How woke took over America

Central banking policy and the corrupting influence of too much money

The one question I have been asked more than any other since my Brearley letter went viral is how did we lose American society to wokeness. I have spent much time over the past two years pondering this question and this piece is a long time in the making. Now I am ready to share my thoughts.

I first need to reiterate something I said in a recent post. Wokeness is not a mind virus, but an institutional virus. Wokeness did not take over society by convincing the majority that it is ideologically correct. Certainly no more more than 10-15% of Americans are truly woke. It has, instead, taken over society by infiltrating and co-opting nearly all of society’s key institutions, including our educational system, arts and cultural institutions, healthcare and legal communities, most of the media, nearly all big city governments, and our military and federal government.

The story of the woke takeover has three parts. I will start with the ideological foundations of wokeness. In this post’s second section, I will demonstrate how K-12 education was captured and how various groups used woke ideology to advance their own interests. In the final portion of this essay, I will explain how decades of central banking policy enabled wokeness to take over society’s institutions. This third part of the story is by far the least understood and it is crucial for comprehending today’s world, and much of what ails us.

Part 1 - Woke Ideology

The ideas behind wokeness are very easy to trace (this topic was the subject of our recent TBOS episode with James Lindsay). We begin with Karl Marx, who, of course, wanted to overthrow capitalism. Marx theorized that the working class, recognizing their oppression by the bourgeoisie, would rise up and start a revolution.

In the years since the Communist Manifesto was published, lots of other reasonably smart people have shared Marx’s fantasy of overthrowing capitalism. In the 1930s, a groups of such leftist academics, known as the Frankfurt school, came together - first in Germany and then in New York. They correctly realized that a revolution would never come from the proletariat because, low and behold, capitalism actually treats workers better than in any other economic system.

In order to take down the capitalist system, the Frankfurt School therefore needed to come up with a new class of revolutionaries. They decided that the new foot soldiers for the “Marxist” revolution should be minority classes, who they would work to convince were being oppressed by a capitalist system. These post-Marxist or neo-Marxist ideas came to be called “Critical Theory.”

The critical theorists made one other significant change to Marx’s ideas. Whereas Marx thought that the revolution would be violent and sudden, the critical theorists posited that the new revolution could be nonviolent and gradual. That is, capitalism could be destroyed slowly by taking over key institutions of society from within - a strategy they would later refer to as the “long march through the institutions.” They also correctly intuited that the most important of these institutions to capture is a country’s education system.

The civil rights era of the 1960s led to an explosion of leftist ideology as former student radicals entered academia, and as affirmative action resulted in the creation of the grievance studies departments in colleges and universities (I wrote more about that here). Over the next few decades critical theory birthed a number of offshoots, including critical legal theory, critical race theory, feminist theory, queer theory and critical pedagogy.

Coming out of the same ideological foundation, these movements shared similar ideas. Most importantly, they all desired to destroy modern capitalist society, but for their own selfish reasons. Feminists, for instance, wanted to overthrow what they viewed to be a patriarchal society. Black militants wanted to overthrow what they viewed to be a white dominated society. Queers wanted to overthrow what they viewed to be a heterosexual society.

These movements also shared very similar tactics, borrowed not just from critical theory but also from postmodernism and poststructuralism. The leftists weaponized the English language by changing the meaning of common words, making it exceedingly difficult for the average layperson to identify and refute their revolutionary ideas. Second, they adopted a strategy of shutting down dissent by framing free speech as harmful, an idea they called “repressive tolerance.” Like all good revolutionaries, they began to attack all institutions that offered alternative (and traditional) value systems, including the family and religion. Further, they mounted an assault on objectivity itself - the idea that there is truth in the world.

Perhaps most importantly, academics in the critical theory persuasion redefined their role as scholars and teachers. No longer was their goal simply to teach their ideas of oppression and anti-capitalism to their students. The new purpose of a professor was to encourage action and to train activists, what they called “praxis.” They understood that the way to foster activism was to train (read: indoctrinate) their students to see oppression everywhere - to have what they refer to as, “critical consciousness.”

