Ryan Cushley-Spendiff-Research Assistant NLS-https://www.ntu.ac.uk/staff-profiles/law/ryan-cushley-spendiff
‘Tis the season of Pride, Prejudice, and Performative Queerness. Since Pride Month began, corporations have scrambled to modify logos, release heart-warming videos of gay-friendly workplaces, and produce an obscene variety of Rainbow themed merchandise.
Yet, despite the common corporate commotion, something strange has begun to happen. Certain companies have begun a retreat from Pride. This is not merely the well-known mockery of corporations not celebrating Pride in Arabic, African, or Chinese franchises, but American corporations have begun to disassociate themselves from LGBT themes. Xbox only kept their pride logo for a period of three days before scrapping it for the launch of its anticipated videogame ‘Diablo’. Xbox then introduced a new logo immediately after, only to back-track a third time and reintroduce pride logos on the 14th June. Companies that previously publicly supported Pride, such as YouTube, Apple, Spotify, and Coca-Cola, have opted out of public pandering such as logo-changes or social media posts (Although this did not stop the latter releasing their pride collection).
Perhaps the most interesting saga throughout this has been the Major League Baseball (MLB). On the 1st June, to mark Pride Month, the MLB changed its normal logo to incorporate the modern pride flag. This got the usual backlash which, 12 hours later, led to MLB doubling-down with social media posts proclaiming they are “Celebrating community, pride and love of baseball”. Within a further 8 hours, they U-turned and changed their logo back to their traditional logo. With a lifespan of 20 hours, MLB’s support of their LGBT base was outlived by the average mayfly.
What is so interesting about MLBs behaviour is that it seems to have no economic rationality. Within scholarship on Corporate Social Responsibility (CSR) there is a plethora of literature and data on LGBT issues in corporations, with a strong trend demonstrating the positive effects of inclusive policies on firm performance. To name a few recent studies: Pro-LGBT corporate policies have been shown to have positive effects on stock prices (Li and Nagar 2013), increases in productivity, value, and profitability (Pichler et al 2018, Fatmy et al 2022), access to advantageous credit ratings (Chintrakarn et al 2018) and even increases to mutual investment (Do et al 2022).
In addition to the direct firm performance benefits from pro-LGBT polices, there is also the “pink dollar” effect. As a care warning for what follows, business and legal research has traditionally focused on gay men, so while the data has been consistent for over 30 years, how well it translates across the entire LGBT community is still up for debate. Either way, management research consistently shows that male homosexual couples on average out earn their heterosexual counterparts and have significantly more disposable income (by approximately $10,200 in 2022). This sector of consumers also display significantly more brand loyalty, brand desertion, and even brand anathema based solely on ethical factors in the face of price increases, with more recent research suggesting that brand loyalty in particular is also prevalent across the entire LGBT community and not just the subsector that traditional business research focuses on.
Moreso, courting the pink dollar has historically outweighed social outrage of enacting pro-LGBT policies. Since there is little evidence to suggest that the balance sheet considerations have changed, there have been attempts to explain the behaviour of the MLB outside economic rationality. For example, one of the popular claims is that the erasure is due to a vocal faction of LGBT anti-capitalists despising rainbow capitalism. This is rather unconvincing since 1) LGBT people are not a homogenous blob of left-wing ideologues and 2) it would be an act of corporate negligence to sacrifice performance and profit due to twitter outrage. Little evidence suggests that the purchasing power of the “Pink Dollar” has decreased and so whatever caused the U-turn, and the rise of corporations abstaining this year, must have more weighting within the corporate zeitgeist than profit or consumer loyalty. Luckily, business history gives a potential insight: Threatening Legislators
An interesting sticking point in CSR legal scholarship has been how corporations respond to CSR regulation. However, when looking at corporate behaviour, this misses an important stage: Pre-regulation. In particular, the game of escape and evasion corporations play to ensure that legislatures don’t get the onus to legislate, regulate or otherwise censure corporate affairs. This becomes more obvious when corporate bodies become anxious that there is a hostile environment or trend that might inspire legislative movement. Perhaps the biggest example of this is the videogame industry. At the height of videogame development in the 1990s, controversy erupted over videogame violence. Confident in the research that there was no link between real-world violence and videogame violence, most corporations were happy to ignore the moral panic. That was until Congress got involved.
Due to the game Mortal Kombat, the US Congress began hearings on video game violence in 1993. The year after these hearings started the Entertainment Software Association was founded by the video game industry, which then almost immediately founded the Entertainment Software Rating Board (ESRB). To be perfectly clear, an entire sector of the economy reorganised itself and, at financial and logistical cost to themselves, built a self-regulatory system from the ground up that has become quasi-mandatory to be a part of. All of this inspired not by social outrage or pending legislation, but because a hostile congress made vague noises that it might intervene, and the industry wanted to ward it off as fast as possible. There was an interest to kill off regulation within its crib before any hard law could be passed, and the easiest way to do this was to divorce themselves from the contemporary moral panic.
The risk of regulator interference certainly explains the meme of corporations pretending pride does not exist in countries with regulators actively hostile to LGBT populations, but what has changed for American companies to get skittish on LGBT issues? One potential factor is that legislatures within the USA are becoming significantly more anti-LGBT, both rhetorically and in their legislative efforts. This year alone (as of June 2023) 75 anti-LGBT laws have been enacted at state level in the USA, and over 565 were proposed within the same time frame. While directly reinstating sodomy laws has been considered too extreme by moderates, there has been general traction within legislatures picking sides on the ‘trans-debate,’ be it regarding schools, sports, or just simply a right to exist. It should come as no surprise that of the 565 bills, over 220 were directly targeting trans-people. It was this trend that led the Human Rights Campaign to declare a state of emergency of LGBT individuals within the United States in June 2023.
The fact that actual legislation is being enacted is already far past the vague threatening noises that Congress made with regards to the video game industry that caused massive market upheaval to its CSR practice. Yet, it is not just legislation such as Florida’s Parental Rights in Education Act (also referred to as the Don’t Say Gay” bill) that has corporations spooked. The recent confidence of more vitriolic anti-LGBT rhetoric can easily add to the perception of a more hostile legislative atmosphere. This is especially true where the rhetoric is unchallenged, tolerated, or even outright supported by members of the legislature, very similar to how members of congress supported moral outcries on videogame violence. For example, if we take someone who was attempting to become a congressman, Mark Burns (Republican congressional candidate, South Carolina) who genuinely called for the return of the House Un-American Activities Committee (aka the McCarthy Committees) to impose the death penalty on the parents of LGBT kids. Or such unchallenged rhetoric can come from ‘community/moral/spiritual leaders’ such as Pastor Steven Anderson, who is the only person in the world to have the achievement of being deported from Botswana for being too homophobic (Particularly impressive since at the time homosexuality was illegal in Botswana).
Where does this leave us? If you notice the title, I referred to this trend as ‘Quokka Queerness.’ The Quokka is a fascinating animal, with its permanent smile meaning that most humans consider them to adorable, sweet, and beyond reproach. Yet the Quokka did not survive Australian fauna through the power of pretty-privilege. When confronted with a hostile predator, the Quokka will flee, but not before dropping its baby on the ground to distract its would-be assailant with a bite-sized snack. The analogy is rather apt. By default, corporations will be adorable and sweet to attract the pink dollar but they are not interested in martyrdom. As anti-LGBT rhetoric becomes more mainstream and more influential to legislatures, the more likely the public rainbow-flag pandering will be dropped for the sake of averting hostile gaze. Most corporations are not allies, they are Quokkas.
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