By Mark S. Mizruchi
Mikhail Khodorkovsky was one of the leading capitalists in post-Soviet Russia. As the owner of the huge Yukos oil company, Khodorkovsky was the richest man in the country and the 16th richest person in the world, according to Forbes. He was also a critic of Russian President Vladimir Putin’s regime. A strong proponent of Westernization, Khodorkovsky denounced the level of corruption in his country and argued that only by establishing the rule of law could Russia become a fully advanced economy. In February 2003, he publicly confronted Putin, accusing government officials of maintaining a system of widespread corruption. Eight months later he was arrested at gunpoint, charged with fraud and, after a trial many international observers saw as politically motivated, sentenced to nine years in prison and named a “prisoner of conscience”. by Amnesty International.
More recently, Jack Ma, the head of Ant Group (and co-founder, former CEO and board member of Ant subsidiary Alibaba), criticized China’s financial system in an October 2020 speech. – according to CNN, he described it as outdated and risk averse and argued that a modernized system could bring banking services to a larger portion of the population. Days later, Chinese regulators canceled Ant Group’s planned IPO, which was expected to raise $37 billion. The following year, the company lost an estimated $400 billion in value, following a host of government-imposed regulations. In January 2022, Chinese state media accused the Ant Group of bribing public officials. Several other Chinese companies, across a wide range of industries, have also come under government investigation, in what CNN described as a “crackdown”.
The cases of Khodorkovsky and Ma illustrate what can happen to business leaders who challenge autocratic governments. Reprisals against critics of the regime are routine events in countries like Russia and China. But that kind of thing couldn’t happen here in the United States, could it? Unfortunately, this is happening and recent events may be a harbinger of things to come.
After the Florida Legislature passed a bill in March prohibiting teachers from discussing issues of sexual orientation and gender identity with children in kindergarten through third grade, the CEO of Walt Disney Co., Bob Chapek spoke against the bill. Chapek did not do this lightly. He initially refused to take a public stand, fearing, as most business leaders are, of alienating important elements of the public even while placating others. It was only after considerable pressure from activists and his own employees that Chapek finally spoke up, but to no avail, as the bill was signed into law by Governor Ron DeSantis. Still, Chapek and Disney paid the price for their words. Just three weeks later, the state legislature passed a bill, signed by DeSantis on April 22, that stripped Disney of its special status, an arrangement that had given the company autonomy over virtually all government services from Walt Disney World, as well as tax breaks. remunerate the company for carrying out these functions.
Disney is one of Florida’s largest employers and, according to virtually every media outlet, one of the most powerful. The company has a huge lobbying operation in Tallahassee and has regularly won favors with the legislature. One could raise legitimate questions about the presence of such overwhelming force within a state, and whether good government might require effort to tame such inordinate power. And yet, the state’s actions toward Disney are troubling. Consider that a company, fully within its First Amendment rights, voiced its opposition to a bill that many of its employees found abhorrent. In response to this opposition, the state government engaged in a direct and swift response. Disney didn’t like a particular law and said so. The state responded by passing a bill with potentially devastating consequences for the company, let alone the surrounding community. Maybe DeSantis isn’t really serious about this law, suspecting it will be thrown out of court, and pushing it through as a political stunt, to appease his base. Even if it does, however, the message to businesses seems clear: cross us, and you could be next. In that sense, his actions seem eerily similar to what the Russian government did to Mikhail Khodorkovsky and what the Chinese government did to Jack Ma.
Businesses, like any interest group, can make campaign contributions and lobby politicians. One can debate the rules around this: whether, for example, there should be limits on the size of contributions, or whether organizations should be required to list all their contributors. But the process itself — the groups making their views known to their representatives — falls squarely within the normal bounds of the democratic process. What we are seeing now is something qualitatively different: a company directly targeted and punished for not toeing the party line. This kind of compensation is not democratic. This is the kind of thing that happens in autocracies. And it is practiced by the Republican Party today.
This is not a question of partisanship, but of fact. Our democracy is facing an existential crisis, and unfortunately, one of our two major parties is largely responsible for it. It is only reasonable that companies want to refrain from wading into the political fray, especially in an environment as polarized as ours. This appears to be what motivated Disney’s Bob Chapek to initially remain silent on the so-called ‘don’t say gay’ bill. We are, however, faced with an emergency, in which the very survival of our democracy is at stake, and desperate situations call for desperate measures. You don’t have to be a Democrat to be deeply concerned about these warnings, and Democrats have their own problems. There are elements within the party whose commitment to democratic principles is also questionable. Woke culture is not a mythical creation of the right-wing imagination. As a university professor, I can attest that this is very real. Yet the threats to democracy emanating from this end of the spectrum pale in comparison to those emanating from the other. The “woke left” is a minority even within the Democratic Party, and it has limited, if not self-defeating, influence on politics. The anti-democratic right, on the other hand, now constitutes the majority of one of our two main political parties, the one which controls the majority of state governments and which could soon return to power at the national level as well.
The American business community has a decision to make. Is it ready to suffer a few minor inconveniences, such as a possible increase in taxes or some new regulations? Or is she, on the contrary, ready to surrender to a party of autocrats, who threaten to transform our country into a version of Hungary (whose anti-democratic Prime Minister, Viktor Orbán, is admired by many Republicans), of Russia, or even of the USSR Union (predecessor of Russia)? The Republican Party of today has rejected the basic standards of a democratic society, and until it is willing to uphold them, it must be stopped. This means that the business community must do everything in its power – whether that means withholding contributions, exerting pressure from behind the scenes, publicly condemning the party’s undemocratic behavior or, if necessary, to support the Democrats – to make sure the Republicans pay the price for their misdeeds. Our society and our world face a series of crises that require sustained attention. But if we want our country to remain a democracy, then the Republican Party must renounce its authoritarian elements and return to the political community to which it once belonged.
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