For much of this year, Republicans have been openly feuding with their most important constituency — big business.
After the January 6 insurrection, the social media giants deleted Trump’s accounts while other major corporations, like Comcast and UPS, suspended campaign donations to Republicans who supported overturning the 2020 election.
After Georgia passed its crackdown on voting rights in April, Coca-Cola and Delta Air Lines condemned the bill, while Major League Baseball moved its All-Star Game out of Atlanta — leading Senate Majority Leader Mitch McConnell to warn that “corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country.” Corporate criticism of Texas’s new voting legislation, likely to be approved in a special legislative session, prompted Lt. Gov. Dan Patrick (R) to openly threaten financial retaliation.
In May and June, Florida Gov. Ron DeSantis blocked cruise line companies’ renewed efforts to require their passengers and crew to get Covid-19 vaccinations. The phrase “woke capital,” an epithet for a corporate world deemed overly left-wing, is everywhere in conservative discourse.
The liberal reaction to all this has largely been dismissive, seeing the GOP battle with corporations as more lovers’ spat than divorce. Liberals point out that Facebook opened the door to a Trump return in two years, while corporations have figured out ways around their no-donation pledges. Meanwhile, they say, most of the GOP anti-corporate rhetoric isn’t backed up by policy substance: DeSantis’s fight with cruise lines is one of only a handful of Republican efforts with real teeth.
Certainly, history doesn’t give much reason to think this will all amount to something real. The GOP and corporate America have been joined at the hip for the entirety of the modern political era, animated by opposition to regulation and taxation.
Yet the tremors are worth taking seriously: They are manifestations of a tectonic shift in American politics toward polarization along educational lines.
Whites with college degrees, a longtime Republican demographic, have shifted into the Democratic camp; noncollege whites have become the GOP’s most important base. These fundamental shifts are realigning the interests of both the corporate world and the GOP — leading the former to lean into social liberalism, while the latter embraces right-wing cultural war as its principal message.
These trends have been building up over time, and they suggest that the GOP anti-corporate turn could one day swell into something consequential, instead of mainly posturing.
An important test case is happening now. The House is currently considering a series of anti-trust bills targeting Big Tech, the corporate sector populist Republicans hate most of all. How Republicans handle this legislative fight will give us a clue as to how serious the GOP’s anti-corporate turn is.
“The longstanding relationship between the business community and the Republican Party is now changing,” says Didi Kuo, a Stanford political scientist who studies business and politics. “I’m really not sure what happens next.”
How education polarization is leading to a clash between business and Republicans
Corporate America is not a monolith. Different sectors of the economy and individual companies have different interests in politics; an oil firm and a renewable energy company will have very different views on which political side to favor. Many firms give heavily to both parties; some even favor Democrats.
But it’s fair to say that the business community is generally on the GOP’s side. A 2014 study of corporate PAC donations found that 35 percent donated primarily to Republicans while a scant two percent preferred Democrats. A 2019 paper, which looked at campaign contributions from 3,800 CEOs of large companies, found that 57 percent heavily favored Republicans (only 19 percent leaned Democratic).
That makes the recent rhetorical turn in the GOP striking. In his recent book The Tyranny of Big Tech, Sen. Josh Hawley labeled companies like Google “the gravest threat to American liberty since the monopolies of the Gilded Age.” In May, Sen. Marco Rubio wrote an op-ed in the left-wing American Prospect blasting the GOP’s traditional pro-business policies. “Politicians in my own party have too often been reluctant to intervene over concerns about the ‘free market.’ But things are changing,” argued Rubio.
This kind of rhetoric is a direct outgrowth of the Trump years. The former president showed that the politics of cultural grievance can be a winning formula for the GOP — that attacks on minorities, the media, and “liberal elites” are powerfully resonant with non-college whites in particular. From vaccines to public safety to “critical race theory,” virtually all of the GOP’s messaging works to highlight the culture war. The party’s free market ideology is, as a consequence, simply less important to its public identity.
“At this point, [Republicans] are driven mostly by cultural grievances that stem from the preoccupations of their most activist followers and ... the conservative entertainment complex,” says Geoffrey Kabaservice, the vice president of political studies at the center-right Niskanen Center. “Those things really have very little to do with business’ calculations about those things that are best for it.”
While Republicans have political incentives to play up their populist, culturally conservative stances — even when they come into tension with free-market ideas — corporations face powerful pressures to take liberal positions on the social issues that most animate the GOP base.
Over the past few decades, the percentage of Americans with a college degree has increased significantly, as has the percentage of good-paying jobs that require one. The biggest sectors in the new “knowledge economy,” like Big Tech and finance, are full of employees with college degrees, while some traditional blue collar sectors like manufacturing have stagnated.
Between 1956 and 2016, Republicans won a majority of whites with college degrees in every single presidential election. But in the Trump years, Republicans’ identity demagoguery pushed college-educated whites — who tend to have more culturally liberal values — into the Democratic camp.
Research suggests that these changes are behind the new corporate willingness to make liberal statements on significant cultural issues, like voter suppression and anti-trans bills. “It’s harder for businesses [now] to stay out of the chaos and say ‘we’re not involved’ in the social issues of the day,” says Zhao Li, a Princeton professor who studies the politics of business.
