The issue with Rainbow Capitalism

Rainbow Capitalism Image

The market economy can give us everything we want and yet render us dissatisfied. What makes the lesbian, gay, bisexual, transgender and queer (LGBTQ+) population feel deceived and exploited in a market that is swamped with brands pandering to the LGBTQ+ community? 

The free-market system of capitalism operates on the premise of demand and supply. It forces capitalists to promote consumerism and encourage people to acquire and consume more and more goods and services. Consumerism is achieved by generating demand for goods and services through innovation, marketing – both genuine and deceptive.

Definition of Rainbow Capitalism

Rainbow capitalism is the act of displaying allyship and support for the LGBTQ+ community with the motive of inducing them to consume more products and services through marketing campaigns that use LGBTQ+ motifs without any concrete commitment towards their cause. It is also known as  homocapitalism, gay capitalism and pink capitalism.

How can Rainbow Capitalism be identified?

This phenomenon is conspicuous in the form of rainbow washing of merchandise, logos, advertisements, buildings, menus, etc. during the Pride Month every year. Companies are seen taking out pride processions with employees wearing Pride Merchandise and holding the pride flag. They use their queer employees as models in their campaigns designed for pride month and deny equal pay and benefits to them. They claim to celebrate the culture and values of the LGBTQ+ community but conveniently forget about it at midnight on July 1.


In entertainment, such as television shows, there is a practice of insinuating same-sex or queer romance but falling short of actually showing it or accepting it. The strategy is employed by creators to attract queer people who get tricked into believing that they are being represented, resulting in increased viewership.

As the creators fail to fulfill the expectations of queer audiences after exploiting their feelings over a length of time, they end up alienating this target group. One such example is that of BBC’s Sherlock, which had a gay subtext to the relationship between Sherlock Holmes and his companion Dr. John Watson. However, the makers of the show never took the subplot to a logical conclusion leaving the queer community feeling betrayed.

The objective is to evoke a favorable disposition for the brand and its products within the LGBTQ+ community and hoping for its conversion into sales.

Why is rainbow washing in the discourse?

According to a 2022 report by The Pride Co-Op, a market-research organization, the LGBTQ+ community wields a purchasing power of around $1.4 Trillion. This money is known as “pink money”. LGBTQ+ is estimated to be the largest growing minority community in the US.

Research also suggests that queer people have a strong propensity to support and use brands that are openly pro-queer. It is this “pink money” at the disposal of the fastest growing minority community that corporations target desperately during the pride month. 

It can be seen that companies approach the problem of marketing to the LGBTQ+ community based on its experience of targeting other groups, i.e. as a demographic. Companies treat LGBTQ+ people as a statistic which is similar to the way it targets other demographic groups based on age, income, education, ethnicity and so on.

Marketing to such demographic groups involves fewer considerations compared to the LGBTQ+ community. It is because of the sheer lack of awareness among marketing professionals about the history, struggles, ongoing issues, needs, cultural metaphors and symbols pertaining to the community.

What is the problem with Rainbow Capitalism?

Notably, pride month is time for the LGBTQ+ community to voice displeasure at their social and economic alienation. The commercialization of Pride Month obscures the real, less-palatable issues that actually matter to the LGBTQ+ community. This induces a feeling of betrayal within the LGBTQ+ community and eventually leads to their alienation. 

The entire rainbow washing business is counterproductive because the target population is discerning enough to recognize the superficiality and even hypocrisy at the core of many such campaigns. It becomes an embarrassment for brands when their act gets called out by people.

Congresswoman Pramila Jayapal, in her tweet dated June 6, 2021, called out the hypocrisy of a US multinational company AT&T. The company had put up a rainbow banner on its twitter account during Pride Month while having donated $56,296 to Mitch McConnell, who was known to be against the Equality Act. 

The representation of LGBTQ+ persons in advertisements, campaigns, movies and TV shows frequently contains imagery created by a heterosexual person. This imagery sells easily as it is cleverly designed and delivered as a package. A genuine and multilayered experience does not appeal to many and is therefore considered unviable.

Stereotypes are always easy to market as they are readily understood. The problem with a package is that it tends to be shallow and devoid of intensity, thereby making it less authentic to a person of the LGBTQ+ community. Alienation is sure to occur in an economic system that is modeled to maximize exploitation of target populations instead of maximizing their well-being.

How can we understand Rainbow Capitalism through a Sociological framework?

The problem with Rainbow Capitalism can be understood by juxtaposing the concepts of instrumental action and communicative action borrowed from sociology. Corporations are made up of executives who are given revenue and profit targets. The executives strategize and come-up with a series of steps / procedures to achieve these targets based on their understanding of what will work. This is known as instrumental action and that is how market-based institutions and governments function.

Rainbow Capitalism being a market phenomenon uses instrumental action to appeal to the LGBTQ+ community through premeditated steps. It fails to naturalize within the LGBTQ+ discourse and ends up making the whole effort seem contrived. 

Contrast this with the concept of communicative action, developed by Jürgen Habermas, which states that people use language as a means of engagement to achieve common goals. To this end, people are driven by shared beliefs, mutual understanding and agreed interpretations of an issue in good faith.

Therefore, when communicative action is used to engage with the LGBTQ+ community, it is done based on issues that are authentic to the queer culture. It fosters mutual understanding based on shared values of the community and therefore embraced wholeheartedly.


Rainbow capitalism as a phenomenon will continue to take place as long as the market economy exists.

The extremely competitive business environment will keep compelling marketing executives to feign their friendship with the LGBTQ+ community to expand their customer base and bottom lines.

However, the customers are rapidly getting aware of these cheap tricks and even punishing the companies engaging in rainbow capitalism.

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