The E̶c̶o̶n̶o̶m̶i̶c̶Capitalist Case for LGBT Equality
By: Holden Anderson
Tags: Rainbow Capitalism, Wp3f2020econ, Economics, Pride

From the ashes of the Stonewall Riots in 1969, the gay liberation movement emerged. In the following decades, this movement became deeply tied with socialism, particularly in academic circles, in a quest to examine and eliminate the root causes of oppression. Historian John D’Emilio’s 1983 essay Capitalism and Gay Identity summarizes the popular perspective on capitalism and the development of gay identity as follows:

“On the one hand, capitalism continually weakened the material foundation of family life, making it possible for individuals to live outside the family, and for a lesbian and gay male identity to develop. On the other, it needs to push men and women into families, at least long enough to reproduce the next generation of workers. This… guarantees that capitalist society will reproduce not just children, but hetereosexism and homophobia. In the most profound sense, capitalism is the problem.”

However, as public awareness and support of the LGBT community has steadily increased, the gay liberation movement has broadened into a wide coalition of queer folks from around the globe. Some are revolutionaries, some are not. Some still seek the socialist utopia that the early gay liberationists strove towards, and some maintain that equality and justice are valuable ends regardless of the means, and thus prefer to advocate for reforming our existing capitalist framework. One such person attempting to guarantee greater LGBT inclusion in society by changing the capitalist system from within is University of Massachusetts Amherst Economist M. V. Lee Badgett.

Badgett’s The Economic Case for LGBT Equality: Why Fairness and Equality Benefit Us All provides a compelling economic argument for making the working world, and society as a whole, more inclusive for the LGBT community. Though Badgett does clarify that “even as an economist, I agree that harm to LGBT people is first and foremost a human rights issue” (7–8), she quickly shifts away from this human rights perspective, and focuses instead on the economic harms caused by homophobia and transphobia. From a comprehensive review of the available data on an international scale, Badgett concludes that LGBT exclusion in education, healthcare, and the workplace harms individual worker productivity, creativity, and wellbeing, thereby leading to economic losses on the scale of 1% of GDP per year.

In utilizing this unique framework, Badgett attempts to convert those who may not otherwise seek to protect LGBT rights. In fact, the book has been lauded by former Chair of the Federal Reserve, Janet Yellen, as a “must-read for all business leaders and policymakers.” Considering this audience, the fact that the book works within our existing capitalist framework proves effective because those in power have a vested interest in preserving the institution of capitalism. However, despite its success in appealing to corporate leaders, the book’s mere 170 pages left something further to be desired: a nuanced discussion of the shortcomings our capitalist framework that, at its core, allows vast amounts of unchecked corporate power and values individuals (both queer and not) solely for their ability to be productive.

Badgett asserts that decreased productivity of LGBT persons arises due to stigma in the realms of education, employment, and healthcare. While LGBT individuals and activists know firsthand the dangers of these persistent stigmas, Badgett tailors her argument towards business leaders and policymakers by framing these damages as financial losses. For example, in her discussion of the disproportionate rates of bullying that queer students face, Badgett states “Without the bullying, stigma, and discrimination that is common in schools, [queer students] would fare better, and the economy would benefit from their expanded skills” (29). While this perspective may compel business leaders, the fact that those in power only value queer personhood insofar as they are able to be adequately productive in our capitalist society is immensely problematic; it neglects that human life in inherently valuable and instead implies that rights should be contingent upon ability to produce. So, while Badgett’s argument may be well-tailored to business leaders who seek only to maximize profits, as a queer person, I found it extremely disheartening to read firsthand that I am only valued by those in power as long as I am able to be productive. Though this aspect of our capitalist society is no fault of Badgett’s own, her silence on the issue speaks volumes; in neglecting to mention the problematic nature of valuing individuals based solely on productivity, Badgett signals her tacit approval of the system.

Badgett goes on to present a strong case for “tearing down closet walls” (48). She argues that being closeted at work causes significant distress, and even those who are “out” often have to engage in “covering,” which is the practice of altering behavior and self expression in order to assimilate into a workplace environment (41). While these assertions appear intuitively plausible, and are backed up by credible research, the discussion then takes a strange turn: the concept that an LGBT worker choosing to remain in the closet harms the productivity of heterosexual coworkers. Badgett cites one study in which participants performed significantly worse on partnered tasks with a partner who was ambiguously gay, compared to a partner that they knew was gay (44). Citing this study, as well as many statistics about the large number of queer people who are not “out” at work, implies that LGBT workers somehow owe it to their workplace to be open about their identities, to bolster team productivity. Instead, the discussion should focus on the data indicating that LGBT workers who are “out” at work are more satisfied with, enthusiastic about, and proud of, their work (Griffith). In this section, Badgett intends to make the case that workplaces should provide equal protections and a safe environment for queer employees, thereby enabling them to feel comfortable coming out if they desire to do so. These actions will both make the lives of queer employees better and increase overall productivity. But, the choice of data creates the subtext that LGBT people owe it to their company and their coworkers to be out, in order to boost the productivity of everyone, and that simply feels exploitative.

