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Analysis: Not business as usual

Events related to Jack Ma and Joe Biden demonstrate that free and fair markets cannot survive without democracy and the rule of law
By Paul Mackintosh   
January 13, 2021

Let’s look at two prominent figures who are half a world apart and see what their situations portend for 2021. One is Jack Ma, the billionaire founder of Chinese e-commerce giant Alibaba Group, and the other is US President-elect Joe Biden. One has just been effectively deposed and silenced by an unaccountable autocracy. The other has just avoided deposition by a would-be unaccountable autocrat, and now has the business of fighting back against autocracy. It ought to be crystal clear that both cases concern businesspeople and financial professionals from the very foundations of their working lives and beyond; there is no “business as usual” in these circumstances.

A new article in the Harvard Business Review headlined “Business Can’t Take Democracy for Granted” by Rebecca Henderson, a professor at Harvard University and the Harvard Business School, makes the case succinctly: “American business needs American democracy. Free markets cannot survive without the support of the kind of capable, accountable government that can set the rules of the game that keep markets genuinely free and fair.”

If anyone doubts that, look at Jack Ma – if you can find him. What business or financial figure in China can be sure that they won’t suddenly be reined in, relieved of their position or their personal wealth, or suddenly “disappeared” at the behest of the political or private priorities of Chinese Communist Party members. If it can happen to Jack Ma, who can’t it happen to?

To everyone in the world of business and finance: you not only have an obligation, you also have a totally selfish survival imperative to support democracy and the rule of law. And more. In the tripod of liberty, equality and fraternity, you have an obligation to ensure that the economic and social benefits of free enterprise are shared. With one leg of the tripod gone, it will fall. “For far too many people, ‘the system’ is not working for them. Even before the pandemic hit and intensified suffering, accelerating inequality and declining social mobility was stoking a deep anger that has too often translated into populist rage,” Henderson writes in the Harvard Business Review.

The business and financial communities, especially in the US, have been complicit in those trends for far too long. They cannot continue to lobby and otherwise push for policies that bolster their narrow interests, confident that the system and society at large are robust enough to let them get away with it. As a recent report in the Financial Times states, “US business leaders rue their ‘Faustian bargain’ with Trump”.

Henderson quotes another FT article to the effect that 88%-100% of a straw poll of 33 top US executives declared President Donald Trump and his supporters seditious, and favoured cutting local investment or political donations. Meanwhile, reports in CNN and elsewhere indicate that Mr. Trump may spend some of his last few days in office in vindictive attacks on Facebook, Twitter, and the other social media giants who enabled him until just days ago.

In such circumstances, there is no business as usual. Stand up for democracy, or look forward to enforced retirement – Jack Ma style.