By ADAM TOOZE*
The dilemmas for corporate capital begin when we move from grim scenarios to more normal questions of policy and regulation. For many companies, it is difficult to argue that a Republican administration will be better for profits.
1.
“I am a very innocent man,” said Donald Trump moments after a popular jury unanimously declared him guilty of all charges. This is, in a nutshell, the reality facing the United States. One of his two leading candidates for the White House is a convict whose campaign is based on the claim that the system is rigged. The GOP nominee now joins his former campaign director, senior political adviser, chief White House strategist and national security adviser as a convicted felon.
The speed and unanimity of the jury leave little doubt as to the impermeability of the verdict. …Regardless of what his lawyers advise, Donald Trump’s court of appeal will be the US electorate. A New York jury showed that no one is above the law. Your fellow Americans will be able to override this in November. The majority of the country's highest court (the Supreme Court) is on Donald Trump's side. But the only court that matters now is the voting booth. Until then, it is premature to say that the US system is working.
Ed Luce's column on Financial Times in response to Trump's verdict brilliantly exposes what is at stake in the wake of guilty verdicts. In the upcoming US elections, the basic mechanics of democracy and the rule of law itself will be put to the test. Donald Trump has openly declared that he seeks his revenge at the ballot box. And he has also made it very clear that he will only accept one election result.
Ultimately, it will be individual voters who decide the outcome of the vote. But in modern American democracy, before you get to the voting booth, there is the political economy of the campaign, in which what counts are not votes but dollars. A staggering $16,4 billion was spent on federal elections in 2020, including $6,5 billion for the presidential race.
Source: OpenSecrets
Both sides race against each other to raise donations large and small. These provide a map of political alignment, money and power in American society. At the current moment, they also map the relationship between interests and the principles of the US Constitution.
What happens between the New York verdict and the scheduled inauguration day, on January 20, 2025, will be a comprehensive test for American society, centered on the individual choices of the 244 million citizens eligible to vote. But this goes far beyond them.
I referred to the inauguration day, January 20, 2025, and not election day, November 5, 2024, as the real end point of this fight, because if the election result is contested, how can much If this happens, social forces, beyond the courts and the ballot box, will be back in the game. This is what we witnessed between November 2020 and January 2021, when a large coalition of powerful interest groups mobilized to secure Joe Biden's inauguration against Donald Trump's efforts to overturn the election results.
Law is a mechanism, but it is constructed by social forces and has to be set in motion by them.
In an often ignored but significant act on Election Day, November 3, 2020, the main American labor union, the AFL-CIO, and its traditional adversary, the American Chamber of Commerce, representing business, along with Dr. Barbara Williams-Skinner, leader of the National African American Clergy Network joined together to issue a statement. joint statement demanding that the electoral count be conducted with full respect for the law. Organized capital and labor as they exist in 21st century America, along with community leaders, have declared their common interest in the functioning of due process and the constitution.
Looking back, it is an open question whether this kind of corporatist rally around the US Constitution would have happened if the Democratic president-elect had not been Joe Biden, but Bernie Sanders. The issue was never put to the test. And this was no coincidence. One of the factors behind Joe Biden's fateful choice in 2020 was that he was a “prudent pair of hands” who would not provoke a business leader to run as a third candidate, splitting the Democratic Party vote and opening the door to re-election. by Donald Trump.
Thus, the apparently bipartisan and republican mobilization around the Constitution in 2020 had as one of its implicit conditions a narrowing of the scope of political choice, to exclude the left. In American politics at that moment, left-right antagonism, personalities, different conceptions of social order, social interests, and the mechanisms of the legal machine are all simultaneously at play.
Furthermore, the choices depend on the trajectory. The choices made in 2024 will depend on the entire chain of events since 2016. And, despite all this multidimensional complexity, the most incredible thing is that the polls are very close. America appears to be almost evenly divided between the two sides.
So how, after Donald Trump's guilty verdict, will American money, business, corporate interests – capital in the broadest sense – align themselves in this decisive battle for America's political future?
2.
