Very few independent minds ever truly believed that “Diversity, Equity, and Inclusion” — DEI, for short — was good for anyone other than its direct beneficiaries. But that hasn’t stopped corporate America from insisting that it is. “Diversity targets” and “inclusion goals” are now the cost of doing business in many Fortune 500 C-suites, spurred on by equity consultants who charge corporate giants by the hour for lectures on their subconscious bigotry — a bigotry that, conveniently enough, can only ever be overcome by forking over more cash for more lectures from the consultants in question.

The formal argument for this system is that DEI is good for business — a claim that, in turn, relies on a handful of heavily-cited studies purporting to demonstrate a link between diversity and corporate profits. The most influential in this genre is a series from the consulting heavyweight McKinsey, which has produced four studies extolling the virtues of DEI over the course of the past decade: “Diversity Matters” (2015), “Delivering through Diversity” (2018), “Diversity Wins: How Inclusion Matters” (2020), and “Diversity Matters Even More: The Case for Holistic Impact” (2023). The core claim of these studies — that more DEI leads to better corporate performance — has served as the fertile ground for the blossoming of the entire DEI industry. The only problem is that it happens to not be true.

A new paper published earlier this week in Econ Journal Watch — and unearthed by journalist Chris Brunet — tests McKinsey’s claims of “statistically significant positive relations between the industry-adjusted earnings … of global McKinsey-chosen sets of large public firms and the racial/ethnic diversity of their executives.” The paper’s authors, Jeremiah Green and John R.M. Hand, found the thesis wanting: “[U]sing data for firms in the publicly observable S&P 500,” Green and Hand’s research showed no “statistically significant relations” between McKinsey’s “measures of executive racial/ethnic diversity” and “either industry-adjusted earnings before interest and taxes margin or industry-adjusted sales growth, gross margin, return on assets, return on equity, and total shareholder return.”

This isn’t the first time that Green and Hand have published work calling McKinsey’s famous pro-DEI studies into question. A July 2021 Quartz piece, “Is McKinsey wrong about the financial benefits of diversity?,” reports on their earlier research on the issue:

If you’ve read an article about the importance of diversity in the workplace in the past few years, chances are you’ve come across the assertion that more diverse companies turn out higher profits.

Key to the popularization of this idea are three McKinsey studies, released in 2015, 2018, and 2020, which showed that companies with greater racial, ethnic, and gender diversity in their leadership tended to perform better financially….

A new paper [from Green and Hand], posted on the open-access research platform SSRN, offers one more reason to be cautious in making claims about the business case for diversity. The authors applied McKinsey’s approach to companies in the S&P 500 index, and did not find a link between racial and ethnic diversity and financial performance.

“McKinsey,” Quartz reported at the time, “declined to comment on the study’s findings.” There is very little reason to expect that the firm will respond to the more recent study’s findings either. The debunking of McKinsey’s research has gone largely unnoticed in most of America’s major institutions, which have continued to highlight and cite the “Diversity Matters” series as justification for their ever-expanding DEI programs and bureaucracies. An X thread from America 2100 chronicles the sheer number of powerful institutions that have uncritically embraced McKinsey’s claims — and, as a result, DEI — in recent years: the New York Times, Washington Post, Wall Street Journal, Harvard Business Review, U.S. Navy, Raytheon, Intel, J.P. Morgan, Ford, and Apple, to name just a few.

A “classic,” the old joke goes, is “a book that everyone talks about but no one reads.” One might say something similar about the “empirical proof” of diversity’s innate virtues. The diversity dogma has become an unquestioned premise among America’s corporate elite; its truth is assumed as something akin to a first principle. In a CNBC interview last year, a member of Ford’s board of directors complained that “the biggest obstacle to diversity is lack of true buy-in — as I call it, ‘true believers.’” Those “believers,” she explained, “are the decision makers in companies who are truly convinced of the proven business case that diversity in their workforce … leads to more profitability.”

Green and Hand’s numerous studies suggest that the “proven business case” for DEI might be less proven than McKinsey would have us believe. But in truth, we never really needed academic studies to tell us this. Basic common sense would have led to the same conclusion: “Diversity,” taken at face value, is neither a good nor a bad; it is merely a multitude of different things. Whether diversity is good, bad, or neutral depends upon the specific nature of the things in question and the context in which they appear. A shipwrecked crew stranded on a remote island might benefit from having a diversity of different skills — hunting, building, food preparation, and so on. A diversity of deadly injuries or exotic diseases would have quite the opposite effect.

Of course, “multiculturalism” is the specific kind of diversity championed by DEI — not a diversity of ailments or illnesses, but of peoples and cultures. But that, too, is subject to the same basic question: Diversity of what people, and inclusion of which cultures? The question doesn’t appear to have even occurred to McKinsey and its counterparts. “Diversity,” McKinsey’s DEI primer declares, “brings multiple perspectives to the table during times when enhanced problem-solving skills and vision are needed.” More differences lead to more perspectives, and more perspectives lead to better business.

In that case, corporate recruiters needn’t limit themselves to a few gender-nonconforming Harvard graduates. If it’s diverse perspectives they’re after, they should hire the Tanzanian witch doctors who kill albinos to concoct potions out of their body parts. They should hire the Afghans who have been practicing bacha bazi — literally, “boy play” — for over a millennia. They should hire the African warlords who pump their child soldiers full of tranquilizers, amphetamines, and cocaine mixed with gunpowder. They should hire the Amazon tribesmen that kill and eat farmers for religious rituals, the Sudanese and Egyptians who practice female genital mutilation, and every other culture and people and tradition in the world. Then, and only then, will they have an authentic diversity of lived experiences, befitting of a progressive, 21st-century workplace.

But they won’t, of course, because that was never what this “diversity and inclusion” business was really about. For all the jargon-laden explainers, neither McKinsey nor their acolytes in corporate America really believe that diversity, in and of itself, is of any particular value at all. What they believe is that our institutions are too white, too straight, and too male, and that the only appropriate solution is to make them less so — even if they have to fudge a couple numbers here and there on the way.