The draconian laws spilling out of Texas’s state legislature must have caused rumblings in corporate boardrooms. Economically, Texas is a state that cannot be ignored. It has the tenth-largest economy in the world and one in five Fortune 500 companies. At the same time, it has taken the lead in a nationwide red-state campaign to gut democracy and individual rights. Under more and more pressure to stand up for social progressivism, corporations face a dilemma most of them would probably prefer to avoid.
The question for companies, as for the progressive advocates who seek them out as allies, is whether to engage with states or to boycott them for their regressive policies. Young, educated consumers and employees increasingly expect business enterprises to share their social values–and to mobilize against efforts to infringe upon the principles of tolerance and equality. Turning a blind eye to what happens in their profit centers is no longer an option. So businesses must choose: abandon regressive states, or stay and work to reverse inegalitarian policies from the inside.
We have more case studies in the boycott strategy. Arguably the first time in the contemporary period in which corporate America retaliated against bigots took place in 2015, when Indiana faced a punishing boycott for its homophobic “Religious Freedom Restoration Act.” The boycott sent Governor Mike Pence reeling, and he had to make significant revisions to the policy in order to stop the economic harm to his state. But the backlash against Indiana could barely hold a candle to the veritable economic apocalypse our own North Carolina brought on itself by passing HB2. The most transphobic law ever passed by an American state cost North Carolina up to $4 billion, and this catastrophe was principally responsible for the defeat of Governor Pat McCrory that November. His successor, Roy Cooper, would cut a deal to partially roll back HB2.
So boycotts can help to vitiate bigoted policy. But the consequences of these actions reverberate beyond the politicians who enact hateful legislation, harming the livelihoods of thousands who were not responsible for the passage of laws like HB2 and may even oppose them. Boycotts are blunt and indiscriminate; they even contain seeds of unfairness. There’s another model for corporate-driven change: engagement. A local example is the way that Apple convinced Tim Moore and Phil Berger to scuttle a pair of anti-trans bills. Apple was invested in the state and took action to protect North Carolinians who would have been persecuted by legislation that was anathema to the values of this Silicon Valley giant.
The question is which strategy, boycott or engagement, is more effective and more humane. Engagement spares innocent bystanders from economic harm, but it also takes longer and has less of track record. The North Carolina Restaurant Association’s quest to broker a deal on HB2 didn’t pay off for over a year, and even then the victory was only partial. Boycotts are clearly effective: they harness the human tendency toward loss aversion to make bigots change course. In the long run, getting bigoted policy off the books provides a greater boon to human welfare than the short-term pain of a boycott detracts from it. Companies should move toward divestment from states that persecute vulnerable citizens.
In other words, Boycott Texas.
Alexander Jones is an original contributor to PoliticsNC.