Virtuous consumption is also getting more expensive. There is less scope to shop for the lowest price if you will only buy cinnamon from a spice dealer who hates the same politicians you do. As inflation goes up, virtuous shopping costs even more because the ability to substitute and comparison shop are your best defense against rising prices.
It's hard to tell how many workers and consumers actually let virtue guide their decisions. It's one thing to assert something on a survey; it's another to take an actual pay cut, or choose to pay 20% more for groceries. Is it a coincidence that as the economy is looking more precarious, firms are starting to demur from taking a stand on contentious issues? Or could it be because they see less value in doing so as the economy gets riskier?
Virtue-based policies may bring more costs than benefits. Columbia Business School professor Vanessa Burbano studied how workers responded when their employer publicly supported gender-neutral bathrooms. She found that taking this political stance did little to motivate supporters, but it alienated and demotivated the workers who disagreed with the cause.
We needn’t mourn the fading of the virtue economy. It was horribly inefficient. It takes time to research every company you might invest in, work for, or buy things from. If you miss something in your research (how can you not) you’ll later have to sell stock (maybe at a loss), quit your job (and possibly get paid less elsewhere), or dispose of the good from the offending company, perhaps by burning it and broadcasting the fire on social media (not only wasteful, it poses many other harmful externalities).
Obviously, these costs may be worth it if the offender supports truly abhorrent things like genocide or overt racism. But in these trying times, the moral and ethical standards we expect from each other have become way too high and there are too many causes to keep track of. Keeping up with who is pure and worthy of your money or labor is a full-time job—which is why it was so tempting to outsource the whole business to BlackRock. We were doomed from the start to be disappointed and at times hypocritical.
Don’t feel too bad. Odds are your virtue investing/buying/working wasn't doing much good anyway. Because virtue became so complicated and arbitrary, it's not clear it made much of a difference in anyone’s behavior. Many firms pulled out of Russia, but nearly all still do business in China. Besides, arguably the biggest problem we face today is polarization and the virtue economy makes that worse.
In these uncertain times we need more shared experiences, even if they include offensive TV, tedious workdays and coping with a volatile stock market. So if you want to save the world, it's better to buy whatever you want, invest in whatever company looks profitable, and work for the employer that pays you the most. Then take all those extra savings and give them to charity.
Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.