The first thing to say – to break the bubble of liberal outrage for a moment – is that Donald Trump and his devoted followers have their own theory of constitutional crisis. For them, the fact that Donald Trump – “a very innocent man” – was tried means a blatant and disastrous politicization of the law.
The other version of this Trumpist crisis diagnosis is more cynical. Instead of insisting on Donald Trump's innocence, he argues that America is a swamp full of impasses, agreements, evasions, routine and not-so-routine illegalities, etc. Donald Trump is one of the actors in this quagmire. He openly boasts about avoiding taxes as much as possible.
But Donald Trump is just one player among many. Joe Biden and his entourage, like the Clintons before him, are also all “crooked”. Everyone who “knows” understands these facts of American life. Everyone who is someone “plays the game”. The crisis is that Democrats sanctimoniously choose to torment Donald Trump and use the law as a weapon against him, while ignoring the peccadilloes of their own side.
Whether we agree or not, these narratives have a powerful attraction for Donald Trump's supporters. Their first reaction to the guilty verdicts was to flood Republican fundraising sites with donations, causing at least one of them to crash.
It wasn't just small donors who reacted this way. Several donors worth millions of dollars publicly declared that, following the verdicts, they would bet on Donald Trump again. As Alexandra Ulmer reports at Reuters, “In a wave of support on Thursday, mega-donors including casino billionaire Miriam Adelson and hotelier Robert Bigelow lined up behind Donald Trump, with their donations intended to bolster a wave of pro-Trump ads, beat the doors and make phone calls in swing states. The verdict also prompted some longtime Trump donors to increase their financial support for him — and, in at least one case, to make a large donation for the first time.”
Doesn't the criminal conviction keep them away? you might ask. Perhaps. But most Americans, especially wealthy Americans, view courts, partly from experience and partly from tradition, not as neutral places to find truth or justice, but as arenas of “lawfare”. If Donald Trump has lost a battle, it is time to unite and make doubly sure that he wins the war.
If we look closer at Donald Trump's entourage of mega-donors, we see that they are a mixed group. Much of Trump's support comes from a handful of super-rich individuals who oppose Biden and support Trump for reasons that have nothing immediately to do with their own fortunes or the economy.
An analysis of the ProPublica of a group of donors who began giving significant sums of money to the Republican cause, only after Donald Trump's victory in 2016 did he identify numerous overlapping groups. One group is made up of true believers in the “big lie” theory, such as the partners of the Fancelli supermarket fortune, who paid for the ill-fated rally on January 6, 2021.
Another distinct group of megadonors are followers of online conspiracy theories of various kinds, who place their fortunes, acquired through business or inheritance, behind the many recipes that Donald Trump has adopted at one time or another. Then there are Trump's personal followers, including wealthy lawyers, golf buddies, etc.
In short, it is a heterogeneous group. But that's all it takes. The United States has a lot of rich people, but you only need half a dozen of them, even if they are scruffy, to raise the hundreds of millions of dollars needed to run a presidential campaign.
Then there are the real heavyweights. Casino billionaire Miriam Adelson, wife of the late Sheldon Adelson, who died in 2021, was primarily responsible for large-scale fundraising for Donald Trump. Steve Schwarzman, the multibillionaire founder of the private equity group Blackstone, was an early supporter of Donald Trump. He dropped out in 2017 after Trump's failure to condemn the white supremacist rally in Charlottesville. But now Schwarzman is back. According to FT, “In a statement, Schwarzman cited “the dramatic rise in anti-Semitism” as part of the reason for returning to Trump’s camp, adding that he believed President Joe Biden’s policies were misguided.” “I share the concern of most Americans that our economic, immigration and foreign policies are taking the country in the wrong direction,” Schwarzman said in a statement Friday. “For these reasons, I am planning to vote for change and support Donald Trump for president.”
Steve Schwarzman is a central figure. Despite your private motivations, wherever your money goes, others will follow.
Hedge fund billionaire John Paulson is an equally influential figure. He recently organized an event for Donald Trump in Palm Beach, Florida, which raised $50 million in one go. The event was attended by longtime Republican mega-donors such as hedge fund investor Robert Mercer and his daughter and conservative activist Rebekah, as well as investor Scott Bessent and casino mogul Phil Ruffin.
