Is ‘Wokeism’ to Blame for Silicon Valley Bank’s Demise? No and Yes

No one denies that macroeconomic factors played a central role in the demise of SVB. But don’t discount the impact corporate wokeism had in creating a culture that emphasized DEI initiatives and goals over creating value and mitigating risk.

Source: Is ‘Wokeism’ to Blame for Silicon Valley Bank’s Demise? No and Yes - Foundation for Economic Education

The short answer is: It was a contributing factor though perhaps not the most important one.

But first, we have to define what we are even talking about when we use the word "woke". People have different definitions and argue to support or reject the concept based on their own definition. A Facebook friend of mind says he is proud to be woke because it simply means social awareness, particularly with regards to social justice issues (another loaded term).

I think that most people (even those claiming to be anti-woke) would support being aware of problems in society and rejecting actual injustice. The problem of course is that not everyone shares that definition of 'woke'.

Those that oppose the 'woke' culture, for lack of a better work, would say that being 'woke' amounts to turning social awareness into social absurdity. A couple of simple examples:

Being socially aware and supporting justice in society = rejecting racism such as an employer making hiring decisions based on race

Being woke = dictating that the board of directors of a company must have a certain quota of minorities regardless of who applies or actual qualifications (something California was attempting to enforce for a while...not sure what happened with that).

So how does any of this relate to what happened with Silicon Valley Bank? It's debatable as there were significant underlying economic factors. However, it would seem that their board of directors was underqualified. Those on the board were chosen more for their ideology than their actual merit. It's difficult to know HOW much this played into what happened but based on some of the questionable decisions the bank made, it's hard to deny that it must have played some role. It stands to reason that more qualified people would have done a better job.

In the past, the U.S. has been economically successful in large part because it is (or has been) largely a meritocracy. That is, if you are smart, good at what you do, and apply yourself, you will be able to succeed in your own business or rise to a high position in someone else's over those who are less capable. If we are going to make decisions based on ideology or race or other factors that have nothing to do with how good you are at the job, then we are screwed. That isn't to say that there is no value in diversity for diversity's sake. It just isn't paramount. What's most important is that people are good at their jobs.