Populism has become a formidable political force across the world, ranging from Trump and Bolsonaro in the Americas to Duterte and Modi in Asia as well as Brexit and a variety of populist movements across Europe. While populism comes in different forms, conventionally grouped into exclusionary right-wing and inclusionary left-wing varieties, our research focuses primarily on right-wing populism. Right-wing populists have achieved some spectacular electoral success across various parts of the world, and they represent a novel and difficult challenge to business. On the one hand, they tend to be anti-socialist and pro-business by temperament, supporting low taxes and opposing many kinds of regulation, such as environmental regulations that generate costs for businesses. On the other hand, right-wing populists also advance policies that many businesses oppose, including protectionism through tariffs and quotas, curbs on labour migration, and threats to central bank independence. Populist leaders inject greater uncertainty and unpredictability into politics and business by rejecting established systems of expertise, law and bureaucracy in favor of their own personal instincts and ability to represent the authentic voice of ‘the people’. Therefore, the rise of populism raises complex dilemmas for business.

What does this tell us about the power of business to get its own way in capitalist societies? The power of business has been a key research focus for a variety of scholars, including many Marxist sociologists. The Miliband-Poulantzas debate of the 1970sstressed the centrality of business power, though there was some disagreement on the sources of this power. Ralph Miliband highlighted instrumental power, such as deliberate uses of lobbying, but also shared class and educational backgrounds, which lead business and political elites to view the world in similar ways. For Nicos Poulantzas, the roots of business power were structural and related to the privileged position of capital. The state is effectively structurally dependent on capital to generate growth, employment and tax revenues, and therefore business may not need to exercise power actively to ensure that favorable policies are implemented. Other work has also highlighted the ideational power of business, which reflects the legitimacy that business often holds in capitalist societies. What all these accounts highlight is a relatively harmonious relationship between business and the state – even accounts that would not define the state as a mere executive committee of the bourgeoisie would tend to agree that business exercises very substantial power over the state and that it is not merely one interest group among many others.

In the neoliberal era business power was further enhanced by the prevalence of what Pepper Culpepper has called quiet politicsor the tendency for business and state representatives to meet and consult behind closed doors, with business providing important technical advice and expertise on complex policy issues, especially related to the governance and regulation of markets. Culpepper’s account implies that business usually wins under conditions of quiet politics.

Populism disrupts this cosy relationship between business and politics in several ways. While many populists deviate from key neoliberal policies in ways that are problematic for many businesses, populist politics is also noisy and often unpredictable, thereby making it harder for business to shape policymaking behind the scenes. Electorates are engaged and cultivated by populists who represent themselves as the voice of the people against the elite, including business. Mainstream parties and business are undermined in populist discourse because they represent an out-of-touch establishment. Thus populists can attack and scapegoat businesses; in the words of Boris Johnson, the UK Conservative Foreign Secretary and later Prime Minister: ‘F**k Business’. This generates great uncertainty for business, as in the case of Brexit, making it hard to plan and invest. To what extent have such changes undermined the power of business?

Our research shows that the rise of populism through noisy politics and taking advantage of the uncertainties and ambiguities of electoral processes can lead to governments that act against the interests of significant sectors of business, both home-based and foreign.  Yet we also demonstrate that business has a variety of strategies at its disposal when responding to populists. Extending Albert O. Hirschman’s famous typology of exit, voice and loyalty, we identify five kinds of business responses, which reflect the dilemmas of engaging with noisy populist politics.

The first strategy of exit is well known and amounts to businesses voting with their feet. If populist governments impose policies that are unattractive or even detrimental to business, companies can relocate to other countries. It is important to note that this strategy is more viable for some companies, notably multinational corporations, than others, such as small and medium sized enterprises that more reliant on resources and markets in a particular location and less able to move.

Voice, as highlighted by Hirschman, refers to attempts to raise concerns about a problematic state of affairs. The key dilemma for business in the era of populist mobilization relates to the fact that politics is noisy. When business prefers quiet politics as this typically maximizes business influence, one possibility for business is to exercise quiet voice using such traditional channels, but the main problem is that populists are often less receptive to expert advice offered by business and less willing to maintain traditional channels of contact. Therefore quiet voice may not be effective.

By contrast, loud voice or attempts to resist the populist agenda by engaging in noisy politics is also risky. Not only is it costly, but it may also backfire as such interventions can be seen as self-serving and reinforce portrayals of business as an elite that is out of touch. It may also alienate the populists and their supporters, and for these reasons loud voice tends to be very rare.

The final two responses that we identify are implicit and explicit loyalty. Implicit loyalty amounts to keeping one’s head down – businesses may adopt this strategy for a variety of reasons. In many cases it does not reflect any strong support for the populist agenda, but rather an aversion to getting involved in noisy politics. Explicit loyalty refers to public and often ostentatious support for populists and their agenda. This strategy tends to reflect economic self-interest as in the case of extractive industry support for Trump coupled with a strong ideological commitment to the populist agenda as a means of building electoral support for a broader right-wing agenda (including deregulation, selective tax cuts for the benefit of the rich, and cultural conservatism).

What can we learn from the rise of populism about business power? On the one hand, any attempt to generalize is complicated by the fact that populist economic agendas vary. Some populists are more business-friendly, and in such cases businesses may be cautious about criticizing controversial actions as the benefits from key policy initiatives, such as the Trump tax cuts, are very substantial. On the other hand, when businesses do object or have serious reservations to the populist agenda, they tend to find that the strategic exercise of business power is more complicated than during the heyday of the neoliberal era. Traditional channels of quiet politics are no longer effective and sometimes not even available. However, our article demonstrates that businesses have a range of strategies at their disposal. While the choice of business responses is constrained and occasionally coerced, especially when populists are dominant, business agency remains important. Most importantly, our research highlights that populism has opened up new divisions and deepened existing fractures within the business sector, for example, between large and small companies, domestically and internationally oriented businesses or between different types of financial institutions. To the extent that populist politics is likely to persist, it will be increasingly important for business to develop effective strategies to respond. If some populist governments mount more serious challenges to existing business models by turning their backs on globalization, the question is whether the structural power of business will reassert itself and rein in such agendas.

Magnus Feldman is a senior lecturer in politics at the University of Bristol School of Sociology, Politics and International Relations. Glenn Morgan is a professor of management at the University of Bristol School of Economics, Finance and Management.

To read more, see Magnus Feldmann and Glenn Morgan (2022), ‘Business elites and populism: understanding business responses’, New Political Economy, 27: 2, 347-359. For a more detailed overview of these issues, see also Magnus Feldmann and Glenn Morgan (eds.), Business and Populism: The Odd Couple, Oxford University Press (forthcoming)

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