Just What Does It Mean To Be Anti-Business?

A lot of corporate executive types have been harrumphing that President Obama and his Administration are 'anti-business,' and this despite the fact that corporate taxes are at an all-time low, regulation is relatively moribund, profits are up and pro-business political parties are ascendant. So when is enough enough? Probably never; that is like asking when profit margins are enough. But Justin Fox has an informed, historical perspective on the anti-business rap and its implications for both policy formulation and marketing in Harvard Business Review:


"George Buckley, the CEO of 3M, made a few headlines earlier this week when he told the Financial Times that Barack Obama is "anti-business" and "Robin-Hood-esque." I've been thinking about Buckley's words — in large part because I'm supposed to go on Minnesota Public Radio today to talk about them (Minnesotans aren't used to hearing CEOs of St. Paul-based 3M say things like that, so it's really big news there).

There's nothing particularly new about what Buckley said: there was lots of similar talk during the first two years of the Obama administration. It's just that recently there have been lots of signs of rapprochement between Obama and the business community — that lunch at the Chamber of Commerce, the President tapping GE's Jeff Immelt to head his Economic Advisory Council, Bill Daley going back to Washington, etc.

Let's step back from that insider baseball for a bit of history. In the 1930s, when the New Deal ushered in the modern age of bigger, more activist government in the U.S., the business community was on the whole virulently opposed. It was only during World War II, when government got even bigger and more activist but the urgency of the situation silenced critics, that business began to embrace Washington. After the war, most business leaders signed on with (thanks in part to some concerted propaganda efforts on the part of Henry Luce, owner of Time and Fortune, which you can read about in this excellent book) Keynesian economics and a continuing role for government in economic life.

Over the decades, the regulatory state grew and grew. Yet it was hard to label this rise of government as "anti-business," since corporate profits grew and grew, too. The 1960s were the best decade ever for American business. It was only in the 1970s that economic troubles, a new layer of regulations enacted during the Nixon years, and the economic arguments of Milton Friedman and others began to turn the tide. Business turned on government, and worked to bring about big changes in Washington (which you can read about in this excellent book). That ushered in three decades of policies that one assumes 3M's Buckley would label "pro-business" — tax cuts, a far less punitive regulatory approach, and reductions in trade barriers. This seemed to work out okay for business as well — corporate profits in the U.S. reached a dizzying new peak ($1.6 trillion, according to the Commerce Department) in 2006.

Then there was the financial crisis, and the Great Recession. Americans elected a president who clearly had some intention of turning the tide on government's role in the economy and relationship with business. And yes, his instincts are certainly more "Robin-Hood-esque" than those of his immediate predecessors. But is that really a bad thing? Robin Hood was a hero, remember (especially when played by Cary Elwes), and after three decades of rapidly rising economic inequality, it seems like a little movement in the Robin Hood direction might be called for. It might even be in the interest of business.

It would be comforting for those who believe in historical cycles (and I do, at least a little bit) to end the story right there: we're at the beginning of a swing in the pendulum, as government reasserts some of its New Deal priorities and business squeals at first but eventually realizes that it's actually better off with a healthy and reasonably affluent workforce and customer base. But last fall's elections made it a lot less certain that we are really are at the beginning of a big swing in the pendulum. And more importantly, these aren't the 1940s or 1950s or 1960s, when U.S. economic policymakers could make decisions with little regard for foreign competitors (or, for that matter, foreign buyers of U.S. Treasuries).

The U.S. is now simply another player — still the biggest, but far from dominant — in the global economy. Which is actually what 3M's Buckley seems to have been trying to say. "Politicians forget that business has choice," he told the FT. "We're not indentured servants and we will do business where it's good and friendly."

Buckley's basic point is right — although he may have a myopic view of what counts as "good and friendly" policies. The economy has gone global. The biggest challenge of U.S. economic policymakers over the next couple of decades is going to be insuring that this country is an attractive place to locate enterprises and create jobs. That's something that shouldn't be even remotely controversial. The details of how to achieve it are controversial, and in many cases just plain difficult. But the "pro-business"/"anti-business" dichotomy doesn't even begin to get at it.