In 1989, the left stumbled onto what is perhaps its most brilliant concept - intersectionality. This is the idea that one isn’t simply oppressed for being black or female or gay, but triply oppressed for being black, female and gay. Intersectionality thus served to unite disparate leftist groups in a holy war. For the first time, minority identity groups shared a common framework to work together for the purpose of tearing down capitalist society.

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Part 2 - Escape from academia

What I’ve just described, at least at a very basic level are the ideological foundations of wokeness. Before I go any further, however, I want to give a proper definition for what exactly is meant by the term “woke.” The original meaning came out of black communities and was used to signify being awake to bigotry and prejudice. Today, most people on the anti-woke side define it as a false belief that differences of group achievement in society (namely, by race, gender and sexual orientation) are the result of systemic oppression, and that “equity” is needed as a remedy.

I have come to the firm conclusion that "woke" signifies far more than a belief in oppression, systemic racism and equity. Woke is fundamentally a rejection of the core Enlightenment principles of free speech, free markets (capitalism), individual rights, meritocracy, objectivity, and the purpose of democracy. It is these Enlightenment principles that are the basis for America’s founding, and for the freedom and prosperity we take for granted.

Stripped down ever further, woke is simply a movement to destroy capitalist society. This is why many equate wokeness with Marxism, though I believe that anti-capitalist is more technically accurate. What the woke often call “white supremacy culture” or “cis-heteropatriarchy” are essentially synonyms for capitalism.

As Adam Smith knew, capitalism is not intuitive. One has to be taught that self interest actually works for the greater good of society. As children, most of us - and especially girls - more intuitively believe in a world where everything should be shared and distributed fairly or equally. It is the role of our schools to disavow us of our naïve intuition, and to educate us on the benefits of free markets and freedom generally, and the historical disasters of socialism and communism. American schools no longer do this.

The role of schools

In order to understand woke ideology’s escape from academia, we must first turn to our nation’s K-12 schools. Schools are the primary mechanism for passing down society’s culture to the next generation, and by inculcating “critical thinking,” are supposed to be the main line of defense against bad ideas. Unfortunately, the mission of our nation’s schools has been flipped on its head. Rather than inoculate against bad ideas, schools have become the premier channel for imparting bad ideas.

The story of the fall of our education system begins more than 100 years ago with the rise of progressive educators such as John Dewey, who, meaning well, believed that schools are the agents of democracy. Progressive education made three fundamental changes to the idea of schooling which had existed at least since the times of the ancient Greeks.

First, progressives de-emphasized a traditional curriculum of humanities (what today we call classical education), in favor of practical, job oriented skills. Second, progressives tasked schools with solving many of society’s most intractable problems, such as poverty and disparate racial outcomes. This mission creep was fully adopted by the educational establishment as a way of attracting ever more government money.

The third change was to switch from a teacher centered model to a child centered model. Rather than the purpose of schools being teachers passing down knowledge to the next generation of children, progressive education decided that it is more important that children be happy and learn whatever, and however they want. In essence, progressive education put the kids in charge of the classroom.

Progressive education trends accelerated in the 1960 and the decades that followed. Leftist and Marxist ideas flowed into all areas of academia but especially in graduate schools of education. Ed schools stopped training teachers in math, literacy and classroom management, but started indoctrinating future teachers in Marxist-based books like Paulo Freire’s Pedagogy of the Oppressed. At the same time, the opening of the workforce to women led to a deterioration of quality women teachers as other avenues for qualified women opened up.

The 1960s also saw the expansion of the federal government’s role in K-12 education as President Johnson’s War on Poverty created many programs that impacted education. This continued into the 1970s with increasing national efforts to help racial minorities, women, and people with disabilities to gain “equal access to education.” In 1979, the federal Department of Education was authorized, leading to the increasing nationalization of curricula and the rise of the power of the national teachers unions. Local school boards and parents began to have less and less control over the education of their children.

In the 1980s, what we would now call woke ideology began a frontal attack on western civilization. Multiculturalism was now the rage and it was forbidden to teach of one culture being better or more advanced than another. No longer would our leadership class receive an education that extoled the values of America.

