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State, Economy, & LGBTQ+ Civil Rights


Joanna Wuest (@joveest) is the Fund for Reunion-Cotsen Postdoctoral Fellow in the Princeton University Society of Fellows.

One struggles to make simple, straightforward observations on the relationship between twenty-first century capitalism and LGBTQ+ civil rights. On the one hand, recent years have witnessed some substantial and surprising victories. In Bostock v. Clayton County, Supreme Court Justice and Federalist Society darling Neil Gorsuch interpreted Title VII expansively to grant trans and gay workers’ federal employment protections, a decision joined by the Chief Justice. Similarly, business lobbies and social justice-inclined CEOs have provided crucial support in successfully reversing blatantly discriminatory Religious Freedom Restoration Acts (RFRAs) and anti-trans bathroom regulations.

On the other hand, revanchist social conservative forces appear more emboldened than ever. In 2021 alone, 8 GOP-dominated states have passed at least 12 laws regulating trans children’s participation in athletics and their access to transition-related healthcare. And in another strange bipartisan opinion, a 9-0 Court granted exemptions to publicly-funded religious social service contractors that refused to certify otherwise qualified queer couples as suitable foster and adoptive parents. Often these assaults on civil rights are led by libertarian-funded groups like the Becket Fund for Religious Liberty and cheered on in amicus briefs by groups like Charles Koch’s Americans for Prosperity.

What are we to make of this strange mix of corporate power and civil rights? If we take seriously the premise that neoliberal governance is defined by diminished democratic inputs (e.g., mass membership civic groups, trade unions, responsive political parties) and increased influence for wealthy donors and business interest groups, we might attend to the ways that non-democratic, private entities determine the fate of civil rights. A political economic approach to LGBTQ+ rights conflicts would foreground the influence of corporate power—broadly conceived to include individual firms, activist CEOs, business lobbies, and billionaire libertarian ideologues—and reveal the undergirding goals and incentives that drive support for both civil rights expansions and rollbacks.

Probing this seeming paradox might also tell us something deeper about what Nancy Fraser has termed “the crisis of progressive neoliberalism.” In other words, it may clarify the consequences of a condition in which capital drives significant social reforms while also undermining their impact and longevity by leaving destabilizing matters of economic inequality unaddressed. From this perspective, current LGBTQ+ victories are built on a shoddy foundation—the instability of the political order renders them potentially ephemeral.

Rainbow Capitalism & the Law

Corporate interests have long been aligned with LGBTQ+ ones, particularly since the 1970s. As gay and lesbian 503(c)(3) interest groups, litigation firms, and employee groups formed, they pressured companies including Microsoft and AT&T to eliminate companywide discriminatory policies. Later in the 1980s and 1990s, these and many other firms began to agitate outside of the office for local and state civil rights ordinances.

Throughout the past decade, such corporate support has compounded. National business coalitions like Freedom For All Americans and individual industry leaders like self-styled “compassionate capitalist” SalesForce CEO Marc Benioff have organized lobbying efforts and boycotts against states that have dared to pass discriminatory legislation. The threat of economic protest led former governors Mike Pence (IN) and Pat McCrory (NC) to reform and replace laws that had been passed by comfortable Republican majorities. Again in 2020, South Dakota Governor Kristi Noem was persuaded to oppose an anti-trans youth healthcare bill. This came after the South Dakota and Sioux Falls Chambers of Commerce warned that the state ran the risk of “triggering economic consequences that include the loss of conventions, tournaments, top-level entertainment and business investment from outside industries.”

Underneath the shimmer of CEOs’ inspired rhetoric and awards from LGBTQ+ interest groups lie some basic material incentives. For one, most businesses get involved at the level of signing onto activist letter campaigns. These are low-lift, high-reward PR maneuvers, which create goodwill with a targeted consumer base and contribute toward a diversity recruitment goal for hiring and retention (contemporary marketing research exalts the profit-generating value of a diverse employee pool). Others like the tobacco giant Altria Group have allied with LGBTQ+ organizations to help launder their reputation. Several amici briefs submitted in Bostock also point to the bottom line. There, a coalition of companies with a combined annual revenue of $5 trillion— including tech firms, retail giants, financial and insurance groups—asserted that civil rights protections increase productivity, reduce administrative burdens, and retain queer employees.

North Carolina’s 2016 bathroom bill controversy provides a more in-depth look at how basic material inducements operate. As punishment, the state suffered the loss of nearly four billion dollars in revenue. A chunk of that came from companies like PayPal, Deutsche Bank, CoStar, and VoxPro, which had originally planned to bring new corporate campuses and hundreds of white-collar jobs to North Carolina. Some of these companies leveraged national outrage over HB2 to negotiate more favorable incentive packages, such as tax breaks, workforce training programs, and infrastructural investments elsewhere. This is not to suggest that business advocacy is always so reducible to a simple spreadsheet calculation. Such economic protests feature a swirl of firm-level motivations, attention-seeking CEOs, and reactions to weather reports on the “business climate” (that psychological element which plays a role in every boom, bust, or minor moment of frenetic speculation or panic).

