One of the central facts of modern American politics has been the strong bond between the Republican party and the country’s business elite. Even Donald Trump, who briefly campaigned as an economic populist in 2016, governed like the plutocrat he was. Businesses could rely on Republicans for the regressive tax cuts and supply-side economics that helped their bottom lines – and the personal bank accounts of their executives. Democrats, meanwhile, have drifted to the left economically, embracing much higher taxes and a new era of trust-busting. If Republicans are the capitalists, then Democrats are the socialists.
That, at least, is the conventional narrative. And it gets some things right. But it struggles to explain what happened in the past few weeks, as large companies such as Delta and Coca-Cola spoke out against Georgia’s new voter-suppression legislation. Republicans were blistering in response, with the Senate minority leader, Mitch McConnell, accusing the private sector of behaving like a “woke parallel government” and warning of “serious consequences” if they didn’t stop. This threat isn’t idle – efforts are under way to hit companies on their bottom line, with Georgia Republicans voting to strip Delta of a lucrative tax break and Trump calling for boycotts of companies like Coca-Cola. (Freedom Pepsi, anyone?)
It’s easy to dismiss all of this as a public-relations stunt. Many of the companies coming out against the Georgia law did so only belatedly and under pressure, and many of the Republican politicians decrying “woke capitalism” are just hoping to score points with their base. But the very fact that these things are happening at all is due to important shifts in the American political landscape – ones which may eventually become seismic.
It’s not difficult to see why tensions have risen as Republicans have increasingly embraced an angry, racist nationalism and an anti-democratic ethos. Doing so has put them at odds with the young and value-conscious Americans who fuel sales of America’s biggest brands. Companies that want to attract younger consumers and employees have flexed their power in response. When North Carolina passed a law in 2016 banning trans people from using the restroom consistent with their gender identity, boycotts and cancelled business expansions were set to cost the state about $4bn over 12 years. The state’s Republican governor subsequently lost to a Democratic challenger and the law was repealed.
For their part, Republicans have turned away from their traditional pro-business stances on trade, immigration and globalization. This shift has been accompanied by a rearranging of intellectual priorities. While a previous generation of Republicans prioritized the economy above all else, the loudest voices on the right today agree with Senator Tom Cotton when he says that “we are not an economy with a country. We are a country with an economy.” Companies that speak out against the new nationalist agenda can find themselves in the crosshairs of the self-declared tribunes of the country, as Keurig did when it decided to stop advertising on Sean Hannity’s Fox News program.
It is premature to predict a wholesale collapse of the Republican party’s alliance with big business. But the events of recent years present an enormous opportunity for Democrats to make political inroads. In 2020, the counties won by Joe Biden produced a whopping 71% of US GDP, compared with only 29% in the counties which voted for Donald Trump – a gap which is 14 points higher than in 2016. Democrats also increasingly represent the more educated voters who corporate America covets as consumers and employees, and who have fled the Trumpified Republican party.
Democrats also represent the values and competence which American businesses – and the workers who depend on them – need to thrive. Trump’s plutocratic tax cuts and shamelessness in gutting the regulatory state might have provided a sugar rush to many businesses, but his woeful handling of the pandemic and impulsive trade wars harmed them. The paranoid, reality-denying, cultish Republican party of today cannot be trusted to elevate competent figures into key political and policymaking positions. As Trump demonstrated, the costs of having a clown in charge can generally be tolerated while the economy is thundering along in normal times – but they become catastrophic when a serious challenge arises.
Democrats, on the other hand, don’t just represent a steady hand in a crisis. They are also advancing plans for infrastructure, increased R&D spending and a green energy transition which are all necessary to the future competitiveness of the American economy. Such plans involve winners and losers, but overall they represent an enormous investment in the economy which can solidify the party’s appeal to corporations, employees and voters.
Progressive Democrats are right to be wary of calls for the party to identify itself as pro-business. And it’s absolutely right that Democrats seek to reform capitalism at the same time that they embrace it. But Republican tensions with big business give Democrats exactly what they need to accomplish that – leverage. Faced with the alternative, groups like the Chamber of Commerce have proven more open to Democratic proposals like raising the minimum wage than under previous administrations. Their support makes such policies easier to pass and more likely to be enduring.
Something even more important is at stake. For decades, corporate America has been a key pillar in the Republican coalition. That pillar is starting to crack, providing an opportunity for Democrats to weaken a dangerously extremist party which poses an existential threat to American democracy. As big business flees the wreckage of the Republican party, the best thing to do for the future of the country is welcome it into the Democratic coalition – with conditions.