Around the same time was the launch of the self esteem movement, which was later rebranded social-emotional learning (SEL). The movement’s original intent was to distract from poor educational achievement by claiming that schools had a much more important goal than instilling knowledge. The new goal was to foster emotional intelligence, resiliency and happiness. SEL would later become hijacked, rebranded again (this time as “transformative SEL”) and would serve as a tool to open up children’s minds for social justice indoctrination.

The past 10-15 years, culminating in the “racial awakening” of 2020, saw the final transformation of our K-12 education system. The mission of American schools was now fully one of social justice and training progressive activists. Traditional subjects like English and math, science and history, even music and art have become mere props for a political education. In almost every school in the country - public and private - American children are now receiving indoctrination in far-leftist, progressive ideology.

Opportunity knocks - how woke is used to further special interests

While schools are a vital part of our story, they are not the only way that revolutionary, anti-capitalist and illiberal ideas entered society. Here I need to dispel two myths. Contrary to what many people believe, there was no single entity responsible for pushing woke ideology into broader society; there is no evil James Bond villain to blame. Instead, a variety of influential groups used woke ideology to further their own interests.

Second, it is important to understand that while woke ideology is itself revolutionary, and the academics responsible for developing woke ideology are indeed pushing for a revolution, many of the groups using woke ideology for their own interests - while on the political left - are not necessarily seeking to overthrow capitalism. This is a crucial distinction. Many of us fighting wokeness are called conspiracy theorists for calling woke a Marxist (or anti-capitalist) revolution. This is technically true, even if most of the entities responsible for pushing wokeness are not necessarily revolutionaries.

What follows is an illustrative, though not exhaustive list of some of the interest groups most responsible for taking woke ideas and using them to further their own motives.

Teacher unions - I wrote about the influence of our education system above, but here I want to highlight specifically the role of the national and state teachers unions. The teachers unions are effectively arms of the Democratic Party. Thus, they have two primary purposes. The first purpose is to raise money for the Democratic party. The second purpose, less appreciated, is to train and recruit future activist Democrats. The unions have been instrumental in pushing progressive ideology into classrooms for the explicit purpose of indoctrinating students to be future Democrats. Even the gender and trans ideology advanced in schools is part of this effort, something about which I have written previously. Discourage children from wanting to get married and have their own children, and you keep them voting Democrat for life.

Democratic Party - Naturally, the primary role of the Democratic Party is to win elections and accumulate political power. In an era of polarized media and especially social media, demonizing the opposing party as racist, sexist, anti-democratic, etc. motivates voters. Social justice ideology also became the core of the Democratic Party’s platform through the efforts of Hillary Clinton and Joe Biden, who both needed the black vote to win primary elections.

Mainstream media - As the media business was impacted by the rise of the Internet (a subject to which we will return shortly), formerly centrist(ish) media outlets such as the New York Times moved far-left to differentiate their offerings and attract an online subscription base. Journalism ceased to be a value-neutral pursuit of truth, and like the vocation of teaching, turned into activism.

Globalists - International organizations such as the United Nations and the World Economic Forum (WEF), as well as influential individuals such as Bill Gates have all adopted anti-capitalist woke ideology to push for the eradication of the nation-state and to promote an elite-led, technocratic world government.

Environmentalists - Climate alarmists and environmentalists have used woke ideology to rail against capitalism and to push an anti-carbon agenda.

Corporations - Large corporations have adopted woke ideology manifested by environmental, social and governance (ESG) practices as protection money, to distract from otherwise capitalist activities, and to appease their younger and idealistic workers.

Elite Private Schools and Universities - Elite universities and private schools have adopted woke ideology as guilt payments for being historically exclusive.

Foreign Governments - Almost certainly, foreign governments (the Russians during the Cold War, and the Chinese in recent decades) have helped fund and disseminate woke ideology to help destabilize and polarize the U.S. and to directly weaken our government and military.

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Part 3 - Money corrupts

In the previous section, I illustrated how woke ideas escaped from academia and got disseminated into the real world. The final part of our story is about how these Marxist-inspired ideas thoroughly took over nearly every important institution of our country. In other words, how and why did our leadership class allow this to happen?

The answer to this question, and what I believe to be the root cause of the woke takeover of America is money. More specifically, too much money - the result of decades of the Federal Reserve’s wrongheaded policies. As briefly as I can, let me explain the past three decades of monetary policy, and its extraordinary and deleterious impact on the incentive structure of our society.

