Big Business and Conservatives Are Headed for Divorce

(Bloomberg Opinion) -- Big business can no longer take the support of conservative parties for granted.

The 1990s saw a great uncoupling between left-wing parties and big labor, with President Bill Clinton embracing free trade and Wall Street and Prime Minister Tony Blair ditching Clause 4 (which committed the Labour Party to nationalization) and tea and sandwiches in Number Ten with trade union bosses. Are we now witnessing an equally momentous change on the other side of the divide: an uncoupling between conservative parties and big business?

In America, the House Minority Leader Kevin McCarthy has dismissed the Chamber of Commerce as irrelevant — “I didn’t even know the chamber was around anymore” — while Senate Minority Leader Mitch McConnell has criticized big business for trying to act like a “woke parallel government.” Senator Marco Rubio of Florida has lamented the way that “business profits have become increasingly estranged from production and employment”; Jeff Sessions, a former senator for Alabama, has argued that the belief that business leaders “understand the economy best” and have “America’s national interest at heart” is “flawed and dangerous”; and J.D. Vance, a would-be senator for Ohio, has tweeted that the legacy of Reaganite-Thatcherite conservatism is “the rise of China, the decimation of the American family, and a lot of tax cuts for the rich.”

The rising generation of conservative intellectuals, such as Oren Cass, Sohrab Ahmari, Nate Hochman, Christopher Rufo, Ben Shapiro, Gladden Pappin and Ross Douthat, are all, to varying degrees, skeptical about business and critical of “zombie Reaganites.” The fashionable causes on the right are national greatness, Catholic social thought and post-liberalism rather than Schumpeterian creative destruction. The Adam Smith ties of the 1980s are now museum pieces along with copies of Hayek’s “Road to Serfdom” and Friedman’s “Free to Choose.”

Business-skeptical conservatives are solidifying their position in the conservative establishment with a network of think tanks, magazines and training programs. The think tank American Compass, run by Oren Cass, is hammering out a post-corporate conservatism. Publications such as “American Affairs” and “The American Conservative” frequently sound as if they ought to be renamed the American Marxist or the American Spartacist. Ahmari, an Iranian-born conservative who used to work at the pro-market Wall Street Journal, has founded a new magazine, “Compact,” together with a fellow religious conservative and a Marxist proponent of “labor populism.” American Moment, a training institute that wants to “identify, educate, and credential” rising conservative stars, focuses on “strong families, a sovereign nation, and prosperity for all.”

Grass-roots conservatism has also taken a notably anti-corporate turn since the financial crisis and the bailout of the banks and car companies. In response to the Citizens United decision in 2010, Dale Robertson, the founder of TeaParty.org, pronounced that “corporations are not like people. Corporations exist forever, people don’t. Our founding fathers never wanted them; these behemoth organizations that never die…It puts the people at a tremendous disadvantage.” Conservatives have also taken a page out of the liberal playbook, boycotting and badmouthing corporations that they don’t like.

This new business-critical conservatism naturally starts with opposition to corporate “wokery”: Rubio is even introducing a bill into the Senate to force companies to “mind your own business” and stop indulging in woke posturing. But this new conservatism goes deeper than that — and overturns most of the tenets of the business-friendly conservatism of the 1980s. The new conservatism focuses on the producer rather than the consumer. Is it really worth getting that Amazon parcel to you within 24 hours if it means that workers have to operate like robots? It puts a premium on pro-family policies such as family leave and near-universal tax credits for children, unencumbered by work requirements, all ideas that the Republican establishment has long anathematized. American Compass goes so far as to call for enhanced collective bargaining rights for workers, lamenting the “labor movement’s slow descent into obsolescence.”

The new conservatives are fiercely hostile to globalization and immigration on the grounds that they have delivered lower incomes for workers along with the destruction of America’s common culture. They are equally hostile to the technology and media industries on the grounds that they are degrading our common culture, indeed perhaps even our common humanity, while making a decadent oligarchy obscenely rich. The central idea of the new doctrine is that the common good must be forged by active government policy rather than allowed to emerge from the play of market forces.

British conservatives have echoed many of these themes. The most interesting thinkers on the right such as Nick Timothy and David Goodhart are preoccupied with communitarian questions — how we make a home in the world — rather than with the ideal functioning of the market. “We do not believe in untrammeled free markets,” Timothy famously wrote in the 2017 Conservative manifesto. “We reject the cult of selfish individualism.” Dominic Cummings, one of the leading architects of Brexit and for a while Boris Johnson’s chief of staff, savaged British business’s leading lobbying group, the CBI, as a moribund irrelevance. In the 1980s Tory philosophy was summed up in Norman Tebbit’s phrase that the unemployed should get on their bikes to find jobs. Now the minister for levelling up, Michael Gove, says “you shouldn’t have to leave somewhere you love in order to have a truly fulfilling career.”