All the actors on this list already have gigantic wealth. Political donations constitute a small fraction of its expenses. Crumbs, in most cases. They mobilize around Donald Trump due to a general feeling of support for his vision of America and the fears they claim to have about the type of America that could emerge if the Democrats keep the White House. This affects your wealth. And a Donald Trump presidency will be good for their fortunes. But the motivations are above all political, in a broader sense.
3.
If we look for people whose businesses are most directly linked to their support for Trump, it's tempting to look at finance or big oil and gas interests. An interview with FT is typical: “A senior corporate lawyer in New York said Trump was also making inroads with disillusioned Wall Street Democrats.” “The message from the Democratic Party has been terrible,” said the lawyer, who asked not to be identified for fear of criticism from friends and colleagues. “Wall Street Democrats are still pro-capitalism,” he added. “Unfortunately, there are a lot of people on the far left who have hijacked the party… they don’t understand what it takes to win the country.” Trump would be a “no-brainer for our industry…we will be richer if he wins,” said a private equity executive who manages tens of billions of dollars in the media, technology and retail sectors. “But I cannot make my opinions public because I will be immediately canceled… many of our customers would immediately start boycotting the services and products sold by our portfolio companies,” the executive added.
There are no inhibitions of this kind that limit businesspeople who support Donald Trump outside of large liberal cities like New York.
Como Michael Cuenco highlights on UnHerd, an enormous amount of ink has been spilled about working-class Trumpism. And even more about each of Donald Trump's billionaires. But in doing so, in focusing so much on the extremes, the working class and the ultra-rich, we often ignore the vast majority of people who are rich in modern America. We don't see the forest for the trees. We ignore what has become known as the “American aristocracy” (Wyman).
There are 140.000 people who earn more than $1,58 million a year – rich by any definition. They are not, as a whole, financial technology wizards.
Como Alexander Sammon said in an excellent report for Slate: “Car salespeople are one of the five most common professions among 0,1% of Americans who earn more money. Car salesmen, gas station owners and construction contractors make up the majority of the 140.000 Americans who earn more than $1,58 million a year. Analyzing numbers from the US Census Bureau, data scientist and author Seth Stephens-Davidowitz found that more than 20% of car dealerships in the US have an owner who earns more than 1,5 million dollars a year. And car dealership owners aren't just one of the wealthiest demographic groups in the United States. They are also one of the most organized political factions – a conservative empire that gives millions of dollars to politicians at the local, state and national levels.”
What did Patrick Wyman, writing in The Atlantic in 2021, dubbed “the American aristocracy” is a core constituency for Trump: “The reality of American wealth and power is… banal. The conspicuously consuming celebrities and jet-setting cosmopolitans of the popular imagination exist, but they far outnumber the less exalted and less discussed elite group that sits atop the local hierarchies that govern the daily lives of dozens of people. of millions of people. Donald Trump understood the existence of this group and its importance, acting, as he often does, on thoughtless but effective instinct. When he spoke of his “beautiful sailors,” praising the flotillas of supporters flying MAGA flags [Make America Great Again] on his vessels in his honor, or when he addressed his devoted followers in the midst of a rowdy crowd on January 6 that included people who had flown to the event on private jets, he knew what he was doing. Trump was courting the support of the American aristocracy, the millionaires who see themselves as local leaders in business and politics, the unappreciated backbone of a once-great nation.” “The wealth of these elites does not derive from their salary – this is what separates them from even the extremely prosperous members of the professional-managerial class, such as doctors and lawyers – but from the ownership of assets. These assets vary depending on where in the country we are talking about; it could be a cluster of McDonald's franchises in Jackson, Mississippi; a meat processing plant in Lubbock, Texas; a construction company in Billings, Montana; commercial properties in Portland, Maine; or a car dealership in western North Carolina. Even the least prosperous regions of the United States generate enough surpluses to produce a rich class of people. Depending on the political culture and institutions of a locality or region, this elite class may exercise more or less political power. In some places, it has effective control over what is done; in others, it is important but not all-powerful.”