Our central bank, the Federal Reserve, has two broad explicit mandates: 1) to keep inflation low, and 2) to keep the economy growing and unemployment low. The main tool in the Fed’s arsenal is short-term interest rates. The Fed lowers interest rates when it wants to spur economic growth, and raises interest rates in order to slow the economy.

Interest rates - which are essentially the price of money - are the most important set of prices in the economy. In a free market, they serve the crucial function of regulating society’s preferences between the short-run (spend more now, save and invest less) and the long-run (spend less now, save and invest more). However, thanks to the Fed, we live in a world that is nothing like a free market.

Due to the mechanics of Fed policy, lowering interest rates is the equivalent of printing money. Equally important, low interest rates encourage banks to lend money and correspondingly, consumers and businesses to borrow money. New bank loans are the primary way in which the economy’s supply of money expands. Thus the nation’s money supply is highly influenced by monetary policy, but expands and contracts mostly due to the issuance of loans by the banking sector.

The Fed also has a third implicit mandate that trumps the first two: to keep the financial and banking system running smoothly. The Fed believes that the greatest risk to a healthy economy is a significant decline in the value of financial assets that would result in deflation, banking failures and high levels of unemployment, similar to what happened during the Great Depression of the 1930s.

That’s monetary policy 101. Now, let me explain how the Fed’s monetary policy over the past 35 years has led to an extraordinary amount of new money in the economy.

Since the Greenspan era of the late 1980s and 1990s, the Fed has made two colossal errors. First, it believed it could micromanage a $23 trillion economy and eradicate the business cycle by relying on simplistic economic models and by manipulating short-term interest rates. Second, beginning with the 1987 stock market crash, the Fed instituted an implicit policy, known originally as the “Greenspan put,” that dictated that the Fed would never let Wall Street fail.

The combination of these policies kept interest rates too low, incentivized risk taking by the financial sector, and created a series of asset bubbles. Each time Wall Street got in trouble and threatened to do serious damage to the U.S. economy, the Fed stepped in with a bailout. That happened nearly a dozen times over the past few decades, most famously during the 2008-2009 financial crises, and most recently just weeks ago with the failure of Silicon Valley Bank.

For the past 35 years, we have lived in a world where interest rates have been determined not by market forces, but by bureaucrats (aka “experts”) running models in Washington D.C. Moreover, the Fed, in backstopping and subsidizing failure, has effectively nationalized the most important sector of the economy - the banking and financial sector.

The upshot of the Fed’s policies is an extraordinary amount of money in the economy that shouldn’t exist, and incentives that are completely misaligned with what is good for society. Thanks to the Fed, what we have is not capitalism. We have a command-based economy - what might otherwise be called communism. As I will try to demonstrate in the next section, monetary policy is the most important root cause of the woke takeover of America.

Income inequality

The most insidious direct impact of central banking policy was the dramatic rise in income inequality, which took two forms: 1) the middle class got crushed, and 2) the wealth of the wealthy exploded. Let’s start with the middle class story.

Beginning around 1990, imports from newly opened China, and elsewhere, put significant pressure on U.S. manufacturing wages. Under a free market, manufacturing wages should have fallen as basic supply and demand predicts. However, due both to regulation and to unions, wages (including legacy retirement costs) weren’t allowed to fall. Instead, we let companies and entire manufacturing sectors fail. What should have been perhaps a 20% pay cut for manufacturing workers became an 80% pay cut to work in the service sector (if workers could find jobs at all).

Because inflation was less than the Fed’s 2% target, thanks in large part to deflationary pressures from imports, the Fed kept their foot on the money spigot. Wall Street followed. All that new money had to go somewhere.

One place that new money went was to the goods and services that consumers cannot buy that were made in China and sold at Walmart, namely, real estate, healthcare and education. These three categories experienced prices increases far exceeding the CPI. The middle class was doubly screwed. Good jobs disappeared and wages declined. At the same time, the price of housing, healthcare and college education skyrocketed, forcing many Americans to become hopelessly indebted.

