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The past year has put our nation’s democratic institutions and economy to the test, pushing America into untested waters on multiple occasions. All Americans are affected by the endless disarray brought on by extremists improvising how to govern. The American economy — the greatest driver of prosperity in human history — depends on a stable government to deliver for our nation.
In May, some House Republicans reneged on a budget agreement with President Biden, bringing the nation to the verge of an unprecedented default on its debt. A default on our nation’s debt would send shockwaves through the global economy, wreaking havoc on American businesses and families — even the threat of such a default weakens our position globally. Then, in September, the federal government came close to a total shutdown. The Speaker, who is second in line to the presidency, was abruptly ousted from his post, plunging the House of Representatives into chaos not seen at any point in our nation’s history.
After three weeks of legislative standstill, the federal government again raced toward a potential shutdown in November. And just recently, the U.S. Court of Appeals for the Eighth Circuit moved to drastically weaken the Voting Rights Act, undercutting our nation’s stability.
Now, as the conflict in the Middle East continues and the war in Ukraine rages on, a small group of legislators still haven’t come together to provide funding for our national security and defense support for our allies and partners. The ongoing dysfunction and uncertainty in our government threatens every facet of our livelihoods, from preserving our safety and security to keeping our economy afloat.
Our economy and democratic institutions fortunately have shown some resilience in the face of this polarization and disorganization, and there is a clear path forward through this disorder — one that involves all of us. But, how long can we hold?
As William Galston and Elaine Kamarck of the Brookings Institution have written, “The fate of democracy and that of the private sector are inextricably linked, and private sector leaders have reasons of self-interest as well as principle to do what they can to strengthen democracy.”
A well-functioning democracy is not merely a matter of pride or principle; it’s the backbone of a strong economy. Our businesses thrive in stable environments where they can predict and plan for the future. Research from the Business & Democracy Initiative found that 96% of business leaders say the existence of a well-functioning democracy is important to a strong economy. In other words, a stable environment allows businesses to thrive, attracting global investment and entrepreneurship.
Business leaders, as champions of economic growth, must advocate for political stability and responsible governance, recognizing their fortunes are tied to democracy’s health. They can leverage their influence to urge elected officials to prioritize national interests over partisan agendas.
Within their organizations, business leaders can promote democratic values and advocate for fairness and equality. Nearly 60% of small business owners are very likely to speak out publicly in favor of protecting the democratic process, according to research in 2022 from Small Business for America’s Future. Such advocacy strengthens democracy and enhances organizational reputations.
Moreover, business leaders can invest in civic education, fostering an informed electorate. Many consumers agree that businesses should drive change or progress on important social issues (57%) and speak out publicly about cultural or social issues (55%). Informed voters are the lifeblood of a healthy democracy.
Investors are more likely to inject capital into a country where the rule of law is upheld, and decisions are made rationally and transparently. Political polarization and governmental dysfunction deter investment and hinder growth. Moody’s Investors Service recently warned that U.S. political polarization risks consensus-building for fiscal planning, affecting debt affordability.
In recent years, we’ve seen some leaders from Main Street to Wall Street speak out on the detrimental effects of government instability on our economy — but not enough. The 2022 midterm elections demonstrated voter rejection of anti-democratic rhetoric. And this year, anti-democratic issues were defeated, boosted by vocal business advocacy. However, more consistent and robust action is needed, not just during election years.
Former President Barack Obama laid out what might be driving some of this anxiety in his remarks last month at the 2023 Democracy Forum: “We’re up against a set of economic and technological and cultural trends that are sweeping across the globe, and they’re weakening people’s commitment to democratic values.”
Unfortunately, hyperpartisan brinkmanship like that displayed over the past year has become an all-too-familiar dynamic that threatens to plunge our nation into continuous upheaval. It is vital that we recognize the dire consequences of bad governance for our democracy and the economy, and hold accountable the few extremists who play games with the prosperity of our economy. Our shared prosperity should not be a bargaining chip, and it is a dangerous precedent to set when some elected officials prioritize their personal agendas over the nation’s well-being.
Business leaders have a collective responsibility to get off the sidelines and play a role in protecting democracy. Our economy and Americans’ livelihoods depend on it.
Rhett Buttle is founder of Public Private Strategies, president of the Public Private Strategies Institute, and a senior fellow at the Aspen Institute. He was national business adviser to President Biden’s 2020 campaign, worked for the Obama administration, and helped found the Small Business Roundtable, Small Business for America’s Future, and the Next Gen Chamber of Commerce.
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