Liberal consumers care a lot about the politics of the corporations they buy from. One study found that Democrats are more likely to boycott businesses for political reasons than Republicans; another found that liberal consumers are more likely to purchase a company’s product if its CEO had publicly taken liberal political stances.
For major retail corporations with high brand recognition, like Coca-Cola, the political perceptions of liberals really matters. Not only are there more college graduates than ever, but these graduates have an outsized market share because college graduates make more money. When you combine rising education polarization with other changes to key demographics, like the overwhelmingly liberal preferences of younger Americans, corporations have strong incentives to offer at least symbolic support for socially liberal causes.
But pressure on corporations isn’t just coming from the outside — it’s coming from the inside as well. The increasingly educated and urban workforce at major corporations is also pushing them in a more socially liberal direction.
A recent paper by two political scientists, Cory Maks-Solomon and Josiah Mark Drewry, examined the effect of LGBTQ employee groups on every Fortune 500 company, finding “robust evidence that in highly-educated workforces LGBT employee groups persuade management to take public stances in support of LGBT rights.”
Another study of 10,000 employees at a management consulting firm found that the launch of corporate social initiatives made employees less likely to quit: “Consultants in this firm willingly took pay cuts to participate in corporate social initiatives, and their post-participation likelihood of staying at the firm was greater than that of nonparticipants.”
Beyond the culture wars, there’s also the issue of how the Republican Party’s assaults on democracy affects the stability of the American system — something corporate America is deeply invested in. Corporations may instinctively side with the GOP on policy, but if right-wing radicalism leads to market dysfunction and political instability, then that may sway business toward the Democratic Party and its small-d democratic agenda.
“As the country becomes more dysfunctional, that presents a greater existential threat to the business community that I think they’ll also be responsive to,” Kuo says.
The GOP’s “war” on corporate America has been hollow, so far
For all the tension between the Republican Party and big business so far, there has been no break-up — not even close.
There have been policies here and there: DeSantis’s battle with cruise lines, for example, and a vote in Georgia’s House of Representatives to eliminate Delta’s special multi-million dollar tax cut as punishment for its opposition to the state’s new voting law. But the spat has been mostly rhetorical, corporate-bashing to win points with anti-elite Trumpists. The Delta bill, for example, was never even considered by the state Senate.
What would a true breakup look like? It would at least involve an end to the mutual aid agreement that’s sustained their political alliance: businesses cutting off the cash flow to the right and Republicans becoming more willing to raise taxes and regulate corporate behavior.
So far, there’s very little evidence of this happening. “It’s striking how the GOP has doubled down on very unpopular plutocratic priorities, e.g., opposition to reasonable changes in tax code,” says Jacob Hacker, a political scientist at Yale.
When Rubio wrote an op-ed in March supporting the unionization drive an Amazon plant in Alabama, he argued on pure culture war grounds — casting his position as punishment for Amazon removing an anti-trans book from its book store. He also said that he would continue to oppose the PRO Act, the transformative pro-union bill passed by Democrats in the House, because “adversarial relations between labor and management are wrong.”
Rubio’s article is unusually transparent about the hollowness of its argument. But it’s representative of the party’s anti-corporate positioning so far — all hat and no cattle.
“The party appears at this point to be caught between its old identity and this new identity that it thinks it wants to take on, due to the influence of Donald Trump. But there’s very little convincing about this transformation so far,” says Kabaservice, the Niskanen scholar.
Yet the fact that business-Republican tensions haven’t yielded much of a substantive shift doesn’t mean they won’t in the future. One of the most significant tests of the GOP-corporate alliance’s durability, at least in the short term, is the Republican relationship with tech.
Republicans have long been suspicious of Big Tech, accusing them of censoring conservative speech (generally with little evidence). Adding to the suspicion is that these companies — Apple, Facebook, and the like — tend to have highly educated workforces with extremely liberal political views.
Tensions exploded after the January 6 attack on the Capitol, when multiple platforms banned then-President Trump for fear that his inflammatory posts could incite future violence. “If Big Tech can ban a former president, what’s to stop them from silencing the American people next?” Republican National Committee chair Ronna Romney McDaniel said in May after Facebook extended its Trump ban to 2023.
Currently, the GOP’s seriousness in taking Big Tech to task and using government to regulate business is being tested in the House, which is considering a package of bills strengthening anti-trust regulations on big tech companies.
The bills, a Democratic-led effort that began with some Republican buy-in, have gained support from prominent Trumpy House Republicans like Matt Gaetz (FL) and Madison Cawthorn (NC) — though House Minority Leader Kevin McCarthy has come out against them, as has ranking House Judiciary member Jim Jordan (OH) (they have their own counterproposal).
So far, the early signs are that GOP leadership is winning: The bills passed out of the Judiciary Committee with mostly Democratic support.
Anti-tech Republicans may well fail to bring the party to their side. But the fact that we’re even talking about a conflict between Republicans and corporate America speaks to a fundamental shift in American politics. As white voters continue to polarize along educational lines in the post-Trump era, these skirmishes between two long-time allies deserve real attention.