However, Badgett does quell some of my apprehensions about queer employees being exploited by reaffirming that “what’s good for LGBT employees is good for their employers” in her attempt to convince business leaders to adopt inclusive workplace policies (95). She discusses the benefits of Employment Non-Discrimination Acts (ENDAs), which prohibit discrimination on the basis of sexual orientation and gender identity, on both employee turnover and patent applications (a strong indicator of workplace innovation). Specifically, Badgett cites several studies which concluded that the adoption of ENDAs decreases employee turnover and increases patent applications. In this regard, the adoption of ENDAs is mutually beneficial: LGBT workers gain valuable workplace policies, from gender-affirming healthcare to benefits for same-sex partners, and companies simultaneously grow more productive.

This section of the book provides another argument in favor of the abilities of a market-based economic system to protect human rights. Specifically, Badgett contends that “pioneering companies’ actions put competitive pressure on other companies that were slower to see the value of making workplaces more welcoming to LGBT workers” (90). In other words, competition between businesses can provide a positive pressure to enact non-discrimination policies, because corporations are in direct competition for employees in a limited workforce. This trend is best exemplified in the rapid increase in prohibiting gender identity-based discrimination in the United States. In 2008, only 25% of Fortune 500 companies included gender identity in their nondiscrimination policies, but 12 years later, 83% had similar policies (Fidas). This is a vast amount of progress in a short timeframe, but Badgett neglects that Fortune 500 employees comprise only 17.5% of the United States workforce (Donnelly). The legislative and judicial institutions in a given country are, by comparison, much more effective in protecting the rights of all individuals (not just Fortune 500 employees), thus calling into question Badgett’s focus on corporate policies.

In our capitalist system, however, there does exist a feedback loop between corporate and public policy. Corporations exercise a vast amount of power over the judicial and legislative processes in the United States. Throughout the book, Badgett draws upon the case of the legalization of same-sex marriage in the United States in the 2015 Supreme Court case Obergefell v. Hodges. She repeatedly states that hundreds of corporations “came together to file friend-of-the-court briefs to educate justices on the business case for marriage equality” (99). This anecdote is intended to bolster the notion that corporations function as trendsetters in the realm of social policy, and can leverage their influence for the greater social good. However, what is missing from this analysis is the fact that, at the time of the Obergefell, 57% of the American public supported same-sex marriage, up from 42% just five years prior (Doherty 1). Five years prior, the majority of large corporations had not taken a definitive public stance in favor of same sex marriage, even if sexual orientation was included in their own non-discrimination policy (Phillip). Clearly, then, when it comes to public advocacy, corporations are followers of public opinion, rather than trendsetters, likely because it is in corporate best interest to have an official position that reflects the values of the majority American populace. Thus, it seems bizarre to laud corporations for filing these amicus curiae briefs, when their intentions were questionable at best. Moreover, this section raises serious concerns about the vast amount of power that corporations hold in the United States and globally. Particularly when it comes to issues where the corporate and public interests are not aligned, we cannot trust corporations to prioritize anything but increasing their own profits.

Badgett indeed addresses some of my concerns about corporate responsibility within the book, albeit not particularly staunchly. She asserts that “companies don’t always take the same visibly public stance on LGBT-related policies in less friendly countries” (100). Specifically, she cites the instance of PayPal, which took a forceful stance against North Carolina’s 2017 “bathroom bill” (which required transgender people to use the bathroom corresponding to their sex at birth) by moving a new office into neighboring Virginia. However, PayPal also continues to maintain facilities in Singapore and Malaysia, which both criminalize homosexuality. This is blatantly hypocritical, and though I commend Badgett for mentioning this trend, her general analysis is far too forgiving of corporations. In particular, in an attempt to convince the readers that corporations will soon act as greater influences on social change, she cites several surveys of “global business leaders,” over half of which predicted that “businesses would be more prominent agents of progress on LGBT issues in the near future” (102). It is no surprise that a survey of corporate leaders projects a positive, progressive view of corporations as a whole. It would be much more telling to survey employees of these corporations, or even the general public, about the role they believe corporations play in social activism. Additionally, Badgett presents no evidence that corporations are inclined to advocate for LGBT rights in countries in which there is high stigma against LGBT communities, indicating that perhaps the business case for LGBT equality only holds in countries where the tides of public opinion have already turned.

Overall, I do believe that Badgett accomplishes her goal of providing a compelling, business-oriented argument for LGBT equality and inclusion to her intended audience of corporate leaders and policymakers. In the words of UN Human Rights Council rapporteur Philip Alston, this business argument can persuade deeply homophobic business leaders to say “Well frankly, I hate gays, but I also hate losing a hundred million [dollars], so let’s just ease off” (Tyson). From a pragmatic perspective, progress is progress, regardless of the personal convictions of those pulling the levers of social change.

However, I am not one of those pulling the levers. As a queer person, and a student, and a budding economist, I found myself personally challenged by this book. Not by its content, but rather its framework. From my economist perspective, I can acknowledge the necessity of working within our capitalist system to simultaneously better the lives of LGBT individuals and improve economic outputs. However, as a queer person, I cannot help but be disheartened by the reality that my basic human rights can be commodified in the manner, and that further, it is only because they can be commodified in this way that a large swath of those in power will even care. Furthermore, I feel a sense of loyalty and kinship to my queer predecessors, who were fervent in their anti-capitalist views. Like John D’Emilio did back in 1983, I can’t help but ask: Isn’t there a better way?