The Corner

Economy & Business

Should Corporations Be Politically Active?

Since the Parkland high school shooting, it has been striking to watch corporations cut ties with the NRA. A few examples: United, Delta, and several rental car companies will no longer offer discounts to the NRA and its members. And the First National Bank of Omaha stopped offering an credit card co-branded with the NRA.

This followed protests from CEOs after the Trump administration’s decision to exit the Paris climate accord, CEO resignations from business councils following President Trump’s shameful response to the Charlottesville protests, tech titans speaking out on DACA, and more.

How to make sense of this? Shouldn’t firms stick to maximizing profits and shareholder value? I address these questions in my latest Bloomberg column.

Let’s be clear that a lot of this corporate behavior is self-interested. It’s hardly surprising that many companies have defended socially liberal causes that are also popular among millennials and the college educated: they want workers and a loyal customer base.

It surely says something about the tribalism that increasingly defines American life. I can’t imagine why anyone would care if their car rental company has chosen the “right” side of the latest controversy. I’ll bluntly say that for most controversies, they shouldn’t. But many seem to, which strikes me as unhealthy.

Does some of it represent long-term thinking from corporate America? If you think the president’s response to Charlottesville risked chipping away at social stability, then speaking out against it could be viewed as strengthening the country’s future. (Which is, of course, in the interest of business.)

If we’re going to have politically active corporations, I wish more of them focused their action on the long term — specifically, on strengthening the post-war liberal order — and less on the day’s headlines. Free trade, a strong commitment to democracy, and strong institutions have helped create decades of prosperity. Many political leaders today, including the president and his administration, seem not to understand this. Corporate leaders, who depend on this system, should be the first to defend it.

You can find my full argument in Bloomberg. Your comments, as always, are very welcome.