On Friday, I was honored to return as a guest on the Economics Detective Radio podcast with Garrett Petersen. Last time I was on the show, we talked supersonic transportation. This time, our topic centered on, of all things, Pepsi — specifically, the essay I wrote in April defending the infamous Kendall Jenner ad that caught flak for borrowing imagery from Black Lives Matter and other protest movements.
As I wrote at the time, Pepsi wasn’t the first corporation to integrate social justice themes into its advertising, and it won’t be the last. But instead of fretting, we should celebrate the fact that free trade and commercial culture appear to be tools of social justice, rather than the enemy:
The social justice orientation of corporations is no accident. Corporations, especially large ones, derive a significant and growing share of their value from intangible assets like branding. So when we are all reminded that Bill O’Reilly is a serial sexual harasser, corporate advertisers run for the hills, with the few that stay back catching serious flack. There’s even a website that tracks the hundreds of major companies that rushed to speak out against President Trump’s executive order on immigration. “Be in great company,” the site reads. Not to be outdone, Starbucks pledged to employ 10,000 refugees over the next five years. …
The inauthentic feel of Pepsi’s ad ultimately comes down to squeamishness over their motivation. Pepsi is a profit-motivated business, of course, but if you really care about police violence or criminal justice reform, shouldn’t you hope for it to be profitable? Take Uber, which has made reducing employment barriers for nonviolent ex-offenders part of their business model. Problems are always easier to ignore when there’s no possibility of making money solving them.
Our conversation touched on a number of other fascinating concepts, from Gary Becker’s seminal work on the economics of discrimination, to the “doux commerce hypothesis”— the idea that societies which embrace commerce and markets tend to develop more tolerant and trusting cultures overtime.
With capitalism and social justice often portrayed as opposites, I hope our conservation plays at least a small part in helping correct the record. I encourage you to listen to the whole thing here or below, or by downloading the latest episode of Economics Detective Radio on iTunes.