The second form of income inequality that we’ve experienced is the rise of the superwealthy. Much of the new money printed by the Fed and the banking system found its way into financial assets, including the stock market. Naturally, this benefits those that own financial assets - the wealthy - not the poor and middle class.

Easy money also led to the immense growth of the financial sector itself. Subsidizing Wall Street caused dramatic increases in the salaries and compensation of finance jobs (investment bankers, traders, venture capitalists, hedge funders, etc.), as well as jobs dependent on Wall Street (public company CEOs, tech founders, etc.). The combination of inflated financial assets and inflated compensation resulted in the explosion of wealth among the richest 1% of Americans.

Now, I know what you are thinking - what does income inequality have to do with woke?

As I wrote earlier in this piece, woke ideology is fundamentally anti-capitalist. The best way to attract people to the woke religion, or even to make them sympathetic to woke ideology, is to persuade them that capitalism is unfair, unjust and inequitable. The dramatic rise of income inequality experienced over the past few decades has become the core message of the left in pushing anti-capitalist sentiment.

Moreover, one of the main reasons why so few of our leadership class will speak up against the woke takeover of their institutions is because they have too much to lose. The likes of CEOs, Goldman Sachs partners and university trustees are terrified of losing their enormous salaries and the status that goes along with those salaries. Thus they have been complicit in allowing the woke institutional virus to infiltrate their organizations.

Third, the dramatic rise in income inequality has caused the privileged to feel guilt, causing many to use philanthropy to fund woke causes to assuage their guilt and/or distract from their wealth by essentially paying protection money. On an institutional scale, this is is how the Wall Street community placated the Occupy Wall Street movement - a movement that was focused on economic inequality - by supporting woke ESG policies.

The enormous amount of guilt and protection money that went into philanthropy over the past three decades has played a central role in developing woke ideology, especially in K-12 schools and within the criminal justice system. Philanthropic organizations like the Ford Foundation, the Bill & Melinda Gates Foundation, the Chan Zuckerberg Initiative, Laurene Powell Jobs' foundation, George Soros’s Open Society, and many others have funded progressive, social justice oriented initiatives and programs. In fact, it was recently reported that the BLM movement had raised an astronomical $83 billion since 2020 for its initiatives.

Income inequality is real. But it is not a result of “out of control” capitalism. It is squarely the result of out of control central banking policy, and the central bank’s refusal to allow capitalism to operate.

Consolidation and the DEI industrial complex

One of the main impacts of inflating the prices of financial assets was to subsidize M&A activity, leading to consolidation in just about every industry. Big companies got bigger to the point where companies in many industries now have monopolistic like power (wrongheaded antitrust policies that focused on consumers rather than competition hasn’t helped either). This trend towards industry consolidation was a major driver in institutionalizing woke policies in the private sector.

Small businesses cannot afford large HR departments or to bring in expensive DEI consultants. Large companies can. In fact, due to federal affirmative action laws, a legal system that effectively mandates “cover-your-ass” (CYA) policies, and ESG practices demanded by asset managers and regulators, large companies have no choice but to go woke. Moreover, large public companies are subject to social media blackmail in ways that small businesses are not.

Fed subsidized consolidation has also led to the rise in power of industry accreditation and lobbying organizations such as the American Medical Association (AMA), American Bar Association (ABA) and National Association of Independent Schools (NAIS), to name a few. These monopoly organizations act more as arms of the government and effectively mandate woke policies amongst their members.

It is crucial to understand that neither consolidation nor the war on independent small businesses was an inevitable result of 21st century capitalism. It was, instead, a result of subsidized financial activity and the explosive growth of regulatory government.

The rise of tech and the death of journalism

Other than financial services, no industry has experienced the benefits of easy money more than the technology sector. Contrary to public perception (and the Fed’s own beliefs), the growth of tech has been much more of a negative influence on our society than a positive one. The tech industry has played a central role in fueling wokeness as well as stoking the catastrophic rise in political polarization of our country.

