The Role of Business in Building a Stronger American Democracy

01.21.2021 | CIPE Insights | Andrew Wilson

Though we have turned our calendars to 2021, the major challenges that faced the United States in 2020 have not yet abated. The COVID-19 pandemic has exacerbated underlying inequities, while a bitterly contested election has laid bare our political divisions. Both took place against the backdrop of a renewed, intensive examination of the country’s racial divide that impedes our delivery on the centuries-old promise of liberty and justice for all.

This tumultuous period has also seen an increase in the number of Americans who question the very principles upon which the United States was founded and has thrived: a market economy and democratic governance. As a result, many Americans no longer feel that they are stakeholders in our system. They imagine that a different type of political or economic arrangement could better address their concerns. The resultant crisis of trust in our political and governance institutions makes addressing these disconnects even more elusive.

“Over the past decade in particular, the business community in the United States has shown leadership in shaping a new understanding of what it means to be a good corporate citizen”

But those of us – including the team at CIPE – who have worked for decades to strengthen democracy overseas know that a well-functioning democracy and an inclusive market economy, while by no means easy to build, are indeed the best ways for a society to organize.

Democracy allows citizens to mediate disputes and hold leaders accountable, and the market generates the broadest prosperity. Countless people around the world have lost their lives in the struggle for the freedoms we enjoy in the United States. We must not take our system for granted. In that spirit, CIPE has unequivocally joined with those who condemned the recent violent attack on Capitol Hill. This was an attempt to disrupt and mar one of the central events in our democracy’s lifecycle: the certification by Congress of the Electoral College vote tally, the confirmation of the valid results of a free and fair Presidential election, and a critical step in the peaceful transition of power. Violent demonstrations and vandalism are never acceptable avenues for public dissent.

All Americans must work together to ensure that such tragic events are never repeated. The business community in particular can seize on this opportunity to play a key role in restoring confidence in American democracy and our institutions. As we know at CIPE, business needs democracy, and democracy needs business.

Business should promote democracy

The business community, in all of its diversity, is a critical stakeholder in democracy. Private sector leaders – from small shops to large corporations, located in our cities, suburbs, small towns and rural areas, active in all sectors of the economy, and run by all manner of entrepreneurs, know that democracy provides the essential elements needed for business success. These include rule of law, not rule by law; protection of property rights; transparent and accountable government that respects the will of citizens; the freedom to compete and innovate; access to reliable information afforded by a free press; and the rights to choose our leaders, form voluntary associations, and through those associations, influence the policy debate.

Likewise, business leaders also have an important job in the practice of democracy, shoring up our institutions and reminding fellow Americans of the benefits of the healthy practice of democracy. As civic leaders, business leaders lend their voices on important community issues. They create the jobs and wealth that underpin a thriving economy and a healthy social fabric. Businesses lend their voices in the vigorous contestation of elections, but accept the results even when their preferred candidate is defeated. Businesses embrace the peaceful transition of power, as this provides the predictability underpinning commercial success.

Further, business has shown for decades how Americans can work in a good-faith, bipartisan way, to solve shared problems. Business leaders strongly advocate for their ideas, but they know that to thrive, economies need stability and consensus. This means seeking dialogue instead of division, advancing compromise and common-sense approaches that incorporate interests across society. Business, labor, civil society groups, political parties, media – all have worked together to build a strong United States. This cooperation is the model for a healthy, thriving democracy.

Showing leadership

Over the past decade in particular, the business community in the United States has shown leadership in shaping a new understanding of what it means to be a good corporate citizen. Increased attention has been paid to issues such as diversity, equity and inclusion; cooperation with civil society groups to marry economic growth with a healthy planet; a growing recognition of the interplay between human rights and business success; a renewed commitment to good corporate governance and transparency; and more. In all of these ways, the American business community has played its role in upholding and strengthening the social contract and social capital that binds our democracy together. American businesses have become a model for corporate citizenship in countries around the world.

“As we know at CIPE, business needs democracy, and democracy needs business”

Now American’s business leaders must embrace that role here at home, through a range of short- and long-term measures. In the short term, business must make its voice clear to end the current crisis of division we face, clearly articulate its values by stressing that only democracy – rather than populism – can drive a strong economic recovery from the pandemic. Business, at both the local and national levels, should lend support to, and work with those who are seeking to safeguard our democratic institutions. In the long term, business should promote a political environment that rewards those who seek dialogue over those who seek division, and help ensure that all Americans have a strong grounding in civics, as well as pathways for pluralistic engagement – particularly in an era of digital media. Finally, business can help to address the underlying issues that have caused instability and a crisis of faith in our institutions. This includes engaging robustly on issues such as economic opportunity, social opportunity, and racial disparities.

We at CIPE are confident that if the American business community embraces its leadership role within our democracy, the United States can emerge from our current moment of crisis stronger than ever. Together, we can continue to move forward as a global leader and beacon for the world.

Andrew Wilson is Executive Director of CIPE.