by race and gender. Similar group representation requirements are applied to corporations and their boards of directors. For manufacturers and other firms, large and small, “green” business practices are implemented by reducing reliance on fossil fuels, adopting solar and wind power sources, and whatever else they might be.

But the “social justice” debt collection process also goes much further.

Thought Police at the Water Cooler—and in Your Head

“Social justice” diversity, equity, and inclusion divisions demand that people have freedom of expression, which largely consists of the right to be whoever they think they are on any given day. But inclusion also demands validation of men who “identify” as women using the women’s bathrooms and other accommodations.

But what it doesn’t include is free speech, which has been often defined as hate speech if one disagrees with the current social narrative of evolving genders, new identity pronouns, and other fictitious progressive, anti-tradition constructs.

Such speech is often censored in corporate America and by social media. Forced compliance with new woke rules is certainly fine by government agencies and watchdog groups, as is the persecution of those who practice the free expression of traditional religious values, most specifically Christian Biblical precepts and beliefs.

Going ‘Woke’ and Broke

Perhaps not so ironically, many companies that are kneeling to the new woke agenda are seeing their revenues fall, forcing them to lay off workers. That’s because progressive social and political agendas are often in service to an ideal that isn’t rooted in reality.

Top-down socialist control over individual creativity, initiative, and the profit motive all work against human nature. They favor group identity over individual merit, introduce divisiveness into business culture, and force solutions that reduce profitability and increase bureaucracy.

In communist China, the pretext of excessive debt is the latest pretext to justify the confiscation of private businesses. In the emerging communism we see in America, the progressive-dominated Biden administration, Wall Street banks, and other organizations are using the mythical debt of “social justice” to gain control over public and private companies.

Thus, the journey in China is different than the one in the United States, but the destination is the same.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.