It is easy to dismiss all this as so much verbiage. For all his corporation-bashing during the 2016 election campaign, Donald Trump ended up cutting taxes on the wealthy and lightening regulations on business, not least by starving the federal government of employees. And for all its populist rhetoric about redistributing opportunity, Britain’s Conservative Party is determined to deliver tax cuts in the run-up to the next election campaign. Rather than bashing corporate wokery with anti-business legislation, conservatives might be better off treating it as a business opportunity: “The Daily Wire,” which was co-founded by Ben Shapiro, plans to spend $100 million over the next three years on children’s entertainment.

But I think it would be a mistake to bet that the old pro-corporate conservatism will survive intact: Just as the upsurge in pro-market thinking on the right in the 1970s presaged the Reagan-Thatcher revolution, so the upsurge in national conservatism could presage a very different relationship between the right and business.

Start with hard realities. Corporations have abandoned their national moorings in favor of the global market (or what’s left of the global market after Putin’s invasion of Ukraine) and are increasingly abandoning middle-of-the-road culture in favor of progressive social values (even Walmart Inc. is moving in this direction despite the roots of most of its customers in suburban and rural America). At the same time, the long-term decline of initial public offerings and the expansion of private financial markets have made it harder for regular people to invest in a future Google.

The past 30 years may have been good for the third or so of people who graduated from universities and work for global corporations. They have been much less good for the two-thirds who have seen their incomes stagnate and their jobs become more unforgiving. Both the Republicans and the Conservatives are reorienting themselves to voters who feel left behind by global capitalism, particularly toward older and less educated voters, because that is where they think future majorities lie.

Then look at history. Right-wing parties have a long history of skepticism about both business and markets, particularly if they clash with more fundamental conservative values such as national identity and social cohesion. Teddy Roosevelt devoted his career to disciplining corporate monsters and their masters, the “malefactors of great wealth.” Pat Buchanan’s 1996 campaign for the presidential nomination was powered by the idea that transnational corporations and crony capitalism were defiling America’s exceptional culture and identity.

On the other side of the Atlantic, Benjamin Disraeli chastised unfettered capitalism for tearing Britain apart into “two nations between whom there is no intercourse and no sympathy.” Harold Macmillan believed in a “middle way” between socialism and laissez-faire capitalism, which, as the son-in-law of a duke, he always found rather vulgar. Edward Heath, another conservative prime minister, denounced “the unacceptable face of capitalism.” On Brexit, the most significant economic issue of the post-Thatcher era, the Conservative Party chose to defy the global business establishment in favor of a leap in the dark, with Prime Minister Johnson memorably declaring “f*** business.”

So far this business-skeptical conservatism is an intellectual muddle. The new conservatives are right that 1980s conservatism has become zombified — always advocating the same solutions (tax cuts and deregulation) regardless of the problems. Nobody these days looks to the Club for Growth for intellectual enlightenment. The new conservatives are also right that conservatism at its best is about the pursuit of a civilized life rather than economic growth for its own sake. Conservatism arose as a critique of the excesses of the French Revolution and its zeal for liberty, equality and fraternity. Today its future lies as a critique of postmodern liberalism and its zeal for a strange combination of unfettered individualism and group rights.

But the new conservatives, particularly their Catholic wing, seem to lack a conservative sense of balance. Their dream of imposing a “common good” on a society that disagrees about fundamental things is a formula for intensified culture wars. They also ignore the strikes, discord and malaise that many of the policies they favor, particularly those giving more power to producer interests, led to in the 1970s. Disraeli owes his place in the conservative pantheon not to his youthful antagonism to the market but to his mature success in combining the best of economic liberalism with the best of conservatism.

Still, for all its intellectual flaws, the new business-skeptical conservatism confronts the corporate world with serious practical problems. It removes a hitherto reliable safety net. Corporate types can no longer rely on Republicans or Conservatives coming to rescue them when the going gets tough, as it surely will as the cost-of-living crisis deepens. It opens the possibility of some interesting cross-party collaboration. Right-leaning Republicans and left-leaning Democrats increasingly see eye-to-eye on issues such as tariffs on trade, tax credits for families, intervention to support communities that have been decimated by globalization and the breaking up of big tech companies. And it raises the serious possibility of something much bigger: the creation of a fully-fledged new conservatism that uses a plethora of interventions in the market such as tariffs and wage subsidies to shift the balance of power from business to labor.

The Reagan-Thatcher era of pro-business conservatism looks increasingly like an aberration rather than a natural state of affairs.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Adrian Wooldridge is the global business columnist for Bloomberg Opinion. He was previously a writer at the Economist. His latest book is "The Aristocracy of Talent: How Meritocracy Made the Modern World."

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