American Affairs: The War Within Corporate America
In the 2020 election cycle, corporate America seems under attack from all directions. Elizabeth Warren and Mark Zuckerberg are in a war of words; Bernie Sanders has proposed codetermination, partial employee ownership, and other major corporate governance reforms; Joe Biden has called for insurance company executives to be jailed; and Donald Trump regularly attacks Jeff Bezos and big media corporations. In one Democratic debate, multiple candidates endorsed stronger antitrust measures against a suite of industries, and Robert Bork—theconservative antitrust lawyer who redefined antitrust law to make the world more favorable for big business—came up twice as a whipping boy.
It’s easy to observe this dynamic as purely political. But if you look a little bit closer, the business world is almost as interested in structural changes as our political leaders. Recently, Salesforce CEO Marc Benioff added his voice to the chorus of those who want to break up Facebook (a chorus which includes Facebook cofounder Chris Hughes and early investor Roger McNamee), and even went so far as to call for a new version of capitalism in the New York Times. Meanwhile, Brad Smith of Microsoft is lauding the social power of big tech and governments working together to foil Russian hackers. The granddaddy of them all, the Business Roundtable, which brings together big business CEOs to push a unified agenda for corporate America, just attacked the idea of shareholder primacy in corporate management.
Earlier this year, Fortune magazine conducted a poll and found that 50 percent of Fortune 500 CEOs believe that Facebook “has grown so large and influential that it needs additional regulation,” while 41 percent believe this about Amazon, and 39 percent about Google. To be sure, most CEOs target just those three companies; very few want more regulation for AT&T, Microsoft, Apple, or Disney. Yet Benioff’s skepticism towards concentrated capital, and the Business Roundtable’s new statement, reflects a new and vibrant debate among corporate executives.
This new attitude is a response to a crisis in corporate America. Business leaders observed the financial collapse in 2008–10, and they recognize the resulting political instability. In addition, problems within a number of major companies are too obvious to ignore. There is a collapse of productive capacity at firms like Boeing and General Electric, as Boeing’s planes now crash and General Electric is involved in a debate over whether it is riddled with fraud. PG&E can’t keep the lights on without burning down California, and Facebook is structuring electoral discourse in ways that are angering both the Right and the Left.
As the arguments of business leaders about how to reorganize the marketplace begin to take shape, a divide is emerging between them. Some, such as Benioff, argue for breaking up companies like Facebook and then regulating the resulting markets, while others, like Microsoft’s Smith, think it’s best to fuse the power of big technology corporations with the state through regulated monopoly. This disagreement is deeply political, because in America the marketplace is a key battleground for justice.