“A huge number of organizations and institutions are dedicated to defending the interests of this aristocratic class: chambers of commerce, exclusive clubs and housing developments, the American Society of Concrete Contractors and fruit growers associations, just to name a small sample. Through these organizations and their intimate ties to local and state politics, the aristocratic class can, and often does, exercise significant power to shape society to their liking. It is easy to focus on the massive political expenditures of a Sheldon Adelson or a Michael Bloomberg; It is more difficult, but no less important, to imagine what kind of agreements about water rights or local land use laws are being made across the United States on the golf course at the local club.”
As Sammon demonstrated in his analysis of the LOBBY of car dealership owners in the United States, their prosperity and power fundamentally depend on collective action to defend their assets on a national level. Car dealerships in the United States are a business defined by exclusive relationships with car manufacturers that, until Tesla's arrival, managed to exclude direct producer-to-consumer sales. This “industry” has no choice as to whether or not to get involved in politics and LOBBY, its huge profit margins depend on defending its monopoly power. Your wealth, livelihood, status, identity and position in society depend on political action.
The crucial question is which politicians most clearly understand these interests. And it's obvious that Donald Trump and the Republican Party understand. This is not a question of sophisticated economic ideology. They are not defending naive notions like “the free market”. They are defending an interest and support the Republican side with all their weight, not because of a political whim, as in the case of Schwarzman or Paulson, but because their lives depend on it.
4.
As Wyman rightly describes, elections go like this: “Power resides in gated communities and local philanthropic boards, in the ownership of a staggering number of fast-food franchises, and in the subtle transfer of the assets of a large construction company to a new generation of small yacht owners. Power can be found in group photographs of half-drunk, overweight men in ill-fitting polo shirts, and in the millionaires ready and willing to fly their private jets to Washington, D.C., in support of a certain would-be authoritarian. The developer of programs for luxury condominiums, the millionaire owner of a meat packing plant, the property management entrepreneur: these are the people who, remembering or inventing their tradition of domination over cities large and small, rushed to the Make America Great Again. As much as the United States likes to think of itself as an egalitarian paradise open to talent of all kinds, hierarchy and local power are also part of the American way.”
In Donald Trump's vigorous defense of January 2021, what reasons are there to believe that this social formation will step aside because of a “partisan trial” in a “rigged” New York court, over a small matter of bribery?
Compared to the biker mob or the handful of billionaires pursuing their personal goals, Trump's 2024 candidacy puts corporate America in a much more difficult position.
As Jeffrey Sonnenfeld, from Yale, comments in the magazine Team: “Guesses that CEOs are excited about Donald Trump’s return are not based on any first-hand stated support from CEOs. I have worked closely with the country's top 40 CEOs for over 1000 years. Support for Trump dropped to practically zero among the top CEOs and, for the most part, they want nothing to do with him now. At the same time, there is no incentive to condemn him in the absence of any current abuse of power, but they have not hesitated to do so before and, I am sure, will not hesitate to speak out again if he does not behave. …I have known Trump personally for 20 years…he is not friends with many top business leaders and few saw him as a true colleague – since he had never run a large global public company.”
As Sonnenfeld highlights, money talks. Most business leaders in the US are Republicans by basic political preference. But as American politics has polarized and the Republican Party has become dominated by populism (starting with Sarah Palin), business leaders no longer choose to express their personal politics through donations. While 42% of leaders in Fortune 100 contributed to the re-election of George W. Bush in 2004, Donald Trump received virtually no personal support from American business leaders.
Source: Team
As a well-known management professor at Yale University, Sonnenfeld was personally involved in bringing together large groups of American CEOs following the contested November 2020 election and in the wake of the January 6, 2021 riot, in which business leaders condemned the attempt to overturn basic legal processes.
Como Molly Ball describes in Team, there was, in the fall of 2020, something similar to what she, unfortunately, describes as a “conspiracy” that “reduced the protests and coordinated the resistance of the executive directors. Both surprises were the result of an informal alliance between left-wing activists and business titans. The pact was formalized in a concise joint statement from the United States Chamber of Commerce and the AFL-CIO, published on election day. Both sides would see it as a kind of implicit agreement – inspired by the summer's massive and sometimes destructive protests against racial justice – in which the forces of labor joined the forces of capital to keep the peace and oppose the onslaught. from Trump to democracy.”
