In their article Zena Al-Esia, Andrew Crane, Kostas Iatridis & Ayşe Yorgancioğlu argues that although populism is re-emergent worldwide, businesses still have an opportunity to do good and support liberal democratic forces.
Zena Al-Esia, Andrew Crane, Kostas Iatridis & Ayşe Yorgancioğlu / Stanford Social Innovation Review
When Disney decided to challenge Florida’s “Don’t Say Gay” bill, signed into law by Governor Ron DeSantis in March 2022, it anticipated a backlash, but not on the scale that it generated. The law prevents discussion “about sexual orientation or gender identity” at all public school grade levels, and LGBTQ+ advocates condemn it as an attempt to curb visibility of the LGBTQ+ community and marginalize them in education and society. DeSantis touted the legislation as a necessary move against “woke gender ideology.” Disney’s public opposition to the bill thrust the company into the center of an unprecedented power struggle that resulted in DeSantis’ dissolving Walt Disney World’s special independent self-governance status in Florida, in February 2023. This dissolution gave DeSantis control of the board of Disney World’s governing district, whereby he created a new state oversight board to manage the district’s municipal affairs and—unsurprisingly—staffed it with allies.
Such morality-driven attacks on minority groups—more dramatically conceptualized in terms of “the culture wars”—are not new. Yet in recent years political leaders have increasingly deployed them as part of their populist strategy to amass power. Populism, according to the political scientist Cas Mudde, is a political approach that divides society into two opposing groups—the people and the corrupt elite—to argue that politics should be an expression of the will of the former. Put simply, populism is an antielitist and antiestablishment political standpoint designed to stoke division for power.
In the United States, populism gained momentum in the mid-19th century, when farmers and labor unions protested corrupt bankers and politicians, whose decisions had left farmers in debt and without legislative protection against high fees on the storage and transportation of their crops. Their alliance became the foundation of the People’s Party, soon thereafter renamed the Populist Party, which was founded in 1892 to fight for political reforms that supported the working class and regulated the private sector. They specifically targeted monopolistic corporations that benefited from high tariffs on farm machinery and banks that imposed difficult loan terms and ruinously high interest rates on farmers. Gradually, the populist movement in the United States waned as the People’s Party merged with the Democratic Party in 1896, when both parties nominated popular orator and lawyer William Jennings Bryan to represent them in that year’s presidential election.
In more recent years, populism has gained a greater foothold in Latin America and Europe, among other parts of the world, where people feel abandoned and deprived of government support and safety nets because of the swift expansion of globalization and free-market capitalism. Authoritarian leaders like Venezuela’s president, Nicolás Maduro, and Hungary’s prime minister, Viktor Orbán, have adopted populist messaging that exploits economic and cultural tensions around issues like immigration and trade and professing to represent the interests of the people. In addition to Maduro and Orbán, political leaders, including the current leaders of India, Italy, and Turkey, and recently ousted leaders like former Brazil president Jair Bolsonaro, former UK prime minister Boris Johnson, and former US president Donald Trump appropriated populism as a political strategy. Even well-known authoritarian leaders who employ hard-power repressive tactics such as surveillance, harassment, and violent crackdowns, including China’s president, Xi Jinping, and Saudi Arabia’s crown prince, Mohammed Bin Salman, have increasingly adopted a populist approach by depicting themselves as champions of the people as a soft-power strategy to mobilize the masses.
For many populists like DeSantis, it is politically advantageous to attack big corporations, which they portray as allies of the corrupt elite that are interested only in increasing their profits. Populist politicians profess to speak for the interests of working-class people who have been exploited by profit machines like Disney. Furthermore, the hostility against big business has become an area of convergence among right- and left-wing populists, as both factions identify corporate hegemony as a common enemy of the people—albeit for different reasons.
Yet populist efforts to address the needs of the people are more often performative than substantive. Authoritarian leaders will use populist framings and language to centralize power by feigning an allegiance to the people, onto whom they project their own beliefs and on behalf of whom they then claim to speak. Such a narrative enables populists to gain political capital and vilify businesses that disagree with or dispute their agenda. Additionally, populists rely on mis- and disinformation to further stoke social tensions.
Populism raises several challenges for companies, like Disney, Ben & Jerry’s, and Starbucks, that are proponents of corporate social responsibility (CSR), whereby businesses enact practices that benefit society in addition to earning profit. Our team of researchers from the University of Bath have examined these challenges to provide new insights and resources about how to rebalance democracy and capitalism. In what follows, we identify ways in which populism poses a threat to responsible business practices and explore why businesses might choose to pursue a responsible business strategy despite these challenges. We conclude by offering a strategic framework for responsible business stances against populism.
Populism’s Threat to Responsible Business
According to 2023 research published by the Carnegie Endowment for International Peace, populism “has negative effects on economics and business” resulting from political corruption and cronyism. Johns Hopkins University professor of the practice of international affairs Yascha Mounk has also argued that countries led by populists have more volatile economies. However, little scholarship or media attention has been given to the examination of populism’s effects on CSR.
We identify three significant ways in which populism threatens CSR: It discredits businesses’ reputation through the slanderous accusation of elitism, it delegitimizes corporate prosocial engagement by asserting businesses’ single purpose is to grow the economy, and it manipulates the market by inhibiting the conditions necessary for responsible business.
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