“American business leaders seem more comfortable negotiating with each other than submitting to collective governance”

LThe cream of American business is erasing democracy, or so their behavior suggests. Stephen Schwarzman, the head of the investment fund Blackstone, is one of the latest business leaders to publicly endorse Donald Trump for the next presidential election. The CEOs of major oil companies have done the same, and Jamie Dimon, chairman and CEO of JP Morgan Chase, recently said that Trump’s views on NATO, immigration, and many other important issues were going to “in the right direction”.

Much has changed since January 2021, when Trump supporters stormed the Capitol to prevent the certification of the 2020 presidential election. In the weeks following the insurrection, many companies solemnly vowed to do not finance candidates who refuse to admit the indisputable victory of Joe Biden. But these promises have proven to be no stronger than drafts.

The business world has never been particularly enthusiastic about democratic governance. When its own operations are at stake, it prefers autocracy to self-governance. CEOs want their executives and employees to obey them, and shareholders, who are supposed to be in charge, are easily reassured if they are given good financial reasons; they rarely manage to unite for collective action, which is essential if managers are to be held accountable.

What makes these business leaders so powerful? The usual response is to point to the control they have over the company’s assets. This is what Karl Marx meant when he asserted that control of the means of production allows capitalists to extract surplus value from labor. This has since been amply justified by economic models, showing that control of assets effectively translates into domination of the workforce.

The legal tools of power

But things are a bit more complicated. Neither Schwarzman nor Dimon owns the machinery of their companies or the buildings that house the brokers, investors or bank employees they employ. While they do own shares of their empire in the form of stock, or options to buy more shares of their company, those holdings typically constitute only a fraction of all the shares outstanding. And while shareholders are often collectively defined as owners, their ownership stakes do not give them control over the company’s operations or assets. They only have the right to vote for directors, trade their shares and collect dividends.

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