There is a reshaping of the culture of US corporate capital. It may be true that most American business leaders are Republicans, but the hue of their Republicanism is markedly different from the bright red of MAGA.
Como noted Sonnenfeld, the effort to stop Trump’s coup in 2020-2021, “highlighted a generational shift occurring in the collective civic attitudes of the CEO class. Its effects are evident in Washington, where the long-standing alliance between big business and the Republican Party is crumbling. Congressional Republicans divorced themselves from the Chamber of Commerce; Republican Party fundraising from businesses has declined; Fox News anchors and firebrand conservatives speak of “awakened capital” [“woke capital”] and call for punitive, anti-free market policies in retaliation. Many of the companies and business groups that relentlessly resisted Barack Obama have turned out to be surprisingly friendly to Biden, backing some of his big-spending domestic agenda and backing his Covid-19 demands on private companies. Political observers from both parties tend to attribute these developments to the pressures companies face, externally, from consumers, and internally, from their workers. But Sonnenfeld, who is in a position to know, argues that this comes equally from the changing minds of the CEOs themselves.”
Tellingly, despite 75% of CEOs identifying as Republicans, in 2016, 75-80% supported Hillary Clinton.
But beyond personal preferences, this may be a more fundamental question of organizational sociology and culture. It is not possible to manage a large organization with extreme political polarization or without respect for basic legal and administrative procedures. The CEO of Expensify put the issue in memorable terms when he appealed in the fall of 2020 to the 10 million users of his accounting software to vote for Joe Biden because “you don’t get many expense reports filed during a civil war.” Have Max Weber's views on calculus and the stable rule ever been presented more succinctly?
The dilemmas for corporate capital begin when we move from grim scenarios of civil war or insurrectionary overthrow to more normal questions of politics and regulation. For many companies, it's hard to argue that a Republican administration, whether headed by a convicted felon or not, will be better for profits, at least in the short term. And profits are what they are dedicated to obtaining.
At a meeting of oil men held at Mar-a-Lago a few weeks ago, Trump casually suggested that a donation of one billion dollars would be a cheap price to pay to elect him, given the benefits he intends to give to the oil and gas industry. It bordered on illegality. It is not allowed to sell politics so openly. A Senate committee is investigating. But the businessmen in the room will have gotten the message.
American interests in the oil and gas sector have performed brilliantly during Joie Biden's administration, but Donald Trump is offering them even more benefits with fewer restrictions. It would be surprising if, regardless of his criminal record and his disregard for the Constitution, Trump did not dominate fundraising, influence peddling and voting in much of the oil industry.
In Wall Street finance, the direction is very different. It has become more diverse and significantly more aligned with the Democratic Party. This began at least in the 1990s, with Rubin's central role in the Clinton administration. Jamie Dimon, his generation's top banker, bowed out in 2020. His seemingly positive comments about Donald Trump in early 2024 were taken out of context and misinterpreted. Far more revealing is his famous quip that running a bank in the modern era requires the assistance of a psychiatrist and a lawyer. A Donald Trump presidency only makes this double dilemma worse.
5.
But also in relation to finance, it is clear that banking regulation under the aegis of the Democrats has been more onerous than it would be under the aegis of Donald Trump. It is telling that the further we move away from New York – just go to New Jersey or Long Island – and the further we move away from the part of finance represented by the big banks, the more support for Trump increases. It is no coincidence that some of Donald Trump's most important financial support comes from hedge funds and private equity groups, which are much less constrained by the polite conventions of corporate America than the big banks.
The same logic of differentiation within the business community also applies to the world of technology. The names of technology giants – Microsoft, Apple, etc. – remain politely distant from the dispute until they have to deal effectively with a Donald Trump administration. At that moment, of course, they begin to act. The overwhelming majority of tech people lean Democratic and donate accordingly. But a handful of Prominent names from Silicon Valley, not necessarily the biggest, but big enough to make a substantial difference in fundraising for the campaign, has been ostensibly speaking out in favor of Trump, as if to burnish his credentials as “outsiders” and dissidents.