Absent nearly unlimited amounts of cheap money, many of the largest and most powerful tech companies in the world would not exist. In fact, most should not exist. Amazon, for example, barely survived the dot com bust of 2000-2001, and only survived because the Fed reinflated financial assets thereafter. Amazon is a company that lost money for most of the first two decades of its life, and to this day, does not make enough money from its famed retail operations to justify its existence. Other companies, including Facebook (Meta), Google and Twitter would never have the market power (or valuation) they have in a world with free market interest rates.

The Fed believes that innovative tech companies spur productivity and create jobs, thus helping the economy. The reality is that most do exactly the opposite. We have yet to see the predicted increases in U.S. productivity, nearly three decades after the widespread adoption of the Internet. Worse, for all the jobs that companies like Amazon have created, they are actually a net destroyer of jobs, having decimated traditional retailers and local real estate.

However, the most insidious impact of the Fed-fueled rise of the Internet and social media was the destruction of traditional media and the death of journalism. With the precipitous decline of local advertising revenue caused by the Internet, newspapers were forced to do two things: 1) drastically cut costs and 2) seek a new online audience by moving to the political extremes.

Journalistic integrity declined as newspapers fired experienced editors and hired inexperienced young writers. These “journalists,” having been indoctrinated in social justice causes at elite universities, were taught to view their primary role as political activism, not truth telling. Facing both financial pressures and bullying woke ideologues, the management of formerly respected newspapers, like the New York Times and the Washington Post, caved. Much of the media has become a mouthpiece for far-leftist, progressive policies, and the Democratic party. Perhaps most worrying for democracy, the mainstream media abandoned the political center.

Another major contribution by big tech to the woke takeover of society was the rise of social media. Algorithms designed to keep us clicking and watching and to stoke our emotions feed us extremist “news” and fuel polarization. Monopolistic social media companies, both at the bequest of the federal government (see: Twitter files) and coerced by activist young workers (as with legacy media) have censored right-of-center and heterodox views and shut down free speech. Most importantly, social media is the underlying cause of cancerous cancel culture and the primary reason why the vast majority of Americans are unwilling to speak up against woke extremism.

One additional consequence of the subsidized tech industry has been the destruction of the mental health of our children, especially girls. Social media has played an essential role in convincing kids that they are victims of society and indoctrinating them into the woke cults of social justice, gender ideology and climate alarmism. As Greg Lukianoff and Jonathan Haidt showed in their bestseller, The Coddling of the American Mind, our kids no longer read, play outside, or socialize with each other, except online. Addicted to their phones, they are depressed, easily distracted, envious and chronically unhappy. Social media has turned them into the perfect soldiers for the woke revolution.

It is imperative to understand that just like the extreme income inequality we’ve experienced is not a natural outcome of capitalism, neither is the rise of the Internet a natural capitalistic occurrence of a post-industrial world. The communications revolution was, instead, an artificial construction subsidized for decades by nearly unlimited free money. Without free money, we never have big tech. And without big tech, woke ideology would never have become mainstream.

Brain drain

As I’ve already mentioned, monetary policy acted as enormous subsidies to Wall Street and to technology companies. The growth of these two industries led to dramatic increases in compensation for those working in finance and tech, as well as finance-dependent jobs such as management consulting and corporate law. I’ve already discussed the impact of this phenomenon on income inequality but there is another very important consequence of the escalating gap between finance and tech compensation and salaries in most other fields.

Because of this huge compensation disparity, over the last three decades we have seen an enormous brain drain out of jobs that used to attract high IQ and Type A individuals (especially males) and into finance and tech. This trend has denuded fields like academia, medicine, science, journalism and politics of both first rate minds, and the types of people that are more apt to fight back against an illiberal woke takeover of their institutions. Moreover, the individuals drawn to finance and tech are the kind of people that used to be politically active and conservative. But, as I stated above, cancel culture and the lure of money mandates apoliticism and/or silence.

One last and underappreciated impact of the brain drain to finance and tech was that it dramatically exacerbated our country’s political polarization. It used to be that someone smart would stay in their hometown as, say, a doctor, or run a small business, perhaps eventually running for political office as a respected member of their community. In today’s world, that person emigrates to cities on the coasts, attracted by the financial opportunities of Wall Street and Silicon Valley. The brain drain out of traditional occupations is the same brain drain out of rural areas and much of the country. The toxic rural/urban divide is a direct result of central banking policies that inflated salaries in what are now blue areas at the expense of the majority of America, which is red.

