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Autocracy is bad for business

Autocracy is bad for business
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Republicans are carrying out an authoritarian style assault on our democracy, not just by making voting difficult, but more chillingly, by seizing the power needed to falsify election results. 

They are taking power away from bipartisan commissions and elected secretaries of state and placing it in the hands of supporters willing to reject voters’ choices. Arizona is moving to strip its secretary of state of the power to defend elections against partisan lawsuits and Georgia has already removed its secretary of state from the state election board and authorized legislative takeovers of bipartisan local election boards. Furthermore, bills pending in 24 states seek to limit judicial independence, having learned from former President Donald TrumpDonald TrumpTrump DOJ demanded metadata on 73 phone numbers and 36 email addresses, Apple says Putin says he's optimistic about working with Biden ahead of planned meeting Biden meets Queen Elizabeth for first time as president MORE’s numerous losses in court that an honest judiciary can impede efforts to steal elections.

Autocracy is bad for business, and companies financing politicians supporting this attack on democracy while verbally opposing restrictive voting laws should rethink their strategy. They should no longer treat their response to efforts to undermine democracy as a mere exercise in public relations — signaling their belief in diversity to customers and employees while continuing to finance Republicans in hopes of obtaining lower corporate taxes and weaker regulation. Trying to play both sides in this way underestimates the threat the GOP’s approach poses to democracy and to corporate interests. Recent international experience shows that seizing control of electoral machinery can facilitate an autocrat’s rise to power, leading to the ruin of democracy. And crumbling democracies are not places where companies can flourish.

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In country after country, elected autocrats and the parties supporting them have tilted the electoral playing field to entrench themselves and their supporters in power. The autocratic party and its leader then use government authority seized in manipulated elections to punish business leaders who cross them and reward supporters. One of the leading books on the death of democracy in Hungary under Viktor Orbán bears a title that captures the problem for business very well — “The Post-Communist Mafia State.” The Georgia legislature’s move to withdraw tax breaks from Delta Airlines employs a widely understood tactic of “new autocrats” like Orbán — who rely more on punitive state economic pressures rather than on state violence to squelch dissent and break down democracy.

The new state election bills mirror a repressive strategy used in Eastern Europe and elsewhere to destroy democracy. When Trump falsely claimed the 2020 election was stolen, he followed the example Orbán set when he used fraud accusations to recast his loss in the 2002 election. By using a “big lie” to delegitimize the government, Orbán laid the groundwork for a return to power in 2010. Once back in power, Orbán had his Fidesz Party create new electoral rules entrenching him in office. Parties such as Fidesz not only rewrite the rules governing elections. They also capture election administration, thereby undermining the reliance on multiparty or independent electoral commissions that constitute hallmarks of functioning democracies. Seen from this broader international perspective, the state efforts to delegitimize and sideline honest election officials is a five-alarm fire.

Trump has already signaled a desire to return, and even if he goes to jail another Republican leader dedicated to democracy’s demise will likely step forward if the autocratic Republican Party is not sidelined or forced to support democracy. The resemblance between the Republican Party and the parties destroying democracy in Eastern Europe such as Fidesz is well-recognized abroad, and globetrotting CEOs need to recognize the pattern as well. 

The Republicans’ autocratic approach to regaining and keeping power need not succeed fully, however, to greatly harm business. A partisan takeover of electoral machinery will likely lead to yet another election in which a significant portion of the country believes that the election is stolen. If state electoral bodies controlled by Republican hard-liners falsify election results, the next election may lead to street battles, violence and chaos that will make the Jan. 6 attack on the Capitol look like child’s play. Just look at Belarus, where a party-controlled electoral commission falsified election results and triggered months of street protests.  

Corporate leaders must use every weapon at their disposal to help safeguard the democracy that makes it possible for all businesses to compete and prosper under agreed upon rules. Otherwise, they may find that their businesses’ survival depends on the mercy of a mercurial autocratic leader demanding fealty as the price of staying in business. At this juncture, companies financing Republican politicians put their businesses at risk. 

David Driesen is a professor at Syracuse University. Eric W. Orts is a professor at the Wharton School of the University of Pennsylvania.