The world is watching the Jan. 6 hearings in the United States in dismay and contemplating the possible end of the American democratic experiment.
But we should also be thinking about the impact of democratic erosion on corporations and other economic institutions that were built in — and thrived during — the last century.
The evidence unveiled at the hearings and by recent decisions by the U.S. Supreme Court suggests another civil war in the U.S. is a real possibility.
The Republican Party is intent on rolling back women’s rights, voting rights and other pillars of democratic governance in an attempt to grab and hold onto power. Republicans are even willing to overturn free and fair elections.
Political polarization, conspiracy theories, the absence of facts and reason in public discourse and the presence of misinformation spreading through social media networks are all contributing to the demise of democracy in the U.S. Combine these with the rise of authoritarian rhetoric in the Republican Party and there’s a lot to worry about.
It’s easy to view these problems as purely political dangers, but they also pose serious risks to the economic order that thrived because of the stability and freedom provided by democratic systems.
Why should the corporate world be worried?
Consider Wayfair: In 2020, QAnon conspiracy theorists alleged that the online furniture retailer used the cabinets they were selling to engage in child trafficking.
Once this absurd theory began to spread, Wayfair saw a huge increase in negative engagements on Instagram and was forced to refute the wild claims.
When misinformation about a brand begins to circulate, a company is forced to spend time, money and resources disentangling itself from false accusations.
Unfortunately, we live in a moment when social media companies profit from the spread of misinformation. It’s only a matter of time before more companies will face the same problems Wayfair faced.
Being implicated in the kinds of culture wars ignited by far-right extremism can have chilling effects on both corporate culture and profit margins.
Targeting education, science, diversity
But the threats run deeper.
Authoritarian rhetoric has long targeted higher education, science, immigration and diversity as dangerous, as objects of derision and as the cause of social problems. The purpose of authoritarian rhetoric is to foment distrust, to make us wary of what we don’t know or understand, and to use that suspicion and skepticism to hold onto power.
The mRNA vaccines invented to fight COVID are an excellent example of this distrust being crystallized into a political position. The Pfizer and Moderna vaccines are some of the safest and most effective technologies that we’ve ever been able to design and manufacture for preventing serious courses of a disease.
They are a shining example of the virtues of democratic societies and their emphasis on scientific progress.
Yet conservative politicians want us to distrust these inventions, even though they represent the kind of scientific and technological innovation that has been at the core of the economic success of liberal democracies throughout the 20th century.
Innovation drives economic success
Economic growth and development depend on innovation, and innovation is made possible in systems that value knowledge, fair competition and open inquiry.
Simply put, the economic success of the U.S. in the last 100 years was made possible by innovation driven by scientific and technological research.
When we attack systems of higher education and other institutions of free inquiry, like the media, we cut off the engines of innovation that have been so deeply intertwined with liberal democracy. Authoritarians do this to grab and hold onto power. If they succeed, the economic advantages accrued from rejecting authoritarianism are lost.
We also know that diversity facilitates innovation. The creativity at the core of economies in liberal democracies is made possible by the mixing of diverse views, cultures, ideas and perspectives.
Google, Apple and other massively successful technology companies have studied the research on creative teams and learned the importance of heterogeneity for team, and corporate, success.
Immigration has obviously been a fuel accelerating economic development in the U.S. for generations.
What happens when diversity is seen as a weakness or a danger? Not only will that mark a dramatic political transformation in the American system, it will also pose enduring limitations on economic growth.
In this era of polarization, when anger, frustration and resentment permeate our politics, we ought to remember how beneficial the kinds of collaboration and stability provided by liberal democratic societies have been.
Democracy has been a great political achievement, but it has also provided the fertile ground for economic innovation. As a system, democracy has driven the advancement of knowledge, the development of new technologies and has provided the freedom necessary for experimentation, entrepreneurship and invention.
We need champions of democracy, those who can successfully communicate its many benefits, now more than ever. We must be reminded of all that is gained from such systems — and all that might be lost if the next American election descends the country into chaos or civil war.