Additionally, they are encountering less resistance as they speak out openly: “Jacob Helberg, a senior executive at Palantir who gave hundreds of thousands of dollars to Biden's 2020 campaign, recently announced a $1 million donation to Trump's campaign . He said the former president's border policies and pro-Israel, anti-China stance were behind his shift away from the Democratic Party. “When people like Palmer [Luckey], myself or David Sacks openly support Trump, we're not facing the same kind of backlash and repercussions that we would have eight years ago,” Helberg said.
Of course, from the Biden administration's perspective, this is all very frustrating. They do not see themselves as in any way hostile to U.S. business. On the contrary. The administration has defended all types of American companies in every way possible.
What Joe Biden's economic policy aims to do is provide decent conditions for workers and consumers, fair competition and visionary investments in America's future. All of this, in the long term, would be good for the American economy, society and companies. In their opinion, their only conflict with American companies is the question of whether to take a long or short term, broad or narrow, self-interested view. And at least some sectors of the American organized business world understand this perfectly.
But that doesn't guarantee their staunch support for Joe Biden, even when the Constitution is clearly at stake. It simply means they are already preparing to defend the parts of Biden legislation they like from an attack by Donald Trump.
Surprisingly, as reported Politico, the Chamber of Commerce and the American Petroleum Institute announced that they will seek to defend specific parts of Biden's signature climate policy, the Reducing Inflation Act: “Two of Washington's most powerful Republican-leaning industry groups are preparing to defend the President Joe Biden's climate bill if the Republican Party retakes the White House next year — setting up a potential collision between big business and a future Trump administration. The U.S. Chamber of Commerce and the American Petroleum Institute largely opposed the Inflation Reduction Act two years ago when Congress passed it entirely with Democratic votes. Both groups have opposed key aspects of Biden's climate strategy, especially his efforts to change rules on federal environmental reviews and pause natural gas export approvals. But the law also contains hundreds of billions of dollars in tax breaks and expenses that could benefit key members of both powerful trade groups — including money for advanced manufacturing of clean energy technologies. Oil companies, in particular, expressed interest in potential business opportunities offered by the climate law, such as projects that would produce hydrogen fuel e would capture and store carbon dioxide".
“Businesses will defend the Reducing Inflation Act,” said Christopher Guith, senior vice president of the Chamber's Global Energy Institute, adding that the Reducing Inflation Act is critical to “energy security, competitiveness and business for the energy transition”. American Petroleum Institute President Mike Sommers told E&E News Politico, at an energy conference in Houston in March, which the LOBBY Oil and gas industry was ready to fight to keep parts of the law intact – specifically pointing to hydrogen and carbon capture tax credits. “We will work vigorously to ensure that the provisions we support in the Reducing Inflation Act are maintained during a potential Trump administration,” he said, adding: “This has always been a bipartisan organization. The industry is bipartisan.”
It's impressive how this defensive action combines great platitudes like “a energy transition” – borrowed from the Biden team – with the defense of specific tax credits. There are even charts that quantify the exact parts of the Inflation Reduction Act that bring benefits to particular combinations of industrial interests.
These data outline the terrain on which legislative battles could be fought. But in the current moment, they also map the terrain on which interest groups must maneuver as they line up for the upcoming election campaign.
In the event that Donald Trump enters, what is at stake are not constitutional niceties, but the process of legislative and administrative dismantling that will cannibalize Joe Biden's legacy. You want to be part of this process. You want to be in the room. If there is a chance that Donald Trump will win, and the odds look good right now, then, as unpleasant as Donald Trump may be, we have to get involved.
Big companies can live by rules – the right kind of rules. They may even be linked to them. But most of all, business interests like a winner. There is nothing they hate more than being on the side of the losers. They may consider it in their interest to defend a fair process. But don't count on them if things get difficult.
*Adam Tooze is professor of history at Columbia University (USA). Author, among other books, of The price of destruction (Record).
Translation: Fernando de Lima Neves.
Originally published on newsletter from the author.
the earth is round there is thanks to our readers and supporters.
Help us keep this idea going.
CONTRIBUTE
