Aspiring autocrats increasingly press businesses to cooperate with their pursuit of wealth and power, demanding that they allocate corporate funds for personal gain or dismiss employees who criticize them. Autocrats undermine democratic societies by rejecting the rule of law, the separation of powers, fair elections, and the rights of vulnerable groups. They also threaten free markets by linking business success to political compliance rather than marketplace skills. These threats highlight the business community’s vital role in democratic society and its shared responsibility to protect it. Public reactions often vary when companies are perceived as conceding to autocratic demands, such as when Paramount settled a lawsuit with US President Donald Trump regarding editorial decisions in a CBS interview.
Some direct their frustration at the companies, arguing they should resist, while others contend that such moral indignation is misplaced, as these businesses are merely acting rationally to safeguard their interests. This division reflects a long-standing debate over the moral agency of businesses and their societal responsibilities. While business ethicists recognize corporations as bound by various moral duties, many others view them solely as profit-maximizers, unaccountable to moral standards. Legal scholar Joel Bakan, for example, suggested in his 2004 book that if corporations were actual individuals, they would be classified as psychopaths. According to this perspective, society can positively influence corporate behavior through regulation and enforcement.
Businesses can also argue that aligning their actions with stakeholder and societal interests benefits their bottom line. However, whether adhering to any moral standard is in a company’s financial interest is ultimately an empirical question, as doing the ‘right’ thing does not always guarantee maximum profit. The moral imperative for businesses to resist autocratic demands is more straightforward. I recently discussed this concept in my book, “Corporations and Persons: A Theory of the Firm in Democratic Society,” which employs philosophical methods to argue that corporations are fully morally accountable for their actions and possess several moral duties regarding democratic governance.
Liberal democratic states like Canada are fundamentally committed to the freedom and equality of all citizens, and it is the collective responsibility of society to uphold these commitments when threatened. The notion that businesses have a duty to protect liberal democracy is not novel. American economist Milton Friedman, a conservative figure, famously asserted that firms’ primary social obligation is to generate profits for shareholders. In the context of the Cold War, he criticized business leaders for leading society toward oppressive socialism through a misguided sense of ‘social responsibility,’ urging them to resist this slide into ‘unfreedom.’ A similar appeal is relevant as business leaders face the demands of contemporary autocrats.
When they yield, it further entrenches autocratic power, making it more challenging for other institutions, such as law firms and universities, to oppose such authority. Each capitulation represents a step away from a free society. While businesses may be excused for capitulating when resistance seems futile, this justification does not hold for powerful companies whose public opposition could mitigate the rise of authoritarianism. Critics who argue that companies bear no moral responsibility contend that their responses to autocratic demands stem from self-interest. From this standpoint, business leaders must assess the risks of retaliation for resistance against the dangers of empowering autocrats, who may escalate their demands or threats. They must also consider the long-term reputational damage from yielding.
However, as I argue in my book, this amoral perception of firms is flawed. One common assertion is that businesses cannot be expected to act ethically because market competition will discipline those forgoing profits. This reasoning is erroneous and overlooks the fact that we expect competitors in various fields, including sports and warfare, to adhere to moral standards. Although corporations encounter pressures that can hinder their moral obligations, they remain accountable for their actions. Similarly, the moral agency of businesses is not negated by threats from autocrats wielding state power.
Businesses possess tools to manage risks while fulfilling their duty to resist autocratic demands, including solidarity and resorting to courts and other societal elements committed to liberal democratic values for protection. Thus, the defense of liberal democracy against autocracy is not solely the responsibility of the business community. However, as I argue in my book, successfully defending liberal democracy against authoritarianism requires a collective societal effort that critically includes morally responsible leadership from within the business sector.