Money in higher education

I’ve already discussed how woke ideology was developed and incubated in our colleges and universities. However, the role of money in higher ed is a big part of the story of how woke escaped academia and took over the world.

Due both to the rising values of financial assets and to increased giving by increasingly wealthy alumni, Fed policies caused university endowments, especially at elite universities to explode. Furthermore, low interest rates helped subsidize student loans. Together, this allowed schools to increase tuitions at rates far exceeding wage growth for the typical American.

Flush with cash, universities dramatically expanded the number of non-teaching administrative positions on campus, something that happened at both private and public institutions. It is these administrative positions that developed into the DEI regime on campus, stifling free speech and academic freedom. Moreover, bloated coffers subsidized the creation and growth of the grievance studies departments (e.g. African American studies, feminist studies, etc.) which went hand in hand in lowering overall university standards and fostering woke ideology.

The dramatic increase in tuitions (again, subsidized by rising endowments and student loans) also led students and their parents to view a college as analogous to any other consumer good. Universities began to focus far more on fancy facilities and making students happy than on proper and rigorous education. Professors, fearing low ratings from students, naturally reduced workload and lowered grading standards. Higher ed, including at our most elite universities, became about the credential and not about the learning. The same thing has now happened in private K-12 schools.

The shift from learning to credentialization reflects a fundamental change of the purpose of education in our society, and is one of the main reasons that at least two generations of our leadership class has not received the classical liberal education necessary to recognize the dangers to society of woke ideology, as well as the skills and ammunition needed to push back.

Subsidizing the federal government

The final impact of decades of easy monetary policy is the direct subsidy to the federal government. Low interest rates allowed our federal government to run enormous deficits which in turn led to the dramatic rise of the administrative state and allowed the government to use ever increasing amounts of federal money to mandate woke policies all across the economy.

Private companies must go woke to secure government contracts. Medical schools must go woke to win NIH grants. Public school districts must go woke to receive ESSER funds. The list goes on and on. The real power of the federal government isn’t simply its ability to regulate or to make laws, but to influence America’s institutions with enormous amounts of money, money that only exists due to the ruinous policies of our central bank.

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Conclusion

This is my account of how wokeness took over America. Marxist-inspired ideologies developed in our universities. These ideas escaped academia and infiltrated K-12 education, indoctrinating generations of children with anti-American and anti-capitalist propaganda. At the same time, entities like the national teachers unions and the Democratic party realized they could use these ideas to further their own interests.

Most important was the role of monetary policy. Low interest rates and serial bailouts of Wall Street and the banking system altered incentives, gave rise to extreme polarization, and corrupted America. Income inequality rose, driving anti-capitalist sentiment, and consolidation forged the DEI industrial complex. The inflated salaries of Wall Street and big tech stripped much of our country of minds capable of standing up for American values while subsidized social media fostered cancel culture and shut down free speech. Lastly, the swollen purse of the federal government proved too tempting for most institutions to resist.

Yet capitalism is not to blame for our afflictions. Our societal rot stems from our refusal to allow capitalism to work. Fixing society will neither be easy nor painless. But society can be fixed. Proper incentives can be restored, communities can be rebuilt, and Marxist-inspired woke ideology can be shunted back to the academic broom closet where it belongs.

There is one final reason for optimism. The story I have told is one that could unite the mainstream left and the mainstream right and help depolarize our country. The left cares about fairness but wrongly blames capitalism for rising inequality. The right is fearful of concentrated power held by elites but fails to appreciate that monetary policy is what has caused that concentration of power.

A shared understanding of the root causes of our country’s despair could unite the vast majority of Americans to win the culture war against wokeness and to reclaim our sanity, our pride, and our founding principles.

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Since this piece is quite long enough, I won’t include the latest episodes of my podcast Take Back Our Schools like I normally do. However, we’ve had some great recent episodes so I will send a separate post about that soon.

As always, please subscribe and share any ideas or suggestions, including for podcast guests. You can contact me through the website: speakupforeducation.org or email me at andrew@speakupforeducation.org. I am also on Twitter @AndrewGutmann.