The fact that millions of Americans see nothing wrong with attempting to overturn the results of an election by force is a threat not only to democracy, but to the long-term health of the economy and to the strength of American business. And while few businesspeople are fans of government, a strong one is necessary for an innovative and entrepreneurial society. That’s why businesses need to finally step up and support democracy, in three key ways: speaking out, with both their voices and their wallets; acting collectively, particularly at the local and state levels; and addressing the roots of the problem, including widespread anger at “the system” and “the elites.”
For years, American business has taken American institutions for granted. It has assumed that someone else would ensure that democracy, the rule of law, and the kind of robust, respectful discourse that keeps societies healthy would simply survive — and that the role of business was to keep its head down and maximize profits in the meantime.
But this week’s events have demonstrated that we cannot take our democracy for granted. Early polls suggest that as many as 45% of Republicans approve of the assault on the U.S. Capitol. If this result holds up, it would imply that millions of Americans see nothing wrong with attempting to overturn the results of an election by force.
Let’s be clear: This belief is a fundamental threat to the long-term health of our economy and to the strength of American business. As I’ve argued in the past, American business needs American democracy. Free markets cannot survive without the support of the kind of capable, accountable government that can set the rules of the game that keep markets genuinely free and fair. And only democracy can ensure that governments are held accountable, that they are viewed as legitimate, and that they don’t devolve into the rule of the many by the few and the kind of crony capitalism that we see emerging in so many parts of the world.
No businessperson I know is a huge fan of government. I don’t care much for paying taxes myself. But as the pandemic has made clear, strong government — democratically accountable government, balanced by a free media and a thriving private sector — is the price we pay for strong societies. Without them, there’s far too little investment in public goods like public health, clean air and sensible anti-trust rules. Without them, the rich and the powerful end up in control of both the economy and the state, throttling the entrepreneurial energy and the innovation and experimentation that has made the American economy the envy of the world. We must not become Russia.
Strengthening democracy is the only way to ensure the widespread survival of free-market capitalism, and with it the prosperity and opportunity that has changed the lives of billions of people. It’s also the only way to tackle the world’s biggest threats, from global warming to increasing inequality. And business has to play a leading role — now.
There are (at least) three things that business leaders should do.
Speak Out in Support of Democracy
In this moment of crisis, leaders can support democracy by what they say and what they do. The key here is to focus on civics, not politics — to stress that it’s about the process, not the outcome. Business leaders could, for example, speak out in defense of the validity of the 2020 election, stressing that more than 50 courts, countless state officials of both parties, and the (Republican) federal attorney general have failed to find any evidence of widespread fraud. They could emphatically and publicly state that they will not donate to candidates that continue to deny the results of the election and and/or perpetuate allegations of voter fraud without evidence.
CEOs are widely trusted by the American public, and such a message could help to solidify the majority of the country that still believes in democracy, helping to rebuild the unwritten norms of mutual toleration and forbearance that, as government scholars Steven Levitsky and Daniel Ziblatt write, “serve as the ‘soft guardrails’ of democracy. They are what prevent healthy political competition from spiraling into the kind of partisan fight to the death that wrecked democracies in Europe in the 1930s and South America in the 1960s and 1970s.”
This is not an outlandish idea. According to an article in the Financial Times, Jeffrey Sonnenfeld, a Yale School of Management professor who convened a call of 33 top executives on Tuesday to discuss how business should respond to the crisis, said there was “universal outrage” among a group that spanned the political spectrum. According to the piece:
In a straw poll taken during the call, 88% said officials supporting Mr. Trump’s stance were “aiding and abetting sedition”; just over half said they would consider cutting investment in the senators’ states; and 100% said companies should warn lobbyists that they would no longer fund politicians denying the election results.
Act Collectively to Support Democracy
Firms could act together as a united voice speaking out in favor of democratic norms, democratic processes, and sensible policies. For example, business must work to pass federal and state-level legislation to significantly strengthen our democracy — focusing on widely supported measures like reducing the role of money in politics and introducing automatic universal voter registration; nonpartisan, independent redistricting commissions; and ranked-choice voting.
Too many business leaders feel they have no mechanism through which they could work together to support better governance and fairer government, however. In many regions and states, local business associations have atrophied and represent only a small fraction of local businesses. Nationally, groups like the U.S. Chamber of Commerce or the Business Roundtable are too often viewed as simply representing business’ short term self-interest. But this can change.
We need to build new institutions — or strengthen those that already exist — so that these associations can put real money and real effort on the line in support of the public good, and so that legislators come to view business as partners in strengthening the democracy. Newer groups like the Leadership Now Project on the national level (I am on their board of advisors), or the Greater Houston Partnership at the state level, may be promising places to start.
Address the Roots of the Problem
Rebuilding our democracy requires addressing the underlying problems that have created our current difficulties. It is not enough to simply assert that the election was legitimate and the results must be respected. There’s a reason that so many of our fellow citizens are willing to give up on democracy. For far too many people, “the system” is not working for them. Even before the pandemic hit and intensified suffering, accelerating inequality and declining social mobility was stoking a deep anger that has too often translated into populist rage and awakened the racist demons that have been part of America from the start.
We must work to understand why so many people are so angry and so willing to believe that the system is corrupt and rigged against them. Unless and until they come to believe that “the elites” care about them and are willing to do something about it, they will continue to support dangerous demagogues — because they see no other solution.
Business must act. Individual firms can make a difference by doing all they can to be racially and ethnically inclusive and by adopting “high-road employment” systems — treating their employees with dignity and respect and redesigning work to create better-paying jobs. Firms can work together to support racial equity and empowerment. They can work with local colleges and universities to rebuild regional educational systems. And they can act collectively to support the kind of policies that years of research have confirmed support the wellbeing of those at the bottom of the income distribution: raising the minimum wage, mandating basic benefits, investing heavily in community colleges and education, and ensuring that everyone has access to decent health care.
Business must step up. Our democracy needs us.