Culture War as Anti-Statism

Conversely, another organized segment of capital has been responsible for bankrolling anti-LGBTQ+ rights litigation. Since the early days of the New Deal, longsighted-libertarian leaders have found cause to conscript social conservatives—most often Christian fundamentalists—in their attempts to roll back the regulatory state. Since the Reagan Revolution, these forces have consolidated in the GOP, most recognizably in the form of big business-backed ventures like the ultraright Heritage Foundation and the Federalist Society. Today, those in the Koch network and Bradley Foundation fund organizations like the Alliance Defending Freedom (ADF) and the Becket Fund, the two of which now appear almost annually before the Supreme Court.

This is no simple marriage of convenience between purely religious actors and business interests. Rather, attacks on LGBTQ+ freedoms today are driven by a corporate money-fueled movement masquerading as a religious liberty one. As law professors Elizabeth Sepper and Amy Kapczynski have observed, this coalition has been quite successful at warping First Amendment case law in a distinctly neo-Lochnerian mode, one which privileges corporate rights over individual minoritarian ones and reinscribes an anti-statist, pro-market orientation back into constitutional doctrine.

Two recent LGBTQ+ rights cases illustrate how this social conservative front helps corporate libertarians advance their anti-statist agenda. On the surface, Fulton v. City of Philadelphia featured a dispute between queer would-be parents who wished to adopt and foster and a Catholic social service contractor (represented by the Becket Fund) that wished to flout Philadelphia’s antidiscrimination ordinance. Although the ordinance applied to service providers generally (and so met the standard laid out in Employment Division v. Smith), Justice Roberts argued that it violated the Free Exercise Clause, thereby making it far more onerous for local, state, or federal laws and regulations to avoid charges of unconstitutional animus. Given the public-private nature of the American welfare state—itself a legacy of business efforts to fragment New Deal social welfare institutions from their inception—the Fulton decision has granted many taxpayer-funded contractors a new right to discriminate. On top of that, Justice Gorsuch has repeatedly invoked Fulton in his dissenting opinions that favor religious exemptions from vaccinate mandates. That such exemptions would severely undercut public health initiatives during a pandemic appears to be largely the point.

A second case, from the tail end of the Obama presidency, demonstrates how opposition to transgender rights can serve as a vehicle for undermining the federal regulatory state. In Gloucester County v. Grimm, the Department of Education came under fire for reinterpreting its own sex discrimination regulations to prohibit anti-trans bathroom policies in schools. The entirety of the conservative legal movement (among the involved parties were John Eastman and future SB8 author Jonathan F. Mitchell) put its weight behind a case that might curtail legitimacy of Auer deference, a doctrinal principle that allows administrative bodies to interpret extant agency rules. Social conservative groups like the National Organization for Marriage, Phyllis Schlafly’s Eagle Forum, the ADF, and Becket joined forces with more single-minded opponents of the administrative state like the Cato Institute to forever tie the hands of all federal bureaucrats seeking to govern without strict instructions from Congress. Though Gloucester itself was rendered moot by the Trump administration’s quick reversal on DOE policy, efforts to restrict administrative action have increased since, particularly as longtime critics of administrative power like Gorsuch and Thomas accrue more influence on the Court.

Wither the Diversity Regime?

The punchline to this all is that, while the neoliberal political economy has facilitated unprecedented flourishing and legal protections for sexual and gender minorities, the sky-high rates of economic inequality it has produced threaten to undermine those nascent guarantees by concentrating wealth (and therefore, political power) in the hands of the very few. The relevant question is not “have we achieved some modicum of social justice?” but rather, “how long could this possibly last?”

For several years now, a faction in the Republican Party has stoked populist rage against those political and business elites deemed responsible for the erosion of traditionalist norms. In the wake of the marriage equality win in Obergefell v. Hodges, former Louisiana governor Bobby Jindal penned a New York Times op-ed demanding that GOP corporate donors get back in line. Responding to the Bostock decision, Senator Josh Hawley gave a similarly-themed speech condemning cultural accommodation and outlining an alternative path for the conservative legal movement. Just a few months ago, Senator Marco Rubio introduced the Mind Your Own Business Act, which would give shareholders the power to discipline overly-zealous activist CEOs. Soon after, Rubio gave a speech on the values of “corporate patriotism” and the ills of “cultural Marxism” to the National Conservatism conference.

If this kind of counterassault has legs, it may not be difficult to rein in companies that are, for the most part, realizing marginal returns on their social justice work. After all, most diversity-friendly corporations already exhibit a thin commitment to such causes, as evinced by the steady flow of donor dollars to the very same legislators they confront over anti-LGBTQ+ policies and the curbing of voting rights protections. Though liberal-left reformers typically criticize such actions as hypocritical (and indeed they are), the reality is that the contradiction is endemic to the profit motive and the requisite legislator-access one needs to realize those economic gains.  

We are faced today with the potential demise of multicultural neoliberalism and the specter of a more authoritarian, culturally conservative variant. This form of governance could easily retain the underlying neoliberal mode of accumulation (e.g., deregulation and state-facilitated rent-seeking) while jettisoning free and fair elections, collective bargaining rights, and equal protection of the laws for minority populations. If business interests are confronted with a choice between protecting equal rights and what remains of our democracy, on the one hand, and siding with the crowd that promises tax cuts and novel plundering schemes on the other, then we ought not be surprised when they go mute.