Are America’s business leaders ready to stand up to Trump?
As ABC and Disney defy the Trump regime by bringing Jimmy Kimmel back, it may finally be dawning on corporate America that deference to Trump is bad for business.
Why can’t business leaders band together to resist Trump’s bullying and autocratic tendencies? The profit motive certainly plays a prominent role: from Mussolini’s Italy and Nazi Germany to Vladimir Putin’s Russia and modern China, there is a long history of major corporations conceding to authoritarian governments for commercial reasons. At the same time, though, business leaders are presumably well aware that Trump is undermining the laws and norms on which commerce is based. Another factor that may be playing into the current state of affairs is the inherent difficulty of sustaining collective action in an environment in which businesses have competing interests as well as common ones, and particularly when Trump is trying to pick off companies one by one. Sonnenfeld recalled that, in March, when the President signed an executive order targeting the law firm Paul, Weiss, which had ties to the Democratic Party, Paul, Weiss’s chairman, Brad Karp, hoped its competitors would rally around it, but instead some of them tried to poach its personnel and clients. Paul, Weiss subsequently reached a controversial deal with the Administration, in which it pledged to provide free legal work to causes associated with Trump.
Economists often refer to such situations as a prisoner’s dilemma, in which individuals, businesses, or countries could theoretically benefit from coöperating with one another but also have, or are presented with, incentives to act selfishly and cut their own deals. Analysis of the dilemma shows how self-interested behavior can easily lead to a bad collective outcome, but also how difficult it is to sustain a concerted strategy that involves some costs. C.E.O.s subjected to Trump’s diktats aren’t being locked up—not yet, anyway—but, as Sonnenfeld noted to me, they face a “huge collective-action problem.” [Continue reading…]